wilson ad; absolute sound;issue 162. page 12.... dave wilson states in his ad that wilson loudspeakers have one of the [ lowest ] profit margins in the industry. My question is should wilson make public their profit margin percentage's to back up their claims or is this more hyperbole from a high-end audio manufacturer...
Dgad, They used all Audio Research components. They used a Reference 3 preamp, and from looking at the Audio Research site, the amps appear to have been the Reference 210 monoblocks. Sorry, I didn't find out what the other component models were. The cables were all Transparent. Perhaps someone has more details on the ancillary gear, or I'm sure you could write Wilson directly.
I switched TO Audience Au 24 cabling. For fear of being sued, I won't say what I had, and replaced. But the total cost of the old cables was over $10k. I can't believe I ever did that!
I also heard the Wilson demo at the HE 2006 show yesterday and it was fantastic - I give Dave Wilson a lot of credit for all he has acheived. Sure, he has succesfully turned his line into a "status symbol" with a great reputation for quality and service and also - great sound. Very well done demo by some guy who obviously knows a lot about music. They gave one of the best demos becasue they took control of the process, and used the demo to put their best points forward rather than letting people just wander around like most rooms.
There are plenty of mercedes type speakers - but mercedes are a dime a dozen here in LA - you want to turn heads, you bettter be driving a Spyker or MacLaren. Why not have an ultra luxury/ultra expensive line in speakers. I can't afford one - but I'm happy to cough up 20 bucks for the opportunity hear some of these greats.
I'd like to know why the WattPuppys weigh in at 700 pounds - my Josephs have 25 pounds of sand in the base and they are only 85 pounds total. Is mass loading all that important to the Wilson sound? Maybe I should stick lead shot instead of sand in my wilsons...
BTW - the most insane value at the show was Dr. Hsu's new bookshelf horn speaker for $250/pair!!! My other two favorites at the show were Joseph Audio ($3200) and MLB Radialstrahler ($46,000). More on that to come.
WP don't weigh 700 Lbs. Maybe shipping weight is that high but not the speakers.
Just to point out, the most important reason for the WP8 upgrade was that the EU's laws about lead meant the WP could no longer be sold starting next year since the speaker is damped w. lead. I would assume the lead helps w. magnetic shielding. My guess is new speakers are not shielded.
Also it appears that Wilson Upgrades their speakers more or less every 4 years. Correct me if I am wrong.
Woodburger, I have tried the Audience Au 24 cables.They sound very dull and compressed on my systems.Actually I could not believe how contrived sounding these are.Obviously some people with very bright shouty systems or rooms must find they work. Solid core copper lighting cable sounds much better to me.This costs about $1 per metre.It is smooth like the Audience but much more open,detailed and most of all neutral. Mick Maloney of Supratek uses this too despite being given all sorts of cables to try.[including this Audience] You are not the first or last person to be a victim of the Great Speaker Cable con[myself included]
Re: Holeneck. What a pile of bullshit. Regardless of who is the subject of this so called doccumentary (it could be any of two dozen or more manufacturers) but all we have here is simply a bunch of clueless cheerleaders. Dave Wilson is in my opinon an innovator in high end (remember the original Watt?) and many love his products and many don't care for his products. But this is a very sad display. It is to me a whoring out of one's self in the name of sales and is truly pathetic. Sure do what you can to sell your product but this is ridiculous. Again this is no commentary on the sound of Wilson Speakers. But this was really a waste of my time.
Proof of YMMV: my Audience cables sound dynamic, uncompressed and completely wonderful throughout the spectrum.
I'll estimate that the Wilson demo I heard recently had about $200k worth of top everything (in a good room)... and I didn't feel my home system was really far behind. In fact, I wasn't envious.
Daves' problem is not price gouging per se. His problem is there are companies who can do it in a smaller box for less. He thumbed his nose at audiophiles not really caring about us. Now of course the chickens have come home to roost. The market is shrinking and the competiton is growing. My local dealer sold Wilson's strickly on reputation. He threw his best products at Wilson. Yet the room was always dark. No one was listening. I resent any notion that we have to support the industry. Dave is running a business. It's his job to bring to market a product that people want and can afford. If he can't do that he will go out of business. What is amazing to me is how certain reviewer's seem to bend over backwards to promote Wilson. The real problem for Dave is most of us can put together a world class system for $60k.
