AudioCircle
Other Stuff => Archived Manufacturer Circles => Aether Audio => Topic started by: bhobba on 30 Nov 2010, 01:08 am
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Hi All
Since it is a bit quiet around here I thought I would post a few observations I have gleaned in recent times about what guys like Bob go through.
I have been posting to Bob's forum for quite a few years now but of recent times have become aware of exactly what manufactures like Bob goes through. I have developed a good relationship with a guy that lives close to me that does, amongst other things, what Bob does (ie design and build speakers). I have seen first hand the stress and strain doing that can cause. He starts at about 10.00 am in the morning and can go though to about 1.00 am the following morning pretty much 7 days a week. When I visit him the phone constantly runs hot with clients and between that he has to do his speaker building and other stuff. From what I have seen the Audiophile speaker building business is a bit like what they say about being a Winemaker. Yes you can make a small fortune that way. You have to work long hours seven days a week - but by far the most important thing is - start with a large fortune. It is fairly obvious to me guys in this business do it for the love of it - not the money. But like the Winemaker there is an upside - the product they produce quite likely is much better and sold at a price often a good deal cheaper than the big boys.
Now I know this I personally prefer to deal with guys like Bob. If we don't support them then we will be left with the big boys and their high prices.
Anyway off soapbox now. And I really would like to hear what others think.
Thanks
Bill
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Bill, I totally agree. Any business, just running the business side (i.e. accounting, taxes, suppliers) is stress in itself. Then you have to deal with the start-up and lack of time off. Things are even harder in an economy like this. You don't want to take time off and risk losing customers. Big investment in time, money, etc.
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Since it is a bit quiet around here I thought I would post a few observations I have gleaned in recent times about what guys like Bob go through . . .
Now I know this I personally prefer to deal with guys like Bob. If we don't support them then we will be left with the big boys and their high prices.
Anyway off soapbox now. And I really would like to hear what others think.
This is Bob's circle so I don't want to be too negative. That said, I think that a lot of small manufacturers are under-capitalized and make up for that fact by substituting their own labor. They don't price their own labor appropriately and are always at risk of going under. If you're lucky you can get a great deal buying their products. If you're unlucky you can lose some money or wait a very long time to have products delivered. You also might be left with an item with limited resale value. The fact that SP Tech went out of business and Bob went on to start Aether Audio is consistent with the thin line a lot of small audio companies walk and makes me nervous.
I admire Bob's passion but that's not enough to get me to buy his products. My audio buying decisions are based on a combination of hearing a sound that I like combined with a price that I find attractive. The attractiveness of the price includes an assessment of possible resale. I assume that a small manufacturer has a lower resale value so it has to be priced lower to make a buying decision make any sense. But even that isn't enough if I don't like the sound.
---Gary
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While this may be an unpopular view, the reason I'm just not crazy about the small guys is the reason Gary mentioned, they are all undercapitalized. And unfortunately, one or two guys working in a garage just don't have the money for R&D like one of the big companies do. Yes, you pay more money for a set of Wilson's, Focal's or (insert your favorite large speaker company here) but you get more quality control, an engineering department, customer service and support and resale value when you decide to make a change.
I think when you plunk down $15k for a set of Wilson Sophia's your odds of getting 7-10k when you sell them used is pretty good and should anything ever go wrong with them, you'll be able to get them fixed immediately.
Whether that's worth the extra money to anyone is their call, but I've seen too many of these guys go under and now you have a product with ZERO resale value.
Again, if you aren't talking big bucks, taking a chance on a small speaker mfr isn't a bad way to get a little extra bang for the buck, but I've yet to see any of the smaller mfrs. make a product at the quality level of someone like Wilson, Focal, Avalon, etc etc.
There really aren't any corners to be cut. While the small guy doesn't have the overhead that the big guys do, they don't purchase in bulk, so the money you think you are saving buying from one of these guys just goes out the other window, because they have to pay 5-10 times as much for the same teflon capacitor that B&W uses. So it's really kind of a wash in the end.
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Actually, smaller guys don't have as much product out there which means demand can be up. Mapletree Audio is a small company..but the resale on their products is tremendous. Same with Salk speakers. Overall quality means a lot...and R&D in the speaker business isn't what many people think. Do you think all of the 'big boys' have better quality research than small business owners like Linkwitz, Geddes, and Bob here are doing? Brick and Mortar shops have increased costs and also once a company builds a name for themselves, the customers will start paying for that name. That name is the only reason the resale value remains high.
Quality control is up to the particular company. Many bigger companies are having things made in China where the QC is, on average, quite poor. Smaller companies often have local cabinetmakers build their cabinets out...which can mean more hands-on QC and also more customization. You can customize crossover parts in many cases, unique veneer, cabinet damping material, etc.
In the last ten years (I believe), B&W was still using electrolytic caps in their crossovers for some of their mid-level products. Cutting corners can often be the case on anything but the highest-end designs from a major name company.
For the highest of the high-end...that's not generally where smaller companies focus. You need a credible history for people to take a flier on your offering when you're selling something that expensive. Danny Richie just did the design work for a $180,000 offering FWIW...though you don't see that too often. The whole idea that big companies have better engineering is a myth.
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In the last ten years (I believe), B&W was still using electrolytic caps in their crossovers for some of their mid-level products. Cutting corners can often be the case on anything but the highest-end designs from a major name company. For the highest of the high-end...that's not generally where smaller companies focus. You need a credible history for people to take a flier on your offering when you're selling something that expensive. Danny Richie just did the design work for a $180,000 offering FWIW...though you don't see that too often. The whole idea that big companies have better engineering is a myth.
From my experience that is all true. I know someone who had a peek inside B&W 800 speakers which sell for $37K here in Australia and was shocked at the low quality of construction and components - I don't think they were electrolytics (if I remember correctly they were polypropylene and green caps) but they weren't the Mundorf or Duelunds Bob and other small manufacturers I know use - and that is in speakers no where near $37K.
