In discussions with a retailer I respect, and talking about Focal speakers, he told be the mark-up was 100% at every step. Focal Sopra 2 cost $6500 to build. His cost from Focal was $13,000. His list price (CDN) was $26,000. Expected discount off list was 20% leaving him with a 30% margin on the sale. I have no reason to believe this formula does not prevail regardless of the cost. Bottom line, the higher you climb up the MSRP, the bigger the profits are built in at every step. It's just a fact of life and no one is forcing any of us to buy anything we don't want.
Is it possible for a high end manufacturer to overprice their goods?
Having just read the interesting and hyperbole laden review by RH of the new Rockport Orion speakers in the latest issue of The Absolute Sound, one thing struck me..
is it possible in the high end for a manufacturer to overprice their product ( doesn’t have to be a speaker, but this example comes to mind)? I ask this, as the Orion is priced at $133k! Yes,a price that would probably make 99% of hobbyists squirm. Yet, the speaker now joins a number of competitors that are in the $100k realm.
To that, this particular speaker stands just 50.3” tall and is just 14.3” wide…with one 13” woofer, one 7” midrange and a 1.25” beryllium dome ( which these days is nothing special at all…and could potentially lead to the nasties of beryllium bite).
The question is…given this speakers design and parts, which may or may not be SOTA, is it possible that this is just another overpriced product that will not sell, or is it like others, correctly priced for its target market? Thoughts…
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Part of my OP came from a recent discussion that I had with a very very well heeled friend who can easily afford anything in high end audio. To this gent, a multi million dollar system is no strain on the pocketbook. What interested me was his comment that he will not spend any money on a product that he sees as having a minimum value to cost ratio. We discussed several speakers ( not Rockport’s, and certainly not the Orion), but others that we all know and would respect, but few here can acquire. My friend commented that one of the reasons he is able to actually afford all of these products is also because he has the discriminatory ability to not get ’taken’, as he put it. Just to add another perspective to the narrative here. Don’t get me wrong, this gent has a system that most would envy, but it has been put together with some considerable thought, and he always bought used or at a considerable discount, as far as I know. |
@8th-note "There are 5.3 million millionaires and 770 billionaires living in the US. The market for ultra luxury goods is bigger than you think." I thought 5.3 million seemed like a low number so I did some checking. You're correct, depending on the source. Other sources doing a Google search listed that number around 22 million. Regardless, your statement that the market for ultra luxury goods is bigger than you think is certainly correct!
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@russ69 +2 Mike |
If they charge enough and sell just 1 that might be all they need for easy money and a big profit. Some might call it a scam. But It’s attempted here all the time (sell something for absolute top dollar that can be finagled). It’s something agon is designed to do ie facilitate sales of one-off hyped up items only here on the “high end” site….the Ultimate hifi boutique shop. Complete with free forum for marketing efforts. See the occasional ad for a 10k power cord from a total unknown, for example. High end means more expensive and elaborate. Things few others are likely to own or want. Duh! Get a clue hombre! All else is subjective. So nope, no price is too high. The sky is the limit. All you may need is a buyer. So just factor in expense of hiring a few good shills perhaps. You know, the usual story just with expensive hifi things. Have at it!
Then you have the reputable vendors who have to be concerned about maintaining a good reputation. Different story ! |
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