The new Watt/Puppy 8, look very interesting.. I have seen they supposedly have corrected a lot with this speaker, whatever that means.
However, in my experience I heard a Pair of some Grand slamms in 2000' so not sure what version they were up to at that point. They were in a room I would say was about 20 ft X 25 ft, decent room treatments on display. I don't remember the front end equipment, however I do remember the the VTL Tube mono blocks hooked to them, which were 30,000 a pair or something, and I think the speakers were over 60,000.
The sound? Gotta be honest I walked behind the speaker to see if something was wired wrong(out of phase) or off all together. Well they were hooked up just fine, sound was very seperated, very boring. These were trade in's used I believe.
What was funny is then I went into the new area, and they had avantgarde Duo's hooked up to a 40 watt intergrated amp that cost about 700.00, the sound blew the doors off the wilsons? We mentioned this to the sale's guy, his response was " Yeah, we gotta get those out of here soon or we won't get rid of those wilsons on trade. "
So back to the original post from my limited experience, would I pay for the Value of the wilson at that point, probably not. But some will, and what would it come to if we did not have Wilson speakers in some of the Mansions around the world? But maybe the mistake was hooking VTL up to them, from my research, Audio Research gear is suppose to be the best with wilson.
Tell me about your research. I just don't get what you are saying. I wonder what speaker VTL use to voice their products. You should give them a call. Maxx IIs. What cable manufacturer uses Wilson (probably one of many), Transparent. Has A Wilson / VTL demo won best sound at any show? Wilson sounds great with many different systems. Audio Research has a different house sound to VTL. Both are great products. Now people are using Lamm w. Wilsons including some Wilson employees. Wilson speakers show everything upstream and offer the user the ability to get different types of sound depending on the kind of equipment that is being used.
Nutella, maybe you didnt read the topic of the post, cost vs value, with a focus on profit margin. the topic of the utah business show delt completely with that. i am sorry you hate wilson and i am sorry you felt it was a waste of your time, i guess you shouldnt have watched the whole thing. but if you didnt watch the whole thing, then maybe it didnt waste your time and you were just looking for something negative to say. it wasnt a documentary, it was a local business show that could have featured farm equipment... the point is it focused on dave wilson and his company. regardless of what you think of the price of the speakers, you must respect him and get a feeling that he is truly doing this for the love of sound. if you dont, you are blinded by your own closed mind.
Dgad, to be fair I mis-stated.. Not research, but from what I have read, and seen mostly from people commenting at shows is the Audio research equipment used with wilson is a pretty common combo. Sorry
Holenneck, I have been following this thread and since it started. Wilson threads are always interesting. First, I applaud Dave Wilson for his success. I see nothing wrong with him charging 28k for his WP8. There are buyers out there for the speaker and he has done a great deal of work in developing this model over the years. Second, don't accuse me of a closed mind. I have had an open mind to everything in this hobby. I actually like Wilson. I stated that I made no comment on the sound of the speakers as this was not the topic of the thread. Pay attention. I watched the whole thing because I am open minded. I found the show quite ridiculous. Perhaps this is more a commentary on the show itself rather than the topic of the show. I simply feel Dave Wilson did not do himself any favors by appearing on that show. I admire his success and respect his accomplishments. That is in spite of his participating in that silly program.
As a product manager for a major biotechnology firm, I find it amusing that Wilson tries to exert leverage on potential buyers by invoking a "because he doesn't charge huge margins that's good enough reason for you to buy our products." This simply plays off the ignorance of consumers, nothing wrong with that but it has nothing to do with the features and benefits of the products. That's some "clever" agency he has retained to come up with this campaign. It's as though, because I'm mostly putting more of my money into his products realtive to what he pays for them and less than what other manufacturers put into their own pockets, this is the reason I should buy Wilson? Very clever and some may bite, but in the long run if the products don't deliver, then reputation catches up. Sad that a manufacturer has to resort to such lame tactics. Makes me wonder what else he is hiding, besides the simple technical fact that you cannot deliver, at least in this universe, accurate midrange with 7 inch drivers.
again, you dont see the purpose of the video, it seems to be a cable access show within the state limits of Utah that Wilson appeared on not to advertise, but to discuss his business. When he spoke technically about his products and his company in general, it was way over the head of any of the three hosts. I doubt a single owner of Wilson speakers saw the broadcast of the show before it leaked on the internet. I believe he did the show to showcase his company to the local public and discuss his business strategy for the future. It is a business show. Wilson is a company based in Utah, they employ local people, yet they sell their speakers in over 40 countries. That is a pretty amazing success story, dont you think? I am sure he never thought for a minute it would be shown on the internet and be discussed by some nuckleheads like us, but it did. Other than that, what else is there left to say?
