Pulling strings

Using software and hard cash, a young entrepreneur plucks himself a tidy profit flipping vintage guitars on the Internet.
By David Bailey

 

Dustin Miller met his man in a cramped bathroom inside the El Paso, Texas, airport — two guys and a big guitar in one tiny stall. He didn’t care what people in adjacent stalls thought as he oohed and ahhed while examining the man’s 1957 Fender Stratocaster. This was business. Finally, his inspection complete, Miller fished $9,500 in crisp bills from his jeans’ pocket and closed the deal. “I went out one side of the bathroom. He went out the other.”

The guitar had been listed for $15,000 on Craigslist only the day before, and Miller called the owner the minute he saw it. Estimating the instrument was worth as much as $25,000, Miller offered $8,500. “He says, ‘How about 11?’ I say, ‘How about nine-five?’ He says, ‘No, I’m not going down below 11.’ I say, ‘All right, call me if you change your mind.’” Miller, determined not to let $1,500 spoil the deal, jumped in his car and headed to the bank. “I’m in line at the bank when the phone in my pocket rings, and he says, ‘Yeah, let’s do it for nine-five.’ So I book a plane for El Paso.” He later sold the vintage Strat for $17,500.

You could say the guitar has always led Miller down a unique path. Long before the Texas rendezvous, Miller would skip school to hang out at Don’s Music City in his hometown of Burlington and “borrow” his mom’s pickup — though he wasn’t old enough to have a driver license — to hear local bar bands play until the wee hours of the morning. Miller describes his first vintage guitar purchase, back in high school, with the affection others reserve for first dates: “It was a 1978 Fender Precision Bass, canary yellow with a black pick guard and a maple neck. I realized I was holding a time machine in my hands. Where had it been? How many girlfriends had it helped to lose? How many bars had it played in?”

No, it didn’t take long for Dustin Miller to find his passion. “At 14 or 15, I remember walking into this bar and seeing this stage and lights and soundboard and saying, ‘Oh my gosh, this is awesome. This is what I want to do.’” After dropping out of high school to learn how to build and repair string instruments, Miller, now 25, realized his dream. He not only made a living repairing guitars and then selling them on the Internet, but he earned decent money — enough to buy 5 acres and a cabin in the woods near Chapel Hill.

Miller would have you believe he’s an accidental entrepreneur — that his success comes from a series of uncanny coincidences beginning with his being born a lefty. But don’t believe him. Skills culled from a tumultuous childhood and a business acumen whetted by academia — abetted by eBay, Craigslist and cool tools of the e-entrepreneur — gave him what he needed to turn his passion into some serious money.

 

Impetuous as the El Paso deal sounds, it was underpinned by methodology derived from Miller’s degree from the Bryan School of Business and Economics at UNC Greensboro. “One of my teachers pulled me aside and started talking to me about investment theory,” he says. The prof explained that if someone pays $300 for something and flips it for 30% and does it 39 more times, preserving principal and interest, that person ends up with a compounded sum of $10.8 million. Miller decided he needed at least a 17% profit margin. “If I couldn’t buy it at a certain price, I just wouldn’t do it.”

Miller loved the guitar long before he thought of turning it into a profession. His passion was ignited by a Junior Brown appearance on Country Music Television, featuring the cowboy-hatted virtuoso playing his signature “guit-steel” — a double-neck steel guitar. Afterward, he told his mom, Cindy Riley, that he had to learn to play the guitar. His instructor immediately noticed that Miller held the neck with his right hand — a natural lefty’s grip. Instead of telling him to switch hands, his teacher restrung the guitar. “There was this obstacle I had to overcome, and that made me want to play even more.”

Because he was left-handed, he had to learn to take guitars apart and restring them backward. “I started swapping parts, experimenting, refinishing guitars and sometimes breaking them. And then when I found out that Paul McCartney is left-handed, Jimi Hendrix is left-handed, Kurt Cobain is left-handed — all these guys — then you start to align yourself with this I’m-meant-to-do-this, destiny sort of thing.”

His obsession with tinkering was championed by his dad, Donald Miller, a former Navy sailor who had battled drugs and alcohol for years. His father’s substance abuse added to an already tumultuous childhood. His parents were twice married and twice divorced — both times to and from each other. “I had a pretty bad family situation, back and forth,” Miller says. He recalls his father’s occasional “yearlong stints of sobriety” with fondness and understands his frustration at being underemployed. “Overnight, he went from being this guy who had pay-grade status as a Navy petty officer to flipping burgers in my grandmother’s restaurant.”

But it was one of these underemployed jobs that cemented Miller and his father’s relationship — and indirectly pushed the son toward his future vocation. The work included disassembling old signs in the Millers’ backyard. “So I’m maybe 10 or 11, and he bought me a chisel and blowtorch and taught me how to take the batteries and metal and lights off of them. It was awesome, and we got to spend some good time together.”

Not enough time. His dad lost his war against drugs and alcohol, dying in 2009. “He had this expectation that he should be further along in life, and he was not. I definitely put that pressure on myself to constantly push myself and be better and better and better.”

 

Miller became so obsessed with fiddling and playing with guitars that he quit high school at 17, finished his junior and senior years in four months online and moved to Phoenix to learn the demanding craft of building and repairing string instruments at the Roberto-Venn School of Luthiery. After completing his degree there he returned to Burlington, opened a guitar shop in nearby Gibsonville, turned a modest profit and then closed it to go to college alongside his former classmates. “I never missed a beat. It was like I was able to jump through time.”

Miller had continued collecting antique guitars in Arizona. Though he sold a few in his Gibsonville shop, it was college that taught him the discipline and methodology to turn his passion into a real business. After Alamance Community College, he enrolled at UNC-G and began working on a bachelor’s in marketing, a subject he loved. “It was analytical. It was borderline scientific. It was experimental. If I could figure out who someone was at their core, I could sell them things.” For the first time, school related to life.

That was in 2007, about the same time he was realizing that vintage guitars were becoming a hot commodity. Starting with only $300, he bought and sold one guitar after another, each at a marginal profit. He turned his newly sharpened marketing eye on baby boomers — bored, affluent and ready to recapture a little of their glory days by strumming the same kind of guitar Clapton plays. Then Craigslist came along, providing Miller the forum for picking up guitars cheaply and, after repairing and marketing them, flipping them for a profit. He quickly learned that it took hot pursuit and cold cash to win the prize online.

“Everybody wanted to trade, and no one had cash,” he says. A guitar would be posted, and “someone would come to them and say, ‘I have a vacuum cleaner and a bag of old toenails.’ But here I was willing to come up with cash. It might not have been what they wanted, but it was cash.” He also invested in a “Web-crawler” application called Notifier. Scanning any website as often as he specified, the program notified Miller as soon as certain keywords popped up — Fender, Martin or Gibson, for instance. “I’d be the first to call, and they would always go, ‘Wow, I just listed it.’ It cost me $18, and that $18 has made me thousands.” He grossed $4,000 to $6,000 in a good month.

But that was then. “The ride is over,” he says. A combination of factors — inflation, market saturation and competition, not to mention the economic downturn — persuaded him earlier this year to unload his inventory and put the proceeds into real estate. “I started all of this out as a $300 pipe [dream]. Now, I’m buying a house with it. To me, it’s just a perfect way to end a chapter and move on to the next thing.”

What that is remains to be seen. Another business, for sure, maybe real estate. One thing is certain: “Speculating on what two pieces of board and six strings are worth? I don’t want to do that anymore.” But he’s never far from a guitar, still keeping his “body and soul” together in a Motown cover band that plays at corporate events.