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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There are no laws for pricing products. Manufacturers must establish what they think they need to run the business, and then what kind of profit the product might drive. Do these products have some type of exclusive patented technology? Maybe sometimes? Hype? Bet your life on it. There is always a market for products marketed toward super high-end customers who have so much money that the price is irrelevant and those same customers are the least likely to be customers who do a lot of technical research or get too deep into learning the nuances of a hobby such as audio. It might be a hard pill to swallow but in many cases all that matters to this demographic is that they have something extremely rare and expensive, no matter what the thing in question might be, and that they can show it off simply for the fact that it costs an obscene amount of money. Price is not always a great measure of performance or quality, especially when you leave the reasonable bounds of high-end-high-quality to the level of ridiculous-price-no-added-performance.

It's also possible for a manufacturer to under price a product.  If someone were to manufacture a power amplifier and sell it for a profit at $1,500 no audiophile putting together an upscale system would buy it, regardless of how it sounds.  Too much cognitive dissonance to match that with a $20k plus loudspeaker.  If you doubt me, consider how most audiophiles view powered loudspeakers.

A few points on the OP;

There are 5.3 million millionaires and 770 billionaires living in the US. The market for ultra luxury goods is bigger than you think.

We are in the situation now that extremely high prices for products are a feature not a bug. In other words, exclusivity is a selling point. If you have $50 million in Microsoft stock spending 7 figures for a stereo is reasonable in your world. What else are you going to do with your money? Give it to the homeless?

To reinforce a point made above, volume and mass production is critical in the pricing of any complex product. I don't think anyone would argue that a Toyota Venza is magnitudes more costly to design and manufacture than a Rockport Orion yet the Venza sells for less than half the price. If Rockport could sell hundreds of thousands of Orions they would be a lot cheaper.

A $100k speaker or amp is not just an appliance, it is a work of art with a story behind it. It has the advantage of reproducing musical works of art as its purpose. People pay over $100k for paintings all the time. Why not buy a nice stereo?

I've been to a few audio shows and it's thrilling to hear some of these ultra expensive systems even though I will never own one. The sound they achieve gives me a target to shoot for and has allowed me to enjoy this hobby even more. I've been able to put together an affordable system that was state of the art 25 years ago and it holds up to the modern ultra expensive systems surprisingly well. I'm glad the ultra expensive stuff is out there and I hope that it brings joy to its owners.

 

Obviously, it is possible. Even the most expensive items are made of components that cost relatively little (thank goodness there is little place for precious metals and gemstones in hi-fi!) Does the manufacturer add enough design know-how, or design beauty to justify the exorbitant price? Looked at objectively, not often. Evidently it makes a difference as to whether the price is a big deal to you, or a trivial throwaway. But it makes no difference to the sound, does it?

I guess I'm saying we should only praise or recommend components on their sound, not on their appearance or their price. An unobjectionable principle. What a shame it so rarely seems to apply.