[Big Red Machine]

Poster has a perfect wave unit.

[RDavidson]

I understand, but the conversation veered into Direct Stream territory as the Perfect Wave can be upgraded to the Direct Steam.....so we were kind of weighing that option. Sorry, I went into too much detail on that front, and I didn't realize the upgrade was $3k. With DS's on the used market for roughly $3500, then upgrading the PW to a DS would not be a better option than just selling the PW.....even at a very low price unfortunately.

[Early B.]

PS Audio overpriced? The price is what the market will support, dude. PSA is a good, American, company that makes quality products. That's worth something to some people these days, especially the employees in Colorado.

I'll bet 99% of Americans aren't willing to pay MSRP for American made goods out of some deep concern for the American worker. Keep in mind that PS Audio's gear may be "partially assembled" in America, but the majority of the parts are probably made in China. PS Audio's greatly inflated MSRP is likely due extensively to being "made in America."  Their high marketing costs don't help, either.

FWIW -- I own PS Audio's PerfectWave Transport and paid 1/4 of MSRP on the used market several years ago for a modded unit. 

[SFDude]

I have had my PWD MkII w/Bridge I listed for a while, with no bites. In the end, it still is a really good DAC that doesn't do DSD. Still awesome for Redbook CDs (which I do not have) and I will likely end up keeping in the end. For anything to sound as good as it does today, you would have to spend about 2-3x more (it is superior to the NuPrime DAC-10 I currently use).

PS Audio will need to firesale off any DSD conversion kits once their new DAC technology comes out. Possibly wait for that? *wishful thinking*

[Phil A]

I'll bet 99% of Americans aren't willing to pay MSRP for American made goods out of some deep concern for the American worker. Keep in mind that PS Audio's gear may be "partially assembled" in America, but the majority of the parts are probably made in China. PS Audio's greatly inflated MSRP is likely due extensively to being "made in America."  Their high marketing costs don't help, either.

FWIW -- I own PS Audio's PerfectWave Transport and paid 1/4 of MSRP on the used market several years ago for a modded unit.

I wouldn't confine that to a single brand.  It's part of the reason for articles like - http://www.stereophile.com/content/rip-high-end-audio#jzwZjGr51dcdQQBf.97

I tried (to no avail) to get a demo of a hi-rez file player from the only local dealer (probably easily within a 50 mile radius and probably more - they are only open 3 days/week and the store isn't big - I might have more equipment and there certainly isn't tons of stuff) they have I'd be interested in) four times (even dragged my own stuff in there).

So, in my opinion, many people interested into high end are just not interested in paying retain on the majority of things.  It gets rough when one has a B&M store where there are expenses.

[RDavidson]

I don't know, Early B. One man's "over inflated price" is another man's bargain. Sure, some manufacturers offer better value, ie bang for the buck, but I'm willing to bet the vast majority of those great bang for the buck brands are largely 1. Lesser known. 2. Are almost entirely web direct, with virtually no dealer network. As Phil said, PSA isn't the only US company building stuff in the US nor do they have a unique business model. So are all those other brands offerings also overinflated (regarding price)? Wherever goods are sold the consumer is always paying for at least part of doing business. In some instances more. Others less. But we're talking about high-end audio. With not a lot of consumers we're all paying more for the price of business, regardless of business model. I don't understand singling out PSA here nor understand how that commentary is useful to jarcher. And yes, we all know that a lot of parts come from overseas. But just parts alone don't make the product. We all know that too.

[jarcher]

So - not to end the interesting broader discussion here  - but the PS PSD MKII w BII sold today for just $1150. Jeez.

I hate to say it but seems to me if people are actually buying new DSDs @ $4k new vs $6k retail or getting excessively high trade ins (basically anything over half of new retail), well then the "MSRP" doesn't really mean anything and the "true" price is actually much lower. That's one way to do sales and marketing, but I think it devalues the product and brand.

But hey - the market & deal obsessed audiophiles brought this on themselves. When everyday we're bombarded by these "get +50% off, buy one get one free, etc etc" for general consumer goods
the US consumer has been trained to expect and demand that everything is going to be available for heavy discount at any moment or at the asking.  I didn't think the US was so much about discount and deal making at least at the retail level until one time last year I actually overheard someone at the sub shop counter ask for a neighbor discount - on a $6 sub!!!!

Anyway - we reap what we sow and now we have phoney baloney pricing practices even in "high end" audio. And the effect is so corrosive and such a vicious circle that more and more companies will probably be tempted to compete towards a race to the bottom.

We actually try to stay away from products and companies with excessive profit margins or discounting practices. It's just bad news all around for everyone involved including the customer who ends up feeling cheated however much they might otherwise like the product.

Rant over & out!

