Is it possible for a high end manufacturer to overprice their goods?

@mitch2  An excellent question. I think it is possible that a speaker can do great dynamics and drive and, when called upon, can also excel at detail and nuance. I recently listened to a new pair of Wilson Alexx V’s, that seemed to fit that bill, albeit at a price.

@jl35 That business model is common. Question is whether a product in this hobby can be so high priced, that the result is zero sales? Or,not enough sales to justify the product and its cost to come to market?
I do wonder if these questions even occur to these folks?

@labguy while I think your math is not quite correct for this particular speaker, as it leaves out a number of factors, including the R&D costs, shipping, advertising, dealer mark up etc., I do think that it is likely that there is a very significant profit in the Orion. Not saying there is anything wrong in that, particularly if the consumer rewards the company with multiple sales. Question in my OP, and I think it bears repeating here, is this…is there a price to value ratio in this hobby that will make the hobbyist say, enough is enough, that’s just not worth it…and therefore..pass on the sale? Clearly, this price has a differing number for each consumer, but I do wonder where it becomes more than thin air for all consumers in this hobby?

So, is the new Orion with its design at that level, or is it not even close?

@steakster While you are correct in alerting folks to the many costs incurred by manufacturers, i also question where the process is when it comes to a speaker ( maybe any speaker/ high end product at this price point) that comes in at a consumer price that equates to a very impressive new car ( or insert any number of other far more sophisticated and complex products here). While the argument that economies of scale come into place, this argument can surely only go so far?

OTOH, all of this is relative to one’s disposable income, and given that, I do question why this speaker ( or others of its ilk) are priced at just north of $130K...and not multiples of this price? Do these manufacturer’s ( or their dealer network) actually know that this price is in fact attainable--while multiples of this price is not?? If so, how??

Part of my OP came from a recent discussion that I had with a very very well heeled friend who can easily afford anything in high end audio. To this gent, a multi million dollar system is no strain on the pocketbook. What interested me was his comment that he will not spend any money on a product that he sees as having a minimum value to cost ratio. We discussed several speakers ( not Rockport’s, and certainly not the Orion), but others that we all know and would respect, but few here can acquire. My friend commented that one of the reasons he is able to actually afford all of these products is also because he has the discriminatory ability to not get ’taken’, as he put it. Just to add another perspective to the narrative here.

Don’t get me wrong, this gent has a system that most would envy, but it has been put together with some considerable thought, and he always bought used or at a considerable discount, as far as I know.

@8th-note Some excellent points. Which is why I asked the OP, when is the price simply too high? Perhaps the answer is at a far higher price point than has been entertained by the industry so far. Question becomes what that price point is..and for what product? This led to my thread about some very pricey cables on the cable forum..and which segues into this thread.

@whart while it is true to say I have not heard the Orion speakers, I doubt many have, I don’t think this is a requirement to have an opinion on my OP. Even if these speakers are as RH reported in his review in The Absolute Sound, with all of the hyperbole being justified, the question can still be asked, and that is…at what price ( to some there may not be a price, although I have a somewhat hard time believing this, given the size and impression that the speaker makes) is a product priced out of the market…and the result will be an absolute failure for the manufacturer and dealer network. For example, if we use the Orion again, the price is set at $133k…which to most folks is not going to be palatable. But, and here’s the thing, what if the same speaker was priced at say ten times this number…does that do the trick and now result in essentially zero sales, or is it twenty times ( hopefully by now you are getting my drift). Or, is it that there is someone out there that just has to have this product..and the price (any price) is irrelevant.
My point is can the ability of the product ( in this case, my example of the Orion, as it had a rave up review) always justify its pricing, regardless of whatever that price is? A matter of value, but is it to some?

This industry may be the exception to the rule, but in most sales based industries, if one prices the product too high, the result is simply a no sale situation. I believe this applies to luxury items, but perhaps there are exceptions to this rule…and maybe high end gear falls under that category. Do we believe this?  
Certainly it would seem that there are a number of folks in the high end industry that do.

While I think it is interesting and instructive to affirm the many costs that go into every product, I think this has little to do with the cost to acceptance factor that is in my OP.

