Amp design logic

IMO, part of this pricing is hype. Boutique parts can be very pricey, especially if machining costs do not benefit from the economy of scale. Unless the manufacturer is copying a time proven circuit and modifying it, there could be significant time spent engineering the circuit, plus there are all kinds of esoteric build "tricks" that experienced designers/builders know and frequently don't share. Things like: wire routing,component layout, capacitive coupling, and stuff that's just plain weird like eddy currents and transformer core-saturation.
It may be a case of the 80/20 rule. You might be able to get 80% of the way there for 20% of the price, but the final 20% is REALLY gonna eat up some time and money.

It would take me years of study to get to the point of building my own tube amp. That takes time and time and expertise is what you also pay for. Time is expensive and means a great deal to us humans. It has been said that to become an expert in any field takes at least 10,000 hours of study and time. 10,000 hours is a lot of money :-)

My tube preamp amp sells for $4000 and the parts including the case, tubes etc. cost far more than $400. Heck two capacitors in the unit cost $400 total!

I am also paying for the mind, ear and experience of the amp's designer. I love the sound of my preamp and it sounds far different and better to my ears then all other preamps I have heard. Are we wanting and willing to pay for this musical experience which is unique compared to other offerings?Yes, for me!

In addition to the parts, time, expertise, unique design and sound you are also paying for these real business costs;

- marketing
- building, tools, employees, benefits, insurance, all sorts of costs from utilities to toilet paper in the bathroom
- costs to travel, attend, set-up and work all the industry shows and events

What about the need to price with a sales profit. Yes profit. The builder needs profit as well as the retailer be it internet based or brick and mortar.

How many $4000 amps can really be sold today? This is not high volume business, so since the business model is not based on volume it must be based on high margin return. That is the business reality. If the builder is only going to sell 100 units, then they better make good money on each unit to pay all the costs listed above and make a living.

Seeing amps that sell for $4000 - $15,000 is certainly no surprise to me. It seems like a must based on the business model. Just attending the shows must carry an annual budget exceeding $50,000 for many.

Your question has many moving parts that must be considered to give this topic a full and realistic viewing.

As for SOTA attempts that sell for $50,000, well I can assure you that you won't ever be able to build these. The cost to market these and get to the shows required is very high indeed. If only a few dozen are sold, then the margins must be very, very high.

When I see people buying and selling $50k gear it reminds me this guy who successfully sold dog for $50k by trading it for two cats $25k each.

Many factors presumably contribute to that $50K sales price, many of them having been mentioned in the posts above. As someone experienced in electronic design (not for audio), one factor I would particularly emphasize is amortization of design and development costs.

Designing a sophisticated high performance electronic product involves many months, perhaps even years, of effort, involving multiple technical disciplines. For starters: Electrical design, including analog, digital, and power supply design, which are essentially different disciplines; mechanical design; thermal design; and in many audio products these days also software or firmware design. Significant payments to subcontractors and suppliers are also involved, not just for parts and materials but also for work by the subcontractors to design and develop custom integrated circuits that may be required, and to perform the non-recurring efforts that are required to prepare for production of major subassemblies such as the chassis, transformers, etc. Specialized test equipment and laboratory facilities will also be needed to support the design and development process.

All of those costs, and many others that have been mentioned, will have to be amortized across a total lifetime production quantity that is perhaps measured in dozens. Frankly, considering that and considering the limited market for high end equipment and the vast number of products that are available to choose from in any given category, what surprises me is not the amps that sell for $50K, but the ones that manage to sell for only $4K.

Now if you were asking about cables, that would be a different story IMO :-)

Regards,
-- Al

Al, you're right of course, but you have to admit that my animal joke fits to expensive cable trade.