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What is it really worth?

I shall give you a snapshot of the appraisal process. Any given piece of equipment is valued mostly by recent sales of similar machines. The market establishes their value. The highest possible value of a given model is for those that are in premium "recently restored" condition. A warranty if offered enhances the value. From that point, you remove value as the machine's condition or desirability goes down. At a certain point, the cost of restoration exceeds the selling value, rendering the unit worthless, unless a very nominal parts value may be present. It is also appropriate here to distinguish between retail value and wholesale value. Here are some examples:

  1. Phase Linear 400 Series II: High power amplifier, middle 70's, High popularity.

    Fully restored, with warranty, retail: $550.00
    Usual restoration: $250.00
    Net value, no complications: $300.00
    Wholesale value, no complications: $140.00

  2. Marantz 2275, Receiver: Mid-sized stereo receiver, middle 70's. High popularity.

    Fully restored, with warranty, retail: $600.00
    Usual restoration: $250.00
    Net value, no complications: $350.00
    Wholesale value: $160.00

Consider the same above mentioned Marantz 2275 and suppose that it has an electronic failure of some significance. Suppose it has a drift in the FM section after it warms up. Bear in mind that this problem is over and above the usual, non-optional restoration. The cost of repair then climbs to the range of $350 or so. This really eats the value of the piece. Its net is now down to the $250 range and since it is a challenging repair which may or may not be successful, it in only worth perhaps $100. That may seem to be a bit of cold reality, but consider, very few people know how to fix that problem properly. Sure, all sorts of individuals will volunteer to screw about with it but it takes someone who knows the piece really well to have even a prayer of obtaining pleasing, reliable performance out of the machine. When you find someone who has this level of skill, you will find that he/she is absolutely buried in work and can pick what is the most rewarding to work on. If you suggest that he might not mind too much spending a bit of "spare time" on it because it is an interesting problem, do not expect to be taken seriously, because in that suggestion, you have written yourself off. The serious professional earns his living this way, takes it very seriously, and chooses to spend his "spare time" in other pursuits—much the same as you do in your own profession.

Another important factor to consider when assessing the value of a piece is its desirability or popularity if you will. This week, a fellow came in who wished to sell a DBX compressor/expander. He was certain that it was a valuable piece, and expected me to jump at the chance to buy or consign it. I have had the precise piece in my store before. It sat for a long time, attracted quite a few time wasting questions (What does it do? Explain it to me.) It eventually sold for something like $50. You can imagine just how excited I was to get another. Though it was very hard for the owner to understand, the machine was not valuable enough to justify its shelf space and handling. The bottom line is that some items excite people and they cannot wait to buy them, whereas other machines are hard to give away.

Perhaps it is helpful to compare stereo appraising to antique or real estate appraising. You may have an idea of the value of your house, but the professional appraiser knows what other properties are selling for, and can properly weigh the advantages of a property and discount for its shortcomings. Above all, whether you are looking to buy an item, or to sell one, do not equate a restored and serviced piece with one that is raw, even if it is physically very attractive. We once had a customer who would repeatedly come in with some piece which he had physically cleaned up, or even painted so it looked fairly decent, though he had no skill to do anything to the internal workings. He would represent these machines as being equal to something that we had restored. Naturally, the machines that came from him had as many failures of performance as any other non-serviced item. The message to you is that you should always be skeptical. If a unit comes from a reputable dealer and has a warranty, then it has a quantifiable value. In all other cases, buy machines only after you have factored out the cost of restoration because it is guaranteed to need it.

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