Thanks
Bill
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After visiting my fair share of the "big boys" factories, for the most part that's where I'll still put my money. And yes I do think that companies like Focal, etc. have much more engineering at their disposal than the garage builders.
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I see pretty high resale value going on for products from the smaller companies. So the generalizations about resale value seem basically untrue to me. I think it's more about the product itself than "large" vs "small."
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I see pretty high resale value going on for products from the smaller companies. So the generalizations about resale value seem basically untrue to me. I think it's more about the product itself than "large" vs "small."
John, I agree. The resale on Salk speakers for example is very good. It's not fair to lump all small manufacturers (or all large) in the same category. There are speakers from both groups with good and bad resale values.
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I was having this same thought process last night when I was looking at PSB speakers vs a smaller company. I was saying to myself there's no reason PSB shouldn't make really nice speakers compared to this boutique builder. I haven't heard PSB speakers in maybe a dozen years.
I like supporting the small manufacturers for a variety of reasons and I think listening has proven many can make a product on par or better than bigger companies. As always it mostly boils down to whether one wants to pay for the other big company conveniences if they exist.
For all the money and man hours than many be involved in R&D I can't hear how the sound that emerges from the speaker has gotten much better in the few decades. Uses a bunch of fancy parts, exotic materials and construction techniques is all for nothing if the sound hasn't been noticeably improved upon.
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Bill,
Thanks for posting and everybody else… thanks for chiming in. I know I haven't been around these parts much lately. Sorry… been busy. :green:
Anyway, I'd like to share my views on the matter a bit.
I admire Bob's passion but that's not enough to get me to buy his products.
And unfortunately, one or two guys working in a garage just don't have the money for R&D like one of the big companies do.
I think when you plunk down $15k for a set of Wilson Sophia's your odds of getting 7-10k when you sell them used is pretty good and should anything ever go wrong with them, you'll be able to get them fixed immediately.
Whether that's worth the extra money to anyone is their call, but I've seen too many of these guys go under and now you have a product with ZERO resale value.
If you take a look at the big picture, high-end audio is pretty much split into two camps. There's the "big guys" with all of their marketing and overhead, then there's the rest of us little guys. The consumer side is split pretty much the same. Folks that tend to purchase from the big names are pretty much like consumers of any other product wherein their time is usually more limited than their financial resources. Therefore, they prefer to take comfort in the security and other assurances associated with brand names, rather than spend large amounts of time researching the smaller companies.
They also tend to be more "pragmatic" wherein ultimate performance must be balanced against the other variables and where "fit & finish" is almost always a higher priority than performance. Industry insiders will tell you that sales of a great looking product that sounds good will far exceed those of a great sounding product that only looks good. Why? Because visual acuity is far greater and more consistent from person to person than hearing acuity is. Sure, the sound had better be good, but by God… fit & finish had better be above reproach.
As an example, we recently sold a pair of speakers to a gentleman that purchased them based on the sound first… this is true. But, he was very impressed with the finish once he received his pair. Along the way during production, I assembled a new analysis system that permitted greater scrutiny of the performance of that (and all other) design(s). Upon taking a closer look, I discovered that a small "tweak" would provide a slightly flatter response in that design, so we implemented it in the pair destined for this customer before we shipped them.
Well, sure enough… upon hearing them he now did not like the sound as well as he did of the original evaluation units. After some communication, I guided him in how to alter the crossover network so that the response was back to that which he had originally heard and that which was by every other measure… inferior.
My point? If this whole process had been reversed and applied to the fit & finish such that the evaluation units looked nicer than the purchased pair, I'm virtually certain he would have asked for a refund. I can also guarantee that if the evaluation units looked worse than the purchased pair, he certainly wouldn't have intentionally put a couple of dings and scratches in them so that they more closely resembled the inferior evaluation units - DUH :duh:
Then there is the other camp of consumers that is typically dominated by folks that are a bit more, shall we say… "Obsessive" when it comes to performance? These folks are on a quest for perfection and they typically know what they are looking/listening for. They are also the ones that will comb every periodical and the Internet in search of such components. THEY are the ones that are willing to take a chance on the "little guys" and risk the associated pitfalls of doing so. They are usually well rewarded for their efforts too.
In regards to R&D, don't kid yourself. In big companies, the motto is "shoot the engineer and get into production ASAP." Overhead runs amok with department budgets that must be maintained, staff payroll and facility maintenance – to name a few. They are a "flying barn door" with a rocket engine strapped on as the only thing that maintains flight. Shut the fuel source (cash flow) off for more than a moment and a big crater in the ground is all that's left. They know this better than anyone though and are well adapted to keeping the fuel flowing. That often means, "When in doubt – ship it out," where product fixes are actually sold as an "upgraded" version of the model in the next generation… in a year or so.
Think about it. A small manufacturer typically cannot out-source in the quantities needed to get the good prices from off shore vendors due to the large financial commitment needed for a minimum purchase. On the other hand, if they build their enclosures in-house, no matter how much attention and detail they bring to the table they're not going to improve upon the fit & finish provided by names like Wilson, etc. Sure, custom finishes are easier to come by, but the market for that isn't big enough to support more than 2 or 3 companies offering ONLY (or mostly) that. So, WHAT do they have to offer that gives them even half a chance at competing? R&D… that's what. In fact, that's about all they have. "Build a better mouse trap… yada-yada." Yeah, right… but it’s the only game we are able to play.