The question of whether something can be overpriced in this hobby to the point that all buyers say..no mas; is what I am questioning here. The example in my OP is of a speaker that has just received an absolute rave review by RH in the current issue of the Absolute Sound. I picked this example for a couple of reasons...1) it is priced at $133K, which only a few years back was almost unheard of for a piece of audio gear, and yet today, as other members have pointed out, is becoming more and more common and 2) It is a somewhat diminutive design that on the face of it does not seem to offer the glitz that a lot of ultra high end buyers are looking for...because they use their eyes as more of a factor than their ears.

To that, I noticed in the new issue of Stereophile, there is a reply to a letter by a reader from Jim Austin, stating the following: " the run-up in prices at the extreme high end is astonishing and concerning. It’s also logical. .......There’s a danger this could lead to too much focus on products for the wealthy and not enough for those of more moderate means--that is to say, most audiophiles. It could even cause the industry to turn towards fancy audiophile jewelry at the cost of sonics- because how many of those shopping at such prices are serious, critical, obsessed audiophiles?"

He then states:" Fortunately, though, most companies selling to that market seem to be doing it in a serious, uncynical way, exploring what can be done in engineering terms with such large budgets. Here's hoping the trickle down accelerates and that companies drunk on luxury high end cash don't forget about the rest of us."

While this may be generally true, there are certainly many companies that may not be complying with this...see my thread on the cable forum as an example.

@henry53 while the example you use is unfamiliar to me, I would not want to be the guy who buys this clock and then needs to re-sell it.

Here’s the thing, I don’t think we are actually discussing the value of something to someone, particularly when it comes to some high end gear, more about what is a price that even the most well heeled say… “enough is enough”. Some folks may believe that there is no price that will bring about this reaction, the question in my OP was dealing with that. Certainly, if we are to believe Dan D’Agostino, he has not gotten push back from his customers…yet. But my point is more along the lines of where does that become a problem for these manufacturers…like Rockport and D’Ag, or is it that they can push the prices up to multiples of what they currently are..and still see healthy interest and sales!

There is definitely a psychological factor in sales of any high priced and therefore exclusive product. In high end audio, this is absolutely a factor as well.

Probably we have all heard of the dealer rep who has told the manufacturer that their price structure is too low, in order to have a product that has a greater appeal to their consumer base who equate price with quality and ability.

I think this circumstance is most likely getting more popular in high end audio than ever. Which is a somewhat vicious cycle, as it tends to price out those but the most ardent and well heeled hobbyists. Certainly, it is not a good thing, at least IMHO, for the continued health of the industry; as it certainly puts off the young music lover who now looks at high end audio as purely an ’elitist’ endeavor! 

@sokogear  While there certainly is a marketing reason behind this strategy ( the halo effect), I believe it is also self- defeating in the long run. For the reason I stated in my last paragraph above. 

@james633 Sure, there are a number of more ’entry level’ products for the beginner audiophile, but this is not really the issue. When I first started in this hobby ( decades ago), as a young lad, I was struck by the fact that I could get into the hobby and the cost was similar to what I would have to pay at any large department store, who wanted to sell me an all-in-one off the shelf system ( with very limited ability and quality). BUT, and here’s the thing, I also noticed that in order to step up in the hierarchy of top-flite gear towards the top, I did not have to essentially pay sums that equated to a new house! (like today). That difference ( which I see as Major!) is what I believe is going to put-off most new and young potential hobbyists.

The ‘Nautilus’ from B&W was indeed a statement piece, and if you ever heard it, it was definitely an eye-opener. If I remember, it also required multiple amps for each driver section, considerably driving up the price. Not sure how many were sold, but at the time, it probably had two things going against it, the price and the WAF!

Therefore,the price may not have been the only factor against it, the aesthetics could have worked to minimize sales as well.

Unfortunately, in this thread, I do think folks are maybe confusing ‘ over priced’, which one can say attributes to a number of products, with a price that is not only ‘over priced’, but also unattainable! This is more along the lines of my OP question. 
IOW, is there a price in high end that is unattainable in this current market? If so, and we would have to assume that there should be, how do most of these manufacturers know what that price is? 

@prof   +1

Question is...do these guys even sell just a few a year?? Perhaps just selling one of the piece is enough???

