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

@grislybutter : Enlighten me! I am dumb, you are so smart. Thank goodness you are spreading your vast knowledge in here. I am honored 

@thyname i will start my own post about it

I go to AXPONA every year and if you hear enough rooms you realize that some of these prices are not based on any cost formula. Made up out of thin air. I look at the Estelon speakers and they are a beautiful work of art and sound and I can see a wealthy person buying in. Some of the others not so much. For my money the Dynaudio Confidence 50 is all you could possibly want for sound. That room was my favorite. The jewelry aspect can't be denied at a certain price point.

He is such a nice fella. 

Oh great, fantastic! I will read it with great passion and interest. Hopefully you get your problem solved and your questions answered. Best of luck

@yogiboy Actually, bears will poop anywhere, not just in the woods. 

So, yes, overpriced equipment abounds.   More so with tweaks and cables where the cost to sales ratio can be phenomenally large.  

The Orion speaker was costly to design and manufacture with home built drivers yet.  Whether it is sonically worth the $133K price is unknown, but it is an expensive audio product to produce from design to finish.  

@dean_palmer 100%  @jimmyblues1959  Nope  I have had the pleasure of hearing a $1 million+ audio system and it blew away any other system I've heard.  My own system(s) cost me $5K and about $60K, the latter in a $150K custom listening room.  The latter permits lesser cost speakers to sound like expensive speakers.  I plan on upgrading from my currently valued $2500 full range Focuses to a superior speaker for reasons of greater listening area (e.g Von Scweikert) and ambiance/resolution which will cost me somewhere between $35K and $180K.  I am satisfied for now but want to share with more than one or two people the sound of the center seat.  

There are some brands of high end, sometimes costly speakers which I do not find musically involving-Magico (heard 18+ A, S and Q series), Wilson (smaller the better), YG Acoustics, Vivid, Vandersteen, etc.  I heard several Rockports and liked them.  Still, I want to audition speakers in my room with my equipment to determine whether they will be worth the expense.   I'm certain the the $180K VS Ultra 7s would be wonderful (I've heard the 9 and 11 and my best friend's VR35 export) but my budget does not allow that and at 67, I may be too old when I can afford it. 

My primary concern in purchasing high end equipment/speakers is that the company goes out of business and no repairs can be made.  Especially with expensive equipment.  

Not so surprisingly a lot of businesses fail because they didn't do basic homework on the cost of doing business like say opening a restaurant and not figuring out things like how much money I have to make just to cover all the costs at the end of the month.  You would be surprised at how many simply don't do the math so when designing products with a limited economic audience, hopefully, you do some statistical analysis, and get a realistic idea of how many people are out there who can afford it but would purchase it.  Though, When Dave Wilson started his speaker company with the Watt, he thought he would sell a few, 20- 30(I have the review somewhere).  His business was recordings, records, but he ended up with 250 orders the first year and that was a very expensive item for what it did at the time.

bache

@mihorn Try to find the you best speakers , just see small bookshelf , what s price ? more than $ 100, 000 ?

I only make 1 model bookshelf speaker ($9k/pair) now. Is it overpriced? Please remember my WT speakers are purist/cleanest sounding, closest to the original music, and the only no veil natural sound speaker in the world and 150 years of audio history. Alex/Wavetouch audio

Very few of these extremely priced pieces of equipment are sold relative to the rest. Egos Drive most of these sales. Sitting in a room with extremely high priced equipment is hard to resist for those who have the funds, and many people do have the funds for these expenditures. Many of them are very gullible souls.

The more seasoned and experienced listeners who really know what they’re doing can get the same Quality, and most often better, for considerably less.

YouTube channels are culprits in promoting this exceptionally high priced gear, which serves to only stretch prices in a manufacturers lower end models.

Even the Rich need to hold someone’s hand and there’s plenty of outreached hands. 

Lots and lots of overpriced gear out in the market. But hey if it sounds good to you and you see the value that is all that matters. Some would say I paid too much for my set-up. If they only knew the deals I got, they would be shocked. 

