Why is Dynaudio so much cheaper in Europe?

I'm all for saving money. The problem is when you have a problem with the speaker and the U.S. distributor doesn't want to help you because it's a grey market product. Then where do you go? Dynaudio makes their own drivers. There is no where else to get them. A couple of years ago I blew a tweeter in an older Dynaudio speaker. My dealer called the distributor in Chicago and ordered it for me. He told me I should replace both tweeters so they would match. It took about 3 months but I finally got the tweeters.

Another thing is resale. I don't think most consumer want grey market products. A lot of people will call the manufacturer and make sure the product was destined for the states. They are also concerned about service and parts.

So off the bat you might save a couple of thousand but when you go to sell you are also going to get less for the product and it's going to be hard to sell.

Schubert wrote: 'Certainly a factor Dave, but would it be one if the chumps didn't pay him?'

Whats something worth? What you can get someone to pay.

One way to get easy money is to be the distributor for some high end bit of gear. You wont get it from the manufacturer because he has a distributor and says go to him. He may not even stock the bit of gear and simply gets it in as required and pockets the money. Anything goes wrong - he ships it back to the maker.

As a distributor he should be earning the commission etc by marketing it and providing after sales service. If he does that then that's what you are paying for - and it can be quite substantial. If not then its money for jam. You as a consumer must decide for yourself if you want to pay that for it. Even if he is doing what a distributor should be doing you must decide do I want to pay that for it.

I don't know what margin Dynaudio distributors get but I do know from some reliable sources for Magico the cost is 9 times the parts used. I hear when a new speaker was released in Singapore a Champagne and Caviar breakfast was held to celebrate it - and it was not cheap stuff - it was Bollinger. Guess who pays for that - you the consumer. Only you can decide if that's what you want to buy into - personally it makes me barf and I simply wont have anything to do with products like that - but that's just me. Obviously Magico is still in business so there are plenty of people happy with that sort of thing - or, possibly a lot more likely, don't realize whats really going on.

Thanks
Bill

Taters: Yes, you have to be careful when buying, because it is better to keep the product than sell. I don't see why you couldn't get the parts direct from Dynaudio or the dist. over there, but maybe not.

It depends on the person when selling, some care, some don't. Obviously, when you paid less you can sell for less on the used market. When selling electronics of a different voltage, if you're tech savvy, no problem. If not, then yes there is a problem. However, there are some (emphasis on some) independent techs who can do a good job of fixing things. Provided they can get the parts, which might be difficult, then you're ok. All of this must be researched before buying.

Playing in the high end is always a risk when it comes to service and parts. And a risk in general...The parts usually are quite expensive unless under warranty. Then you have equipment matching and what have you which I can't stress enough. *If* it's truly excellent equipment, it won't need much service if at all, and only new parts 20-30 years down the road by which time will be out of warranty for most high end products.

That's basically my take.

Bill: Exactly right. You nailed each point perfectly. Great post. Allow me to add that the markups in many cases don't add up and or make sense. I know there are bills to be paid, salaries, R&D, and what have you, yes. But, the numbers still don't add up or justify the high price in as you said, the cost of whatever component is to make. I can't help but think there's some greed or a lot of greed involved. It's a human weakness, and has been going on for centuries. There are some "good guys" in audio though that price fairly and make a great product, however.

There are a number of posts here that seem based on incomplete understanding
of the difficulties involved in achieving long term longevity if you are specialty
manufacturer of goods with a limited market. If a manufacturer's parts cost to
retail ratio is 9, I don't see that as an indicator of obscene markups necessarily.
You also have to factor the cost of machinery involved in tooling the parts, the
cost of USA based skilled labor to construct a speaker as complicated as the
Magico line, real estate to house the manufacturing facility, etc. When you have
an informed view of the real costs of maintaining a specialty manufacturing
operation that can stay in business profitably for years, a 9 to 1 parts cost ratio
seems reasonable.

I've been interested in high end audio for forty years and I've seen many upstart
audio companies started with the idea of delivering exceptional value for money.
They start out as a small operation getting by with shoestring margins,
inadequate facilities, and insufficient labor. Word of mouth gets out about what a
great "value" they are and demand builds. Demand outpaces the
ability of the business to deliver products at the initial price point and then
prices have to rise or they go out of business because they can't manage the
transition long term, full fledged viability.

If you look at the long term survivors in this business like Conrad Johnson, Audio
Research, McIntosh, Pass Labs, Bryston, Luxman, Audio Note, etc., I bet they all
will have parts/retail ratios that are similar. Sure, they don't offer the same
seemingly great deals as that new guy building amps in his garage with no
workman's comp insurance, but they'll be here in ten years to take care of your
product (which is unlikely with the upstart "value" model.) I'm not an
apologist for greed, but if you believe in efficient markets, every manufacturer
that survives does so because they offer what some segment of the market
perceives as fair value.