2004 Retrospect & 2005 Changes

David Ellis · « **on:** 22 Jan 2005, 06:12 pm »

These comments will cover my thoughts regarding EllisAudio activity in 2004. I will also address some forecasted changes for 2005. My goal isn’t to cover everything in this essay, but to convey the larger sentiments about my business. I have deliberated, and possibly lamented, over these comments these past few weeks, and have decided to post them for public scrutiny. My sentiment about public scrutiny follows the very good US government example that all public/government entities publicly disclose their financial matters. Certainly SEC firms accomplish this differently than Government institutions. Nonetheless, some degree of financial disclosure is obligatory. I believe this financial disclosure is good. It allows such entities to be subject to public scrutiny. In this sentiment I will follow.

The Facts…

Fiscally, 2004, was very similar to 2003. In 2004 EllisAudio sold $27k of product and profited $360. In 2003 EllisAudio sold $27k of product and lost $500. Given the @1000 hours (wife estimate) I spend each year on this hobby my “income” rose from $-.50 to +$.36!!! In 2005 EllisAudio made a few modestly significant expenditures. First, I visited Jim Salk in Michigan ($500). Second, I paid TC sounds to develop a 10” woofer ($800). Third, I purchased a Makita miter box ($580). Aside from, these larger purchases, all other purchases were nickel-and-dime items. Anyone who wishes to look at my financial books completely is very welcome to visit my home and examine them in detail. I mention this in candor so that all may know where EllisAudio is financially.

The other significant event in 2004 was the number of reviews added to the EllisAudio 1801 at www.audioreview.com . There were 3 reviews added to this list.

The net summary of EllisAudio in 2004 is thus: EllisAudio purveyed a fairly significant quantity of product to a sublimely pleased group of customers, but only 3 reviews were added at www.audioreview.com .

At this point I will restate my published goal for EllisAudio:

My mission is to build a reputation and business based on outstanding products and service during the next 6 years that might then become profitable after I retire from the Air Force.

My reflection…

I will begin with a quote: “If a tree falls in the forest and nobody is present to see/hear the tree fall… did it really fall? ” In 2004 EllisAudio’s reputation did… nothing. The number of reviews in 2004 was almost nil.

I must admit being befuddled by this. At least 80% (I don’t track this number) of the folks that purchase 1801 email/call me with their glowing appreciation following project completion. One gentlemen from Germany telephoned and raved about the 1801s for 5-10 minutes before I could enter the conversation. His reaction is extreme, but this is the general sentiment I receive. In all of these cases I ask folks to write a review for the 1801s. It’s not happening.

I accomplished 2 new things when I launched the 1801s several years ago. I paved new paths for a DIY speaker builder. First, I spent several hours petitioning the folks at AudioReview to get the 1801 posted. Second, I “sacrificed” a pair of 1801s to the shipping gorillas to get them out for customer review. This endeavor has consumed hundreds of hours and many repairs (by others and me). While this consumed considerable time, it was fruitful. Nearly all the listeners posted a review… until recently. Of the past 4-5 listeners there have been no reviews.??

My initial methods have reached their useful end. Stagnation has arrived. Sales aren’t increasing, and folks have stopped writing reviews. My current methods are no longer producing increased sales or credibility.

My reaction…

Many people have generously offered me the following advice (paraphrased):

1. Dave, you really need to spend less time building cabinets. You really need to have someone else build cabinets for you.

My response – Yep, I know, but I am not willing to put another @$ 8k of my personal capital into a hobby that is only earning +/- $.xx per hour (i.e. less than $1). Further, cheap cabinets are cheaply made. In bulk quantitiy, 1801 cabinets will cost about $400/pr as I make them. Lower quality cabinets cost less, but I am not willing to do this.

2. Dave, you really need to raise your prices. These speakers sound much better, and are built much better than anything close to them in price. Your time is worth more than +/- $.xx per hour.

My response – Yep, I know. Effective 1 Feb 2005 prices will rise.

3. Dave, I am really excited about those 3-way speakers. You really need to get them done!

My response – Yep, I know, but my time is tight. I am spending hobby time on backordered 1801s and responding to many email messages daily. My solution to the time problem is: in 2005 all 1801 customers will have their information posted on the Customer Community page ( http://www.ellisaudio.com/Customer%20Community.htm ). This will hopefully alleviate many of my email queries concerning the use of the 1801 in various system configurations. Future 1801 customers will simply ask past 1801 customers with common system/setup interests.

I do realize that I am asking something very real of my customers. I am asking for their time. In this regard, I believe they will consider this hobby a blessing, and be willing to share it with me. Further, I think the knowledge and input of many of my customers is extremely valuable. Many of them have copious insight. This is worthless if it remains hidden. I believe uncovering the tip of their knowledge & exposure via the Customer Community is a very good idea and a win-win for the hobby.

