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

@kokakolia 

Surprisingly Sonus Faber pricing favors the mid-range, the more you pay the exponentially more value you get.

There are two strategies: make the profit on the lower end vs the top end. Of course, with the sound, everyone's priorities are different, for me the best (perceived) value is the no overhead boutique brands 

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? 

@daveyf This discussion may as well branch out into economics, art, politics and philosophy. 

I mean some artist sold a banana taped to a wall for a $120k. Is it overpriced? No because it's art...

Yeah the adage "something is only worth what someone is willing to pay for it" is always 100% correct until you talk about utilities or medecine... Fortunately, we're talking about non-essential consumer goods here. So you could even argue that everything is under-priced and underrated considering labor costs. Only the high-end is priced 'correctly'. 

At the end of the day you vote with your wallet. The 'overpriced' question is not something for individuals to answer. It's more relevant if you're the seller. Ask the seller, not the buyer. 

Nope speakers are worth hundreds of thousands of dollars obviously! As well as amps, 20k + power and speaker cables etc. 

in luxury goods, price is one component of the value.  The manufacturer is not selling a function, they are selling the brand. Add limited production-  reduce the supply for the same demand and price may be increase even more.

The best part is: they don't need to sell any. They can keep selling the midrange stuff and claim trickle-down buzzwords and increase its price by 10%

Anything is possible 

No.  Fair market value is what a reasonable seller is willing to sell the product and what a reasonable buyer is willing to pay. If any product is sold, opinions from non-experts are worthless. I have some strong opinions about Hermes hand bags, but no one cares. 

@markalarsen The assumption of a fair market is the root of most problems in our world. There is no such thing as a fair market. The values are rigged or influenced by actors in that market. A direct example would be a monopoly, or oligopoly. These things inherently exist in any market, it's just a matter of time. 

Furthermore, the line between non-experts, experts and salesmen is very very thin and blurry. 

The value of Hermes handbags is 90% the brand and the assumption that its value will rise over time (due to limited production run and high demand). The physical object is worthless in comparison. The NAD 3050 LE is making a farce out of us. NAD will no doubt release a dozen similar amplifiers with slightly different features and specs. The NAD 3050 LE is selling like hotcakes because it's "limited edition" and it looks different. It also helps that the amp is predictably good in an NAD fashion. "You can't go wrong". 

So if you view Hi-fi like Hermes handbags, you'll be buying gear based on re-sale value. Not performance. That's probably the smartest way to go about it. I mean these vintage Pioneer and Marantz amps from the 1970s are shooting up in value because of "Hi-Fi influencers" (which are typically vintage shops trying to move products). You may as well buy them and sell them later for a profit. 

Lastly, there's no such thing as a reasonable buyer. You either have cheapskates, gear flippers or fools. 

I don’t know the answer to your general question about price evaluation. I can say some things on the specifics of the Orion. You reference hyperbole in the review and I can understand why if you’ve never heard the Orion. That happens all the time with reviewers. In this case in my opinion none of it was hyperbole. I heard Orions in the room that housed Wilson XVX at the Sound Environment in Omaha. To me the Orions are a better overall speaker than the 345k XVX. When Peter set up the XVX they held a presentation as they did when Josh set up the Orions. I’m told there were about 10 attendees that made it to both presentations. As stated in another Audiogon thread and verified by me with the folks at TSE almost all preferred the Orion. It’s a GREAT speaker. Now if you’re a horn guy you may not like them and that’s fine. To each his own. If you are a dynamic speaker guy and you listen without bias you can not help but be impressed. As far as cost goes consider 5/1 cost to retail as a starting point. Does Orion have 30k in cost? Well look at the video on its construction. 360 pounds of cast aluminum and carbon fiber! Every driver is new and was created specifically for this project which took 3 years to develop. Rockport is a small company. How would you amortize the engineering costs for this. Each driver was engineered fully by Andy. Nothing is off the shelf. Every speaker is listened to and measured by Andy and Josh. No two drivers or cabinets are exactly a like so each crossover is fine tuned by the owners before it goes out the door! That is not efficient but it is beyond amazing. Most sane people would say it’s absolutely stupid to pay this kind of money for a stereo. They have a point. In the world of relative value in this crazy hobby I would say these are fairly priced. 

It is possible for low end manufacturers to overprice their goods.  

People say audiophile gear prices are crazy and they might be right.  However, show me a (component) for cheaper that sounds as good in all categories,  

Unfortunately many times the price you have to pay is the price of admission for that kind of sound.  