Holleneck - I also thought the show was silly. You are right that it could have been about farm equipment and it probably was the following week. It could have been about the upcoming fireworks display or the Prom 2 weeks ago. It was a poorly executed puff piece put on by a local news show. Dave probably helped to write the script, telling the emcee dude what questions to ask. For a company that markets itself to the rich and famous, it was embarrassingly provincial. Dave came across to me like Donald Trump. And to stay on point, I don't think there is any real justification for speakers to cost so much. Hence, I do not see them as a good value. I would say the same about a $1000 bottle of wine. It is just so far beyond the point of diminishing returns that it cannot be commensurately better than other options available for a fraction of the cost. Unlike some others, I do not feel a crime is being committed in the sale of these items though I would not choose them at one tenth of the price. Timex is just as good as Rolex. And they're both better than my ex.
If we truly want to discuss his margins, we need to know what salary David Wilson is paying himself, his wife & what his employee payroll is. His advertising budget is enourmous as well. Also, he can do some innovative bookkeeping to keep the profit elsewhere. He could have 2 separate companies selling from 1 to the other and the profit is divided. All this is guessing but possible.
Now discussing his advertising. I bet there is a firm involved. If you see his advertising is thematic. Many different ads with different information concepts seeking to differentiate Wilson from other speakers. The advertising campaign might have a few poorly chosen examples, but this is all from the advertising firm.
On to Dave Wilson's salary. For a multi million $ company I am sure he is allowed to pay himself a huge salary & why not. I believe he pays his staff very well, but to be fair he should as he probably is sharing his growth.
I am also guessing that he manufacturers more of the product in house than many other speaker manufacturers. Other manufacturers probably farm out a lot of their production including cabinet work. Others manufacturers might not have a marketing department, customer service dept. or a quality control dept.
Holleneck: "I am sure he never thought for a minute it would be shown on the internet and be discussed by some nuckleheads like us" Maybe you are right on this one. But I still stand by my assertion that the program was silly. Nothing more to say.
Now discussing his advertising. I bet there is a firm involved.
Of course he has an ad agency. I'm sure most high end companies doing remotely near his volume of sales have ad agencies. If not, they end up with ineffective, ugly crap.
I really don't understand the point of the ad at all. Why advertise something that cannot be proven nor verified by any means, and something that you will not even provide your own details to back up your claim? To me this is just irresponsible advertising period. My opinion on this has nothing to do with the speakers themeselves...
Furthermore, the profit margin is really misleading. On a cost basis let's say they were right. But the more speakers or revenue you generate via market share etc, you achieve economies of scale and bring down the fixed cost burden such as depreciation etc as well some share variable costs such as ads, back office etc. B&W can do this. On the other hand one of the key reasons some smaller or new equip makers have a large cost plus margin but low overall margin, indeed many are likely to be loss making.
At the end of the day none of this matters. Why does profit magins matter to us consumers? We only are concerned with quality of the product and affordability in the end. No one would purchase a product on the basis of an guess on the mfr's profit margin.
IMHO, the ad probably targets a segment of potential customers who like Wilson's sonics but believe they're overpriced or are being gorged. I'm not saying the ad alleviates the issue, but lots of people believe everything they read anyway ;)
Wow, a lot of strong feelings towards a "harmless" ad.
I think it's a great ad. Wilson products are expensive, and it is easy for someone to feel "wow, $28k Wp8s, i'll bet they cost $1k to make, what a ripoff," etc... But the ad serves to remind that person that there's a WHOLE LOT more you are buying than the raw parts... You are buying the knowledge, experience, operating costs, and everything else that goes into running a large, successful operation.