Oh... and the idea that we don't have the capital needed for really good R&D? Man... it's obvious that you're not into electro-acoustic design. The "toys" available these days are nothing short of amazing. I just put together an analysis system comprised of FREE software, a $150.00 sound card, a (used) $200.00 laptop pc and a $600.00 microphone... that BLOWS AWAY the closest analyzer from back in the 80's (a Techron TEF). The TEF cost $12K back then and I'm just shy of $1K for this whole new system. It does things the TEF never even dreamed of and that I'm still learning. Heck... I'll probably never come close to using all of its features. Oh yeah... and God gave me the brains to know how to use it all for free too! :green: :lol:
So, us "little guys" cater to the "nuts" out there. Then again, if you ignore their obsession for performance, they might not be so crazy after all. Let's put it this way: I'll put ANY of my models up against an equivalent sized model from the big names and let's see which one you think sounds better. Our products consistently out-perform products from them at a minimum of 2, to as much as 10 times their price. Also, our customers tend to KEEP their speakers for life and aren't looking at them as a financial investment with the expectation of remaining on the equipment "merry-go-round." If you're purchasing based on re-sale value, then you've already made either a conscious or sub-conscious commitment to riding the endless revolutions thereof. You're not REALLY looking to "find the end of the rainbow," so your purchase is just another "commodity."
Oh… and our products usually sell for at least 50% of their retail price on the used market (and that's a rare find due to the above), and I've even seen them sell for MORE than what I know the customer paid for them when I sold them to him. Yes… there has been at least one occasion where I KNOW the customer made a PROFIT. So how's that for an investment?!!! :bounce:
Take care,
-Bob
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There are manufactures big/small/domestic/foreign that make items that are more akin to art. The other guys just make stuff for consumers. I value both types of gear as I need the consumer items to get by until I can purchase something to cherish.
I also like to roll my own gear but that’s a different topic. By the way nothing gives you a greater sense of how hard it is than to try to build something on your own.
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While I can appreciate the craft and love put into a product by a small manufacturer, I still think that many of them (not all) are marginal businesses and that makes buying products from them risky. For some people the chance to get a deal makes this an acceptable risk; for others it doesn't make sense.
For me, too many companies seem to follow the business model first articulated on South Park - The Underpants Gnome business model. For those not familiar with this business model, here are a few links:
http://www.fool.com/news/foth/2001/foth011108.htm (http://www.fool.com/news/foth/2001/foth011108.htm)
http://www.niallkennedy.com/blog/uploads/sp_gnomes.mov (http://www.niallkennedy.com/blog/uploads/sp_gnomes.mov)
(http://www.audiocircle.com/image.php?id=39381)
---Gary
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I see pretty high resale value going on for products from the smaller companies. So the generalizations about resale value seem basically untrue to me. I think it's more about the product itself than "large" vs "small."
Agreed, the product dictates sale not big or small. AC is a great outlet of where to find the small companies offer. So far they all have some very nice products.PI, Kaplan, GR,Omega,Vista, etc. I would have little ol JC Morrison build me a component anytime. Blair at nNghtshade is another person with which I would trust to build me something. So it takes a month or so.
When a product delivers we find outabout it and go from there.
charles
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WEll, I think buying anything, from anyone, is risky. All we do is minimize the risk to an acceptable level and go; you really can't do more than that.
If the product is fundamentally sound, uses standard components, and the manufacturer is forthright and honest, you're at the low-risk level. Some products can be fixed by anyone, long after the OEM is gone, some can't be fixed period. Zero risk is not possible, so don't try to find it.
I think that's true for big manufacturers and small, from boutique to bleeding edge to consumer grade commodity products. Counterpoint, Proceed, Dynaco, B&O or Ariston owners know what I'm talking about, but so do owners of products that are still in business but can't source replacement parts*. Then you have small-scale builders who seemingly don't sleep if a customer has a problem until they find a solution, or large-scale firms who stop support before the product life is over; just look at the problems people who buy all-in-one printer/fax/scanners have with an OS upgrade. Drivers break and never get fixed; the device is perfectly fine but it's also a boat anchor at the same time.
Do your due diligence, assess your needs and your tolerance for risk, and buy accordingly. No two people will have the same answers to those questions.
* Although B&O is still around, they haven't made components for 20+ years, and sourcing cartridges for their turntables is an issue that's not easily solved. So, I consider them the same as the others; they're not broke so it's not fundamentally a money issue, but they're not in the same business as they once were. You can get abandoned anytime.
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Think about it. A small manufacturer typically cannot out-source in the quantities needed to get the good prices from off shore vendors due to the large financial commitment needed for a minimum purchase. On the other hand, if they build their enclosures in-house, no matter how much attention and detail they bring to the table they're not going to improve upon the fit & finish provided by names like Wilson, etc. Sure, custom finishes are easier to come by, but the market for that isn't big enough to support more than 2 or 3 companies offering ONLY (or mostly) that. So, WHAT do they have to offer that gives them even half a chance at competing? R&D… that's what. In fact, that's about all they have. "Build a better mouse trap… yada-yada." Yeah, right… but it’s the only game we are able to play.
Take care,
-Bob...
I think it's also true that if you offer a choice to consumers, where standard and "real nice" cosmetics are offered for the same product, and charge the reasonable and true cost for the nicer stuff, people just buy the plain one ... they don't really believe that fit and finish costs as much as it does, fundamentally.
If they do bite and pay extra, all you've really done is baited the picky, sometimes unreasonable customer who expects far more than you've offered to provide ... for some reason they seem to think they deserve custom product at commodity prices, so that in the end, you probably didn't want that particular business in the first place ... the old 90-10 rule comes back and bites you.
Not everyone has good taste ... that's not something to lose sleep over; it's just part of who we all are. But, I also think you can do a lot with very little cosmetics-wise if you either have good design sense or hire for it.
Good proportions and a little effort in something as simple as choosing knobs, adding a little cabinet accent, or designing the silkscreen panel markings can go a long way at the same per-unit cost as the ordinary. Engineering types tend to be performance-oriented and not aesthetic-orented, and if it's a one-man show sometimes you need to get outside help there. It's my personal opinion that it will pay off in sales if you do. Just make 'em all the same; no super-finish options.
