The Cost of Cables

I can understand that Calloway, I guess my question all along is, are cables marked up FAR more than the rest of audio or legit reasons for the costs. The concensus is that they are marked up far more.

the moral of all this is to spend less on cables, and buy a porsche.

....brian...you're probably right, but as long as audiophiles have the financial ability to buy the expensive cables and believe they are sonically better then a less expensive cable .....ie .whatever the market will bear...there will continue to be that niche market.

...is there $70,000 more car in the porsche then in the kia?..probably not.

Maybe, maybe not. But I can look at a Porsche and a Kia next to each other and easily see huge cost differences. On the other hand, while one can (sometimes) see cost differences with wire, for me it is hard to understand the huge differences in cost. And there certainly doesn't seem there would be the overhead in cable as in other aspects of audio and warranty work would seem to be lower and easier.

As for percentages of mark up, some of these cables must be far above the 100% - 200% range listed above.

The pride of bragging about the cost of possesions seems to be relativley common human nature. For many, spending big relieves insecurity and promotes a feeling of self worth when others see a possesion and respond to it. Also, one component of the high end of anything is that there are some individuals who enjoy shopping and buying as an activity all to itself.
I think of mega buck cables, or the desire for same, as a tax on folks who won't blind test. Some folks do seem to enjoy paying the tax however, so perhaps they are getting what they want.

...doesn't a kia and porsche accomplish the same goal...that of going from point A to point B ..most of the time at the same allowed speed....if you can afford the porsche...and like its' ride and experience better...you're going to buy it...if the $3000 power cord sounds better in your system ..and you can afford it..guess what?...you're going to buy it...this isn't rocket science!!..is there $70,000 more car in the porsche then in the kia?..probably not.

Okay, my two cents. I used to sell this stuff once upon a time and there were HUGE markups on cartridges and also cables, but especially low end cartridges, like at least 200%. In general as the retail got higher, the margins got smaller. Margins on cables were generally at least a hundred percent. I don't know the current industry and I imagine we won't be hearing concrete examples throughout a line from the mfrs or the dealers. Generally audio resale was about 50-100% markup from wholesale.. with variables based on whether a dealer paid cod, bought qty, etc. Actual TVs had terrible margins, 25% markup was awesome.

An interesting story though, we used to sell at the low end, yamaha, sony and denon. Yamaha and Sony were about a 100% markup, Denon was about 60%. Amazingly enough, at the same retail price points, the Denons always sounded better... hmmmm.

If one looks at this somewhat objectively, many, many hardware dealers have had financial problems, even venerated names like Mark Levinson recently, Wadia, McCormack, etc. But when did you hear a cable dealer going out of business? I am sure there is one, I just can't think of one, same thing with cartridges. So if I add what I know of their profit margins to the fact that they don't seem to have near the percentage of failures of the other dealer types, I'm guessing the margins are still pretty healthy.

Now then, having said all of that, I recently had what seemed like a reasonably honest dealer/manufacturer at my nome. He will soon or has come out with cables. For two years, they have been researching the cables, and he feels that the only way they can conceivably break even or make a profit on these cables is to retail them at 6k a pair for the 2 meter speaker cables. He had to buy the test equipment, figure out the manunfacturing, figure out what the key elements to sound were ( he personally thinks it is the leading and trailing edge of an input square wave) market it, advertise it, etc. He is absolutely convinced that if he cannot get this money in the market, than it will not be worth the developemental costs.

Now to my personal experience. I own a calibration laboratory and a test equipment rental/sale business. I look at the materials, the retail cost of the plugs used, the cost of the wire and shielding, as we often make our own cables and connectors, and I can definitely say that the cost is not in the componenents, absolutely not. Now then, look at the cost of accutron drivers direct from the mfr, and a good scanspeak tweeter from Audio Express. Even at full retail, and purchasing the parts for a crossover, and then having a cabinet maker make a one-off cabinet, I could duplicate a pair of 40 grand speakers for well under six grand. So I wonder how much at wholesale, and in quantity, making your own multiple cabinets, the speaker maker has as materials cost, maybe 1/2? However, I don;t have time nor inclination to make audiophile cables, experiment with different connectors and cables, inductors in parallel, etc, etc. so I experiment with various cables and yes, in a high resolution system, there are huge differences in sound, especially in my experience, in speaker cables. So I pays the money whens I hears da difference, and when I don't, I don't.

On the last part of your post, I bet prices wouldn't go down for existing cables, many cable manufacturers just would come out, as they did during the tech downturn, with "amazing new technology able come within 98% of our very best cable due to incredible advances in metallurgy techniques and connector manufacturer".

Having sold hi-end retail, I can tell you I never pushed the top cables when I sold a system, that could have been death to the whole system. I would try to get them to buy a cable I felt was a relatively good value for the particular system, but even if I thought an expensive cable was the best for a system, I would never ever push it because in the eyes of most of the initial buy consumers, I would then lose any credibility I had. If they came back, after they were familiar with their systems at home, at that point I would recommend loaners, and they got to make their own decisions as to whether different cables were worth it. Any dealer I have dealt with, and when I sold hi-end, the challenge was always to try to find the cheapest cable that would make the speaker or system sound the best, and I personally probably did 65% of down time listening trying different cables in different systems to find the best synergy at the lowest price. I have, however seen some very unscrupulous things go on when my friends do their hometheatres. They get charged as much as 20 bucks a foot for hometheatre cable for stuff that doesn't cost the dealer even 2 bucks a foot, because the consumer looks at the total cost, or they look at what they think is the big part... ie projector, and by the time they are getting to the wire, they are so worn out, that they really don't notice the perfoot price, because it is either totalled, without noting the actual linear footage, or it is a relatively inexpensive line item compared to the projector for instance.

