Know Your Gear Podcast w/ Phillip McKnight
Episode 445: "Another Guitar Brand Files Bankruptcy"
Date: January 21, 2026
Episode Overview
This final episode of 2025 blends Phillip’s Q&A style with sharp industry insights, focusing on guitar business realities, gear valuation, and an in-depth discussion on the recent Höfner bankruptcy. Phillip also tackles trends in digital modeling, small business advice, and the shifting economics impacting both stores and players. The episode's tone is casual, honest, and laced with Phillip’s trademark mixture of practical wisdom and humor.
Key Discussion Points & Insights
1. How Guitar Trade-in Values Are Determined
- Audience Question: How would Phillip, as a former shop owner, approach the trade-in value for a 1995 Epiphone Riviera Sunburst in great condition?
- Phillip’s Method:
- Emphasizes psychology and context over pure market value—how much you want what’s being traded, and how much you want what the customer is offering.
- Looks up recent sold prices on Reverb, eBay, Sweetwater Gear Exchange, and Guitar Center’s database.
- The year typically doesn’t impact price for Epiphones unless there’s something unique.
- Shops often "massage the numbers" (e.g., offer extra trade-in value instead of discounting the outgoing item).
- Memorable quote:
"It’s not a trick... Sometimes you massage the numbers just to make the customer feel the best." (07:40)
- Advice for Store Owners:
- Key is balancing profits with creating return customers.
- Guitar shops should be run like salons, aiming to cultivate dedicated, repeat clientele.
"A small store is like cultivating a hair salon. What you want is: 'No one touches my guitar but Rhonda.'" (13:25)
2. Guitar Pedals, Amps, and Resale: Not Like Other Tech
- Q: Are guitar pedals and amps similar to consumer electronics when it comes to obsolescence and resale?
- Phillip:
- Pedals and amps don’t become obsolete like TVs or computers—people still care about a Tube Screamer from 8 years ago, but not a TV from 2017.
- This longevity hurts manufacturers (hard to create "need" for new products) but benefits buyers.
- Notable moment (25:15):
"This industry has the opposite problem—it’s not that the technology gets replaced. It’s that it lasts so long."
3. Digital Modeling, Neural Amp Modeling (NAMM), and the Future
- Q: Will NAM Technology (Neural Amp Modeling) change the modeling market in 2026?
- Phillip:
- Digital products are extremely profitable—minimal costs, no tariffs, easy to scale, and subscription models are appealing to companies.
"It is extremely profitable to sell links to shit. It's just so profitable that it's impossible for it not to become an avalanche." (39:10)
- Predicts an ongoing wave of digital products, with even physical amp makers prioritizing their digital lines.
- Warns that traditional brick-and-mortar ("mom & pop") stores face challenges selling digital goods.
- Observes that even top artists like John Mayer are promoting plugins instead of amp lines for higher margins.
- Quote:
"I don't think we're even at the beginning of what the wave of digital products coming from these companies is..." (49:00)
- Digital products are extremely profitable—minimal costs, no tariffs, easy to scale, and subscription models are appealing to companies.
4. Small Repair Business: Should You Take Deposits?
- Q: If you run a small home-based repair shop, should you require deposits for parts?
- Phillip’s Take:
- Typically, no—you already have their instrument as “collateral”; requesting a deposit can signal distrust.
- Ensure you have enough capital to front small costs and prepare for "oh crap" moments where you might need to cover mistakes swiftly.
- The repair and tech business is built on repeat trust, which is easily lost through one slip-up.
5. Höfner Files Bankruptcy & Deeper Industry Trends
[Segment Begins ~1:10:20]
- Höfner in Germany has entered bankruptcy, aiming to reorganize debt rather than liquidate entirely (similar to Guitar Center’s Chapter 11).
- Larger Pattern:
- Not surprising, as multiple legacy brands have struggled or closed—trend extends to G&L, Peavey, Carvin, etc.
- Direct connection drawn between signature artists and company health (e.g., Peavey losing Eddie Van Halen led to decline).
"Paul McCartney made Höfner. They should have given him half the company to keep the Beatles magic alive." (1:14:24)
- In tough markets, only brands offering true desirability or innovation can weather the storm.
- Economic Reality:
- This is a "weeding out" phase where less adaptable or financially weak companies close or restructure.
- 2026 will see the effects/outcomes from 2025’s market challenges.
6. Will Heritage Guitars Suffer a Similar Fate as G&L?
- Unlikely. Heritage is financially stronger and better organized than G&L.