The X-2's take many weeks to build. Lots of man hours and overhead are required for that one pair of speakers. they use the best drivers, their own developed cabinet materials, and the best finish quality of any speaker availible. plus, when you buy the speakers, there is professional setup included. their dealers go to provo for training. it is a speciality speaker, only the wealthiest can afford it and most that do buy them may not be audiophiles. like wilson said, they are buying into the culture not neccisarily the product. wish i had that kinda money.
Holenneck - Say what you will, the X-2 is still only a pair of speakers and he's got them priced like an S-Class Mercedes. I get a big disconnect when I look at that comparison. Consider what goes into that car compared to what is in the Wilson speakers. Sure volume is a factor but so is the difference in tooling and parts count and labor. Talk about man hours, the Benz must be 100 times as labor intensive with 100 times as many parts and a reputation for quality that outstrips Wilson by many years and several orders of magnitude. For these reasons I continue to ignore justifications for his pricing. He charges that much because people will pay it, not because his cost of manufacturing requires it. That argument is illogical.
I agree with you, people will pay 125k for speakers; they also pay that much for a wrist watches.
If you simply go on a cost to cost ratio, sure, the Mercedes makes more sense.
But we are talking about loudspeakers, and I believe there a more speakers over the 100k barrier than the x-2. Why arenÂ’t we talking about them?
S-class Mercedes is to automobiles as Wilson x-2's is to audio?
That comparison isnÂ’t even close!!!! There are cars that cost several times 125k, so Mercedes is actually an average priced luxury car; the x-2 is the king of the hill.
So to say that my argument is illogical is fine, but to look at it the way you are looking at is also illogical.
In the end, despite my argument I will never purchase a pair of x-2's unless a miracle occurs in my bank account, but i still respect Dave Wilson's products and the prices he chooses to sell them.
Holenneck - I chose to use Wilson speakers in my analogy for two reasons. First - I believe they are the highest profile offender although you are right about there being others. Secondly, Wilson is the topic of this thread. You say there are cars that are more expensive than $125,000 and that makes my analogy "not even close". Illogical again. The topic was prestige or pride of ownership or status. Mercedes wrote the book on that topic. Walk out your front door and start asking people what they think of when you say Wilson. Then try the same thing with Mercedes. This is where "not even close" will show up.
Not many people know that you can spend 125k on a pair of speakers. Plenty of people know and readly accept spending that kind of money on a car. Buying a 125k car is like buying a Watt Puppy 8 at 25k, buying a pair of x-2's is like buying a ferrari or some other super expensive car i dont know about.
I understand you will again disagree with me, i accept that you will do so, but the x-2 is a specialty speaker, mercedes are an everyday car, even the really expensive ones......
"I believe they are the highest profile offender", Offender!! Offender of what? They design and manufacture speakers, that sell to persons that can afford it and these people buy it, they want it, or they would not build them, they are creating and meeting a demand and as far as I can see, the only people that take offence to that are the ones that can't afford it.
I think Holenneck might be hinting that a $100k Mercedes is more like a $10k speaker, and that a $125+ speaker is more like a $400k+ (or 1mil) car (especially a hand-built, custom model). Maybe I'm way off base on that one.
As for the original topic at hand, I agree the ad copy is targeting naive readers who some of who probably feel Wilson is charging exhorbant prices. "Gee I guess they're a good value after all!" I don't get a sense that it was aimed at enlightened audionuts, like us. Although I am happy that Wilson makes enough money to consistently take out full page ads in Stereophile, thus helping to subsidize the magazine and maintain my $1/copy subscription.
My take on it is this. Wilson is a successful business man. He knows his client base, and has carved out a successful niche (niches?) while resisting market erosion. I applaud him for that. He's obviously doing well. Would I buy his product? Not unless I had a lot more disposable income (or a lot more income period). The value just isn't there for me. Although he does have a good performing product.
Audiophools like me will need to make their own economic decisions. If the wilson product appeals to their tastes, and it economically doable within the household budget, then it's a good value. But that's a value that has nothing to do with Wilson's costs - publicised or not. The value is only compared against the final retail selling price. It doesn't matter to me if there is $27k profit, $1k profit, or a $2k loss with each set of WP8 sold ($28k retail). Well, the loss or the razor profit might worry me if I was concerned about the company's viability for long term warranty repairs or service. But that's Wilson's problem. And I take that into account when I do my own "value" calculation.
