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#630122 - 01/17/09 01:21 AM Re: True Piano Values in this economy
RoyP Offline
500 Post Club Member

Registered: 12/10/03
Posts: 786
Loc: Cincinnati, Ohio
 Quote:
Originally posted by Jerry Groot RPT:
So, are any of you planning on dropping your tuning or servicing fee's as well then? [/b]
I'm not planning on it. So far so good. But, never say never...

It is an interesting question. Some people are talking about deflation. It's interesting to read about the Great Depression. There are alot of similarities to what has happened this time around. A period of deregulation and big tax cuts in the 20's was followed by a speculative real estate bubble. Sound familiar? Then the bubble burst in 1929. If you had bought stocks in 1929, prior to the stock market crash, you wouldn't have gotten back to even until 1954. I wonder what the price of pianos was like in that time? Does anybody know?

After the 1929 crash, the stock market was pretty unstable, and made big jumps up and down, which it has also been doing recently also. A recession in 1930 didn't become a depression until 1933. So, there was a deflationary period for several years after 1929. What happened was that people started paying off debts. They weren't spending money and buying things, but tried to strenghten their financial position. As that happened, each dollar became worth more, because so many people were doing it. So the value of that debt became more, even as the actual dollar figure shrunk. That's the danger.

I don't see that happening this time. At least not to the same extent. Partly, the dollar is no longer tied to gold. The government is going to be printing lots of money, which should fuel inflation.

Still, we will see how much debt the government will be able to sell. Many governments around the world are trying to sell bonds to stimulate their economies. The Germans just held a bond auction that they had to shut down because they weren't selling. web page
The article seems to think the US Treasury will be more successful. Let's hope so.
_________________________
Roy Peters, RPT
Cincinnati, Ohio
www.cincypiano.com

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#630123 - 01/17/09 11:12 AM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
I haven't lowered my prices either. I did however, hold them steady for the past 2 years rather than to increase them this year as I normally might have.

I've noticed for many years now that the lower priced technicians in my area and probably in most areas, for the most part, are usually, much less knowledgeable about pianos as a whole. They can't tune well and they can't repair or regulate well.

Obviously, that doesn't account for every tuner but, as a whole, over all, that's what I've found.

Their knowledge of tuning and repairs is
lacking. Therefore, the demand for their services is also lacking.

A person with more knowledge in many service industries, gets more pay thus, the reason RPT's are often higher priced than non RPT's. No offense intended to anyone out there that is learning or is a non member. I'm just posting my discoveries on the subject.
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630124 - 01/17/09 06:44 PM Re: True Piano Values in this economy
Silverwood Pianos Offline
4000 Post Club Member

Registered: 03/10/08
Posts: 4190
Loc: Vancouver B. C. Canada
Something else I thought of regarding pricing. Instead of lowering your rates, or having a sale like Ryan stated, why not offer a little more service for no charge, like a capstan raise, or something small, less than 15 minutes….. Maybe vacuum out the key bed or something.
A free 15 minute appraisal on what is wrong, or not wrong with the instrument, what may be coming up for repair. Maybe a free quotation for repair…. Small things like this…….

This way the customer sees a visible extra while it does not cost you too much…. Step up the pace a little bit on the tuning should give you the extra time at the end. Work smarter, not harder….. ;\)

www.silverwoodpianos.com
_________________________
Dan Silverwood
www.silverwoodpianos.com
http://silverwoodpianos.blogspot.com/
http://www.facebook.com/SilverwoodPianosDotCom
"If you think it's expensive to hire a professional to do the job, wait until you hire an amateur."

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#630125 - 01/17/09 07:55 PM Re: True Piano Values in this economy
Bob Offline
3000 Post Club Member

Registered: 06/01/01
Posts: 3866
Suppose the number of pianos you tune is down by 25%. You panic and drop your rates by 10% A rate decrease may add some tunings, but not enough to cover the 25% decrease - in fact not even close. You will end up making 10% less money on 20% less tunings.

The best way to handle a slowdown is reduce your costs as much as possible, while providing the best service you can, and selling as much service as you can - in other words, make more gross income with each piano you tune, and more net income because you reduced your costs.
_________________________
www.PianoTunerOrlando.com






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#630126 - 01/17/09 09:24 PM Re: True Piano Values in this economy
Ron Alexander Offline
1000 Post Club Member

Registered: 06/17/03
Posts: 1292
Loc: North Carolina
Excellent discussion. I'm holding the line on any rate increase for the time being, but dont plan to reduce my fees. Perhaps in some parts of the country deflation may be an economic reality, but I dont see it yet here in the Southeast, at least in my corner of the Southeast.