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While this may be an unpopular view, the reason I'm just not crazy about the small guys is the reason Gary mentioned, they are all undercapitalized. And unfortunately, one or two guys working in a garage just don't have the money for R&D like one of the big companies do. Yes, you pay more money for a set of Wilson's, Focal's or (insert your favorite large speaker company here) but you get more quality control, an engineering department, customer service and support and resale value when you decide to make a change.
I think when you plunk down $15k for a set of Wilson Sophia's your odds of getting 7-10k when you sell them used is pretty good and should anything ever go wrong with them, you'll be able to get them fixed immediately.
Whether that's worth the extra money to anyone is their call, but I've seen too many of these guys go under and now you have a product with ZERO resale value.
Again, if you aren't talking big bucks, taking a chance on a small speaker mfr isn't a bad way to get a little extra bang for the buck, but I've yet to see any of the smaller mfrs. make a product at the quality level of someone like Wilson, Focal, Avalon, etc etc.
There really aren't any corners to be cut. While the small guy doesn't have the overhead that the big guys do, they don't purchase in bulk, so the money you think you are saving buying from one of these guys just goes out the other window, because they have to pay 5-10 times as much for the same teflon capacitor that B&W uses. So it's really kind of a wash in the end.
Not surprising from a mag publisher with revenue targets.
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There is a small amount of truth in what TONEPUB has written.
As one of many victims of the Line Source/AV123 crapfest; I would have say that working with smaller companies has its risks.
I had originally ordered LS9's, and waited 18 months to get LS6's in a veneer color that I wasn't crazy about. However, the boat was sinking pretty fast at that point, and I took what I could before I was left with nothing to show for it.
However, on the other hand, I've worked a couple of time with Bill from Response Audio to great success.
Incidentally, he built me a pair of custom external crossovers for those same LS6s, that turned them into speakers I sorted resented given the circumstances, to speakers I truly enjoy now.
He also took a preamp I bought from someone else that was his, and checked it out immediately when I had an issue with my system. (turned out it was not his preamp).
I think it can go both ways, and as a regular joe who just buys this stuff, I tend to look not so much at the name, but the features and quality I can get versus the price.
I wanted a Pass Labs 250.5 amplifier after hearing it, I threw out the money for it, and couldn't be happier. For that I gladly pay the money.
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Gee, I lean toward the small guys because I know their heart and soul is in the product and I'm not funding some large machine which needs high margins to stay afloat. I'd rather get a boutique amp or speaker from someone who really cares and personally handles my product during the build than from a high volume automated manufacturer who doesn't have my best interests in mind. I anticipate more shortcuts from the big guys than the small guys. Quality? Can't tell me Wilson's have more quality than Salks, especially in the sound area.
I have a little experience in R&D, having run a 100 person $26M organization. I see more gimmicks than sound engineering from some of these large companies due to the marketing pressure they are under to keep their margins up.
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Gee, I lean toward the small guys because I know their heart and soul is in the product and I'm not funding some large machine which needs high margins to stay afloat. I'd rather get a boutique amp or speaker from someone who really cares and personally handles my product during the build than from a high volume automated manufacturer who doesn't have my best interests in mind. I anticipate more shortcuts from the big guys than the small guys. Quality? Can't tell me Wilson's have more quality than Salks, especially in the sound area.
I have a little experience in R&D, having run a 100 person $26M organization. I see more gimmicks than sound engineering from some of these large companies due to the marketing pressure they are under to keep their margins up.
+1
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I think one other thing may be important to consider. As a general rule, nobody starts off 'big'. Klipsch claims to be the largest (volume) speaker manufacturer in the world, and Paul began in the 1940s in a garage with one product. I heard the original Wilson Watt (there were no Puppies at the time) at the Chicago CES, and Dave was a one man show (known for his excellent recordings... but not as a speaker manufacturer). Vandersteen. Theil. Snell. Etc. The bottom line... almost everybody (Revel is one exception that comes to mind at the moment) starts small.
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Many manufacturers started out as a garage operation as one guy with a great idea including Dave Wilson and Niel Patel (Avalon) and of course Hewlett Packard as two guys with a great idea.
There is no guarantee of product quality or innovation when buying from a large company and often times the value for the money spent is questionable. The landscape in the high end audio industry is 95% very small companies and a few large conglomerates such as JBL, Harman, etc. Innovation usually happens in organizations with agility and freedom from over anxious investors nervous about the numbers for the quarter.
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While this may be an unpopular view, the reason I'm just not crazy about the small guys is the reason Gary mentioned, they are all undercapitalized. And unfortunately, one or two guys working in a garage just don't have the money for R&D like one of the big companies do. Yes, you pay more money for a set of Wilson's, Focal's or (insert your favorite large speaker company here) but you get more quality control, an engineering department, customer service and support and resale value when you decide to make a change.
I think when you plunk down $15k for a set of Wilson Sophia's your odds of getting 7-10k when you sell them used is pretty good and should anything ever go wrong with them, you'll be able to get them fixed immediately.
Whether that's worth the extra money to anyone is their call, but I've seen too many of these guys go under and now you have a product with ZERO resale value.
Again, if you aren't talking big bucks, taking a chance on a small speaker mfr isn't a bad way to get a little extra bang for the buck, but I've yet to see any of the smaller mfrs. make a product at the quality level of someone like Wilson, Focal, Avalon, etc etc.
There really aren't any corners to be cut. While the small guy doesn't have the overhead that the big guys do, they don't purchase in bulk, so the money you think you are saving buying from one of these guys just goes out the other window, because they have to pay 5-10 times as much for the same teflon capacitor that B&W uses. So it's really kind of a wash in the end.
OK, I am going to take offense, at a lot of this.
First off, find any industry where the vast majority of smaller companies are not under-capitalized.
