Price Increases

"The challenge is to find, say, the $10K speaker that sounds like those $100K "high-end" ones",

That all depends on the speaker. For example, take a look at the Vandersteen Model 5 speaker. I think the website or an old mag review shows the construction. Labor intensive for sure. Materials have gone up, and cost of health care went up in some cases close to 50%. Hard to run a business without hiking up the prices. Plus nobody makes money selling speakers as everyone has made and marketed a speaker. It is not hard to make a speaker, just hard to make a top speaker and not something that is just competitive. Most Goners have never heard a really top system like a system that Michael Fremer has. You can learn so much from hearing a system like that and how each component, cable, etc., changes the sound. In addition, the cost to experiment to develop something that is better than the original is quite costly. I build a preamp and it took me three years to try different parts to see what parts worked the best. I'm still trying different parts to see if I can improve the sound. That cost me $10K in parts that I don't use alone. he pram is hand build with custom parts, what would Audio Research charge for this preamp???

"Well, there are some giant killers out there Ack, largely the small manufacturers selling direct. I spoke to just such a small manufacturer a couple of years ago, who estimated the material, labour and delivery costs of a $80000 loudspeaker, was probably $20000, including a modest profit. The rest is marketing, dealer and distributor margins, which can easily add 50% to the cost+ a large margin to the manufacturer."

I think the list you show in your post are very good speakers but I am not sure what giants you are slaying with them. Magico, Hansen, etc.???

Look at the price of drivers in the speakers you own or think about buying. Paper, carbon, aluminum drivers are expensive. $80K no but go ahead and try 20 pairs to see what works the best in your speaker design, cabinet construction materials, finish, etc., not to mention cross-over parts, do you know how many capacitors there are to try? Look at the cost of Dueland caps, who are they kidding? That is where the cost comes in for the original design and research. Yep and then the 50% mark-up for the dealers. Look at how many good speaker designs are no longer around, Meadowlark comes to mind for me.

So I am carrying on and on. Sorry. I hope I made a point!

Happy Listening.

I found Alan Taffel's article in this months Absolute Sound about the Swiss audio industry fascinating for its perspectives on the audio business and the business model Swiss industry has adopted. A point I noticed (relevant to this thread) was that when Cyrill Hammer of Soulution audio needed to remodel his electrical manufacturing firm and find a product that he could succeed with in Switzerland, he chose high end audio because of its relative insensitivity to price increases. Those of us without the living standards and purchasing power of the top 2-3% need to accept reality and realize that segment of the market doesn't care about price. If any given price tier product provides superior perceived value to their target demographic, they're adequately capitalized, and their marketing is successful, they'll have a chance to succeed in the marketplace. The vast spread of price points in the audio realm just reflects economic reality in the world. No point in beating up on businesses that try to go after the upper end consumer, they're just trying to find the product niche that works for them.

No doubt that most manufactures 'stick it' to us customers.

What manufacturer is forcing you to buy their products NOT including the government? If you don't like their products or policies, shop elsewhere.

Bigkidz, much of what you just wrote makes a lot of sense. I seem to recall reading an article authored by either Steven Stone or one of his colleagues (Robert Skoff?) that advanced the same points about the relationship of "hard costs" versus MSRP, particularly the points about dealer costs and margins.

Perhaps some A'gon members who are dealers can answer a question about one element of dealer costs, namely inventory. Just guessing about this, but I suspect aside from display and demo units, most dealers do not inventory large stocks of high-end equipment. That is not to say that the cost of display and demos is not significant. Consider -- how many Magico or Wilson speakers can a dealer be expected to have boxed in the back?? OTOH, aside from inventory, I imagine the cost of running a B&M store must be quite considerable, plus there is also the need to make a profit. Otherwise, we're talking about a hobby.

That's why buying preowned top end gear makes a lot of sense for me. I've bought most of my gear preowned for about 60 to 70 percent of MSRP. Having said that ... I won't and don't shop and audition gear in B&M stores. I have mentioned many times before that I won't take up a salesperson's time unless I intend to buy retail.

Cheers,

BIF

BIF I agree. The dealer I know very well offered to set up speakers that I purchased used. I cannot take up their time unless I am going to pay for the service otherwise I would feel obligated.