It is your money and life. 

The "market distortion" aspect as suggested by @hilde45 has merit in my opinion. Here’s this audio market where everyone plays nicely and introduces "new products or new versions" with incremental price increases of, say 10%-20%. Then, out of nowhere some manufacturer has the audacity to take that metric and increase it by a factor of 2 over previous "norms". This presents a number of possibilities for other manufacturers. The "sticker shock" of their top end products is has been obliterated by another company (thank you!) so their products appear to be a more reasonable cost/performance value. So, they would feel justified in raising the price, not just 20%, but 40% and still be very much in line with the perception of high performance AND high value. So, yes, a market distortion could follow the introduction of steep pricing into the marketplace.

A little about the luxury market: Centi-millionaires, traditionally, don’t loose sleep agonizing over whether or not they received strong price/performance when making a purchase.. They are primarily concerned with owning something that really IS something worth owning. Sure, they’ll brag about the "guts" or "workmanship", but their true motivators may be the intangibles that can’t be measured. What is the prestige in owning the best of the best actually worth? And, if it IS expensive, wouldn’t it be viewed as a badge of honor rather than a shockingly high-priced trophy?

Customers are also different. Many who engage in the ultra highend of a product category are true enthusiasts who love what they are doing and appreciate every nuiance their extraordinarily expense product does for THEM. They ARE getting great value from something they have heavily invested in.

Back to the marketing considerations, I think we could look at various price ranges to see if a significant and meaningful gap exists whereby a segment of the buying public is being ignored, or has been abandoned altogether. As a result of that 2x product introduction, is there still a healthy market for legitimate high-value products at 1/2 that price, and somewhere in between? IF that 2x product negatively impacted the viability and availability of those other (lower) price ranges, then some measurable damage has been done.

I suppose I could purchase a pair of $133,000 speakers if I want to economize a lot elsewhere in our lifestyle... If my wife would let me, of course 😎. She needn't worry. It ain't going to happen. Our values and goals are aligned.

Once said, the comments made by Pope Francis and the criticism of materialistic values is a slippery slope. Consider a $133k or $3k pair of loudspeakers. If you get on his slope then you have to ask, "Why should we enjoy any stereo or hometheater system when there are poor people living in cardboard boxes?" We also would then have to ask, "Who's to decide how much we are allowed to spend, if anything, on loudspeakers?" 

Hopefully Pope Francis is not making the decision. Fancis sounds like he forgot the story of the woman honoring Jesus by pouring expensive perfume on Him. Some of the people in attendance criticized the woman because the perfume could have been sold and the money given to the poor. Jesus rebucked them for numerous reasons. And if I unpack this Gospel story, the economics major in me makes me see that there was a market for the perfume that honored Jesus. This means that somebody developed the perfume because they recognized the demand for expensive perfume. For the reasons cited in the Gospels, Jesus didn't have a problem being honored with expensive perfume. Implicitly, it would seem that Jesus didn't have a problem that there was an expensive perfume and a market for it.

This brings us back to $133k speakers. If there is a market for the attributes the speaker offers, the law of supply and demand dictates that there will be some quantity demanded, that can be zero, by those who have the means. On the supply side, any product is going to have R&D costs that are outside of direct labor and material costs. Then there is also the general and administrative costs (G&A) associated with a product as well as sales and marketing expenses. The R&D, G&A, and S&M can be quite high relative to the direct material and labor cost. The speakers will be priced at the level that maximizes profits.

Bottom line: If you look at only the material cost and direct labor part of a $133k pair of speakers, you will find the speakers over priced. If your look at the full context of a speaker's manufacturing costs, you might or might not find the speakers a fair value at market price. If your want to factor in some moral values about what people should be able to afford, all bets are off.

@waytoomuchstuff 

A little about the luxury market: Centi-millionaires, traditionally, don’t loose sleep agonizing over whether or not they received strong price/performance when making a purchase.. They are primarily concerned with owning something that really IS something worth owning. Sure, they’ll brag about the "guts" or "workmanship", but their true motivators may be the intangibles that can’t be measured. What is the prestige in owning the best of the best actually worth? And, if it IS expensive, wouldn’t it be viewed as a badge of honor rather than a shockingly high-priced trophy?

