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

There is such a thing as a 1" fine extra large brushed brass faceplate in front of a mediocre piece of electronics.

It might be a good idea to rate lines by a minimum age. Like Movies.

Highest priced lines are Rated XXX Over 30 to view

Moderate Lines rated R for buyers 25+

Affordable Lines PG for "Pretty Good" All ages 

I think it's about exclusivity and avoiding comparison.  If you price something high enough hardly anyone will ever hear it or be able to compare it to other products.  Bose is famous for requiring their products to be displayed in separate areas where they can't be compared to anything.  If you price a product high enough no dealer will have a demo so it doesn't need to perform because it can't be compared.  It needs to look pretty and have a sound that some will prefer.

@mihorn ,

”
The only Hi-end audio company is the Wavetouch audio. Everything else are Hi-Fi. They all are simply unlistenable to me. I watched few 2023 Axpona videos and my ears are in serious pain. My ears are much better after I listen WTPC video for few minutes. Alex/Wavetouch”

ohh my that made me laugh after a rough night !! 😃😃😃😃😃

@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??

Not only is it possible, it happens.

daveyf OP

@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.

It’s amazing how many people are naive about the costs involved in running a business, let alone designing and building a high quality product. $100K+ speakers aren’t made in a garage over the weekend.

_ _ _ _ _

Here are just a few considerations:

- Manufacturing costs could easily be a minimum of $25K/month - most likely much more for larger operations. This would include: shop space rental, warehouse space rental (for both raw materials & finished products), CNC machine purchase, assorted power tools purchase, specialized handheld tools purchase, specialized electronics equipment, specialized software programs, multiple large work benches, etc.

- Cabinet raw materials

- Driver raw materials (probably modified)

- Wiring and wire harness raw materials

- Exotic paint and/or staining products

- Separate paint shop space rental

- Labor costs for skilled technicians: $50/hour X # of hours, X # of technicians.

- Estimating profit margin needed to keep those skilled technicians on the payroll vs trying to find new qualified workers every few months and training them.

- Monthly utility expenses.

- Liability insurance and Comprehensive insurance.

- R&D costs. How do you value thousands of hours by the lead designer? When creating something new, there is no formula. It hasn’t been made yet.

- Cost of the prototypes. Those that didn’t work out - as well as the ones that came sort of close - but not good enough.

- Attending industry events. Shipping the gear there and back. Hotel rooms, etc.

- Website maintenance

- Inflation: Price of everything going up.

- and many other costs

the only thing "high end" about those products is often the name.

The only Hi-end audio company is the Wavetouch audio. Everything else are Hi-Fi. They all are simply unlistenable to me. I watched few 2023 Axpona videos and my ears are in serious pain. My ears are much better after I listen WTPC video for few minutes. Alex/Wavetouch

Someone is buying a $133k speaker while someone else is living in a cardboard box.

And some are eating fillet mignon and others are eating a hot dog. So what does that have to do with the topic? 

Of course! They price them as high as they can get away with...meaning there is always some sucker willing to pay their high price.

I've seen dealer price lists from "high end audio" manufacturers.

Particular segments have REALLY high markup, that doesn't seem to faze customers.

 Also have been exposed to the wholesale end of other high end consumer products. Nothing shocking comparing "high end audio" to other luxury products.

Consumers with wide wallets will pay.

They’re servicing the nouveau riche. Why have to entertain hundreds or thousands of whining customers and complex distribution networks with tight margins when you can sell to a select few and make a killing?

I would look at this from the other direction. Will consumers over pay for what they perceive to be top quality? This hobby is notorious for consumers who think quality comes with a high price tag. IMO as the price goes up so does diminishing return. There is a spot where double the price is double the quality. Then once you jump the shark you can pay out double for only 5% to 10% bump in quality. Some people have the money and how they spend it is no concern to me. We hear from people all the time chasing down that last 1% they are trying to find.

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

If it is true "high end", no, their market buys overpriced jets and yachts so an amp is no BFD.

Now, is it possible for cheesy amps to be priced to high? It gets me sick just thinking about it because the only thing "high end" about those products is often the name.

The manufacturing process of the Rockport enclosures are pretty insane compared to many and if you're not familiar with their design, research it.

Although at this upper end, there are many which are impressive for sure (engineering/manufacturing).  Whether or not that equates six figure prices isn't my point, just that these aren't some MDF boxes slapped together.  Also I believe they now manufacture their own drivers (not 100% sure though).  Not many that do (Dynaudio, Focal etc..), which just adds to the overall R+D costs.