[S Clark]

There have always been discounters. Before the internet, discounters ran ads in trade magazines.  I remember buying my Teac RTR and Sherwood receiver from an outfit in NY (Somebody's HiFi and Camera?) back in the mid 70's because they were significantly cheaper than the dealers in Dallas.  People will always look to stretch a dollar- unless price simply doesn't count.  When $1k spends like pocket change, paying list is an option.

[Early B.]

If you're gonna charge high prices, at least be able to back it up with the level of quality you'd find for comparably priced products at or near MSRP.

A high end company should strive for high resale value. Think about if PS Audio was selling cars with an MSRP of $20,000. No one would be willing to pay sticker price, so the cars would need to be deeply "discounted" to $10,000 to get them to sell, and used prices for nearly new ones would be $5,000. The  quality of the cars is not going to be comparable to other $20,000 cars, but they'll be built at the much lower $10,000 level or less.   

[JLM]

I recall almost 40 years ago taking a friend to my favorite shop to shop for a system.  After listening he started bartering very hard with them (it was in his culture to do so) and it embarrassed me.  Seems to me the U.S. was one of the last places to expect paying MSRP for big ticket items. 

But beyond that with the rapid advancements in digital technology it's going to be impossible to maintain value with time.  My approach before I buy is to try to put a price on how much enjoyment you derive from the piece per month, and beyond a general discount for new with warrantee versus used plus cost of selling, keep a running overall value in mind.  If the piece doesn't make financial sense up front, I move on.  Which is why I don't often upgrade and avoid high priced DAC's.

[slugworth]

On Audiogon
Aqua La Scala Optologic $4,800 2 month old dealer demo MSRP $7,000
Aqua Formula Optologic $8,900 dealer demo MSRP $14,000

These are current and recent products. Are these
typical of dealer mark ups? Are they a response to the 6moons review of the Metrum Adagio or lack of MQA?

[jarcher]

On Audiogon
Aqua La Scala Optologic $4,800 2 month old dealer demo MSRP $7,000
Aqua Formula Optologic $8,900 dealer demo MSRP $14,000

These are current and recent products. Are these
typical of dealer mark ups? Are they a response to the 6moons review of the Metrum Adagio or lack of MQA?

No - not typical. One seller says he's driopping the line because of disagreement with the distributor - so is basically liquidating his stock. The other is a known heavy discounter. I'm going to guess the latter may have  something to do with the former's decision. Dealer / distributor politics.

[thunderbrick]

A high end company should strive for high resale value.

Huh?   How does that help them?  If they strive for high performance the resale value should take care of itself.
True landmark products, though they may be few and far between, do have high resale value.

[slugworth]

No - not typical. One seller says he's driopping the line because of disagreement with the distributor - so is basically liquidating his stock. The other is a known heavy discounter. I'm going to guess the latter may have  something to do with the former's decision. Dealer / distributor politics.

Nice well informed explanation. Gotta love capitalism. BTW, the Formula was apparently sold in about 16 hours.

[jpm]

Huh?   How does that help them?  If they strive for high performance the resale value should take care of itself.
True landmark products, though they may be few and far between, do have high resale value.

That's just one of many, many factors. The automotive business offers some useful points of comparison - too many to go into here.

Some of us are fortunate enough to be able to buy expensive items with no regard to future value, but typically we have assumptions about that future value range.  Problems occur when expectation diverges greatly from reality. Problems for individuals don't take too long to translate into problems for manufacturers.

Vinnie Rossi's approach demonstrates that he has a keen understanding of how important a holistic value proposition is to the health of his business and his customers satisfaction. Product performance is undoubtedly critical, but long term value drives  loyalty and incremental business.

[Rusty Jefferson]

No - not typical. .......

I would respectfully disagree, mostly because it's a digital item in a quickly changing market. A friend and I auditioned the LaScala mk1 about a year and a half ago. It sounded very good. The dealer offered us about 40% off msrp. My friend bought one, I did not. Perhaps the dealer knew the mk2 was on the way, or perhaps that is his normal discount. Everybody was happy.

....These are current and recent products. Are these
typical of dealer mark ups? ...........

They are only current for the next few months. It's digital and the same issue that started this thread. Once the new dac comes out the previous (still good sounding) one has very little value.  I believe many dealers will discount dacs pretty steeply. 

When those new PS Audio mono block amps start showing up on the used market, they will have good resale value for the next decade and be in demand used.  Digital is just different. 

[Phil A]

I would respectfully disagree, mostly because it's a digital item in a quickly changing market. A friend and I auditioned the LaScala mk1 about a year and a half ago. It sounded very good. The dealer offered us about 40% off msrp. My friend bought one, I did not. Perhaps the dealer knew the mk2 was on the way, or perhaps that is his normal discount. Everybody was happy.
They are only current for the next few months. It's digital and the same issue that started this thread. Once the new dac comes out the previous (still good sounding) one has very little value.  I believe many dealers will discount dacs pretty steeply. 

