Economics of small speaker manufacturers

Interesting thread. I'd be curious to read an analyst's view on the industry and its trends. Reading Duke and Lou's open and honest posts, it sounds like a consumer is definitely benefitting, cost-wise, from purchasing direct from the manufacturer, which certainly feels like it makes sense. The biggest downside is, as identified, that you can't, or can't easily, demo the speakers. But that is already a downside for most models for most of us - unless one has a dealer close by, hearing before buying is difficult at best.

The value proposition of buying from a local dealer is disappearing in many, if not most, cases and with it goes any reason to pay the prices of a dealer-network distribution model. The direct-from-manufacturer model probably doesn't scale to huge heights, but high-end audio gear will likely always be a niche market, so it probably doesn't have to scale that way.

someteimes it is better to compete with fewer manufacturers than many.

there are many designers using "cone" drivers, but very few design dipole speakers.

"small" companies take note: please design panel speakers. there are many cone designs, but so few panel designs.

hi duke, i'm trying to persuade you to design an electrostatic speaker or planar magnetic. i'm looking for one now. you have already gone the cone route. it's time for a change.

one of the advantages of a small company is the ability to sustain a viable company without having to sell as many "units", because there are fewer salries to pay, plus possibly less rent to pay as well.

Beheme, politics aside, the problem with Chinese gear is that you never know what you're getting. Lead paint in toys, dental bridges, and other games that Chinese manufactures play to up their profit margin makes it a crap shoot I'm not about to play. Say that a production lot of transistors doesn't meet QC from a manufacturer, after a random test of a few samples. It's cheaper to sell the whole lot at a 50% to 75% discount than to start testing each one.

Maybe not all the transistors will eventually fail, or are only slightly out of spec's, but I GURANTEE YOU, that the Chinese manufactures will grab them up in a heartbeat.

As scientists discovered long ago, many questions cannot be answered by theoretical pondering alone, even by brilliant thinkers, and we have to go to the real world to see what is actually going on.

In principle, a boutique shop could pass on much of the savings to the customer giving you a "$5000 speaker" for $2500. Or it could decide that you're used to paying $5000 for such sound and charge $4799. Who is doing what?

In principle, a big company could use overseas production to give you the best quality at 1/2 price. Or you could get 1/10th quality for 1/2 price. :) Again, who is doing what?

This is not for theoretical deduction. In the end, we need A'goners who know the best of each kind and can tell us where the best values are.

The answer may well depend on the price range: for example, it is quite possible that for the "best $1000 speaker" you need to go to a big company outsourcing from China, and for the "best $5000 speaker" to boutiques in small town USA (that's an example, not a statement).

In any event it is important to compare best with best. Much review ink is wasted on comparing good product of one kind with mediocre ones of the other.

Fatparrot:...the problem with Chinese gear is that you never know what you're getting.

That's why I won't buy direct from China at this stage. However, with a company like Quad or LSA in the middle, I expect them to take care of QC issues.

As a general life lesson, I have seen many Westerners make a mistake in Asian countries. If something costs $100 back home, we should be glad to get a comparable item for $50. Instead they get busy chasing $19 possibilities in proverbial dark allies. :) So, while made-in-China is cheaper, we don't have to chase absolutely the cheapest that may be out there.

Aktchi, I agree with your statement. The most important factor in Chinese manufacturing is "who is watching the cookie store". Without proper oversight, too many games are played in the manufacturing. This happens at upper level management, unlike America, which had previous problems at the actual blue-collar assembly lines.

Again, I personally try to avoid Chinese products, whenever possible [more difficult every day], due to political reasons...but this is NOT subject of this thread!