Very well put. Their motivation by the "intangibles" specifically referenced here place them outside of audiophilia, in my opinion, as their concern is about their power (relative social status) and that is neither about "sound" nor "music." (Nor about their soul, if we channel Pope F.)

we could look at various price ranges to see if a significant and meaningful gap exists whereby a segment of the buying public is being ignored, or has been abandoned altogether. As a result of that 2x product introduction, is there still a healthy market for legitimate high-value products at 1/2 that price, and somewhere in between? IF that 2x product negatively impacted the viability and availability of those other (lower) price ranges, then some measurable damage has been done.

This is really insightful. Let me see if I got the gist: the intrusion of hyperbolic price increases ("game-changer" products and prices) creates a carve-out which damages an existing market segment. That segment has high quality (if a bit more expensive) stuff. They experience a new customer drought. Here, my mind goes to, say, an expensive Hegel H30 amp which at, say, $16k may be just a fantastic amp and an end-game solution for many customers in that aforementioned segment. But now, if enough people are now chasing, say, Gryphon amps, then Hegel has a problem because the carve out is starving them. I hope I am getting that right.

Once said, the comments made by Pope Francis and the criticism of materialistic values is a slippery slope. Consider a $133k or $3k pair of loudspeakers. If you get on his slope then you have to ask, "Why should we enjoy any stereo or hometheater system when there are poor people living in cardboard boxes?" We also would then have to ask, "Who’s to decide how much we are allowed to spend, if anything, on loudspeakers?"

Who's to decide? Are you suggesting that there should be no limits? 

@hilde45

"hyperbolic price increases"

When the "market" determined that a $4 cup of coffee could actually be enthusiastically adopted when the "norm" was 99 cents -- with free refills, it may have been a good example of a game changer? It might be interesting to take a granular approach and determine how consumers prioritized the elements of that $4 cup of coffee at the time: "the coffee"- 99 cents, "being actively involved in the coffee culture"-99 cents, "looking good while I’m drinking coffee"-99 cents, "an affluent, unique experience"- 99 cents, "free wifi" - 4 cents?

Now take those numbers and project a straight line out to 100,000 times that investment ($400k) while removing the word "coffee". Is there some level of consistency in the motiviators?

Last year I heard the just released Burmester 216 and was very impressed with the liquidity and the ease of operation driving a Sonus Faber Lilium. I asked the sales rep. the usual generic questions and $35k was quoted. I thought this an extreme value when considering brand/build quality and near reference SQ. When comparing the Burmester to any Hegel amp(mid fi darlings?) which company is making more profit(%) on a component. Compare the Hegel H30a at $20k? and the Burmester 216. My conservative guess is the the Burmester is at least 3x more costly to produce. Clearly the Burmester is a superior product and represents better value.

The question is whether the Supra expensive product is delivering an outcome that can’t be achieved at a lower expense 

my dress watch from Tiffany has a quartz mechanism that keeps perfect time and requires a 75 dollar battery change every 3 years

the same model with an automatic movement is 4 times the price, requires a 500 dollar overhaul in 5 to seven years and is less accurate

Resale in my quartz is 20 percent cs cs the automatic held its original price

perception of the value does not match the reality.   Same with tubes bs solid state.  We don’t use tubes to make our TVs have a less clear picture that is more natural

@waytoomuchstuff 

Now take those numbers and project a straight line out to 100,000 times that investment ($400k) while removing the word "coffee". Is there some level of consistency in the motiviators?

I guess...yes? This is clearly in your wheel house, so I'm trying to follow out the logic. My guess is that whether the coffee/audio analogy can be extrapolated in this way would depend on empirical psychological factors which someone could study. It sounds like commonsense to me, but the devil would be in the details! ;-)

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! 

It is called a halo effect. It creates buzz and if successful, increases sales of their lower end lines. A loss leader, unless maybe it is a tiny company hoping for a couple home runs.

