Sure Salk speakers are great, but they are certianly expensive.
I dont get how they charge 700 for a ribbon upgrade on the ST. Lets say the ribbon are 200 more over the dome twetter (pair), where did the 500 invested? Aluminum baffles cost that much?
First, let me say that the SongTower "RT" version was designed well after we started producing the SongTower QWT's. The RT version was priced out and we simply subtracted the existing price of the SongTowers to calculate the difference. So it is may be less a matter of the ribbon tweeter option being expensive, but more the fact that the SongTowers were priced too low initially. This will be adjusted on June 1st and the price of the RT upgrade will certainly not go up at that time. I might also point out that machined aluminum baffles are quite costly as well.
On the basic matter of pricing, I have a few comments...
There are basically three things that determine the cost of a speaker. The first is the cabinet, the second is the parts (drivers, crossover parts, etc.) and the third is the distribution model.
There is no secret to producing moderate quality speakers at a very reasonable cost.
First, you have the cabinets manufactured in Asia. The quality is fairly good, but you have to be willing to purchase in container loads and wait. This means you must settle on two or three finishes as you cannot possibly offer custom finishes (you would not know what combinations to order six months in advance). You also have to accept the risk of having fit and finish issues (you can't simply send them back for re-work).
The second thing you do is look for moderate quality drivers you can purchase at a low cost. You'll never get a "great" speaker by doing this, but you certainly can control costs.
There are many, many companies that use this formula. In fact, very few brands available at retail are done any other way. I know of one company that offers speakers under at least a dozen brand names. They all used to be produced in the US. They now have 20 or so US employees processing all orders for all those brands. All the manufacturing is done in Asia.
So if that is what a consumer is interested in, there are plenty of companies already offering this type of speaker. We simply have no interest in inventorying and shipping boxes of speakers made elsewhere. We want to build them ourselves. And we want to use the best drivers for each individual design.
No doubt, our model is more costly. We simply can't compete with Asian labor rates. And we do pay more for the drivers we use than we would if we sourced lesser quality drivers from Asia.
But we couldn't offer products with sound quality we would want to put our name one. And our customers would not have a virtually unlimited choice of finishes.
The only pricing advantage we have is that we do not sell through dealers who need a 40% markup just to take on a line of speakers.
While our cabinets are vastly more expensive to build and the parts we use are more expensive as well, we would not hesitate to put our speakers up against any retail speakers at twice the price. Anytime. Anywhere.
I am always amused when someone adds up the cost of the drivers and wonders how a certain price can be justified. It's as if drivers are the only cost involved and everything else is free. The fact is, the cabinets almost always cost more than the drivers.
When establishing pricing, there are many areas of cost that must be considered. Until you actually build them for a living, you simply won't recognize most of them. For example, the finish (sealer, lacquer, etc.) we use costs about $100 per pair of speakers. Tooling is also something you have to build into the price of a speaker. We took six routers in for repair this week. We go through about $200 - 300 in sandpaper in a given month. The list goes on and on.
In fact, some months, credit card processing fees we pay in order to accept credit cards actually exceed our profit for the month!
From the very beginning, we have always priced our products as low as possible. We started building speakers because we wanted to put great sound within the reach of the average person. While we can't perform miracles, we are proud of what we have accomplished in this regard.
We feel we have the best speakers in the world under $2000 in the SongTowers (of course we are biased, but we are not the only ones who think so - see our reviews and check out the next issue of The Absolute Sound). The same holds true at $3000, $4000, $6000 and $10,000 with the new SoundScapes.
While we could change our model and produce speakers at a lower cost, we simply have no interest in doing so. As indicated above, there are many companies already doing this. But I am not aware of any other company that offers the sound quality we offer at the prices we charge. Add to that the fact that the owner can have them custom-finished to their personal taste, and we feel we offer a unique package that has no equals.
There are many, many options out there when searching for new speakers. Each person will rate what is important to them. If cost is the most important criteria, chances are they will look elsewhere. And that is perfectly OK. We simply try and provide the best product we can, at the best price we can offer and be as responsive as possible where customer service is concerned.
In the end, we know our business model will not allow us to please everyone. But, this model has allowed us to build a very satisfied and loyal customer base that has grown consistently at about 35% year to year. That is just fine with us and we see no need to change now.
I hope this makes sense.
- Jim