4. Dave, you need to setup a room at a real audio show - like CES. The 1801 is easily among the best loudspeaker I have heard. They need more exposure.

My response – Yep, I know, but CES costs $3500/room. Such expenditure is in the very distant future.

5. Dave, you need to have some professional reviews of the 1801s. This would really cement their relative place in the audio marketplace.

My response – Yep, I know. This will most likely happen in 2005.

A summary of my 2005 goals. I hope to:

1. Save time via the customer community web-page.

2. Save time via eventually having enough overhead $ to buy a high quality professionally built cabinets.

3. Increase my credibility and reputation by having professional reviews of my 1801s.

4. Finish my 3-way speakers.

David Ellis · « **Reply #1 on:** 22 Jan 2005, 11:29 pm »

Please feel free to comment/criticize any/all of the remarks I offered. This is a forum, and I posted these comments here for this reason. Any feedback/comments/criticism is very welcome. I realise that a marketing die-hard would simply be dismayed by these comments, but I truly believe there is a core of good folks remaining in this world. I also believe these folks can discern the difference between honest business, and excessive marketing babble.

Also, please understand these honest remarks about slightly rising prices come in-lieu of some 1/2 truth garbage marketing babble. Such babble might include remarks about some fancy new high purity silver coated wire with Teflon insulation that I am using in my speakers. Such babble might also garbage about the profoudly improved sound quality from Black Hole 5. Such babble might also include the very good polyolefin heatshrink that I now use in all of my completed speakers. Such babble might also include the Cardas Quad Eutectic that I include in all of my speakers/kits. While all of these things are present, the real reason for the price increase is explained above.

Sincerely,

Rocket · « **Reply #2 on:** 23 Jan 2005, 02:05 am »

Hi Dave,

It seems like you have thought long and hard regarding your business operation. I think you have covered most areas that you can improve upon and market your speaker. You could consider sharing a room with another company to reduce costs at CES.

I honestly think that one area where you face problems is audiophile snobbery, as Many people will only buy a Name brand product so they can show them off to their friends.

I would have purchased a pair of your speakers unheard but shipping prices to Australia are significant and i am totally lousy working wood

.

Do you have a projected price that you will increase your kit speakers by?

Best wishes

Rod

JoshK · « **Reply #3 on:** 23 Jan 2005, 02:43 am »

Dave,

I feel for you, audio is an extremely tough business and audiophiles are probably one of the worst customer groups one could wish for, but alas you persevere (sic). I wish you great luck and fruitfulness in your endeavors even though I have never heard or purchased your wares. You are one of the guys making this hobby fun, at for that our community should be thankful.

However, your time is worth money and for you to give it away without the beneficiaries giving something back, in this case their time with a review of their thoughs on your speakers is shameful of them. Just a though but have you considered a deposit upon purchase of your speakers or kit refundable upon an honestly written review, either good or bad? Charge an extra $200 up front and if they don't give you a review, you keep it as profit, otherwise you refund it because they gave back to your cause. Sounds good to me.

Rocket · « **Reply #4 on:** 23 Jan 2005, 03:04 am »

Hi,

Sometimes audiophile's can be slack and it may be worthwhile contacting your customers and ask them to provide a review of your speaker.

Regards

Rod

David Ellis · « **Reply #5 on:** 23 Jan 2005, 03:10 am »

Quote

audiophiles are probably one of the worst customer groups one could wish for, but alas you persevere (sic).

Actually, I think audiophiles are great guys! They are all mature, honest, and open about what they think and hear. I actually feel quite blessed with the gentlemen I encounter in this hobby. They are really classy guys.

Quote

Just a though but have you considered a deposit upon purchase of your speakers or kit refundable upon an honestly written review, either good or bad? Charge an extra $200 up front and if they don't give you a review, you keep it as profit, otherwise you refund it because they gave back to your cause.

This is a VERY good thought, and I considered this extensively! I actaully conveyed this thought to a couple of my cohorts. They both conveyed the same sentiment that I didn't initially see. Subsequently, I agree with them. I decided against this for appearance reasons. I wish to avoid any hint that I am paying for reviews. This would imply that I had a hand in the comments that were made. While I am very willing to accept the comments of any audiophile auditioning my speakers, paying for reviews is just too close to looking very bad. Further, it really cheapens the very truthful and honsest reviews that others have charitably offered.

David Ellis · « **Reply #6 on:** 23 Jan 2005, 03:14 am »

Quote

Sometimes audiophile's can be slack and it may be worthwhile contacting your customers and ask them to provide a review of your speaker.