I think it is important that people not over re-act. Yes the economic news is not good. But I have seen little change in my weekly schedule since Christmas. I had a very busy fall, right up to the week of Christmas. I geared back up the first week in January and still going strong for a January.

I believe the big factor in people's spending habits are driven by employment. Those who feel secure in their job will continue to spend, though much more carefully.
_________________________
-----------------
Ron Alexander
Piano Tuner-Technician

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#630127 - 01/17/09 11:34 PM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
Good point Ron that people should not over react. So often they do just that more out of fear, or immediate desperation/fear rather than thinking about the best ways to make it through.

Increase quality and knowledge instead.

Be customer oriented.

Be better than your competitor's.

In my mind and many of you here have the same mentality, NOBODY is going to better than ME! NOBODY!!! That's the attitude to take... Not just now but, always. However, we cannot simply take that attitude without something else to back it up with. If we don't also follow these thoughts through with qualified actions, good quality, ethics, morals, honesty etc., your better qualified competition will run you over like a steam truck. ;\) Steam truck? Those big rigs with rollers on them that flatten tar!!! \:D
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630128 - 01/18/09 12:26 AM Re: True Piano Values in this economy
Dave Stahl Offline
1000 Post Club Member

Registered: 05/06/07
Posts: 1645
I haven't had to reduce my fees yet, but I haven't had the nerve to raise them, either.

I have always given extra service besides just a tuning at my regular 1 1/2 hour service calls. Some people really appreciate the effort. Lost motion, let off, pedal noise, backchecks, cleaning, touch up voicing, sanding the hammers--if you only do one of these at each regular service call, the pianos end up being stable and playing as they should.

When I get price shoppers, I point out that when they hire someone good, they get better value, and a much better playing and sounding piano than if they hire a violin teacher who moonlights as a piano tuner.

If you want to stay busy, make yourself needed. Make the pianos sound so good that your customers become addicted to that particular sound.
_________________________
Promote Harmony in the Universe...Tune your piano!

Dave Stahl, RPT
Piano Technician's Guild
San Jose, CA
http://www.youtube.com/watch?v=JAniw3m7L2I
http://dstahlpiano.net

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#630129 - 01/18/09 02:57 PM Re: True Piano Values in this economy
b3groover Offline
Full Member

Registered: 06/05/08
Posts: 119
Loc: Lansing, MI
Jerry, obviously you have to charge what your particular market will bear. I did run a "special" over the holidays that was quite successful, where I offered my repeat customers 15% off my normal rate. I drummed up a lot of business with that and it was very timely for me, being the holidays and all.

I don't plan on raises my rates this year and may have to take them down a bit, due to the incredibly poor economy in Michigan (and Lansing in particular).
_________________________
=-=-=-=-=-=-=-=-=-=
Jim Alfredson
Musician / Tuner
www.organissimo.org

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#630130 - 01/18/09 09:00 PM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
I always figure this way. If we give to many discounts, people will expect them like they do with piano sales and then will not want to pay full price. Our costs of traveling certainly and other expenses are not going to go down. Only up.

Therefore, I only give discounts for tuning 2 or more in one location or a discount for a piano teacher that refers me a lot.

I also will give one to someone that sets up a full day for me (I have to do nothing but show up) when tuning out of town. Otherwise, that's about the extent of my discounting.

I'm holding firm on my pricing.
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630131 - 01/18/09 11:41 PM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
Here's a very interesting article that I read.

"Knowledge of failure helps lead to success."

I think it pertains very well to the topic at hand. Fear etc. When you read it, think of how this pertains to yourself and to your own business and to your own feelings.


http://www.usatoday.com/money/companies/...ke_N.htm?csp=34
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630132 - 01/19/09 11:10 AM Re: True Piano Values in this economy
Bob Offline
3000 Post Club Member

Registered: 06/01/01
Posts: 3866
A past customer called last week and said he wanted to pay the same amount he paid last time ($20.00 less current market). I said no, that prices had gone up - he would have to find another tuner. When I looked him up on my customer list, it turns out the last tuning was 3 1/2 years ago.