I have been playing with audio equipment since I was 13 and now I am 50. I have worked in the industry on an off over the last 37 years. I was was a dealer of new and used equipment. In 2013 I purchased a huge collection of equipment that it took almost 4 years to sell. During the early part of Covid I started selling audio equipment again. I could own just about any kind of audio system I want. In Dec of 2019. I had a pair of Yamaha NS 1000m on L100 stands, a Bryston B60R and BDA 2, Bryston Moving Magnet phono amp, a Technics SL 10 linear tracking turntable with the factory moving coil cartridge rebuilt by the sound smith. The turntable has a built in mc step up transformer for the cartridge. A Simaudio Moon streamer. All of this wired with Mogami. I have owned some of the most exotic beautiful equipment you have ever seen and rarely does it sound as good as my cheap system. Much of the ultra high priced equipment rarely sounds all that great even with really well designed listening rooms. I still have the system that I have mentioned above. I do have a much more resolving system at my office. I have come to the conclusion that price has no correlation with sonic performance. There are many products that are well engineered, built well with great materials that perform at a very high level at a very reasonable cost and there is the pixie dust BS.

yes of course,, need profit 2000 percent minimum to survive for high end manufacture

For it to be really good it has to be expensive right?  

My current phono stage, a Schitt Mani, sounds great to me but it's so cheap that I keep thinking there must be something better because it's so cheap, but I'm not finding it.  If it were priced higher I probably would not be looking.  If I paid a grand for it I would make sure in my mind that it sounds great and wouldn't doubt it and I wouldn't be looking.  

I do not generally think that cost necessarily parallels performance in high end audio. I was recently at an old friends house listening to vinyl on a $1500 rig and it sounded great. There is a very real phenomena of luxury pricing designed to make people THNK it’s better when it’s not. That said the Rockport Orion is worth every penny. Joy and happiness achieved from music do not require anywhere near this investment. That is a different question. 

If it's one of the best sounding speakers in the world, it fits your listening room and you can afford it, what does it matter. It will be appreciated and give joy as much or more than a Patek Phillipe or other super expensive watch. It's all relative. Provided the speaker performs as one of the best. 

Who is to judge?

With most products and services, if at least some people don't complain about the price then it is probably not high enough.   If it priced too high, then it won't sell.  The purpose of most businesses it to make money so the good ones price their goods/services based on "what the market will bear" for the value provided.  With a group that will pay $250 for a pink fuse, the sky's the limit!  

Very few goods are priced as 'cost + small margin'. Goods are priced at market - as high as buyer may be willing to spend. So sure. Just look as Porsche tax 

@mikhailark    This brings about my point in the OP.  Looking at my new copy of 'The Absolute Sound', there are many speaker manufacturer's who are now supplying speakers with pricing in the same league ( and many times much more) than a new Porsche!  The number of companies that are offering speakers in the range below even $10K is considerably less than those who are offering speakers for more than this figure, and many times --much more. Looking at the cable offerings, the same can be said about these folks. Some cables in the $70-$100K price points. ( Many mostly silver based, but anyone look at the price of raw silver recently!). IMHO, there are a lot of vendors who seem to believe that the high end is made up of primarily folks who say...'pass the Grey Poupon'.

@daveyf - this is the only way they can survive. Too few customers. Young folks buy $500 active system at Amazon and it sounds pretty good (facing my desktop active speakers with ribbons right now). Also, young generation is much better educated in computers and won’t buy $$$ ’Ethernet filters’.

There are more buyers of Porsche than speakers. So manufacturer calculates how many they can sell, then take expense, divide by production and get the price. Need 2 million a year to run the company, but can only sell 200 speakers? Well, $10K it is then.

My local high end gear shop has small room with "budget" gear (that's $10K+ items) and several rooms with $200K systems. People driving up in McLarens shop there now.

IMO, more interesting is used market. There you can see actual prices people are willing to pay. I am getting $10K MSRP speakers delivered tomorrow. I bought them for $3K basically like new.

And I bet 90% of buyers will put them in their expensive houses with glass floor to ceiling windows and zero acoustic treatment

@mikhailark, you make some very good points. I agree with what you say.

The most expensive system I ever heard in a private setting was housed in a multi million dollar room, all glass and overlooking the ocean. No acoustic treatments.

@fac

2000% is CRAZY..  Ive never met a single manufacturer that can get away with that.  There might be one product in their line that has a huge mark up because it's unique, some some one of kind invention,  but Im sure the rest of the company's line is in range with other product margins (typically 30%).  There is way too much competition to get away with ridiculous prices as the competitor is almost always willing to offer the same thing for less. 

 

The biggest driver of prices is the price of parts and metal work/cosmetics.  If you are small and can only afford to build say 50 of something in a year, your prices on those parts are very very expensive because you are buying in low quantity.  I learned this when I was complaining about the price of Jaguar parts.  I visited England and learned that Jaguar buys 50 sets of brakes at a time while Ford buys 100,000.  The jag brakes are 5X the money of the fords due to a small manufacturer having to set up to make just 50.  And since Jag never made a lot of money, got sold to Tata, you can see its not all that profitable to do.     

