What makes a $20,000 cd player cost 20,000?

I had the opportunity to hear a 47 labs flatfish transport about $4k back to back against a pi tracer (maybe the most expensive transport made) $25k through the same 47labs system and yes there was a surprisingly meaningful improvement for someone with the $$$.

Tvad,

Your comment implies that high end companies are in the business of finding fools and getting them to part with their money. While some companies provide better value than others, you can't base selling price purely on the cost of the parts used to manufacture. The time it takes to do the R&d and marketing and administrative tasks must be accounted for.

Let's look at an extreme scenario. Assume that I am a 1 man shop and I only spend $1000 in parts for my $20k cd player. Assume that I sell 2 in a year and spend $10k/yr for marketing and rent and admin costs. Assume that I do R&D myself (say 20 hours per week). Am I really making a lot of money even if I sell my cd player for $20k each and pocket $19k for each one that sells?

What I can tell you from a buyer's perspective is that you would want killer R&D and extensive attention to the voicing of the cd player if you're going to pay $20k. Whether or not you get it depends on how fanatical the manufacturer is.

I like Boa2's point. A $2k cd player may just be a $500 model with a nice case and a few upgraded op amps and capacitors. Price alone tells you nothing.

I suppose that to answer the question, Grant, we would have to open up the player and note the difference in parts, if any. But to deem it arbitrary is really just a guess, isn't it? My suspicion is that we could trace the money trail of all of its ingredients, R&D, advertising expenses, etc. and find a similar gross margin percentage as say, a Sony SCD-1. Of course, I could be wrong, but I don't think so.

However, more to the point, it seems to me that this is once again a mirror of the vast majority of the conversations that take place in these threads. And that is, we each stand for our choices based upon a justification of what we personally deem to be reasonable and worthy. If we set our limit on power cords at $300 apiece, those at $600 look like diminishing returns, and those at $2000 look like a fool's playground. On the other hand, we might conclude that the audiophile who is still messing around with the $50 cord has not quite heard the potential of his/her system. It's all a game, one in which the rules are malleable. Most of the cars I've owned cost less than our current CD player. Imagine what kind of mental gymnastics I had to go through to come to the conclusion that to spend $5K on a CD player made sense, and that I could sleep at night having made such a decision. Well, it didn't take that much effort actually, because I was after the best sound I could get. If the price is arbitrary, it must only be so to the point that we are willing to embrace it.

Honestly, and I don't want to divert this thread, but the issue that continues to nag at me throughout this discussion is how little value we place on life itself. I can't help reading the headlines each day and wondering why dozens of Iraqis, hundreds of Sudanese, and hosts of Americans are lost each day, and it's almost as if they don't even represent the number 1, let alone the loss of a life. Again, I don't want to derail this excellent conversation. I just felt like saying what came to mind, and right now I have the vision of a $20K CD player as well as the picture of a fallen soldier occupying that pea brain of mine. Weird.