Every time I've let a customer talk me down in price the piano turns out to be a PSO, one note flat, sticky keys, etc.
_________________________
www.PianoTunerOrlando.com






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#630133 - 01/19/09 11:13 AM Re: True Piano Values in this economy
Bob Offline
3000 Post Club Member

Registered: 06/01/01
Posts: 3866
P. S. We sell piano work for a living.....We do NOT tune pianos for a living. Figure out how to sell tunings, and you will always be busy.
_________________________
www.PianoTunerOrlando.com






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#630134 - 01/19/09 12:53 PM Re: True Piano Values in this economy
rysowers Offline
2000 Post Club Member

Registered: 04/16/07
Posts: 2402
Loc: Olympia, WA
Good point, Bob!

I'd take it one step further still: We sell musical enjoyment and customer satisfaction.
_________________________
Ryan Sowers,
Pianova Piano Service
Olympia, WA
www.pianova.net

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#630135 - 01/19/09 01:24 PM Re: True Piano Values in this economy
CC2 and Chopin lover Offline
1000 Post Club Member

Registered: 01/12/06
Posts: 1981
I would add one thing to Roy's comparison of the period leading up to the great Depression and now.....the one aspect that is definitely not the same is the role the media plays now in fostering an impression among the populace that the sky is falling. Their ability, and willingness, to manipulate the public with half truths and incomplete facts feeds their own selfish need to sensationalize in order to sell their product, or further their own political agendas. The end effect is that even those who are not in financial hot water believe they will be shortly, and will not make the purchases and other financial commitments that they normally would. This, then, becomes a self fulfilling prophecy. The power of the modern media is often overlooked and may be the single most devastating component of this whole mess.
_________________________
Piano Technician/Tuner

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#630136 - 01/19/09 02:35 PM Re: True Piano Values in this economy
portmanteau Offline
Full Member

Registered: 08/24/08
Posts: 76
 Quote:
Originally posted by Jerry Groot RPT:
That is another thing mentioned at the meeting that I had forgotten about, craigslist, and others. Along with so much other disinformation circulating about the internet pertaining to pianos, piano prices and the simplicity of the inner workings of them. We see these examples on the Piano Forum all the time. "I wouldn't pay more than XXX for a piano." If a dealer pipes in, they get blasted as if they know nothing about the market or true piano prices.

Another question to think about would be, are we going backward with the general public's knowledge and/or awareness of pianos and piano prices due to misinformation being presented? Or, is this all inner related to the economy in general? [/b]
If inaccurate information is hurting sales much of the blame lies on the piano industry. There would be
much less if it if piano dealers were open about the price.

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#630137 - 01/19/09 03:03 PM Re: True Piano Values in this economy
portmanteau Offline
Full Member

Registered: 08/24/08
Posts: 76
 Quote:
Originally posted by CC2 and Chopin lover:
I would add one thing to Roy's comparison of the period leading up to the great Depression and now.....the one aspect that is definitely not the same is the role the media plays now in fostering an impression among the populace that the sky is falling. Their ability, and willingness, to manipulate the public with half truths and incomplete facts feeds their own selfish need to sensationalize in order to sell their product, or further their own political agendas. The end effect is that even those who are not in financial hot water believe they will be shortly, and will not make the purchases and other financial commitments that they normally would. This, then, becomes a self fulfilling prophecy. The power of the modern media is often overlooked and may be the single most devastating component of this whole mess. [/b]
I disagree with the notion that it is self fulfilling, at least in this respect. We are witnessing
the end of a long term credit cycle. This will run its course whether the media has anything to say
or not. It is almost comical how they are just picking up on something that has been going on for a
year now, just as some of the deflationary pressure has abated I might add. There are some pretty
interesting clips of newspapers and such from the 1930s and 1870s. The sky was falling then too.

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#630138 - 01/19/09 06:00 PM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
"If inaccurate information is hurting sales much of the blame lies on the piano industry. There would be much less if it if piano dealers were open about the price."
--------------------------------------------------------------------------------------------

Why the heck would blame lie on the piano industry? They are not the ones proclaiming false information pertaining to pianos. Maybe a few are. There are bad apples in every field. But, I would say, most are probably reputable.

Much of the disinformation that I read about it, comes directly from people with no REAL knowledge about running a business, no real knowledge about pianos or their inner working parts, or they spout off with some expectation of what they THINK they should pay rather than having a reality check of what profit margins are for dealers.

