Is the main reason audio equipment depreciates so much is

"You don't find that with cars, where dealers are making slim margins"

What you said is the perception many people have. I worked as a car broker for 3 years. The dealer actually makes what they call in the Industry trunk money. That is essentially a kick back the dealer gets from the manufacturer. We would broker cars all day long at dealers cost and still make a good profit. Every month the manufacturers put out different incentives for different cars. We would focus are advertising on what cars we could make the most on. I remember when Mercedes was giving us a 4000.00 rebate for every E-series car we would sell. We would offer the car at dealer cost and sell a ton of them. They were paying me 25 percent of gross so I was making 1000.00 a car. It was a very lucrative business till the owner of my company got greedy and started screwing people.

I think the reason is a lot of audio equipment sound practically the same at widely varying price points due to economies of scale (labor and buying power) and the fact that audiophiles are constantly selling to upgrade. So if you're in the market for CD player and have two grand to spend, you can either buy a new one or one a used four grand unit and get practically the same sonic performance -- plus the four grand unit may have a higher resale value when time to upgrade again. When you are talking about six figure equipment, then the difference in performance is smaller still, if any at all.

That's what the used equipment seller is competing against. If the prices accurately reflected performance, the depreciation would be a lot less (see the iPad auctions on eBay where they usually sell for 60 to 75% of retail).

My man Taters!...:-)

keen observer of the obvious, love ya man!

I am in product development. Don;t forget that R&D expenses can sometimes be significant. Initial product samples are all hand made. Co-manufacturers of subsystems or other parts charge for their prototypes If you are developing something new then you have to go through many rounds of prototyping to get the results you want. And then once you have the design you are looking for you have to scale up and figure out how to manufacture it. Sometimes you have to buy new equipment, a new line. Then you have to iron out the manufacturing wrinkles, so the first line runs may have high defect rates. All of this can be very expensive, Engineering time, craft people to hand make samples, materials travel ect. All of these expenses have to be built into the cost. The actual material and labor cost of any piece of gear sometimes not the most significant cost. If the projected market or number of units that they think they can sell is not large then all the development costs are spread over a relatively small number of units. For the most part I don;t think that greed is driving the cost of high end gear. As in most things you get what you pay for. However it seems that charging what the market will bear can be a factor.

I read recently where a guy took apart some 20k Transparent cables and try to duplicate them.

Jafant, where can I read that?  I once took apart a well-regarded $600+ power cord and found.......about $25 of hardware parts and wire.  I am no longer easily impressed.