Stratospheric audio gear prices


The more time I have under my belt pursuing quality audio, the more I realize that high audio gear prices have some basis in their quality. Yet there is a limit. When you buy a Ferrari the cost is high, but you can see the money involved in the design and parts. Many would argue that high quality audio gear is similar to the quality and design of a hyper-car. But when you look a the sheer quantity an complexity of this kind of car, there is no piece of audio gear that compares. To me, a piece of audio gear that costs as much as even an inexpensive car is just a manufacturer cashing in because they can. Can you imagine what audio manufacturers would want to charge for a piece of audio gear that was the size and weight of a car? Like $100 million.  I believe it just drives the whole market up and we end up getting a little bit suckered. This is all perhaps a little overstated. I guess I just want to shame audio manufacturers. I do understand that they are not charities, or here for the betterment of mankind. If you are not frustrated by this, good for you.  Here is a quote from a book about marketing. The reference is a victim of link rot. Nevertheless it has common information. 
  

"Premium Pricing

Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation or represent exceptional quality and distinction . A premium pricing strategy involves setting the price of a product higher than similar products . This strategy is sometimes also called skim pricing because it is an attempt to "skim the cream" off the top of the market. It is used to maximize profit in areas where customers are happy to pay more, where there are no substitutes for the product, where there are barriers to entering the market, or when the seller cannot save on costs by producing at a high volume. It is also called image pricing or prestige pricing.

 

Luxury has a psychological association with price premium pricing. The implication for marketing is that consumers are willing to pay more for certain goods and not for others. To the marketer, it means creating a brand equity or value for which the consumer is willing to pay extra. Marketers view luxury as the main factor differentiating a brand in a product category."

Source: Boundless. “Market Share.” Boundless Business Boundless, 26 May. 2016. Retrieved 07 Feb. 2017 from https://www.boundless.com/business/textbooks/boundless-business-textbook/product-and-pricing-strateg...

ericrt
I once heard Bill Dudleston (Legacy) say that there are only 30,000 audiophiles at a given time, who all the manufacturers of boutique gear are competing for.

Not sure what the number is, but it's certainly pretty small, and boutique manufacturers can't be keeping the lights on by sales volume alone.

So it seems like high markups and prices are inevitable in the audiophile market.  (Not to say there aren't conspicuously better and worse values).

I assume this is a common circumstance for artisanal goods of all kinds.


I suspect the irony in this is not lost on the artisans themselves: to develop their art as far as they can, they have to price most people, including people like themselves, out of the market.  Not quite the simple life of a craftsperson, somehow.
ghdprentice said:
What is stratospheric pricing to you? $150K? Most companies have flagship products that advance the art and have lots of top electrical designers time invested in it... few are sold. So costs are high when you load with the R&D. You price against the competition. Then the technology trickles down the substitute cheaper components and offer reduced price stuff.
I agree and think about it as: the people who buy the high-end stuff are essentially funding R&D for the industry. Those of us who can't spend that much benefit from their willingness to shell out so much for the cutting edge.
I thought the post by ericrt was worth reading and makes a few good points.  Overpricing to convince buyers that an item is top quality has been a marketing technique for a very long time. I now make it a habit on all products to read customer reviews, particularly as so much crap is coming out of China. Of course, this may not pertain to stereo equipment.  I would think stereo equipment will get better and cheaper like most electronic items. I paid $900.00 for my first VCR. 
In general principal and spirit, I agree with the OP. The Premium Price theory is common in most industries. Although many of the subsequent responses had valid comments and thoughts, not all supported the theory that Premium Pricing is a negative. To each his own...

Speaking from personal experience, 46 years of Wholesale, Retail, Commercial and Construction Sales / Management taught me to charge what the local Market can afford, as long as the Service/Product provided is of commensurate value.  Business 101.

I found value (to me) in better quality audio through a Hybrid Build process via having collected some vintage equipment (Zeta tonearm), as an example, marrying it with new equipment (ZYX cartridge) and a customizable kit (SunValley EQ-1616) phono pre-amp... Result, not a bad analog front end at reasonable (to me) cost. The rest of the System ... a similar mix of Luxman, Elekit (maxed out upgrades), Anti-Cables(new), Martin Logan (used)... you get the picture.

In the end ... a hyper-car (as referenced in the OP)... it might not be a New one, I may have to work on it myself and do a lot of research... but it is a hyper-car that I can afford and avoid Premium Pricing along the way.

What a Great Hobby...
"...Much of human happiness, for better or worse, is derived by one’s status relative to others in one’s perceived peer group..."

Only if you are susceptible to two deadly sins, pride and envy.
It is possible with the help of basic science and simple listenings experiments to create a more than good audio system that will not lag so far away from costly gear to give you total frustration...

It is the S.Q. /price ratio that is the ONLY indication of value in our hobby, never the price per se....

Anybody can buy the costlier system in the world and with money create the best room....Anybody....


Try this with 500 bucks all in all + extra peanuts ....

This is my hobby....

Frustration, envy, dont exist in my world...

But sorry pride survive more healthier than ever.....Especially when you succeed...

I dont say that to brag first but to help others who dont have money.... Be creative and trust yourself....

You will smile...


Why do i smile if my system is less good than many costly one?

Because it is possible to create a system that is not so far behind what is in the hand of those who can buy the best gear on the planet....

A piano filling your room with natural timbre and with each note a timbre hue associated is here.... Is there better ? Yes but i dont give a dam when listening Bach well tempered Klavier if the sound dont come from between my speaker at all and seems natural....

Be creative, read and think but let any audio magazine behind after picking your gear..... After picking the right gear create your own experiment in vibrations control, electrical noise floor control, and especially acoustic controls...

Call the rest superfluous...It is....

The goal is not the better, the goal is the optimal.....

The " better" is a chase to the moon....

"Upgrading" is a chase of your own tail....

Choose right first among all those pieces of gear available in a mature market for the last 50 years now at a low price , after that work through the 3 embeddings controls....

Thats it.....