[msing539]

In the past year or two, I've noticed a huge decline in pricing on pre-owned audio gear.

My guess is this was a result of Covid, during which people were losing work (myself included) and tightened up on spending. As a direct result, sellers started dropping prices to compensate, hundreds and hundreds of dollars, depending on the item. Now that we're mostly out of Covid, you'd think that the market would have slowly come back. But I regularly see headphones, amps, dacs, etc. sitting around at well below new pricing. And well below initial pre-Covid pricing. It's almost as if buyers (again, myself included) are expecting those lower Covid prices.

My concern is this devalues the market as a whole, meaning manufacturers are also forced to drop pricing since the incentive might be greater for someone to buy used. This could, in theory, lead to less money being spent by companies to develop new headphones, amps, etc. I'm only speculating, as I'm not an economist or manufacturer. But it also hurts current owners of gear that are looking to sell. I've had things in mint used condition sit around well below market pricing, and I'm sure many of the sellers here have, too.

This seems great for buyers. Cheaper prices, high end audio. But there's always a desire to want more for less, and I'm sure the buyers will take a loss, too, when they go to resell. Most things, after all, aren't going up in value.

As a seller or buyer, do you see this as an issue or is it only me? Does anyone else feel the pain of trying to sell high-end gear for ridiculously cheap, only to have someone try to haggle them down even further? As a buyer, do you feel that everything is fine and used pricing is in line with what it should be?

 

[dougms3]

In the past year or two, I've noticed a huge decline in pricing on pre-owned audio gear.

My guess is this was a result of Covid, during which people were losing work (myself included) and tightened up on spending. As a direct result, sellers started dropping prices to compensate, hundreds and hundreds of dollars, depending on the item. Now that we're mostly out of Covid, you'd think that the market would have slowly come back. But I regularly see headphones, amps, dacs, etc. sitting around at well below new pricing. And well below initial pre-Covid pricing. It's almost as if buyers (again, myself included) are expecting those lower Covid prices.

My concern is this devalues the market as a whole, meaning manufacturers are also forced to drop pricing since the incentive might be greater for someone to buy used. This could, in theory, lead to less money being spent by companies to develop new headphones, amps, etc. I'm only speculating, as I'm not an economist or manufacturer. But it also hurts current owners of gear that are looking to sell. I've had things in mint used condition sit around well below market pricing, and I'm sure many of the sellers here have, too.

This seems great for buyers. Cheaper prices, high end audio. But there's always a desire to want more for less, and I'm sure the buyers will take a loss, too, when they go to resell. Most things, after all, aren't going up in value.

As a seller or buyer, do you see this as an issue or is it only me? Does anyone else feel the pain of trying to sell high-end gear for ridiculously cheap, only to have someone try to haggle them down even further? As a buyer, do you feel that everything is fine and used pricing is in line with what it should be?

Theres always alot of those weird people that don't know how to negotiate and tell you their personal stance on buying used items and expect you to abide these weird rules they made for themselves.

Like when they say things like I refuse to pay more than 50% of the original msrp, not sure why they expect someone else to adhere to something this.

I think its also that alot of people have been left with a bad taste in their mouths from alot of these shill reviewers. They are duped into buying something not good that is peddled by some of the unscrupulous reviewers.

Also its the new rules regarding sales of used items by the IRS. In the past there was a high limit on sales of personal used items before it was taxed. Something like $15-20k before paypal sends you a 1099, now its anything more than $600 I believe and they will tax that as income.

Technically they're not supposed to tax used personal items that you're losing money on but when the men with guns tell you otherwise, what can you do.

 

[miketlse]

It's a free market.
If you want to sell your gear, on principle, for a price higher than someone in the market is prepared to pay, then you will get left with the gear on your hands.

 

[DenverW]

The used market has seemed a bit slow over the last couple months, however there may be a seasonal aspect as well. I know that I haven't been in the market for gear while making sure the family is covered for the holidays. We'll see how things pick up. One way I look at it is that if I buy something on the used market, and sell under the price I purchased, was it worth the money to either demo or use the gear? If I get something, immediately dislike it, and sell it at $100 less, that's a bummer. But if I buy something, really love it and enjoy it for a year, and sell for $200 under my purchase price, that's all right with me. I 'rented' it.

And FYI, the IRS requirements for the sale of used goods has been on the table since 2022. In 2022 and in 2023 there was supposedly going to be a change where sales over $600 for the year (total) were reported via 1099, however that did not happen. The plan for 2024 (again, if it happens) is that sales over 5k total will be reported via 1099.

