Know Your Gear Podcast - Episode Summary

Title: Fender Buys Reverb The Largest Used Website
Host: Phillip McKnight
Release Date: May 7, 2025

Introduction

In this episode of the Know Your Gear Podcast, host Phil McKnight delves into the recent buzz surrounding Fender's acquisition of Reverb, the leading online marketplace for used musical gear. Released on May 7, 2025, this episode provides an in-depth analysis of what this move means for the guitar industry, Fender's strategic positioning, and the broader implications for musicians and retailers alike.

Fender's Acquisition of Reverb

Background and Ownership Dynamics

Phil begins by clarifying the nature of the acquisition. He emphasizes that Fender has not directly purchased Reverb. Instead, two major investors in FMIC (Fender Musical Instruments Corporation)—Creative Partners and Servco—are orchestrating the move. Servco, known for its extensive holdings in car dealerships and brands like Harley Davidson, has Fender as its sole musical investment. This strategic acquisition aims to integrate Reverb more closely into Fender's business model.

Quote:

"Fender is the only musical investment they have, and now alongside Creative Partners, they want to own Reverb."
— Phil McKnight [05:30]

Reasons for the Acquisition

Phil outlines several key motivations behind Fender's interest in Reverb:

1. Addressing Used Gear Competition:
   Historically, Fender's biggest competitor wasn’t another brand but its own used product line. A pivotal moment was a 2012 New York Post article that highlighted how used Fenders rivaled new models in popularity, challenging Fender's market position. By acquiring Reverb, Fender gains control over a significant portion of the used gear market, potentially mitigating this internal competition.

   Quote:

   "If Reverb is being purchased by Fender's investors, it could solve a huge problem they had back in 2012 with used gear competing against new gear."
   — Phil McKnight [10:15]

2. Enhancing Direct Sales Channels:
   With the decline of physical music stores, Reverb offers Fender a robust online platform to directly reach consumers. Major retailers like Sweetwater, Guitar Center, and Musician's Friend already have a presence on Reverb, allowing Fender to capture sales that might otherwise slip through the shrinking network of brick-and-mortar stores.

   Quote:

   "Reverb could open a big store for Fender, allowing them to maintain sales margins without relying heavily on traditional retail stores."
   — Phil McKnight [12:45]

3. Expanding the Certified Used Program:
   Fender previously attempted a certified used program, which faced challenges in controlling used guitar prices. Integrating Reverb could streamline and expand this program, ensuring better quality control and consistent pricing across the board.

4. Diversification and Tariff Protection:
   Owning Reverb diversifies Fender's revenue streams, particularly by tapping into the global used gear market that is currently untapped by tariffs. This strategic move shields Fender from potential economic fluctuations affecting new gear sales.

   Quote:

   "Having a piece of the used market is a diversification of their portfolio, protecting them from tariffs that might affect new gear sales."
   — Phil McKnight [15:20]

5. Capital Utilization from Record Sales:
   Following a record year in sales, Fender likely has substantial capital reserves. Investing in Reverb allows Fender to deploy this capital effectively, fostering growth and innovation within the company.

Potential Changes and Implications

Phil speculates on possible future adjustments Fender might implement post-acquisition:

• Fee Structure Adjustments:
  Under Etsy's ownership, Reverb fees increased significantly. Phil suggests that Fender might reconsider these fees to make the platform more attractive to sellers and buyers alike.

  Quote:

  "Reverb's fees feel almost double now, but with Fender's acquisition, there's a possibility these could be restructured to better serve the community."
  — Phil McKnight [18:05]

• Monopolistic Control Concerns:
  While Fender's acquisition could streamline operations, Phil raises concerns about potential monopolistic practices. If Fender gains too much control over the used gear market, it could stifle competition and limit consumer choices.

• Employee Impacts:
  Rumors suggest that Fender may furlough some employees periodically to manage low sales periods. However, Phil remains optimistic that Fender’s strong brand and strategic moves will mitigate severe layoffs.

  Quote:

  "Fender is bulletproof at this point, much like Gibson, and any employee furloughs are likely temporary measures rather than long-term job losses."
  — Phil McKnight [20:50]

Listener Q&A and Community Engagement

Beyond the primary discussion, Phil engages with several listener questions, offering expert advice and personal insights on various guitar-related topics.

1. Comparing Ibanez AZ Standard to Premium and Prestige Models

A listener inquires about the Ibanez AZ Standard, priced in the $500-$550 range, and how it stacks up against higher-tier models. Phil shares his experience, noting that while the AZ Standard is a quality instrument, certain features like the bridge design could be improved to match the Premium and Prestige counterparts.

Notable Insight:
Phil emphasizes the importance of bridge quality, suggesting that a harder-tail bridge might make the AZ Standard more appealing and functional.

Quote:

"If that guitar had a hardtail, I would have definitely kept it because it would enhance its resale value and functionality."
— Phil McKnight [25:40]

2. Storing Guitars with Strings at Full Tension

Another listener seeks advice on storing a Gibson SG with strings at full tension. Phil confirms that it is generally safe to do so if the guitar is only used once or twice a month. He provides additional storage tips to prevent potential damage, such as avoiding leaving the strap attached and regularly airing out the case.

Quote:

"It's totally fine to store guitars with the strings under tension if they're only accessed occasionally. Just make sure to open the case every month or two to prevent any finish issues."
— Phil McKnight [30:10]

3. Recommendations for EQ Boost Pedals

Listeners ask about the best EQ boost pedals available. Phil discusses various options, including the Boss G7, MXR EQ pedals, and others. He highlights the differences between models, such as the ability to boost volume and the number of EQ bands, helping listeners choose based on their specific needs.

Quote:

"The MXR EQ pedal with gain and volume control offers more versatility compared to simpler models, making it a great choice for those looking to enhance their tone."
— Phil McKnight [35:25]

4. Comparing Pickups Beyond DC Resistance

When asked about effectively comparing guitar pickups beyond just DC resistance, Phil explains that while resistance is a useful metric, it doesn't capture the full sonic profile. He discusses other factors like inductance, magnet type, and wire thickness, emphasizing a holistic approach to pickup evaluation.

Quote:

"Resistance is a starting point, but factors like inductance and magnet type play crucial roles in how a pickup interacts with your amp."
— Phil McKnight [40:00]

Final Thoughts and Closing Remarks

Phil wraps up the episode by reiterating the significance of Fender's acquisition of Reverb for the guitar community. He encourages listeners to support the podcast through subscriptions and patronage, emphasizing the mutual benefits of financial and emotional support.

Quote:

"If you're not supporting me financially, you're supporting me mentally. Your support matters a lot, especially in the social media landscape."
— Phil McKnight [55:00]

Conclusion

This episode of the Know Your Gear Podcast offers a comprehensive breakdown of Fender's strategic acquisition of Reverb, exploring its potential to reshape the used guitar market and enhance Fender's direct-to-consumer sales channels. Through expert analysis and engaging listener interactions, Phil McKnight provides valuable insights for guitar enthusiasts, industry professionals, and casual musicians alike.

For more insights and detailed discussions on guitar gear, tune in to future episodes of the Know Your Gear Podcast with Phil McKnight.