In 1976, David Schecter opened Schecter Guitar Research, a repair shop in Van Nuys, California. The modest repair shop manufactured replacement guitar necks and bodies, complete pickup assemblies, bridges, pickguards, tuners, knobs, potentiometers, and miscellaneous other guitar parts. Eventually, Schecter Guitar Research offered every part needed to build a complete guitar. It supplied parts to big guitar manufacturers such as Fender and Gibson and to custom repair shops that were building complete guitars out of Schecter parts. By the late 1970's Schecter offered more than 400 guitar parts, but did not offer any finished instruments.
In 1979, Schecter offered for the first time its own fully-assembled electric guitars. These guitars were custom shop models based on Fender designs. They were considered to be very high quality and very expensive, and were sold only by twenty retailers across the United States.
In September 1979, Alan Rogan, then guitar tech for Pete Townshend of The Who, picked up a custom shop Schecter guitar. It was a Fender Telecaster-style guitar with two humbucking pickups and a Gibson Les Paul-style pickup selector. Townshend immediately fell in love with it, and it became his main stage guitar. He later had several similar instruments built from Schecter parts and assembled by Schecter and U.K.-based guitar maker Roger Giffin. Townshend last used a Schecter on stage at The Who's 1988 appearance at the BPI Awards Show, although Simon Townshend, Pete's brother and part of The Who's touring band since 2002, often plays one of these guitars during Who concerts.
In 1980, Mark Knopfler of Dire Straits used Schecter Stratocaster-style guitars to record the band's third album, Making Movies. Mark Knopfler has owned many Schecter guitars, including one finished in Candy Apple Red with a 21-fret maple neck/fretboard without dot markers, white pickguard, gold-plated hardware, master volume and tone controls. This instrument was his main guitar for live and studio use until 1987. In 2004 one of his Schecters, a Stratocaster-style guitar with a tobacco sunburst finish, was sold at an auction for over $50,000, the highest amount ever paid for a Schecter guitar.