However it is important to note, sold goods are not taxable as income if sold under their original value or purchase price. Income is taxable, selling a used good at a loss is not. The only thing that may be required in the future is to state this on your taxes to show there was not a profit. For those people selling their gear at a profit, pay your taxes.

There is a lot of misinformation and fear about this on used markets, and it helps reduce this concern to know the information.

 

[dougms3]

The used market has seemed a bit slow over the last couple months, however there may be a seasonal aspect as well. I know that I haven't been in the market for gear while making sure the family is covered for the holidays. We'll see how things pick up. One way I look at it is that if I buy something on the used market, and sell under the price I purchased, was it worth the money to either demo or use the gear? If I get something, immediately dislike it, and sell it at $100 less, that's a bummer. But if I buy something, really love it and enjoy it for a year, and sell for $200 under my purchase price, that's all right with me. I 'rented' it.

And FYI, the IRS requirements for the sale of used goods has been on the table since 2022. In 2022 and in 2023 there was supposedly going to be a change where sales over $600 for the year (total) were reported via 1099, however that did not happen. The plan for 2024 (again, if it happens) is that sales over 5k total will be reported via 1099.

However it is important to note, sold goods are not taxable as income if sold under their original value or purchase price. Income is taxable, selling a used good at a loss is not. The only thing that may be required in the future is to state this on your taxes to show there was not a profit. For those people selling their gear at a profit, pay your taxes.

There is a lot of misinformation and fear about this on used markets, and it helps reduce this concern to know the information.

Check how many used items are on sale below msrp and see if ebay charges tax on those items. They're not supposed to do that, as a seller, you can't even remove the tax option.

In theory if you are correct but again, how do you show on your taxes that you didn't make a profit on each item that you bought and sold? If you buy and sell $10k worth of equipment, then get audited you better have the original receipts and also hope the they dont find anything else wrong with your tax return.

Most likely this won't happen, this is a too small an amount for the IRS to care even if it wasn't legit, but its just something to keep in mind.

If the IRS takes the time to do an audit, you can be guaranteed that they will find something...

 

[DenverW]

In theory if you are correct

This should help. Here is a link directly to the IRS website stating the current 2023 reporting threshold of 20k, and the planned threshold for 2024 (again, planned) of 5k. https://www.irs.gov/businesses/understanding-your-form-1099-k

In regards to ebay charging tax, it is because they are essentially a 'store.' Since ebay as a business facilitates the transaction you are charged tax, in the same way you'd be charged tax at an antique store, but not when buying the same antique from a garage sale. This is why you're not charged tax on craigslist or here, as those places assist with communication but do not complete the transaction for you.

As far as reporting and showing profit or loss, the 1099-k form comes from places such as ebay. Thus, if you have 5 transactions on ebay for a total of 10k, and IF the reporting threshold is changed in 2024 to 5k, you'll received a 1099-k document from ebay showing the amount you made and fees that were incurred. If audited (incredibly unlikely) most people will have record of purchase from their payment method (for example, credit card record or paypal/ebay transaction history), but what if you don't? Here is an answer from the IRS FAQ:

"A. Generally, you should keep accurate records for personal items you may sell. If your records are lost, destroyed, or are not available due to circumstances beyond your control and your return is audited, examiners may allow you to present reconstructed records. Additionally, examiners may accept oral testimony when records do not exist.

In this example you have a nondeductible personal loss. $800 sales price - $3,000 purchase price = ($2,200) loss amount. You can offset the proceeds reported on the Form 1099-K using some of your purchase price as shown here:

Form 1040, Schedule 1, Part I – Line 8z, Other Income. List type and amount: "Form 1099-K Personal Item Sold at a Loss…. $800" to show the proceeds from the sale reported on the Form 1099-K.

and

Form 1040, Schedule 1, Part II – Line 24z, Other Adjustments. List type and amount: "Form 1099-K Personal Item Sold at a Loss…. $800" to show the amount of the purchase price that offsets the reported proceeds. Do not report the $3,000 you paid for the purchase because a personal loss is not deductible."

Again, only income is taxable. If you're making income selling audio gear above the current threshold you'll be taxed. If you're selling above the current threshold and not making income you should report but won't be taxed.

 

[Metalingus]

I totally agree. I have other hobbies such as camera gear and cars, same goes for all. People rather invest or save and play the long game. However, i disagree that manufacturers do that. TOTL headphones increased from $1-2K to $4K. Despite no major improvements on sound and design but costs are up. Hopefully some competitive products like Tungsten will come and shake the market and make expensive stuff obsolete.