Rega makes a $40K turntable and KEF makes $230K speakers.

Technology/design trickles down. I think KEF has sold less that 5 pair of them in the US and Rega about 50 or so WW and won't sell it to anyone who will resell it (Not sure how Roy does that).

They looks sweet and I am sure they sound good. Luckily there are lots of good speakers coming out around the $5k mark for the new younger people if they are interested. While I have not heard them speakers from arendal sound, Mo Fi and even the new marten Logan motions are probably all 99% of what most people need. 
 

I added up my system the other day and I somehow have $50k worth of gear. If you would have told me I would own $50k worth of gear I would have laughed and said that would be dumb…. But here I am. So I guess if you have it you have it and if you can afford $133k speakers the price is not an issue. A $5000 purchase might be a bigger stretch for the average family.  

@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.

Two things... it's about margin (profitability) and what the

Market will bear. I once consulted for a fairly high-end, reputable and recognized amplifier manufacturer. They were conducting a market study on a proposed $10k pair of monoblocks. The feedback they received was for the quality of amp they manufacturer, most felt that price was "too low" at the time. They decided to price them at $25k and after bringing them to market, they sold quite well.... That said, sometimes it isn't what the may feel is a fair price, but rather what their customer deems fair and worth the value.

Hilde45,

In a word, yes. That is what freedom, free will, and free markets are all about. I'd ask you what we should be allowed to spend on speakers, but maybe we should keep the moral and political discussions on Twitter, not an audio hobbiest website. 

"Bottom line: If you look at only the material cost and direct labor part of a $133k pair of speakers, you will find the speakers over priced."

This is a problem I and others have had with what we consider trolls on Audiogon. They quote the cost of materials and direct labor-so what? There are many other significant costs associated with equipment, particularly electronics and speakers which result in high costs relative to sales price/margins. The tweaks and cabling are where the margins can be huge and can be highly profitable. R&D generally costs the most to make a successful (sonically and economically) tweak. An SR Master Fuse at $595 sales price costs almost nothing to manufacturer but the R&D and/or luck created a masterpiece Fuse. A $22 Acme Fuse is absolutely a bargain compared to a stock 50 cent fuse. The margins are great but the results can also be great (Fuses saved my EAR 864 from resale as well as my Emotiva XDA-1 highly modified/upgraded DAC). I am neither poor nor very wealthy but at the cost of a "high-priced" tweak with high margins, I improved my system much more than paying for an equipment upgrade.

Again, will anyone address the potential problem of obsolescence/inability to repair due to a manufacturer’s bankruptcy?

P.S. I can afford an EAR 912 and already own(ed0 a $9K DAC (COS Engineering  D1v) and have a $150K listening room but chose musically more satisfying equipment regardless of price.

Daveyf,

interesting I got into speakers around 2002 in college and things were already pretty expensive. The Wilson Sophia came out and I think it was around $12k at least by the time I noticed it.
 

Interestingly as I have made more and more money in my adult life speakers just keep going up equally. By the time I was ready to buy Wilsons from both an interest and from an income standpoint they were on the Sophia 3 and it was $16,700, unless you wanted a different color then it was somehow $19,000???  Then today the Yvette (Sophia successor) is what $28k. So compared to my first engineering job out of school I make 2.6 times more now and Wilson have gone up 2.3 times in price. 
 

it is all pretty crazy to think about. I blame suckers who buy over priced stuff without a proper A/B test. I have no problem with people spending any amount of their money on anything but I don’t believe a lot of things are actually better and are just different. 

 I'd ask you what we should be allowed to spend on speakers, but maybe we should keep the moral and political discussions on Twitter, not an audio hobbiest website.

Sorry to let morality exceed it's appropriate boundaries. We must keep morality contained, or it might take hold. 

Good discussion, guys.

To the OP’s point, I think the answer is "yes" that high end manufacturers CAN overprice their goods. In the cost/performance metric of mere mortals (like us) the math just doesn’t work. And we feel a bit frustrated when folks inject their own value component into the mix that is clearly above our paygrades -- and didn’t ask OUR opinion about whether the sonic (or otherwise) value is there. How dare they!!