The fact that you can hand over a sticky wad of cash (cash) equalling 600k for a speaker (box+4 drivers), 100k for wire....and most of the guys who do this hail from Asia, etc should give you the gon crew a clue....i.e. tis certainly one way to launder some dirty money.

Soundstage explodes to the sky as ya keep paying....(you get what you paid for)..yeah right...and my hiny explodes all the way to Mars.

It is yes but has always been the Hi-End. The market for that particular brand would be a smaller demographic who believes in the product and engineering through and through. They often care less about hunting down another type of sound to relax to each evening when its already perfect. When you hear it you know

 

Happy listening!

 

 

I guess it depends on whether it sells. At that price there is only so large a market. If it provides something not easily found otherwise, or requires a highly-refined level of skill only uncommonly found, someone will appreciate it . . . maybe. It is because of products like these that i welcome the controversial ASR site and Amir's approach: does it measure well, as one might expect a TOTL product to measure? Or is it something that measures in a fairly ordinary and unexceptional way and its makers have to explain themselves.

IMO yes it’s grossly overpriced. However I’m not the target buyer. If they can sell it and the market will bear it and they sell to projections I guess it’s not overpriced. I’m not sure but would venture to guess if they sold it for a third of that they would sell MUCH more and probably make a much bigger profit. I could be wrong and maybe it costs that much to make, although how could it…? 

As long as there are enough wealthy people with space to fill and who like expensive toys that will buy them,  they serve a unique purpose and are not any more overpriced than a Ferrari,  Lamborghini or designer watch. Or designer handbags and clothes for the ladies. 

to me it is a mystery how so many people have so much disposable income (e.g., from my db of speaker companies revenue) to buy high end gear. But I come from one of the poorer side of the world, it’s just my lack of imagination. And I feel the same way about every 4th house on my street having one or two Teslas.

There must be 100 dollar bills raining while I am still asleep (not a morning person )

@grislybutter Clearly the trend is fewer people possessing more of the wealth. Some may own golden toilets. Precious metals can be a very good investment. A few may find large Rockport speakers to be more to their liking as a statement piece. Different strokes. Some just way better financed than most. To the victor goes the spoils. A few smarts and hard work can end up in many different places. A big inheritance doesn’t hurt either. Isn’t this “the American Dream”?

@mapmap I take any explanation I can (other than everyone getting rich from drug money)

On a positive note, I don't see the fewer part. There are so many new and new-ish cars on the roads, the wealth is well-spread. Not just in my fancy city, I spent 6 weeks total in the Midwest this year, and yes I have seen poverty but a lot of middle class wealth too. People who can afford Teslas, Range Rovers and Suburbans can afford 20K speakers too. (high end in my vocabulary)

@grislybutter who knows? Each case is different. A Tesla can be a decent investment. Prices are actually down for some Teslas and of course you save money on gas. Of course you still have to be able to finance large ticket items somehow. The stock market is at an all time high. Personal debt is out of control. Always many looking to get your money. It’s a chaotic world in general. In some cases the chaos results in expensive high end gear. All it takes is the desire, some money and/or a good credit rating. In any case these things are luxury items. Things you buy because you want to not because they are necessarily truly needed. It’s the American dream! Women often tend to love expensive jewelry that in most cases is a bad investment. What’s 30% annual interest on a credit card as long as you get what you want? Things happen. A lot of it not necessarily a result of a well thought out financial plan.

As long as there are enough wealthy people with space to fill and who like expensive toys that will buy them, they serve a unique purpose and are not any more overpriced than a Ferrari, Lamborghini or designer watch. Or designer handbags and clothes for the ladies.

I am associated with a circle of guys who could afford any cost no object hifi crap, buy it and throw it down the drain, if they felt like it.. But, they are quite simply not as dumb as you think they are. For instance, they have a pretty good clue about what goes into the engineering/build of a F spider or a GTR for example. If some of y’all dealers with the lousy narrative ("if you’re rich, why not?") took a box with 4 drivers and said it is worth more than their car, they will throw you outta their houses.

Elon Musk will run you out of his house in a hurry if you said the polished box+drivers you sell is worth more than his car.

Some of y’all dealers (promo dudes) on this forum think you’re real flipping brilliant, smarter than all of us, huh?

No, you didn’t get anyone with half a noodle in his head. You got some dirty money though, if you indeed managed to sell a box+4 drivers that cost more than some guy’s Lambo...and I know something about the kinda guy who bought it.

Get a clue and try not to insult anyone’s intelligence.