Second, you apparently know nothing of how Avalon got started, so don't even attempt to place them above the fray. (I am talking about the days before Neil took over. He wasn't there, so don't run to him for details.) And Wilson..............? He started out as a recording company. He only built his monitors for his use, during the recording process. It wasn't until after folks heard them, and said "Gee, Dave, these are awful good. You ought to think about selling some."
Third, mega-corporations, like Hewlett-Packard, were started in a garage. By 2 guys. (Guess what their names are.)
Fourth, I know what passes for R&D, at some of those big companies. Yes, they have more money to spend than I do. Doesn't mean it is well spent, or yields anything of merit. A lot of what is claimed to be R&D is just the hogwash the marketing department makes up.
Fifth, yes, we make up our inability to purchase in large quantities by substituting our labor. Yes, causes a lot to go belly-up. And your point is?
Sixth, do not even attempt to imply that smaller companies can not provide the same level of QC, that the big boys can. Or customer service. When is the last time you called your favorite under-capitalized high-end vendor, for product support, and you heard "Press 1, to continue in English"? And got someone in Mumbai?
Going back to doing the 3 jobs I am stuck doing this week, by myself. Over and out.
Pat
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OK, I am going to take offense, at a lot of this.
First off, find any industry where the vast majority of smaller companies are not under-capitalized.
Second, you apparently know nothing of how Avalon got started, so don't even attempt to place them above the fray. (I am talking about the days before Neil took over. He wasn't there, so don't run to him for details.) And Wilson..............? He started out as a recording company. He only built his monitors for his use, during the recording process. It wasn't until after folks heard them, and said "Gee, Dave, these are awful good. You ought to think about selling some."
Third, mega-corporations, like Hewlett-Packard, were started in a garage. By 2 guys. (Guess what their names are.)
Fourth, I know what passes for R&D, at some of those big companies. Yes, they have more money to spend than I do. Doesn't mean it is well spent, or yields anything of merit. A lot of what is claimed to be R&D is just the hogwash the marketing department makes up.
Fifth, yes, we make up our inability to purchase in large quantities by substituting our labor. Yes, causes a lot to go belly-up. And your point is?
Sixth, do not even attempt to imply that smaller companies can not provide the same level of QC, that the big boys can. Or customer service. When is the last time you called your favorite under-capitalized high-end vendor, for product support, and you heard "Press 1, to continue in English"? And got someone in Mumbai?
Going back to doing the 3 jobs I am stuck doing this week, by myself. Over and out.
Pat
+1! In some magazines there is no wall between editorial and ad sales so the comment Pat is referring to is totally preductable. Happily this is not always the case.
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Thinking for oneself vs. thinking with the herd
That's how I sum it up :thumb:
p.s. Sometimes going with the herd can work out just as well
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When I make a purchase decision the resale value is a part of it, but not a dominant buying criteria.
I made the SP tech decision many years ago, after much discussion with AC folks and some reading on my own. I hadn't heard one musical note come out of them. (this was true of the previous few speakers I'd owned too, like Sassons from Ridge Audio, and several from VMPS...all small mfger's). I purchased 5 very hi-end SP Tech speaker/crossover sets (the best Bob manufactured at he time) and have come to respect Bob more over the years. He has become a truly good and trusted friend. Was he late on some promised delivery dates? Yes. Was I aware of the risks in buying from a mfger who could be out of business in the next few years? Yes. So why did I buy? Because the product was innovative, special and high value...and also because this ownership experience means knowing the manufacturer and creating a relationship where i could ask for special mods or product tweaks, get personalized customer service, and possibly even gain insight into the design process of a very smart speaker designer. ALL of those things came true. I made sure i was informed all the way, was treated professionally, and eventually was welcomed into the customer base as if I was family. Hell, Bob and Jason came to my house and helped install the speaker sets, twice! (once for mains, once for the others).
I would never get this kind of insight, support and flexibility from a large hi-end manufacturer, and likely would pay a lot more for whatever I got (which I suspect is largely the aforementioned marketing budgets that eat into margins). In fact, this same story can be told with now-friends Dan Wright (Modwright), Ethan Winer (Realtraps) and others. This personal feedback loop that occurs between a small manufacturer and his/her customer is the backbone of early commerce, and is missing, out of necessity, from 99% of what we buy/sell/trade today. There are pitfalls, yes, but the plusses outweigh significantly over time. MY $.02
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Thinking for oneself vs. thinking with the herd
That's how I sum it up :thumb:
p.s. Sometimes going with the herd can work out just as well
You sound like Manny of Ice Age, or was that Sid? :lol:
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GBB,
While I can appreciate the craft and love put into a product by a small manufacturer, I still think that many of them (not all) are marginal businesses and that makes buying products from them risky. For some people the chance to get a deal makes this an acceptable risk; for others it doesn't make sense.
It's not fair lumping the majority of small businesses into the same category as there can be very significant differences from one to the next. Having had more than my fair share of negative experiences operating under SP Technology, I think I'm fairly qualified to help folks identify companies that are truly "marginal" and risky.
Other than the fact that a small "sole proprietor" type business always runs the risk of it's head "guru/genius/owner" popping a vein and taking a permanent "dirt nap," the single other biggest factor is his overhead. If a small company has relatively low overhead, then the risk is minimal. If the owner either operates his business "on the side" wherein his personal income is derived elsewhere (as in my case), or his personal needs are minimal in the first place (say his home is paid for) then the only real risk one takes is that of waiting for his order to be filled.
As in my case, seeing I have a day job now (NuForce) my time at the Aether Audio workbench is limited. We may be a bit slow on delivery (especially seeing I always manage to get involved in engineering some new design on a semi-regular basis), but since my payroll (the biggest factor) is not funded by Aether Audio sales, managing what overhead that remains is not too big of a deal. On the other hand, when working full-time at SP Technology the risk was not only delays, but whether or not it would fold altogether before a customer got his order filled. Now days under Aether Audio, you may still wait a while... but barring my taking that "dirt nap," you'll definitely get your order filled and shipped... and supported at a later date should the need arise.