"Messaging" is an important element and could negatively impact current and future hobbyists. The question becomes WHERE are those messages being placed and HOW are they effected by them? Or is it just "noise."

I sold decent Hi-fi gear for decades. We had a speaker line whose market positioning statement included “owning 50% market share of speakers over $10k a pair.” When presenting this to customers, the vast majority were shocked that there were speakers over $10k a pair on the market. After allowing them a few seconds to "recover", I’d inject: "You’d be surprised by the number of speakers out there over $100k a pair." The point here is there are still virgin ears out there who can be introduced (properly) to high performance audio -- with an emphasis on sound-for-the-buck.

As @hilde45  suggested: "We must keep morality contained, or it might take hold."

I think there may be a valid (and, useful) point here that, perhaps, we have a higher purpose than being “audiophiles” in the grand scheme of things. I’m sure, more than once, someone (knowing our obsession with high performance audio) has asked our opinions. We’ve straightened people out more than once. Sometimes avoiding disaster (or divorce?). A helping hand (and, brain) can go a long way in separating “noise” from useful information, fact from fiction. As one professional contributor stated (I’m paraphrasing): “A high resolution audio system can be bought for under $5k.”. I agree with that statement provided the person can keep their ego in check.

I’ve spent quite a bit of time identifying elements that connect us and developed some materials to help illustrate the relative group size vs our level of intimacy. We, in this forum, fall into the “Shared Indulgences” group where we share things we are passionate about (music and the stuff that makes it happen). Above that group is a smaller (and, more intimate group) I refer to as “Purposeful Bonds” where there is some level of higher purpose in what we are doing. As you can see, there is the aspect of migration UP where some may seek a higher, more purposeful (and, yes, more ethical) involvement. Above that level is “Heartstrings” where deep friendships can develop as a result, and we become like family. The group below “us” (speaking purely of involvement in audio, not intellectually or other component) is the “Navigating Complexity” group. So, they are there just like us moving about trying to get things done when, all of sudden, we discover we share an interest. So, up the ladder we go. Or, not?

Here’s the link, if you want to check it out. You’ll need to scroll near the bottom to get to the pyramid.

https://youniteusa.com/connections

It’s also been said that "people spend money on what their attention is on." So, keeping this group and it’s influences on high performance audio helps insure the health of the industry -- and, the hobby.

A huge driver of cost at the manufacturing level is "how many". I once talked to a Jaguar engineer and he told me they paid $500 for a set of brakes becasue they bought only100 at a time; Ford paid $50 for the similar set becasue they made 10,000. The cost of scale DOES make a huge difference in price.

Some of the beautiful metalwork I see in amps or speakers I see must cost a ridiculous amount to make - I know they aren’t maing 10,000.

Brad

That’s why some of the bigger manufacturers can offer better value in many cases, like KEF, Technics, Ortofon, Rega among others. So long as a high level of QA is in place these are well worth considering, except their very low volume models.

News flash. The majority is overpriced. Which is why for 40 years 92% of my purchases have been purchased used. That’s the only way to build a decent system on a budget. I’ve spent 30 cents on the dollar to build a $12k system. The only new items I’ve bought in 15 years was a PSAudio dac, and Cambridge Audio CXC transport. That’s it. Used tube monoblocks, speakers, preamps, both tube and SS, turntable, and phono preamp. All used, all the time. Buying new is buying a 2 year warranty. I’ve never had a single component die on me. End of story. 

I went and watched a video on the Orion. Take a look at it on the Rockport website. It might influence your thoughts about the product and it’s MSRP. Of course, I have no idea what it sounds like. But I can see that someone thinking about purchasing them might be impressed by the manufacturing technology. Each speaker ends up weighing 360 pounds! Again, I’m not able to make any judgement about the audio value of them, just saying that they are not just a few parts put into a cabinet.