Truth be told, if I had more bucks than time, I'd just get a turn-key solution from a dealer (maybe a Wilson dealer), pay the bucks, and enjoy my stereo. Perhaps that is the value that Wilson is generating.
I thought this discussion was about value, perceived or real, and not about economic class distinctions. Whether or not anyone choses to spend their money on a $300,000 bicycle does not prove that the bicycle is worth that much, or isn't. The determinant I would use has more to do with whether people who need to think about how they spend their money can justify such a purchase. As someone pointed out to me earlier, all of this stuff is ridiculously priced. I agree. What we pay for even modest audio equipment is hard to justify relative to what most things in your household cost. What I meant to indicate by referring to Wilson as "one of the worst offenders, is that they move the needle way up on the exploitometer. Their products are priced so far beyond the cost of parts and labor that you can't see them both at the same time because of the curvature of the earth. Think about what it can possibly cost. I just replaced all of my kichen counters with slab granite. The work was done by the premier granite fabricator in our area with numerous upgrade features that added to the cost. I paid $6000 for that. Do you imagine that a pair of X-2 cabinets cost more? Add in the crossover, drivers and binding posts and remember that all these items cost much less in the volume that Wilson purchases than they would if you bought a few. I assure you that cost of parts and materials on those $125,000 speakers does not exceed 10% of the asking price. The normal markup for speaker manufactures is 4 to 5 times the cost of parts and assembly and packaging labor. Does it really cost Wilson $25,000 to $30,000 to build a pair of those?
Parts only make up a limited percentage of any product cost, as a person involved in manufacturing, I can tell you, there is Industrial design cost, which can be in the six figure range, product design costs, can also be in the six figure range, prototyping/ material selection costs, expert assemble and handling costs (cabinet makers), factory cost (taxes, lights, heat, air condition, water), then there is "after" costs, like liability insurance, health insurance, shipping, warranty costs, marketing, shows, future research and development, damages and so many other small stuff it would make your head spin.
Now all this investment has to be made back, plus the cost of parts.
How can we even begin to point fingers at Wilson, I mean, does your wife have diamonds, gold, how about art work, designer cloths, handbags, shoes, watches, do you eat in any fine restaurant, it is a class thing I am afraid, the only reason we think $27K or $250K is over the curve, is because to you and I it is, but to many it's nothing, so therefore to those that can afford these speakers it's worth every penny.
I am not sure if Wilson is right in what he says in the ad (unless we see his books and every other speaker manufacturers) but I do understand what he's trying to say.
There seems to be a lot of contention about Wilson products, price, size, weight, sound, color...everyone seems to have an opinion.
In my life I have found Cost vs. Value is generally in the depth of my wallet.
A couple of examples...
I use to think that Mobile Fidelity recordings were way too much money and not a good financial value, until years later when my income level increased to the point of having disposable cash, now I am sorry I did not purchase the complete catalog as they were released. If I had of they would now be Value vs. Cost (what an investment that would have been)
Or...in my younger years Steak and Lobster was way over rated and quite frankly not worth the expense, hamburgers and fries were the way to go. Steak and Hamburger come from the same source, so why such a discrepancy, or disparity in price, as they are both beef. It takes more work and time to produce hamburger than steak so why is steak more expensive? I now think steak is expensive but not over rated as I can now afford it on a regular basis.
Is it right to assume Cost vs. Value is a derivative of income, and does it sway or have a bearing on a persons opinions toward a product?
How many of the posters on this thread actually own, or have owned, WIlson products?
Out of the people who have, what do you feel about the cost vs value issue now, are you comfortable with what you paid, or do you now feel the price was inflated, and you did not get good value?
Dave, excellent point. There are things I do, own, have done for me that, when I was a young buck, I thought to be ridiculous to spend the money on. Now I do those things and oodles more. Why? Because I have the means. As to Wilsons, being worth the money? I haven't heard their new Puppy, but the ones I have, I'm not wild about the sound. I don't understand why all these audiophools are picking on Dave Wilson and his (to me) over priced speakers. Don't buy em and clam up. He's entitled to his markup. Fair or unfair. Wilson does give you a lot of weight and fine craftmanship...sound? Not my cup of java..
Warren... It has been said that people generally stop spending money in their early fifties, so maybe we all revert back to being frugal like the young only now with a different reason.