So, my advise to most folks is to not judge a company so much by how long they take to build a product, but rather how much internal risk they are leveraging. Most times its not the "garage" guys you have to worry about, but rather the "used to be garage guy" that just took the next step to a big new facility and is running the business full-time now, and where he derives his personal income from the business. Even then, if his dad or uncle owns the building he's working out of and most of his equipment is already paid for, then that's not even really an issue. It's really hard to know looking in from the outside, but if you "dig around" as bit, it is often possible to get a good idea.
In some ways I suppose it's a lot like doing research on a given company that you're interested in buying stock in - except the "stock" happens t be a product you use in your home instead of a piece of paper. In fact, I see all of my past and present customers as being stockholders in my business on a certain level... because if it weren't for them taking the chance they did... I never would have had a chance myself. Thanks guys. :thumb:
-Bob
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I go out of my way to deal with small businesses that provide good service, whether a hardware store, camera store or a car dealer. Owning an item is as much about the relationship with the firm than anything else. I have lived all over the U.S., and I still call firms that treated me great when I was a penniless teenager, and do my best to spend my money with those folks.
I like companies that give their employees the authority to do the right thing without having to "check with the boss". I called a large high-end machine products company recently to order a switch, and they told me the minimum order was $100. When they found out needed a $5 switch they said, "ahh, hell, give me your address and we'll send you one for free" Same thing happened when I moved to a new town and needed a plumbing part. The guy at the hardware store said "That's under warranty. Take this one and bring the defective part in when you can" He didn't so much as ask for my name. I'll be loyal to those kinds of firms forever, and I try to do the same for my customers when I can. Your good name is far more important than a small sale.
I do like it when a small firm does so well that they grow and become more stable, but if they lose the customer service I'll move on.
Incidentally, the guys (and few gals) on AC embody this philosophy very well. You put out a call for help and strangers (even NY Yankees fans) step up to help. I was looking for an LP to replace a trashed one, and some guy (whose message I've lost) sent me a CD copy of it. He refused payment and just said "pass the favor on." :thumb:
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Thinking for oneself vs. thinking with the herd
That's how I sum it up :thumb:
p.s. Sometimes going with the herd can work out just as well
A herd of zebras is one thing, a herd of lemmings is another. The former rallies around to protect all; the latter buy Bose. :lol:
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I haven't actually _ever_ considered resale value when buying a component. I buy them for me, not to sell to some other bloke in 6 months.
There are things that big companies do well and things that small companies do well. Perhaps one generalization we can make is that a product made in large quantities by a big company will cost less than the same product made in small quantities by a small company.
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While this may be an unpopular view, the reason I'm just not crazy about the small guys is the reason Gary mentioned, they are all undercapitalized. And unfortunately, one or two guys working in a garage just don't have the money for R&D like one of the big companies do. Yes, you pay more money for a set of Wilson's, Focal's or (insert your favorite large speaker company here) but you get more quality control, an engineering department, customer service and support and resale value when you decide to make a change.
I think when you plunk down $15k for a set of Wilson Sophia's your odds of getting 7-10k when you sell them used is pretty good and should anything ever go wrong with them, you'll be able to get them fixed immediately.
Whether that's worth the extra money to anyone is their call, but I've seen too many of these guys go under and now you have a product with ZERO resale value.
Again, if you aren't talking big bucks, taking a chance on a small speaker mfr isn't a bad way to get a little extra bang for the buck, but I've yet to see any of the smaller mfrs. make a product at the quality level of someone like Wilson, Focal, Avalon, etc etc.
There really aren't any corners to be cut. While the small guy doesn't have the overhead that the big guys do, they don't purchase in bulk, so the money you think you are saving buying from one of these guys just goes out the other window, because they have to pay 5-10 times as much for the same teflon capacitor that B&W uses. So it's really kind of a wash in the end.
having survived in the audio business (both pro & home) as a 'small manufacturer' for almost twenty years I have a couple of opinions about this.
it's perfectly valid reasoning to look at the potential resale value of a high end audio product, and a new start up large or small is a risk that is up to the end user to decide if they can accept. btw, rule of thumb has always been five years big or small to see if they can stick.
I have seen a lot of companies big and small go under (a lot of magazines fail too!). a for instance is one of the big guys, Hafler. I sold a lot of their amps to pro users over the years, they were bought up by a bigger company then closed doors, their value is pretty low now. also my products rarely come up used but two of them this year got almost 80% of retail, at the same time similar speakers from some very big names were looking for 30%. my point is there are a lot of factors in long term value other than how well capitalized a brand is.
btw, the odds of getting 7-10k for a 15k set of Wilson's are pretty low when the wholesale is closer to 6k. yes for export they offer as much as 65% off list. in todays market more small companies are going to direct sale. this is a very fair way, since they can then price their product based on the product cost/value without adding in dealer margins, importer margins, large advertising budgets etc., all this is typically 70% or more of the price of the revered big name products. so if that dealer network, nice showroom, glossy manual and full page ads are important then stay clear of the small companies.
as for the savings of buying in bulk washing out the savings from overhead etc., that is just not true. a popular misconception but at least in audio beyond the level of Best Buy , not true. typically the bulk savings is in the realm of 10%-20% of parts cost, occasionally more, but on the whole it averages out in that range. this is nowheres near the margins and overhead of a full on sale & marketing staff etc... btw my percentages are not based on individual off the shelf pricing vs moderate quantity, that is the realm of DIY and very small outfits. I'm basing this on my experience and communications over many years with having parts made OEM and dealing direct with primary suppliers, some of them among the worlds largest. another point on this is that in high end audio even the 'big' guys are not buying in 100,000 or 1,000,000 lots but generally MUCH smaller quantities. comparing the percentage of savings in parts cost between a $100 Best Buy speaker and a $10,000 high end audio speaker is not realistic.
again I want to reiterate it is up to the consumer as to what is most important in their individual purchasing decision. I've spent years in the pro music world and know that for many people the same arguments as here push them to buy a Martin guitar instead of a handbuilt instrument, but for others they would never consider anything but the 'small' builder. I know that I'm pretty excited about my newest guitar that will arrive friday. a Froggy Bottom 12 string custom made in a small shop in Vermont. I guess the resale would always be good since these are very established as one the very best guitars in the world but I would never sell it and I don't believe the 'big' guitar companies have ever made many guitars that could touch this at any price. for me the quality and individual attention are much more important than the big company name. just a personal choice, which is what this all boils down to. rationalizations like 'quantities of scale etc are really not what these decisions are about.