No businesses relay their "costs" of a product. Piano dealers are no different.
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630139 - 01/19/09 07:57 PM Re: True Piano Values in this economy
portmanteau Offline
Full Member

Registered: 08/24/08
Posts: 76
 Quote:
Originally posted by Jerry Groot RPT:
"If inaccurate information is hurting sales much of the blame lies on the piano industry. There would be much less if it if piano dealers were open about the price."
--------------------------------------------------------------------------------------------

Why the heck would blame lie on the piano industry? They are not the ones proclaiming false information pertaining to pianos. Maybe a few are. There are bad apples in every field. But, I would say, most are probably reputable.

Much of the disinformation that I read about it, comes directly from people with no REAL knowledge about running a business, no real knowledge about pianos or their inner working parts, or they spout off with some expectation of what they THINK they should pay rather than having a reality check of what profit margins are for dealers.

No businesses relay their "costs" of a product. Piano dealers are no different. [/b]
I didn't mean to imply they should publish their cost structure. If misinformation is hurting them
so bad why can't they simply put out some accurate pricing information. The fact that a book like
Fine's piano book exists and seems necessary is somewhat telling in this case. They may not be the
ones spreading fiction, but the way pianos are currently priced makes it inevitable. I'm not sure if people in the
industry realize how frustrating it is to outsiders shopping for instruments. Some might just give up
and others probably buy a used piano because comparison shopping is easier.

I would love to be able to go onto a stores website and get a realistic price for a new piano. What
is it about pianos that makes this impossible?

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#630140 - 01/19/09 11:43 PM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
"I would love to be able to go onto a stores website and get a realistic price for a new piano. What is it about pianos that makes this impossible?"

I know what you mean. I think this is a factor in all sales. Cars, computers, clothing even. Nobody wants us to know the actual cost and it seems the more demand there is for one product or brand name, the higher the price.
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630141 - 01/20/09 06:07 AM Re: True Piano Values in this economy
88Key_PianoPlayer Offline
1000 Post Club Member

Registered: 02/02/02
Posts: 1906
Loc: El Cajon, CA
" 'I would love to be able to go onto a stores website and get a realistic price for a new piano. What is it about pianos that makes this impossible?'

I know what you mean. I think this is a factor in all sales. Cars, computers, clothing even. Nobody wants us to know the actual cost and it seems the more demand there is for one product or brand name, the higher the price."

I'm in the same club. I like to know the "real" prices of things. (For example what would the cost (not including shipping, labor, tools, tax, etc) to a tier 1 factory for the raw materials used to make the parts that are in turn used in making one of their concert grands?)
I kinda wish the retail prices were set more reasonably close to the cost-of-raw-materials prices... like maybe 25-50%, tops 100% more than the cost of the raw materials, plus at-cost overhead (shipping the piano to the store, etc... i'm not involved in the industry and don't know what all goes into getting a piano to market so I can't comment further.)

So using the cost-of-raw-materials-to-factory-making-components mode, what would be a typical markup by the time the piano gets to the store floor?
_________________________
Associate Member - Piano Technicians Guild
1950 (#144211) Baldwin Hamilton
1956 (#167714) Baldwin Hamilton
You can right-click my avatar for an option to view a larger version.

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#630142 - 01/20/09 01:31 PM Re: True Piano Values in this economy
Marty Flinn Offline
2000 Post Club Member

Registered: 11/25/06
Posts: 2604
Jennifer and I spent a lot of time on the section in our book related to prices and piano values. We have charted representitive samples going back several decades. We work in a large store for a company that has five large stores. We do a respectible volume in used instruments in all price points.

Yes, business is slow for everyone in retail. We are fortunate to be holding our own in our area. Used pianos continue to sell. Many/most continue to sell for more than they did originally if they are over ten years old.

We have just gotten wind of a material price increase on new Yamaha effective 2-1.

Folks we talk to are desparate to transfer the falling housing prices to our industry. This is just not happening on wholesale pricing and must not on the retail side if businesses are to survive. Most of this talk is just hearsay and has no basis on fact.

New piano prices are doubling at between 12-15 years. This pulls the values/prices of used right along with it.