 

[kumar402]

Good time to buy if you have stable job and Savings but not a good time to sell gear.

I have stopped buying new gear in this hobby as the money you loose out is a lot these days. Saw some one selling new Utopia 2022 for $2500 and a B Stock VC for $1000

 

[vcoheda]

i occasionally buy new but with the understanding that if/when i sell, the price is 33% off what i paid and maybe more if not a popular or well-regarded item, or if superseded by a new model. the best prices are obtained buying used but then you run into the issue of condition being overstated and use understated as well as problems with warranty claims. open-box is a good compromise between new and used. condition is generally close to, if not the same as, new and warranty is provided.

audio equipment is easy and fun to buy but much harder to sell - always has been this way.

 

[kumar402]

i occasionally buy new but with the understanding that if/when i sell, the price is 33% off what i paid and maybe more if not a popular or well-regarded item, or if superseded by a new model. the best prices are obtained buying used but then you run into the issue of condition being overstated and use understated as well as problems with warranty claims. open-box is a good compromise between new and used. condition is generally close to, if not the same as, new and warranty is provided.

audio equipment is easy and fun to buy but much harder to sell - always has been this way.

Some manufacturers provide warranty as long as you have the original receipt or some do allow to transfer warranty.

 

[ScornDefeat]

Contrary to logic, the used market for "luxury" goods, like hifi audio, watches, etc., was at it's absolute peak during COVID. The reasons for this are likely a) stimulus checks and b) sheer boredom forcing people to seek out other interests (in lieu of vacations, travel, food and drink, etc.)

The luxury goods market, altogether, has taken a massive hit over 2023 and into 2024. For example, used Rolex watches, on average, are 25% cheaper than they were in late-2021. I have absolutely noticed this trend carrying over to audio gear, including headphones.

People are back to spending their leisure money of social outtings and travel.

I think this will be a significant issue for headfi manufacturers. How many people (including myself) were happy just trying something at MSRP knowing they can then recuperate 75-80% of their spend? With the current used market, it's closer to 50-60% now. Personally, I've been much more judicious with picking up gear unless I'm confident I will like it a lot.

 

[Rattle]

Is it the used market though ? Or is it new headphones amps and dacs are way to freaking expensive? A lot of things should cost a lot less than they do.

 

[dougms3]

This should help. Here is a link directly to the IRS website stating the current 2023 reporting threshold of 20k, and the planned threshold for 2024 (again, planned) of 5k. https://www.irs.gov/businesses/understanding-your-form-1099-k

In regards to ebay charging tax, it is because they are essentially a 'store.' Since ebay as a business facilitates the transaction you are charged tax, in the same way you'd be charged tax at an antique store, but not when buying the same antique from a garage sale. This is why you're not charged tax on craigslist or here, as those places assist with communication but do not complete the transaction for you.

As far as reporting and showing profit or loss, the 1099-k form comes from places such as ebay. Thus, if you have 5 transactions on ebay for a total of 10k, and IF the reporting threshold is changed in 2024 to 5k, you'll received a 1099-k document from ebay showing the amount you made and fees that were incurred. If audited (incredibly unlikely) most people will have record of purchase from their payment method (for example, credit card record or paypal/ebay transaction history), but what if you don't? Here is an answer from the IRS FAQ:

"A. Generally, you should keep accurate records for personal items you may sell. If your records are lost, destroyed, or are not available due to circumstances beyond your control and your return is audited, examiners may allow you to present reconstructed records. Additionally, examiners may accept oral testimony when records do not exist.

In this example you have a nondeductible personal loss. $800 sales price - $3,000 purchase price = ($2,200) loss amount. You can offset the proceeds reported on the Form 1099-K using some of your purchase price as shown here:

Form 1040, Schedule 1, Part I – Line 8z, Other Income. List type and amount: "Form 1099-K Personal Item Sold at a Loss…. $800" to show the proceeds from the sale reported on the Form 1099-K.

and

Form 1040, Schedule 1, Part II – Line 24z, Other Adjustments. List type and amount: "Form 1099-K Personal Item Sold at a Loss…. $800" to show the amount of the purchase price that offsets the reported proceeds. Do not report the $3,000 you paid for the purchase because a personal loss is not deductible."

Again, only income is taxable. If you're making income selling audio gear above the current threshold you'll be taxed. If you're selling above the current threshold and not making income you should report but won't be taxed.

Awesome thanks. I'm gonna show this to my worthless accountant.

I was not aware they delayed that. Its not like its readily available news.