LMAO!!!!!

Sorry, nothing else to add.

@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?

There will always be consumers who believe the more expensive something is, the better it is, or simply want the bragging rights to having paid the most for something.  And so long as there are people with more money than they can spend in 100 lifetimes (Elon and Jeff B. come to mind), there will be a small market for $500,000 speakers etc...  Are they worth it?  Doesn't matter.  

No - free market so they can price things however they want to.

Whether they make enough profit or not is another question that depends on many factors other than price alone.

Yes. It's definitely possible. A fool and his money are soon parted, and there is no denying corporate greed. Think about it... Product parts may equal three thousand dollars max. Product sells for a hundred and thirty three thousand dollars. That's a net profit of a hundred and thirty thousand dollars. Well over my annual income if they sell just one pair to somebody rich and wanting an elitest speaker.

This also is not Rockport’s most expensive speaker. The Lyra is $190,000

Typically all out assaults at building the very best possible component of a category results in a product with an extreme price. It serves to show what the company is capable of and its value gets assessed mostly by professional reviewers. If favorably reviewed it builds the companies reputation and can cause folks to look at their lower priced models. Trickle down technology and techniques benefited the customers and company. It may not be the profit or volume of the highest price model that is important to the company. A few sales to well healed customers may be well worth it. look at Wilson, they have been selling speakers for over $500K for decades.

Plenty of choices at any price range. I personally only look at stuff in price ranges I can afford. The cheaper the better. I also don’t protest on prices of the stuff I cannot afford. I just admire them, but I also ignore them when it comes to making a purchase decision for myself. Simple

I see a lot of ultra exotica being offered these days. For instance, road bicycles in the $20,000 range are available. That prices out people like me, but it doesn't mean that really great new bikes aren't available for much less, and these are lighter and better in many ways than anything I could have bought 20 years ago for the same price, even if not adjusted for inflation. You can spend $100K plus on a TV now, or spend $1600 and get something astounding compared to what you could get for $1600 20 years ago. There are those who have the money and want something extra special. The market is providing those goods, it seems to me more now than it ever used to. It's possible to over or under price the exotic stuff. You'll know it's under priced if  it sells well but you can't make a profit on it. It's over priced if you can't sell enough to make a profit. Or it can be fine to lose money on it either way if it's viewed as a marketing campaign. 

I don't wish to rag on anyone trying to make money in music reproduction, but I do wish the industry didn't make me feel like the new, younger, and not yet inherited listener is being priced out.

From what I read Rockport really put a lot of work into the cabinet, and my guess is a lot of the speaker’s cost lies there.  That said, it’s a competitive market even at this level and Rockport will find out rather quickly if they overpriced it.  Rockport’s been around the block before and I’d be surprised if they overpriced the Orion, but whether customers hear something they deem worth that price relative what else is out there in the same price range — that’s the bigger question.  We’ll see. 

The fact that speakers are priced like that only adds to arguments against the value systems we have allowed to get set up. Someone is buying a $133k speaker while someone else is living in a cardboard box.

A quote from Pope Francis:

"Today consumerism determines what is important. Consuming relationships, consuming friendships, consuming religions, consuming, consuming... . Whatever the cost or consequences. A consumption which does not favor bonding, a consumption which has little to do with human relationships. Social bonds are a mere 'means' for the satisfaction of 'my needs.' The important thing is no longer our neighbor, with his or her familiar face, story and personality.

"The result is a culture which discards everything that is no longer 'useful' or 'satisfying' for the tastes of the consumer. We have turned our society into a huge multicultural showcase tied only to the tastes of certain 'consumers', while so many others only 'eat the crumbs which fall from their masters’ table'. This causes great harm. I would say that at the root of so many contemporary situations is a kind of impoverishment born of a widespread and radical sense of loneliness. ... Loneliness with fear of commitment in a limitless effort to feel recognized."

-- Address to bishops at St. Charles Borromeo Seminary, Philadelphia, Sept. 28, 2015

I think long standing, big time companies like Rockport are well aware of the sales dynamic, not that they always guess correctly...and for some, it's almost an advertising statement product, not one they actually expect to sell many of...questions of "value" become irrelevant with so many super wealthy potential customers...I like seeing these products, though with no expectation of ever hearing one...

@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?

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

Do Bears Poop in the woods?

A few years ago I read an interview with an amp manufacturer. He had just introduced an extremely expensive amp. When asked about sales, he stated he expected to sell maybe 3 a year for 3 or 4 years worldwide...