Designing and building expensive equipment benefits us all - stretching to build the ‘best’ tests out new designs, materials and manufacturing processes. Some of those that are successful will trickle down to lower cost equipment. This is especially true if higher production rates are developed. And as new materials, manufacturing processes, etc. are developed for other non-audio products - such as space rockets - it’s a good thing that there are people designing and experimenting to apply those new ideas to consumer audio.

As someone with poor taste in general and not the best hearing... Yeah totally.

My opinion is void. But it's not the 20 year olds with prisitine hearing who will buy this high end audio equipment. The prices are too darn high. The 20 yo will likely buy a good set of headphones or IEMs if they care a bit about the sound. The sound quality you can get from $100 IEMs is astounding. You're pretty much overpaying for everything else.

Back to speakers, yeah everything was said. I may add that most people have poorly setup rooms and bookshelf speakers with almost no bass.  

I agree that the introduction of over-the-top, outrageous (and, often ugly) "statement" pieces accompanied by their various "key talking points" can find their way to more mainstream products. I recall a very weird-looking, very expensive speaker from B&W (Nautilus) that introduced their isolated reverse tear drop pod speaker enclosure technology to reduce the effects of rear wave colouration. This technology found it’s way to their most affordable, entry-level bookshelf speakers.

IMHO, being "over-priced" does not exclude the prospect of commerical success in the marketplace. There are customers out there that will adopt a product for a variety of reasons. Strong performance/value not being one of them. This seems to push back against "common sense" which would imply that an "over-priced" items would be strongly rejected in the marketplace. So, it appears that we may have to redefine or, atleast, redirect the phrase "over-priced" to encompass poor market performance?

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? 

I think all of us want something "cool" and like owning "cool audio gear". How many would buy a pair of MBLs if they could? Quite a few I would imagine. It would be fun to own a pair and invite your friends over. Plus if you have a big job you’d probably need to escape to your man cave and turn them up and just sit amazed how good it sounds. If you can afford them, why not?

That being said, every company has a personality. I work with ATC, they are very practical down to earth people who want to build super low distortion speakers because their customers (pro and home) really respond to that. They don’t invest a lot of money into image, marketing or exotic cosmetics that obviously appeal to many. The price their product on what it costs to make, plus a margin that pays the bills and enables them to compensate and keep very good employees. They aren’t trying to "beat" anyone, they just do their own thing and guarantee themselves a future though solid engineering of a small number of new products that solve more problems in pro, or extend performance in consumer.

Other companies are kit builders, using mostly OEM sources to "package" parts together to build an appealing package, usually with a focus on cosmetics and often with significant marketing budgets. If you see a lot of ads and promotions, you know where that money is coming from: product.  These kinds of companies usually have a leader with a vision, and everything is oriented on that vision (even if it's technically questionable) .  They may even be big enough to order special "built for them" OEM parts, or have some unique tech inside (DSP) that addresses an issue or two.   

Still others are some combination of both, with talented engineering and good OEM sources of parts and products they need to build "their vision". It is upon the end user to try and figure out what the company is about, what they build in house versus what they buy, and judge the value based on the price, and the value based on performance.  A good marketing program can alter this perception, promoting some performance issue or focusing on some angle or spec that looks good compared to others.  Some of us respond to that angle, and buy based on that.  If you get sold on horns, you have a limited number of companies that do that well in the horn "micro market".   

There is almost zero sense in the high end of "what other people are doing in product". One high end company probably pays no attention to competitors, as this is a task left to larger companies with staff to devote to such efforts. So if you are Gold Peak (and all the brands they own) you study the market, find a niche, engineer a product that speaks to that niche, build it, test it, market the hell out of it. if you are ATC, you try to improve your product- done.  You hope people find it!  

Each company has a unique formula to their business and pricing is rarely a strategy in and off itself, it’s usually a choice based on what it takes to make it worth building. Pricing becomes more important as a strategy as you get larger and want to appeal to large groups of people when "Steps" are important (one at $100, a better one at $200, even better one at $400, etc).  In this case you work backwards- what can I create for $400 vs $200 and make money on both so I can stay in business?