If you are not wild about the sound, which is not your cup of java, why have you not sold the puppy's yet?
As for picking on Dave Wilson, I believe that once you get sucessful, or high profile in the media eye, the masses start to notice and take sides, we all need hero's to embellish, and villian's to debase.
PS...nice looking system, bet there is a lot of time in front of it.
Given the value is utltimately sound quality which in turn is quite subjective, whether pricing/perceived value again is subjective and is also based on one's wealth (the marginal value we put on each incremental dollar spent). As such, I find these debates rather useless...including the cost mark up way of thinking: it doesn't matter in the end. Each to his own in tastes & budget and thus perceived value.
Thanks Holenneck for sharing that link to the Wilson business program. I filtered out all the business crap and just listened to what Wilson had to say. He said some very interesting things. He pays full benefits to his employees. He doesn't like the vocabulary of "growing a business." (Thank god that someone is standing up against such perversions of the language). And he's not that concerned with having a greater profit margin, even though he probably does well financially. I respect his speaker line. They're not to my taste but I'm pretty sure they're priced fairly for what goes into them, including his labor costs and overhead. I'm not opposed to having equipment built in China and Bangladesh, assuming the workers are treated well and they aren't underpaid too badly, but I like the fact that Wilson wants to do it all in-house and according to the costs that are specific to the US.
Anyway, thanks Holenneck for passing along that link. Seeing it leads me to respect Wilson for not making profit his primary concern as opposed to his love for audio. I get a sense that he's genuine about that. I'm sure he makes a good living. and I think his speakers are well-made and appropriate for a certain audience that has the ears for them. I think its important to remember in all of these discussions that we all have different ears and preferences. Some people are going to really like Wilson products and others not so. I think that Wilson has done a service to a certain corner of the high end audio audience. I respect that, even if I'm not part of it and don't want to be.
I beg to differ. Dave by his owm admission declared his company profit driven. Declaring he cared little for audiophiles and only cared about those who had $10k to purchase the Watt/Puppys. That was what they were selling for at that time. Now that all the Saudi shieks have made their purchase, he now wnts to return to his base. I for one am always happy when the prodigal son returns home. But let 's not re-write history. Now that he is home we do not owe him any special treatment. He has to compete with his siblings for the attention and love of his parents like everyone else. After all he left on his own. We did not drive him out. You should buy the Wilson's because you like them and not to help Dave out.
It would have been nice for the Wilson owners on this thread to voice their opinion on the subject of cost vs value, as they are the people who rightly deciede this issue, as they keep Dave Wilson and his team in business.
There has been a lot of derogatory comments on this thread by people who do not, have not and will not own Wilson products.
I can only assume the Wilson owners are blissfully unaware of this thread as they sit in front of their "WILSON" speakers enjoying what they were meant to do. I find it amazing that there is not more Wilson trumpting here, it indicates to me that Wilson owners do not have to prove to the world or the audio community that there product is good, better or best.
Henryhk...thanks for the comment, it really sums it well.
Whether or not someone or many people like their speakers does not address the topic of this thread. I'm glad that they are happy and enjoy pride of ownership. That's nice. Nice. The matter up for discussion has to do with Mr Wilson's public claim that his company operates with a smaller profit margin than most other manufacturers. Because I have some experience on the inside of this game, I see a likelihood that his claim is bogus. Typically speaker manufacturers who sell through a dealer network price the finished product at about 5 times the actual cost to manufacture and package the goods for delivery. Back office expenses are not included in the base figure for this calculation and neither is advertising or insurance. Knowing this we will take the model for our conversation to be the $30,000 pair of speakers. If his markup is normal, then he would have $6000 involved in the parts and labor for one, uno (1) pair of speakers. Is this even imaginable? Now consider the model around a $125,000 pair and picture $25,000 in parts and labor for a single pair of speakers. Did you know that you can have someone build you an oversized two car garage with automatic door opener and insulation and sheetrock on a concrete pad for about that much money? I wonder if that could be as labor intensive as a pair of speakers. I'm not jealous, I'm incredulous. I don't care if we're talking about Wilson or Goldmund or Sigmund or Freud. Dave Wilson is the one who opened this can of worms and aolmrd 1241 asked the question. I think his query is reasonable and I'm amazed that so many of you behave as if you are being personally attacked. And remember that the numbers I used are for industry standard pricing. If Dave is to be believed, his costs are even higher than those I posited. If you take the $30,000 model and parse the take, your dealer gets 40 points or $12,000 for selling the speakers at reatail. He may (probably will) discount them but that comes out of his share. Wilson is unaffected. Ole Dave gets the remaining $18,000 from which we deduct the original $6000 cost of production. That leaves $12,000 to pay the front office and the rest of the enumerated costs. Suppose he sells 20 pairs of this model ( probably a very conservative estimate) per month. WOW. That's $240,000. WOW. What about the $125,000 speaker pair? Well, as the model stands, that speaker generates $50,000 in profit for the dealer and for Wilson. That's per pair. We have to guess that there are few pairs of these sold and that one a month would be an exaggeration. So anyway I believe that Wilson is showing a gross profit on the order of a half a million per month. Good for him. That's the old American success story in a nutshell. He's been at this for nearly 30 years and he's pulled it off as well as Polk or Bose or Infinity. Maybe better. The only problem arises when he comes to us and asks us to believe he's taking a beating. It just isn't believable.
