Amp design logic

As Minor1 has stated, there are many who have failed in this business. Many times that is due to cutting their margins too thin, or under-estimating their "true" costs. Trying to make something that is "too good of a deal" is a good way to go out of business. Great posts by Al and Byron too.

A manufacturer has to realize when a certain item is "too good" of a value and is dragging him down. I know of a manufacturer who is still in business, who stopped manufacturing a $6500 integrated amp because "he couldn't make any money on it". Knowing when to show 'em and knowing when to fold 'em is critical for staying alive in this, or any other business.

Cheers,
John

Mechans, there is a difference between a modification and a straight parts swap as the OP is suggesting. Taking a $1000 amp and just putting premium parts in it. I have heard several modifications, mostly to digital gear, but also with amps. Some make a big improvement, some, not so much so. However, a modification implys a circuit (re)design, not simply a parts swap.

Well. My question about amp design turned into a huge lesson about the hifi business, and I wish I'd posed the question a little differently. I'm certainly in over my head in several ways. There is clearly some heavyweight experience and wisdom in these forums. Thank you for sharing your thoughts.

All I can say is, when I turn out the lights, kick back with my favorite cabernet, and just let the vacuum tube warmth of Diana Krall's impossible voice diminish my daily cares, I'm glad there are people who dedicate themselves to bringing this gear to the world.

Jim

River251, here are some other things I did not see above.

A $1000 amp is likely mass-produced where is $50,000 likely is not. So any vendor offers price breaks on parts- the more you buy the cheaper they are. If you have an assembly line, which is practical for less expensive amplifiers made by larger companies, you can further drive the price down.

There are other factors- parts being one. However there is also the labor. Some $50,000 amps may be entirely handwired (our MA-2 is exactly that but is only $42,000/pr :) ). Handwiring is often more labor intensive than circuit boards. But it gives the designer the ability to control stray capacitance better than a circuit board, due to the dielectrics involved (fiberglass, which is a poor dielectric, as opposed to polyethylene, which is pretty good, for example).

In addition there is the overhead of the facility, the overhead of legal fees (patents, lawsuits, legal advice). There is also the formula for markup, which I think is where many audiophiles might feel that they are being taken for a ride. Some companies mark up by a factor of 5 and others even 10x. FWIW we have a markup of 2 times. This allows us to replace the sold unit and build another after that. IMO that is enough to make an honest profit, OTOH those that know me well know that I got in this business because I enjoy it rather than to make a fast buck. I should also point out that high end audio is a very finicky market that is also very competitive. Thus the saying about 'if you want to make a small fortune in this business, start out with a large one' applies.

Lately, Chinese parts and assembly has become an issue even in high end audio. Many companies that don't want to admit it have their gear made in China for a lot less. This puts a squeeze on those who are still holding out by using better, non-Chinese parts that should be more reliable (and also more expensive), not to mention the labor issue.

Any factory in any country is capable of building things well with high part quality. The key is establishing quality control and avoiding slave labor issues by paying fair wages...Jolida apparently does that and others might also but you don't hear much about it.