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How are Hig-End Speakers Priced?

I recently (early Feb 2012) purchased a pair of Model 61 Human Speakers, intending to build a small office system with them. I've been listening to them through my main system for a few days now, while breaking them in. These were purchased directly from the builder/designer; my cost was only $675, delivered to my door.

I am so very impressed with the build quality of these small speakers and the quality of the music emanating from them (even though they are not yet fully broken in). I'm honestly surprised they are as inexpensive as they are, and have begun wondering how high-end speakers are priced.

The speakers are manufactured in the Northeast US, and (so far as I know) the builder/designer doesn't advertise and doesn't attend trade shows. The speakers are built with only one pair of binding terminals, two hand-built drivers, and a very simple 1st-order crossover using a design I believe is refined from an 1970's-era design. I'm not sure how much the designer is actively pursuing R&D currently.

I'm wondering if there is a formula that speaker manufacturers generally use when designing/pricing their products. For example, does a manufacturer target a price point, and then decide to follow an "industry-standard" formula like (say) 15% for R&D, 15% for materials, 15% for manufacturing/assembly, 15% for marketing, 15% for distribution, 15% for manufacturer's profit, and balance for seller's profit? Certainly, eliminating (or reducing) one or more of the above categories could yield a speaker that is much less expensive than the price point it was designed for.

Any thoughts?
rx7audio

Showing 4 responses by rx7audio

rx7audio OP
24 posts
 
Thanks, all. It's been very enlightening to read your perspectives. Some of you have provided great insight—and hilarious entertainment! Thanks again.

Best,

Rx7audio
rx7audio OP
24 posts
 
Jmcgrogan2, I'm one of those people who, with most things, characteristically buys once and keeps "forever"—at least, this has been the case with me with respect to audio ever since my first several years in this hobby in college—so resale value means relatively little to me. However, I do appreciate your point. The fact is, when I did my initial Google search in April 2007 and stumbled upon Human Speakers, there really wasn't much I could locate on the www about the company. And today, there is still very little there. By the way, after several e-mail exchanges with the designer/builder/owner back then, I was intending to make a purchase, but then life for me suddenly got extremely complicated!

Tpreaves, my percentages were completely made up to help illustrate what I was asking. I was hoping to learn some *real* percentages (if they actually exist) from knowledgeable A'goners, so I might impute the *real* value of my speakers.
rx7audio OP
24 posts
 
I wish there were a "like" button for individual posts on Audiogon forums.
rx7audio OP
24 posts
 
I didn't know this thread was still alive. (I'm not receiving e-mail notices.)

Here is a bit of my perspective: I returned home from work rather late last evening, a bit worn out by some projects I've been struggling with. I turned on my DMA-90 to let it warm up while I watched the late-night news. (I had left my Icon and DMC-12 on from my listening session the previous night.) A short while later I was thoroughly enjoying cuts from Yellowjackets' "Live Wires", Joshua Redman's "Wish", Lyle Lovett's "Joshua Judges Ruth", Rickie Lee Jones' "Pirates", Duke Ellington & John Coltrane, and John Coltrane & Johnny Hartman. I had the volume set at twelve o'clock! The music was beautiful.

I had thought I would need to spend three-to-five thousand dollars on a pair of stand-mount speakers to have something commensurate with my main system. (And the ATC's I spent some time with a few months ago certainly satisfied, even though they thirsted for a bit more power than my DMA-90 could muster.) However, I am so pleasantly surprised to be enjoying my music through these relatively inexpensive Human Speakers as much as I am. The music is detailed and fast and involving and, um, musical—whether at lowish SPL's or highish!

Now, I don't have "golden ears", and my listening room—my family room—isn't treated with audiophile sound panels, etc., and I haven't invested in special power cords, etc. But I do attend a fair bit of live music performances, and I can absolutely appreciate the quality of music emanating from these small, inexpensive speakers. The live cuts on the above CD's sound very good, indeed.

I can't help but believe that if the designer/builder of these speakers was more "conventional" with respect to marketing, etc., these small speakers would sell for a good deal more than they do. Oh, God! I really hope he doesn't read this!

rx7audio
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