I could go on but anyone with REAL manufacturing experience knows all this.
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I haven't actually _ever_ considered resale value when buying a component. I buy them for me, not to sell to some other bloke in 6 months.
Same here. I recently became aware of this in purchasing a DAC from a small guy. I had heard a prototype of the DAC and was assured the production version would be better. Now I trust this guy and order the model with all the upgrades. I hear the first dac from the initial production run - fantastic. My fully tricked out version then comes along and me and a few other guys I trust go and hear it. Everyone who head it said it was the best DAC they had ever heard, with maybe one exception, - you can close your eyes and almost and reach out and touch the sound. I had a chat to the designer of the DAC who also came along for a while. He explained the changes he had made such as fast recovery diodes for the valve rectification and a new special USB to I2S stage.
I thought people would be chuffed at having such a good sounding DAC. But you know what the reaction was? If the guy changes the design so much its resale value will drop. In fact at least one guy I know actually tells people not to get the DAC because of that, but really wants to hear it because of all the reports he is getting about how good it sounds. I was flabbergasted. To me I want the best sound - I don't want manufactures to hold off releasing new versions because of fear the resale value of previous units will drop. The psychology of some audiophiles really leaves me scratching my head sometimes.
Thanks
Bill
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Thank goodness for the small audio manufacturer! Sure, the big companies can be more stable and have a support network for the products but that cost is rather substantial for the buyer. I could never have afforded the quality of sound I get from my system had I gone through dealers selling gear from the big boys. I may lose re-sale value if the small company goes belly up but writing the gear off as a total loss may still cost me less money then the drop-off in resale value from new to used of the higher priced stuff from the big boys.
While the little guys may not have the R&D budget or economy of scale of the big boys they also do not have the advertising costs nor does the buyer have to pay the dealer markup.
Not all of us have the desire to drop 15K on a set of speakers or lose 8K when we sell them to move to something else.
Plus it's nice getting gear customized to your preferences and not buying one size fits all gear.
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While the little guys may not have the R&D budget or economy of scale of the big boys they also do not have the advertising costs nor does the buyer have to pay the dealer markup. Not all of us have the desire to drop 15K on a set of speakers or lose 8K when we sell them to move to something else. Plus it's nice getting gear customized to your preferences and not buying one size fits all gear.
Yea - and the proof of the pudding is in the eating. Bob's speakers regularly best the big guys speakers costing many times the amount. The B&W 800 I mentioned previously at $37K was heard by a guy in the market for some speakers and was almost going to buy them. I don't know why, probably because someone said he should check them out, but he went and heard the speakers of the guy that lives down the road from me. He heard his $6.5K model and was flabbergasted - they easily bested the B&W's. He was almost going to a buy a pair there and then, but the manufacturer mentioned he is working on a more upscale version with stuff like very expensive Duelund capacitors for $14K. He decided to wait to hear that model and I will be going down with him in hopefully a couple of weeks to hear it with him. Like Bob found when he investigated Mundorfs in his crossover this guy found similar things with Duelund capacitors and has high hopes for this speaker. We will find out in a couple of weeks - but my gut feeling here is the $14K job will blow away the B&W's and save the guy $23K.
Thanks
Bill
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Good to hear that Bob has been getting a regular paycheck. Good to see a little traffic in the Aether Audio circle, bhobba good on ya! When it comes to small, independent audio manufacturers, one has to do their due diligence and research the principal owner and designer/s. Each one must be evaluated on a case by case basis. The fact that Bobs' engineering chops are some of the best around makes the choice a little easier. There is always the intangibles, however. In the end.....well, sometimes its just best to quote Dirty Harry.... "you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?" :green:
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I'm not a manufacturer now, but have in the past and think I that Tone is dead wrong.
The best audio products I've ever owned come from small manufacturers, especially the speakers I now own. Just because a company is large, does not mean that they won't go out of business. It can happen to anybody and any business, especially ones that rely on high end audio. In a world of MP3, where there are fewer people paying attention to audio quality, the smaller companies, with the correct way of selling their products, have every bit as good a chance of staying in business as the "big" guys.
As for R&D, it is a matter of who is designing specific products. In a small company is usually the owner. In a large company it is usually a guy who works for the company. Still, just a guy.
The bigger they are, the harder they fall certainly has been seen in this recession, so size alone does not guarantee a companies survival and an exceptionally good product will always retain most of its value, whether it was produced by a big guy, or a small guy.
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The most significant pitfall that small manufacturers face is that the brand could be made extinct should the main owner/designer accidentally step in front of a bus. Otherwise, the playing field between the two is quite linear.
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Timely topic http://www.audiocircle.com/index.php?topic=88605.0
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I'm not a manufacturer now, but have in the past and think I that Tone is dead wrong.
The best audio products I've ever owned come from small manufacturers, especially the speakers I now own. Just because a company is large, does not mean that they won't go out of business. It can happen to anybody and any business, especially ones that rely on high end audio. In a world of MP3, where there are fewer people paying attention to audio quality, the smaller companies, with the correct way of selling their products, have every bit as good a chance of staying in business as the "big" guys.