- Heritage’s fate seems secure short-term under current ownership (which also owns Mono Cases and Harmony).
7. Warranty Realities for Pickups & Parts
- In-guitar pickups are covered under instrument warranty; aftermarket pickups usually have no warranty once installed.
- Dealership Experience: Phillip recounts how Gibson's poor warranty support led him to drop their dealership.
"Gibson was horrible... that’s the main reason I stopped being a Gibson dealer." (1:27:10)
8. Is Refretting a Budget Guitar ‘Worth It’?
- From a financial viewpoint—never.
- For skill-building or experimentation—absolutely.
"Is it worth it? The education is the payout." (1:31:30)
- Even a cheap Glary can be turned into a playable, fun instrument with work.
9. Import/Export Realities & Manufacturing Trends
- Indonesia is to Korea as Mexico is to the US—lower-cost production satellite for established brands.
- Even "Made in [Country]" items often have globally-sourced components.
- The big US brands’ growth is now rooted in overseas production and markets (e.g., PRS’s expansion in India).
10. Episode’s Running Theme: The Value of Trust & Long-Term Relationships
- Whether in trade-ins, repair, or content, treating customers right for repeat business is paramount.
"You cultivate a client list. You want them to say, 'No one touches my guitar but Rhonda.'" (13:25)
- One failed job can lose years of goodwill—service businesses must operate with precision and speed when fixing mistakes.
11. Rapid-fire Q&A Highlights
- Pedals & Modeling: Still using many original pedals from years ago; likes modeling tech but doesn’t use it for gigs with multiple sound changes.
- Three-way switches: Still uses stock Fender blade switches out of long-term habit and surplus inventory.
- Best pedal platform amp under 15W: Favors Fender Princeton for compressed tone, but Blues Junior and Hot Rod Deluxe are also good options.
- FRFR vs. PA: No strong preference, but suggests avoiding overly “colored” equipment; studio monitors can be fine for at-home use.
12. Podcast & Channel Reflections: Transparency, Sponsorships, and Focus
- 2025 saw reduced sponsorship content in favor of more focused, value-dense videos—resulted in doubling average view counts.
- Personal endorsement is reserved for US-made products that truly need the push.
"When I put my full energy behind something, I always put it behind something I feel more passionate about personally." (2:19:00)
- Looks ahead to even less sponsored content and more data-driven content tailored to subscribers’ interests.
Notable Quotes & Memorable Moments
-
On Guitar Trade Valuation:
"I need to make money and I need you to come back again and be a customer…you'll never make it as a small business otherwise." (11:45)
-
On Digital Product Future:
"I don't think we're even at the beginning of what the wave of digital products coming from these companies is..." (49:00)
-
On Company Failures and Signature Artists:
"Paul McCartney made Hofner. The fact that Hofner every year should have called Paul McCartney and begged him like, 'Hey, we'll give you half the company...'" (1:14:25)
-
On Boutique vs. Mass Market:
"All the companies I endorse make products in the USA. That’s who needs the most help. When I put my full energy behind something, that’s who I choose." (2:19:00)
Important Timestamps
| Timestamp | Segment/Quote | |------------|-------------------------------------------------------------------------------| | 00:00 | Episode intro and trade-in valuation process | | 07:40 | "Sometimes you massage the numbers just to make the customer feel the best." | | 13:25 | "A small store is like cultivating a hair salon..." (Trust/Repeat business) | | 25:15 | Pedals/amps vs. technology obsolescence | | 39:10 | "It’s extremely profitable to sell links to shit." (Digital product trends) | | 49:00 | "I don't think we're even at the beginning..." (Future of digital gear) | | 1:10:20 | Segment on Höfner bankruptcy and larger industry trends | | 1:14:25 | Paul McCartney and brand value | | 1:27:10 | Gibson warranty and why he stopped being a dealer | | 1:31:30 | "The education is the payout." (On refretting cheap guitars) | | 2:19:00 | "All the companies I endorse make products in the USA..." (Endorsement policy)|
Conclusion & Outlook
Phillip closes with gratitude for the channel’s audience, reflecting on intentional changes that have improved engagement by prioritizing content with user value over sponsorships. Looking to 2026, expect even better, more focused videos and more transparency about the realities of the modern guitar and gear market.
Final words:
"Ultimately, better content. I'm not going to complain. So I want to thank you all for that..." (2:26:10)
For more content and to join special live clinics, visit Phillip’s Patreon or subscribe for free on YouTube!