hello- macrojack; I see you understand the heart of the question as opposed to name brand loyality, thanks for the reasonable imput concerning cost vs. value as was the intention of the thread...
"My question is should wilson make public their profit margin percentage's to back up their claims or is this more hyperbole from a high-end audio manufacturer..."
My answers are No they should not make public their profit margin percentage's...and yes it is just more hyperbole....it seems to be the way of advertising today...make any claims you want with out any back up
Mr Wilson has been critized for trying to lead us to believe, without supplying enough information, why do you feel your Typical model applies here without knowing anything about how his company is structured?
Here is an example of excess Cost vs. Value that supports your profit model
Radio Shack speaker wire has been rated as a best buy at 19.99 per 100' roll or $0.1999 per foot. Zu Cable (I use this because of the previous refferences on this thread, and also because they include price on their website) sells speaker cable at 23.93 (their cheapest) per foot. That is a difference of $23.73 per foot "WOW" I know that this is wrong, I do not have enough information so it is just supposition. Which is what the context of this post was about.
883dave- The post immediately preceeding yours would indicate that I responded in the manner sought by the original poster. That, however, is the only comment you offer with which I disagree. But, while you are factually accurate, in your cable comparison, I'm pretty sure the analogy wasn't quite parallel. Radio Shack is selling some sort of raw cable and the Zu product is terminated. I don't know what this means in precise numbers but it seems to equate to a comparison between the price of raw drivers from company A and the price of finished speakers from company Z. How Wilson's company is structured addresses what happens to the profits more than how great they were.
Question to Macrojack: Does the 1/5 of MSRP refer to COGS alone? What exactly is included? Before we can declare that his margin is 67% (12k/18K), we need to consider such costs as warranty expense, shipping (not trivial on Wilson speakers), sales and marketing as well as other G&A expenses. When it gets to profit that falls to the bottom line and accrues to the owners, I expect it's a much smaller number than $12K per WATT/Puppy.
Again, I can't argue on if the Wilson statement is accurate or not, as much as anyone else here can't, but being involved in the manufacturing of amplifiers that are in the process of changing its entire line and looking at the costs ahead and behind us so far, for things like C&C machinery, specialized booths, engineering costs, tooling, industrial design, I can tell you without conjecture it can cost close to a million dollars to bring honest products to market.
I suspect Wilson could have much more than that invested in their facilities and if one does not include all daily operational expenses, one would not be in business long, there is so much more to it than a simple equation of cost of production to retail.
So unless someone here is Wilson's accountant, we can only speculate on if Wilson's claim is accurate or not but from where I sit, I can see it being closer to the truth, than not.
FYI, I do not own a pair of Wilson speakers or have I ever, nor do I suspect that Wilson has ever used or even heard of our amps but I feel to single out a prominent manufacturer who may have millions as well as decades invested, whither or not we like the speaker and simply because some feel that an advertising statement is misleading, is simply wrong and extremely judgmental, especially without any kind of pertaining facts.
My defense is not only for Wilson but I feel it's to all honest manufacturers who have spent a greater part of their lives along with immense investments to bring products to consumers who are very happy with them, Bose and Polk included.
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