As for R&D, it is a matter of who is designing specific products. In a small company is usually the owner. In a large company it is usually a guy who works for the company. Still, just a guy.
The bigger they are, the harder they fall certainly has been seen in this recession, so size alone does not guarantee a companies survival and an exceptionally good product will always retain most of its value, whether it was produced by a big guy, or a small guy.
Hi Figcon and all Audio Circle members.
I agree 200% with what you wrote.
I prefer to do business with small companies or even with a one man company, because you can speak directly with the owner which is also the designer, the sales man and even the shipping person, therefore when you talk to him, he knows who you are and he knows where your order stand, no need to give him each time all the details.
That's why I do business with Blair Lamphear of Niteshade Audio and Danny Ritchie of GR Research.
Guy 13
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I agree 200% with what you wrote. I prefer to do business with small companies or even with a one man company, because you can speak directly with the owner which is also the designer, the sales man and even the shipping person, therefore when you talk to him, he knows who you are and he knows where your order stand, no need to give him each time all the details. That's why I do business with Blair Lamphear of Niteshade Audio and Danny Ritchie of GR Research.
Exactly. Thats why I deal with Bob and my mate down the road. I took part in an incredible DAC listening session yesterday with a DAC called the PDX. We heard the base grade model and the level 2 model. The base grade model sounded excellent - one of the top three DAC's I have ever heard. But the level 2 was simply REAL. It was a breathtaking experience. I have only heard one other DAC like it and it too was from a smaller manufacturer - but it is nearly twice the price. I firmly believe you will not get products like that from the big boys. I like this DAC so much I may see if I can get it into the hands of some of you guys in the US like Lonewolfy.
Thanks
Bill
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Bill
They call me the resident DAC evaluator (I have demo'd over a dozen inhome lately and am mod of hires forum) so send me one!! :thumb: :)
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Here are my thoughts on the subject: If the small guy is experienced, passionate and not afraid to risk his own money, then he will likely deliver more for the money than the big corporation that is focused on profits. They have to keep everyone employed and pay for those expensive ads in Stereophile and TAS etc..
The reviews tell the story. If the products get great reviews, then who cares whether its Krell doing it or Joe Audio in his garage?
There is also the matter of scale of production and ability to react to the customers needs. Large companies cannot do this. They design a product and then outsource the volume manufacturing to China. This means that they are building at least 1000, and sometimes 10,000 minimum. When you have this many in stock, you cannot afford to scrap them and do a tweak to the design. You are forced to get out there and hard-sell them until they are all gone.
Small manufacturers deal in 10's and 100's, so its much easier for them to change something or offer a new feature that customers have requested. I often order 25 circuit boards and only use 10 of them, and then do a new fab within a couple of months to improve things, imbed rework or add features. I prefer to do 100 at a time though.
Then there is the issue of parts selection. Smaller companies tend to use the bleeding-edge technology to achieve the maximum performance. These parts are often from other small companies that cannot source 10,000. There are also no second sources for these parts. Therefore, you will not likely find any of these in large company brand-name products. They go with the cheapest and the safest choices. Examples of these types of parts are Black Gate caps, silver wound transformers, V-Caps, OCC silver wire etc..
The fact is that most small audio business dont rely on money from banks to make the payroll or fund the next big project. This makes them more likely to survive, not less than the big boys. Look at what happened to Mark Levinson. They almost died on the vine. It was this cash-based business model that allowed my business to survive the downturn with no issues, in fact it gave me more time to develop more interesting products. This enables the small business owner to be here for the long-run.
There are also issues with ethics with bigger companies. With a small company, if you come to trust the owner, then you can rest assured. You are not going to be ripped-off. I have worked for really large corporations where ethics violations were a BIG problem. I left those companies.
There are also issues with support with large companies. Some are good, but these are in the minority. With the single entrepreneur, you are dealing with him directly and if he has a good reputation for customer service, you are better off IMO.
The fact is, that it is the people, particularly the designers that make the product what it is, not the company. When the key designer leaves the big company, beware. You better find out where he went and then buy their products now. Most people are under the illusion that a big brand names guarantee stellar designs. In fact, I believe it is just the opposite. When companies get big, they lose sight of the real goal of performance and focus mostly on profits. I have seen lots of instances of this. When their key talent leaves, what is left is the trainees, and they may know almost what the key designer knew, but they may not be as creative or skilled.
Steve N.
Empirical Audio
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The fact is, that it is the people, particularly the designers that make the product what it is, not the company. When the key designer leaves the big company, beware. You better find out where he went and then buy their products now. Most people are under the illusion that a big brand names guarantee stellar designs. In fact, I believe it is just the opposite. When companies get big, they lose sight of the real goal of performance and focus mostly on profits. I have seen lots of instances of this. When their key talent leaves, what is left is the trainees, and they may know almost what the key designer knew, but they may not be as creative or skilled.
Steve N.
Empirical Audio
Steve,
Great point. Dan D'Agostino (http://hometheaterreview.com/what-would-dan-dagostino-do/) just left Krell last year. We'll see where Krell is 5 years from now. Of course the fact that both parties are suing each other enthusiastically doesn't help.
Anand.
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They call me the resident DAC evaluator (I have demo'd over a dozen inhome lately and am mod of hires forum) so send me one!! :thumb: :)
Hi Ted
I think that can be arranged. All I need is for you to send it onto Chris (Lonewolfy). I am thinking of doing it sometime next year. Will need to get it converted to your voltage for that though. Fortunately the guy that makes it is amenable to stuff like that.
Thanks
Bill
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Hi Ted
I think that can be arranged. All I need is for you to send it onto Chris (Lonewolfy). I am thinking of doing it sometime next year. Will need to get it converted to your voltage for that though. Fortunately the guy that makes it is amenable to stuff like that.
Thanks
Bill
Sounds good to me.... 8)
Thanks Bill.... :thumb: