Price Increases

Also seems many are aiming for where they think customers are still left with disposable income. Tossing in less sales you end up selling less units for higher price just to pay the bills. Think you will see a great thinning of the herd in hi end manufacturing.

Jmc, I'm not sure the point of this:

As for prices rising on the same item, that is just the start of the devaluation of the US dollar that the Fed started early in 2012. We can lower unemployment when you devalue the dollar, the flip side is that retail prices will increase just to stay the same in value

It seems you are advocating for a return to the gold standard? As far as price stability goals, the Fed has been targeting around 2% inflation +/- 1% for decades. Nothing about the period you referenced (early 2012) is unique. And I don't think big increases in prices for high-end audio are related to monetary policy. Others above more accurately described the phenomena in my opinion.

It's good to put it into perspective.

A: Something's worth whatever someone pays for it.

B: How many live music experiences could you go to for the price of a really high-end system?

labor, shipping, tape, wood crates, boxes, drivers, caps inductors, screws, finishes..... 100% of everything used has gone up a in price and some things have doubled in 2 years. A few a the big "fine" makers are 100% produced in China now I finally get it!

Decent car 30K

Fine loudspeaker 30K

Fine Chinese loudspeaker 15K

David ... the "directionality" of your figures appears reasonable. To put an even finer point on your comment, let's add variable and fixed costs, such as R&D, QC and "S,G, & A" overhead. I made a similar point in other threads about manufacturing economics.

For example, I surmise that large manufacturing companies like Focal, Revel and Paradigm incur roughly similar amounts of fully loaded speaker production costs on a per unit basis. These companies have large volume operations, do their own R&D and manufacture many speaker components in house, most notably the drivers.

It is no coincidence that the three companies also use beryllium dome tweeters in their high end speaker lines. I understand that these companies manufacture their drivers in house.

I don't know how much it costs Wilson to make its speakers on a full absorption cost basis. I realize that the speaker enclosures are made of some secret formula materials, which may be expensive. But ... I surmise that because Wilson doesn't do the volume that a Focal, Revel or Paradigm does, its per unit full absorption cost to make a Wilson speaker is higher than a Focal, Revel or Paradigm speaker -- and that doesn't even speak to the quantum of gross profit that Wilson has to make if it has less volume.

I have no support for the next point which I heard from a Paradigm dealer, who in turn heard this from a Paradigm regional sales rep. So take this with a grain of salt. The story was that a speaker like the Paradigm Signature 8 would have to retail for $30,000 if manufactured by a smaller company for all of the reasons mentioned above. Is the $30,000 number a hard figure. Probably not. But the take-a-way is that because Paradigm is a large volume company, it would be a challenge for a small manufacturer to match Paradigm's MSRP of $9,000 for the Sig. 8.

As to price increases, the point of this thread, it is no coincidence that the US dollar has decreased in value compared to the Euro and the Canadian dollar. In the case of the Paradigm Sig 8, the MSRP was about $5500/pair when the S8s were first introduced sometime in 2004 or so. At that time, the Canadian dollar was worth about 70 cents US. The current exchange rate is about one-to-one. Just based on f/x considerations alone, the MSRP increased by almost 50-percent!! And that doesn't even speak to inflation or the cost of R&D design improvements.

Happy Holidays,

Bruce