ascend sierra tower with raal or Focal Aria 936

"They don’t need to make as much" is simply referring to what their costs are. Costs per unit, when one doesn’t have marketing, advertising, and a B&M chain to support, costs per unit are far less. So they don’t have to charge as much to attain a margin of 100%, or whatever they need to cover material and parts costs, salaries, utility bills, and a healthy profit. Typical margin for a company like Focal is probably over 300%.   That is, Focal would sell a given pair of speakers to a wholesaler (that cost them 1,000 to manufacture) for probably around 2,000, or 100% margin.  The wholesaler would sell to the retail shop at a profit, then the retailer sells to you at a profit, for a total margin of the original cost to Focal of easily 300%.

This is just simple economics, obviously you were not a business major. Don’t worry about it, you’re not the type of person who would understand examples like Emotiva and SVS, and how they have built up their brands, and changed their approach.

Please explain how they changed their approach to offer the same stuff for the same price but adding a gigantic margin for dealers off the top.  Oh, and the fact that they now advertise all over the place.  Explain it.

I’m not sure what you’re asking. Emotiva used to charge $899 for the XPA-5 amplifier. Today it’s $1599. Emotiva seems to be experimenting with a hybrid Internet Direct with dealer approach. I really don’t know what the costs are, but rest assured that a dealer is getting a profit from each sale, and so is emotiva.

With a true Internet Direct approach, there is only one level of profit margins, not 2 or 3.

You’re comparing two COMPLETELY different products at those price points. One a gen 2, one a gen 3, plus inflation. Plus the fact that they’re now made in the USA, plus the fact that they’re... you know... completely different.

Any other solid points you’d like to make?

Let me make this simple for you. I originally stated that there’s really extra substantial intrinsic value of an internet direct product at a given price point. There is no way that Ascend is selling a product that would sell for say $10,000 at retail, for $5,000 direct to customer just because they don’t have to deal with dealer/distributor cuts. No way they would be that dumb. If it has a consumer value of $10,000 why wouldn’t they sell it direct for say, $9,000 and keep the extra profit? I fully understand the point of “lower profit, but sell more” and to some minor extent there’s is an obvious SLIGHT bit of that but not nearly to the amount you suggested.



You can say this is Economics 101 all you want, and I’d agree. Basic short sighted overly simplistic economics. The real world of speaker/electronics selling is more complex than the basic simplicity you seem to be applying to it. There are so many more factors.

Look at Dollar Shave Club for a perfect example of the internet direct “advantage.”  Pay more for the same product and they laugh all the way to the bank.  

I believe there is no point in continuing this discussion, perhaps we can at least agree on that.

There are many factors on the Emotiva company, believe whatever makes sense to you.  I've been simplifying the discussion so those unfamiliar with business concepts could understand the basic issues.

One reason internet companies do not charge a full retail price on their products is specifically YOUR mind set. Many couldn’t be persuaded to try Ascend or Axiom or Aperion Audio or Hsu Research or Odyssey Audio or Oppo or any other such company. To succeed they have to discount their products to a point where enough are willing to try them out in their homes.

The first such product I ever bought was an Emotiva XPA-3 for around $500. The equivalent amp from Parasound was about 3000. I was willing to save 2500 and possibly get an inferior product. Since then I’ve purchased many pieces from the Oppos of the electronics world.

Some will try, but many like you won’t. Do whatever makes you happy.