Wow, that was some good therapy :)

When you see a set of cables that cost over twenty grand, what runs through your head? Is it a)ridiculous, or b) well, they HAVE to be the best, so no matter what I buy, I will never reach near perfection unless I have them. Sadly, I think the latter is what audiophiles assume and such products create their own demand.

My opinion, yes cable manufacturing process plays a big role in the cost. But you have to ask - is that process really achieving anything? If you make a toothpick from a tree trunk and a pocketknife, you can say a lot of work and one tree went into the process (hence the exhorbitant price), but is it better than the ones you can buy in a box?

Here's some other conversation too on the subject:

Expensive Cables

[Using a "high test" gasoline, higher octane, can actually be bad for a car if it doesn't call for an octane that high. The octane ratings correlates to when the gas detonates, so an octane too high can cause wrong detonation.]

There is no such thing as "wrong detonation" by using an unnnecesarily high octane for a particular engine, you just use up unnecessary $.

If you use too low an octane for a vehicle it will preignite and "diesel" (ie compression ignition), or pre-ignition, in advance of the spark, but using a higher octane has no negative effect.

Regardless of the price of the cables, it is neither financially or psychologically the main purchase,

Cwlondon

Actually, look around this site some more, you may be surprised. Some are using cables as expensive, if not more expensive, than their equipment.

Is it determed by most then that cables simply are marked up much more than other audio componants or is there actually something to the cost?

Brian
Brianmgrarcom

Yes, there is more mark up in cables than other gear. Again though, blame the consumers, not the manufacturers. If you found folks dying to give you more money, wouldn't you take it?

John

I pay extra for high test gasoline, which some people say makes a lot less sense than expensive cables, but I have no intent to change.

Using a "high test" gasoline, higher octane, can actually be bad for a car if it doesn't call for an octane that high. The octane ratings correlates to when the gas detonates, so an octane too high can cause wrong detonation. The mistake is made when one uses this gasoline because they think they are using better gasoline. (If anyone wants to correct my crude response, feel free, I am no automotive expert.)

Man, I just took the thread off topic.

Is it determed by most then that cables simply are marked up much more than other audio componants or is there actually something to the cost?

Brian

I have a grandson who makes a good living importing stuff, mostly from China. One kind of stuff is audio equipment. He tells me that he buys some decent-sounding speakers for $50, but had a hard time selling them for $200. He raised his price to $400, and now they sell well. "Who wants a $200 speaker?" is how he explains it.

There are more subtle and manipulative forces at work which might better explain the high margin greed seen in cable peddlars.

Although cables can cost thousands, of course you can spend thousands more on speakers and all the other associated components.

Having suffered through the pain of that invoice - and with high expectations for joy and happiness to arise from a new system - the customer is in a psychologically vulnerable state, where he would be unusually sensitive to disappointment.

At that point, with those high expectations, and having already blown a considerable sum of money, the last thing you want to worry about is that a) you are not really getting your money's worth, b) not really going to get gloriously high end sound etc etc.

Regardless of the price of the cables, it is neither financially or psychologically the main purchase, so this still big but most likely lesser sum - despite the ridiculous mark up - seems like sensible insurance and often tempts the buyer into a oh what the heck I might as well really go for it - type of a purchase.

Similar psychology is employed when a car salesman will say how attractively priced the car is, before piling on a load of high margin options.

If my theory is correct, the "best" tires, oil, gasoline etc could all be sold at inflated margins to Porsche and Ferrari drivers.

I pay extra for high test gasoline, which some people say makes a lot less sense than expensive cables, but I have no intent to change.

Beware the accessories and extended warrantee salesmen!

I think the cable prices are inflated more than any other area of audio. They don't have the nickname 'wire bandits' for nothing.
Having said that though, ultimately, the fault lies with the consumer. If I only had a cable for every manufacturer that has told me that the public demanded a new higher priced cable, so they make it. They are simply filling a need. Some people need to spend a lot on cables, so there has to be someone there to fill this niche, don't you think?
I had one manufacturer tell me recently that he had to make more expensive cables because he had customers telling him that while his product sounded excellent, it's cost was too low compared to the customers reference cables to consider purchasing them. So obviously the manufacturer created more expensive cables.

Supply and demand.

Don't blame the manufacturers, they are simply filling the customers demands.

John

RD plays a big role, materials, along with low volume sales cant be dismissed. Cables get a huge mark-up and are many times a cash cow for dealers. And never forget the price of Prestige.

Some cables cost a bit because they are hand made to order. Others may have an exotic construction with strands individually coated in ceramic, etc. Yes, copper has gone up in price lately, but it fluctuates like all commodities. Sometimes it's low in price. Amortization of R & D is also a consideration. However, for the mass market cables from the usual suspects, cables are simply a high margin product that are significantly marked up at the retail level. The big box store that sells you the TV on a small margin will try to make up some profit by pushing an expensive cable. The marketing pitch is that you should get a premium cable in order to get all the benefit and performance you paid for in the expensive TV (or stereo).

the wire in hi end cables is 'magic'. it costs lots of money to cast a spell on copper...even more for silver. also cable jackets that are cool colors are many times more expensive than colors that are not cool. cables also sounds much better (sweeter highs, and more detailed) when shipped in a wooden box with a lining......i can't believe i'm the only one who knows these facts.

I agree with Tvad. In hi-fi in general, sales numbers are too small to bring costs down substantially.

Now this doesn't mean I agree with $3000 power cords. I think there is some overinflation going on too.

Also, have you noticed how many cables (and amps) have actually seen big price increases lately? One dealer told me it is because the cost of copper and silver has skyrocketed.

Arthur