I just re-read this thread from the top. At the beginning there were a few posts pushing the thought that there is a conspiracy among retailers to dis and devalue used in favor of new piano sales. This has never been my experience. I have 35 years in retail, for several companies, in over a dozen locations. We always stocked and sold used pianos. Many came from trade-ins, some from outright buys. Profit margins and consequently commissions were always higher on used than on new.

I sit here this morning with 125 pianos on the store with 22 of them being used. Nearly all of them are priced (and will sell for) more than they sold for when new.

I have heard and read the statistic several times that for every new piano sold, four used pianos change hands. This was before Ebay and Craig's list. Internet advertising of used pianos may have only supplanted previous ads in the Penny Saver or classified sections in the newspapers.

One thing is certain. The market for truly rebuilt low to medium line grands ie. Vose, Chickering, Knabe etc. was gobbled up and eclipsed back in the 1970's by inexpensive new black shiny grands from Korea; today from China.

How can one doubt the continuing value in used pianos when container after container load of gray market Yamahas and Kawais are brought in and sold for much more than they originally did?

The cost to manufacture a product is much more than the sum of the costs of the raw materials. I don't understand how that information could possibly be relevant to a potential end-user customer for that product. That's like trying to deduce what the selling price should be for a Mercedes S class sedan from the cost of the steel in the frame.

Gotta wonder about musings like, "I kinda wish the retail prices were set more reasonably close to the cost-of-raw-materials prices." What the ....?
_________________________
Co-Author of The Complete Idiot's Guide To Buying A Piano. A "must read" before you shop.
Work for west coast dealer for Yamaha, Schimmel, Bosendorfer, Wm. Knabe.

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#630143 - 01/20/09 03:29 PM Re: True Piano Values in this economy
Jerry Groot RPT Offline
6000 Post Club Member

Registered: 11/07/07
Posts: 6828
Loc: Grand Rapids Michigan
Great response Marty. Thanks for chiming in on it!
_________________________
Jerry Groot RPT
Piano Technicians Guild
Grand Rapids, Michigan
www.grootpiano.com

We love to play BF2.

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#630144 - 01/20/09 03:34 PM Re: True Piano Values in this economy
portmanteau Offline
Full Member

Registered: 08/24/08
Posts: 76
 Quote:
Originally posted by Marty Flinn:

Gotta wonder about musings like, "I kinda wish the retail prices were set more reasonably close to the cost-of-raw-materials prices." What the ....? [/b]
Are you referring to my post? I'm not sure why people keep mentioning material cost in reference to
it. I thought it was pretty clear that I was discussing retail price. Why would I, as a piano buyer,
care about a builder's costs?

My original comment was in reply to a concern about people being misinformed by reading blogs and
crag's list and such. Yet many published prices on new pianos are so far from reality as to be
meaningless. This is the first item I've ever considered buying that I had to buy a book just to
find its price. With differences like that a customer should be skeptical, and if dealers lack credibly
it is because of the perpetuation of those practices.

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#630145 - 01/20/09 03:45 PM Re: True Piano Values in this economy
cardguy Offline
500 Post Club Member

Registered: 12/17/08
Posts: 977
Hey Guys,

I'm a non-professional potential customer eaves dropping on your very informative discussion. Bear in mind we're in an deflationary world now. Prices are dropping on almost everything. This in some sense is great for the consumer of course, but it's a huge detriment to the seller, chiefly because the potential buyer says to himself, well this widget is selling at a good price, but if I wait til next month it might be even cheaper...

I'm a case in point. I see no reason to be in a hurry while prices continue to fall..I did notice that Steinway has gone through with their price increase, but I'm betting it won't hold...

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#630146 - 01/20/09 04:13 PM Re: True Piano Values in this economy
Marty Flinn Offline
2000 Post Club Member

Registered: 11/25/06
Posts: 2604
My reference was to 88Key just before my post. A direct quote.
_________________________
Co-Author of The Complete Idiot's Guide To Buying A Piano. A "must read" before you shop.
Work for west coast dealer for Yamaha, Schimmel, Bosendorfer, Wm. Knabe.

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#630147 - 01/20/09 05:02 PM Re: True Piano Values in this economy
portmanteau Offline
Full Member

Registered: 08/24/08
Posts: 76
 Quote:
Originally posted by Marty Flinn:
My reference was to 88Key just before my post. A direct quote. [/b]
I see now. Sorry, I misunderstood you.

On a different note, currency exchange rates have been volatile recently. Has anyone seen an impact on piano prices?

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