@prof   again, +1

@curtdr  The question is not whether a marketing plan exists that banks on 'over pricing' gear to sell at the high end, but rather if it is possible that such a plan might ultimately cause buyer ' exhaustion'? Resulting in a major reduction in sales to a final conclusion of zero sales? This would seem to me to be highly probable, since the upward spiral in pricing is getting more aggressive. But, perhaps we have just seen the tip of the iceberg here, who knows? 

@cd318  Quite a difference between Harbeth's and JBL L100's!! Presumably your sister was primarily into rock, which might explain the preference for JBL's.

@jl35  You ask a good question, how much do consumers in the very high price range for some of this audio gear concern themselves about re-sale value? I suspect little, because most of this gear drops heavily in value once used. There are numerous examples of high $$ speakers that are not easy to sell at 70% of new- once hitting the used market, regardless of age! 

OTOH, while this is an interesting point, i am not sure at what price point this relates to my OP, because there are also examples of far less expensive gear that also fails to hold value, and naturally, there are a few examples of gear that has actually risen in value ( although a much much smaller category).Albeit, I can't think of a ultra pricey speaker system that has risen in value.

While the news about ARC going into receivership is not really a speaker forum subject, it does possibly connect to this thread.

About a year or so ago, I was at an ARC dealers premier of their new Reference 80s amp. While I was there, the ARC rep was discussing with the attendees some of ARC’s future product line up. It was to include a new flagship model with, if I remember, about 64+ KT150 tubes and slated to be a replacement to the Ref 750SE model. I asked the rep two questions, one was how much heat this beast would give off, and two…how expensive? The rep told me that he didn’t know about the heat, which I thought could be a considerable problem in a hot climate, and that the price was not yet set, but definitely more expensive than the Ref 750 SE! Many attendees said nothing, but the look on their faces said it all.. and it was obvious to all that this new flagship would be a VERY hard sell.

@kokakolia While my thread was asking about the very top end pricing in audio, I am interested in your points about the area below high end...commonly called mid-fi, or even mass produced low end gear. I think today, unlike in years past, there are some quite good low priced components that do give one a ’taste’ of what high end can accomplish, ( which is what i think you are pointing out). However, while this is encouraging for folk who cannot budget for what is now becoming very serious $$ for a lot of this gear, the reality of the situation is...and I hate to say this, that one typically does get what one pays for in this hobby in SQ ( in most instances). IF..again IF, you have a chance to listen to what some of this gear can sound like, particularly when set up properly in a proper dedicated acoustic space, I feel certain that you will hear what it is that the top high end companies provide from a SQ perspective. Now my question of whether the $$ asked can be raised to such a point that even the most well-heeled audiophile says...sorry, too expensive and I pass regardless of the ability, still applies.

I would agree that rock does seem to hold a certain challenge to many high end speakers, regardless of the price. Most of the time, I don’t hear it played back well on speakers that are great for jazz or classical. Question becomes as to whether there is truly a certain type of speaker that does all things best…including music like RAP? 
The JBL’s mentioned would be preferable to a lot of speakers for rock,at and above their price range, but for other types of music and specifically something that requires an intimate presentation, not so much. 
 

@patrickwilison   Clearly 'overpriced' is a relative term. But, I think we are not so much taking about an 'overpriced' item here, as one that is so costly that even the most well heeled a'phile will balk at the price...

Therefore, my OP was questioning whether the price asked by a high end manufacturer can actually ever be too high for them to sell any of the product that is touted as 'SOTA'?? 

Folks, if we look at the pricing points in high end, it seems if we take speakers as an example, the low price points for high end speakers seem to hover around $500 to $1000 ( Maggies, some Polks etc.,) and the ceiling seems to be around $1M or so, ( for Wilson Wamm's and a few others). At the ceiling point, we do not see speakers that are priced in the multi millions. ( $2M or more), yet! But, i wonder why, do these very same manufacturer's know what the threshold is to their maximum attainable price...or is it something else? 

One of the common themes of this thread are posts that state that high end is 'over priced'. While we may believe that, perhaps it is not over priced and is in fact priced at a point that the various vendors know their goods will sell. Since the old adage that something is only worth what someone is willing to pay for it is usually 100% correct; maybe the folks who are saying most (all) high end is overpriced-- are in fact incorrect?