 Brad

it’s confusing too daveyf, as the Orion is $60,000 less than the top of the line Rockport Lyra...and when the Lyra was introduced, it was second to the $225.000 Rockport Arrakis...

that’s the industry where the largest profits made, what are you talking about?? Drug cartels can only dream about such levels of profit!!!

the reason of largest profits is the advertisement and diminished IQ level of consumer falling onto these advertisements. Manufacturers see that and price their stuff accordingly. One of the ways to alleviate that is stop posting foolish posts here about bag of rocks making differences or praises on $20k internet wire as Audiogon is being somewhat an "execution ground"

@czarivey :

One of the ways to alleviate that is stop posting foolish posts here about bag of rocks making differences or praises on $20k internet wire as Audiogon is being somewhat an "execution ground"

Please indicate the maximum price we should post anything here about for each category.

Speakers

Amps

DACs

Preamps

Analog stuff

etc.

P.S. I was going to list "cables" above ,but I figured your upper limit price on cables would be zero, so why waste "internet space"

czarivey

5,121 posts

04-27-2023 at 12:48pm 

that’s the industry where the largest profits made, what are you talking about?? Drug cartels can only dream about such levels of profit!!!

Any objective proof to back this statement? How do you know? You cannot possibly be the CPA for both a drug cartel and a speaker manufacturer. By I may be wrong, who knows.....

Answer:  Of course.

I've often wondered how satisfying it actually would be for those manufacturers engaging in this race-to-the-moon-who-can-price-higher model.

Where you sell just a few a year.  Is that really satisfying?

Do you really want to spend all that time engineering great sound, only so that it can be experienced by a few rich guys?  And not only that: often enough Rich guys who may be buying "to have the expensive thing" vs those who have to strive for what they buy, and truly appreciate your work?

I'm sure it works as a business model.  Everyone is doing it now.  But in terms of personal satisfaction?   I'd want my work to be enjoyed by as many as possible

What I find interesting is how dealers and equipment manufactures tend to complain how difficult of a business high end audio is. Tough to stay a float. Yet at the same time there are hundreds of manufacturers entering the market and constantly introducing new products. With dealer and manufacturers margins at 40-50% it’s hard to find truth or empathy.

@prof   +1

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

Why spend all this energy speculating and judging what others should be thinking or doing like some sort of social crusade?

Those manufacturers are likely making exactly the choices they want to make.  Anyone who doesn’t agree is free to spend their money elsewhere.  Pretty simple.

I haven't noticed any posts that look like someone is on a crusade (might have missed it).

But it makes sense for audiophiles to discuss the nature of how audio gear is being priced these days.  I mean...that's obvious, right?

@prof   again, +1

" You cannot possibly be the CPA for both a drug cartel and a speaker manufacturer"

many CPAs don't know they work for the mob. I know this from Hollywood movies :)

@thyname That's an interesting direction. Only because these forums exist (mostly) to validate your purchases. Heaven forbid you overspend on a piece of equipment. 

From experience (outside of Hi-Fi): high-end = extra hassle and extra costs. The quality of the service and goods seldom meets expectations. 

For example:

- You can buy a sturdy laminate table in a flatpack box and get it shipped in 2 days for a few hundred dollars. Or you can custom order a table, spend thousands and wait months. You may be unlucky and notice that one of the legs isn't fitted properly. Because everything is hand-made and not factory-made with precision machinery. This applies to everything custom made: kitchens, sofas etc... There's a reason IKEA dominates the furniture world: consistency, convenience and price. You get none of that with custom high-end furniture. 

My point: entry-level Hi-Fi from established brands (Yamaha, Polk, Denon, Klipsch etc...) is consistent AF, affordable AF, easy to purchase (no dealers! Yay!) and the customer service puts a lot of high-end manufacturers with shady dealers to shame. You know that Yamaha will still be selling amps for decades to come, it's not certain with smaller boutique manufacturers. 

Mass-produced equipment is the way to go IMHO. I'll happily sacrifice "performance and prestige" for better reliability, service and prices.