What makes an expensive speaker expensive

Obviously too much audio gear is absurdly priced, but as long as there are buyers the vendor can keep up the sales... 

In July of 2015 I drove from Northern Virginia to Sanford Florida in order to audition a pair of used Avalon Acoustics speakers. They sounded great, I forked over less than 1/4 of the new price, we packed them into my car and I made the long drive back home. Over the next month I listened to these speakers and came to understand why they are worth the new price (roughly $45k new, used 8-10k).

Amazing speakers. Completely changed my understanding of audio and all the music I had previously listened to on other speakers. Worth the price. Absolutely worth the price, but I would not buy them new unless I would not miss the $ spent. These speakers are worth the price differential compared to lesser speakers.

In August I was in Boulder Colorado where the factory is. I called and managed to secure a tour. What I saw there were quality craftsmen building massive and complex cabinets that weigh 150 lbs each. I saw top end drivers and crossovers, and internal wiring that goes beyond what the typical speaker includes. Each speaker represents a massive investment of time by craftsmen and engineers, as well as the R&D.

What makes an expensive speaker expensive?
A target audience of very wealthy people who think more money buys the best.  Up to a point its true.  But, today's technology and understanding will hit a wall of not knowing what's the next improvement will be. After a point of some sonic benefits, its a matter of raising in price by over engineering - more and bigger... using the most expensive components that will many times become common place in the next generation..  Just look at past first generation most expensive components ... Now many are obsolete and may not even sound as good as what we now find in mid fi. ;)  And, the fact that the very wealthy will never invite you over to hear his system.  So?  He can cloak himself in a mystique that exclusivity offers him.  You will wonder what it is you are missing, when you may be missing what you already have. One of the most satisfying systems I ever heard was achieved by good quality components and a great room. Not expensive at all compared to the super systems.

Bottom line is there is a strong market for these speakers.  Many who can't afford them are jealous and will say their X cost speakers are as good or better, but I've rarely found that to be true. Some companies do over charge based on cost of production (all costs from utilities to R&D are in the final price), however many do not. I know how much it costs Vandersteen to make their higher end speakers and they are very expensive to produce. I am sure that some of the brands using esoteric drivers are the same.  it's incrementally better and in some cases wildly better.  If I had the money, I'm sure I'd be running the Vandersteen 7 mk 2's.  No doubt in my mind. It's the best sound I've heard.  I used to love the older Avalon's, but their value will go steadily down like Thiels and others who have changed hands recently.  The irony is that I loved the older Avalons and even Sonus Faber and now I don't.  Things change, but it's no different than the auto industry.  They have to have safety items and the costs of both R&D AND newer materials along with THEIR R&D drive the cost of vehicles just like speakers using high end caps and carbon fiber drivers or even ceramics/diamonds etc... can become very expensive to produce, plus what many don't realize is the cost involved in matching drivers and crossovers to make sure both speakers are within tolerances isn't cheap either. Again, all manufacturers have a sweet spot in their lines that represent best value.  The highest end speakers in the lines are not best value and are obviously not priced that way, but they are worth it to many who DO hear a difference and to THEM it's worth it as they have it.  I take NOTHING away from those folks and they actually help support great speaker technology and R&D trickling down to our favorite speakers that are attainable for many of us.

The reverse snobbery is amazing to me to be honest.  It really just hit me.

It's not always reverse snobbery.  I own three different speaker models that retail at over $10k.  While I spend time in front of each, I spend more time these days listening to a system with speakers that ran me about $2700.