When those new PS Audio mono block amps start showing up on the used market, they will have good resale value for the next decade and be in demand used.  Digital is just different.

That's pretty much what I said about digital in reply number 4.  I had my new (used) DAC upgraded (and I got it at a price that likely reflects the new improved model out).  Got no bites on my old DAC (which I bought used about 4+ years back).  I can have the old DAC upgraded just as I did the new used one.  However, for the cost involved, I may just decide to keep it in a secondary system (just had lightning damage to other stuff and between the deductible and what the insurance company will probably do, I'll likely just keep it as it is a significant upgrade vs. the DAC I have in the secondary system).  Digital and video just change more rapidly.  I think I paid $9.5k for my first good projector (believe it was $10k list) and after 8+ years and HDMI available (and I ran the wiring underneath the floor and above the basement ceiling before finishing the basement and into a column above the main listening/watching position and of course with component video cables I made - I did also use Cat5 and of course the house was sold and I'm sure if someone wanted it they can make use of it).  That's why I hate shopping for digital.  Over the past year I wasn't able to get a demo of a digital player (crappy dealer), which I'll probably upgrade in the near future and I'll likely have to travel a distance to dealer (there is only one within a 50-60 mile radius and most of the ones that carry what I'd be interested in are about 150-175 miles away - it's just the state of high end audio) to audition one.  It's just a frustrating experience for the consumer (at least to me).

[jarcher]

Huh?   How does that help them?  If they strive for high performance the resale value should take care of itself.
True landmark products, though they may be few and far between, do have high resale value.

Resale value can be decimated by poor sales and marketing decisions regardless of the inherent quality of the item. The high end audio road is like the highway of death littered with the carcasses of wonderful brands that were decimated by bad distributors and dealers and sometimes just poor strategy by manufacturers. It can take years and even decades to build a brand and just months to nearly destroy it.

With luxury brands in particular resale value is particularly important because it's reinforces the notion that the companies pieces while expensive have higher intrinsic value. And while electronics like cars regardless of the brand usually have a steep depreciation, you don't want to compound to that, particularly if it's based on decisions you have control over.

[jarcher]

I would respectfully disagree, mostly because it's a digital item in a quickly changing market. A friend and I auditioned the LaScala mk1 about a year and a half ago. It sounded very good. The dealer offered us about 40% off msrp. My friend bought one, I did not. Perhaps the dealer knew the mk2 was on the way, or perhaps that is his normal discount. Everybody was happy.
They are only current for the next few months. It's digital and the same issue that started this thread. Once the new dac comes out the previous (still good sounding) one has very little value.  I believe many dealers will discount dacs pretty steeply. 

When those new PS Audio mono block amps start showing up on the used market, they will have good resale value for the next decade and be in demand used.  Digital is just different.

If everybody had to keep selling digital at 40% off because there's some new model coming out a year from now, nobody would sell digital. 40% is typical margin - maybe 50% on a store demo model. Even if it was a dealer / distiributor who might get 60%, selling regularly at 40% off would be the kiss of death. If you can't make over 20% margin you go out of business. If the dealer was selling above that % its most likely because he's trying to dump something that's not selling or wants to get out of.

The moral of this story : if a current generation high end piece is selling with huge discounts or incentives , whether it be digital or otherwise, be very wary. It says something is very wrong - either bogus pricing, or desirability / issues with the product, or bad sales practices which is going to cause that product brand damage or even revocation from the market by the manufacturer. Any of which are ultimately bad for the customer.

[Rusty Jefferson]

If everybody had to keep selling digital at 40% off because there's some new model coming out a year from now, nobody would sell digital......

Clearly, not everyone is discounting that much, but it's more likely with digital from what I've seen. If you had taken in a LaScala mk1 dac in trade instead of a PS Audio Perfect Wave you would have struggled to sell it at 70% off msrp too. The new mk2 plays all the formats, blah, blah, blah, except...... no MQA. Doh! Watch for the mk3 coming soon!

....The moral of this story : if a current generation high end piece is selling with huge discounts or incentives , whether it be digital or otherwise, be very wary. It says something is very wrong - either bogus pricing, or desirability / issues with the product, or bad sales practices which is going to cause that product brand damage or even revocation from the market by the manufacturer. Any of which are ultimately bad for the customer.

Look, you know this business way better than me, because you work in it and I don't. I wouldn't expect a 40% discount on a pair of Devore speakers or an Audionote amplifier from your shop.  But a dac?  I wouldn't pay close to msrp for one in that $5k price range. That part of the market is too volatile for me. I don't want to see a $5k purchase be obsoleted in 18 months