Is the main reason audio equipment depreciates so much is

analogluvr,

That's the same thing my electronic technician tells me.

Jafant,

When you say the mark up is 500 to 1000 percent. Are you talking about the cost to build something versus what it retails for?

Jafant,

When I am at a audio show and looking at a ton of gear I find myself trying to figure out what it cost to make the Item. Of course it's only a guess and I don't have actually numbers. I have worked in manufacturing before and I remember what it cost for us to make a product and then seeing the product on the open market. The company I worked for was owned by my sisters husband so I had inside information on what it cost to make an item. One popular item we made in the 80's and was distributed worldwide was a fashion Item. The parts came from China but the units were assembled in Southern California. The Item cost with parts and labor included was 7.00. The retail price was 69.95. So like you said about a 10 times markup from what it cost to it's retail price.

"You don't find that with cars, where dealers are making slim margins"

What you said is the perception many people have. I worked as a car broker for 3 years. The dealer actually makes what they call in the Industry trunk money. That is essentially a kick back the dealer gets from the manufacturer. We would broker cars all day long at dealers cost and still make a good profit. Every month the manufacturers put out different incentives for different cars. We would focus are advertising on what cars we could make the most on. I remember when Mercedes was giving us a 4000.00 rebate for every E-series car we would sell. We would offer the car at dealer cost and sell a ton of them. They were paying me 25 percent of gross so I was making 1000.00 a car. It was a very lucrative business till the owner of my company got greedy and started screwing people.

Jea,

If you are saying the dealers are only making 10 percent after expenses that sounds about right. The manufacturers on the other hand are making a lot higher profit margins than that. 

Jafant,

I read recently where a guy took apart some 20k Transparent cables and try to duplicate them. I don't remember where I read it. So unfortunately I can't provide a link. He wind up buying all the parts and putting it together. He did say some of the parts were a bit different because he could not find all the original parts. Though he said he found many. He says his total parts cost was 800.00. Plus all the time he spent putting it all together. He said at a price saving of nearly 19k he was extactic and he was very pleased with the sound.

Ji35,

There is no rhyme or reason to it. They just try to get what the market will bare. It doesn't matter what it cost them to make it. They are only Interested in perceived value.