How are Hig-End Speakers Priced?


I recently (early Feb 2012) purchased a pair of Model 61 Human Speakers, intending to build a small office system with them. I've been listening to them through my main system for a few days now, while breaking them in. These were purchased directly from the builder/designer; my cost was only $675, delivered to my door.

I am so very impressed with the build quality of these small speakers and the quality of the music emanating from them (even though they are not yet fully broken in). I'm honestly surprised they are as inexpensive as they are, and have begun wondering how high-end speakers are priced.

The speakers are manufactured in the Northeast US, and (so far as I know) the builder/designer doesn't advertise and doesn't attend trade shows. The speakers are built with only one pair of binding terminals, two hand-built drivers, and a very simple 1st-order crossover using a design I believe is refined from an 1970's-era design. I'm not sure how much the designer is actively pursuing R&D currently.

I'm wondering if there is a formula that speaker manufacturers generally use when designing/pricing their products. For example, does a manufacturer target a price point, and then decide to follow an "industry-standard" formula like (say) 15% for R&D, 15% for materials, 15% for manufacturing/assembly, 15% for marketing, 15% for distribution, 15% for manufacturer's profit, and balance for seller's profit? Certainly, eliminating (or reducing) one or more of the above categories could yield a speaker that is much less expensive than the price point it was designed for.

Any thoughts?
rx7audio
I think that's why we're starting to see catalogue merchants like Crutchfield starting to carry high end lines.
I didn't know this thread was still alive. (I'm not receiving e-mail notices.)

Here is a bit of my perspective: I returned home from work rather late last evening, a bit worn out by some projects I've been struggling with. I turned on my DMA-90 to let it warm up while I watched the late-night news. (I had left my Icon and DMC-12 on from my listening session the previous night.) A short while later I was thoroughly enjoying cuts from Yellowjackets' "Live Wires", Joshua Redman's "Wish", Lyle Lovett's "Joshua Judges Ruth", Rickie Lee Jones' "Pirates", Duke Ellington & John Coltrane, and John Coltrane & Johnny Hartman. I had the volume set at twelve o'clock! The music was beautiful.

I had thought I would need to spend three-to-five thousand dollars on a pair of stand-mount speakers to have something commensurate with my main system. (And the ATC's I spent some time with a few months ago certainly satisfied, even though they thirsted for a bit more power than my DMA-90 could muster.) However, I am so pleasantly surprised to be enjoying my music through these relatively inexpensive Human Speakers as much as I am. The music is detailed and fast and involving and, um, musical—whether at lowish SPL's or highish!

Now, I don't have "golden ears", and my listening room—my family room—isn't treated with audiophile sound panels, etc., and I haven't invested in special power cords, etc. But I do attend a fair bit of live music performances, and I can absolutely appreciate the quality of music emanating from these small, inexpensive speakers. The live cuts on the above CD's sound very good, indeed.

I can't help but believe that if the designer/builder of these speakers was more "conventional" with respect to marketing, etc., these small speakers would sell for a good deal more than they do. Oh, God! I really hope he doesn't read this!

rx7audio
Pubul57 That's a very interesting point you raise. How far is to far to expect to be able to buy from a dealer. This is much more of a problem in the US, with the size of the country. Here in the UK, 500 miles takes you from one end of the country to another. I also believe, that is why shows like Denver are so much more important to you than us. It really is impossible to audition a range of options, unless you go to a show.

What I do know, is direct selling by manufacturers, drives dealers crazy. Particularly when they dem the speaker and the client goes and buys cheaper from the manufacturer. Most dealers would drop a line of products under these circumstances. I think you have to ask a dealer, how far he considers, his patch covers
RMAF is the only time I see equipment I or a friend don't own:( In my 30s I visited dealers in NYC/NJ/CT many times and it was the way I bought equipment - last 15 years? Everything through Audiogon, or direct from manufacturer with "anchor" pricing to feel like you got a good deal.

Not sure how well 2-channel dealers are doing, HT seems to be where it is at in terms of retail survival.

A few regional shows for the hi-end is probably the best we can hope for to "audition" and expose ourselves to new equipment - or buy/sell/buy/sell... on Audiogon.