This is very funny, but true. Dang it, those guys aren't supposed to be listenig to my speakers. They are supposed to be writing about them

Crunching my paperwor & email for contact information will consume considerable time, but I will do this with 5-10 previous customers. If it bodes well, I'll continue.

However, I think my goal at this point is to add folks to the "Customer Community" page on my site. I think this might have more merit. Heck, maybe this is the reason for my introspection about 2004. Maybe I was supposed to come up with idea???

JoshK · « **Reply #7 on:** 23 Jan 2005, 04:51 am »

Yeah I see your point, actually thought the same, but I figured I'd throw it out there. You could argue that it is solely for review, good or bad, but it does hint at paying for good reviews. If only you could find some system where a third party, unbiased party, would do the rebate not yourself you might avoid that but it would be too troubling to do so.

lonewolfny42 · « **Reply #8 on:** 23 Jan 2005, 05:15 am »

Quote

A summary of my 2005 goals. I hope to:

1. Save time via the customer community web-page.

2. Save time via eventually having enough overhead $ to buy a high quality professionally built cabinets.

3. Increase my credibility and reputation by having professional reviews of my 1801s.

4. Finish my 3-way speakers.
_________________
Dave Ellis

Hello Dave,

Chris[/list:u]

MaxCast · « **Reply #9 on:** 23 Jan 2005, 12:39 pm »

Hi Dave,

One thing for sure is, you have to make a profit. Unprofitable companies don't stay around long. Who wants to buy a speaker form a company that may go out ot business?

Shorten lead times. I'm not sure if the above is correct...12 months?? I'd bet 50% of our systems change within 12 months.

Get a review sample going. Charge $50 just for ware and tear. Possibly build a pair in a cheap cabinet??? I know it won't show off the finish, but it may save on repairs.

Ask a couple times for a review. Nothing wrong with that. Sometimes we all need a push.

I would keep your community here. You circle is already in place, no maintainance on your end, searchers and readers will stumble upon threads possibly leading to more sales. This is a good idea by the way. If you can stay off the net more you would have more time for family/building.

Best of luck!!

David Ellis · « **Reply #10 on:** 23 Jan 2005, 12:48 pm »

Thanks for reading Chris.

Quote

you still need good quality cab's !!

I agree, and this isn't cheap. A while back I queried a few local cabinet shops and the cost looks like @$200/cabinet in quantity of 50 for what I currently build.

Quote

Always better to have more than one style speaker...IMO.

I agree, I would like to work on some other projects, and have some other projects in the works. A few days ago I purchased some Accuton C95 drivers for testing. Then there are those 3-ways speakers that continue to beg for work.

Quote

Its really ashame that more of your customers can't take a few min.'s to write down some comments.

I am a bit befuddled too. In first 2-3 years darn near everybody wrote a review for me when the opportunity came up. Lately it just isn't happening. My customers are great guys, and I have little/no explanation for this.

Quote

Can't stay in business without making money.

Well, I can stay in business, but I really want to grow my endeavor from a hobby to a business without investing more of my personal capital. I really would like the speaker building end of things to pay for some cabinets and a run of good underhung 10" woofers from TC Sounds made for hifi.

I offer the comments about my financial end of things so folks understand that this remains a labor of love, and some sense of community feedback/input/help is needed to matriculate other projects and other work. And to be completely honest, while I have improved and tweaked the 1801s lightly over the past 2 years, the real reason for a price increase is to fund other projects and expand what I am doing. I thought about sharing the financial end of building speakers, and a possible perception could be that I was whining about not making any $. This is not the case. I feel very blessed by my hobby. Heck, how many guys have a hobby that actually breaks-even annually!! I think this is really great. I mention these matters so the community of folks who read about ellisaudio will have some idea about what is happening and why I am/am not getting things accomplished. In all community based organizations (i.e. church, government, SEC companies too), the financial books are essentially open.

quote] I'm not a fan of money(I own my own business)...but it pays the bills !!!!!![ [/quote]

I totally understand!! Yep, this is exactly where I'd like to be someday. I don't mind working for someone else. I actually enjoy this. Nonetheless, I might well be in a financial position to give this endeavor some time after retiring from the USAF. Maybe it'll happen. Maybe God has another plan for me.

salva · « **Reply #11 on:** 23 Jan 2005, 01:16 pm »

OK, I will have to take the flak and give a explanation why, as a 3 Kits buyer over the last year (wich one of them is being finish rigth now) I have emailed with dave a great deal, and as well I have emailed with other users wich some of them Dave have sent to me.

I have as well posted most of the experiences of building the speakers on this forum to help others and some of the experience abt the listening of the speaker. All that means that I am willing to spend time to help others/write abt my experiences, now, why I have not written a review on audioreview ?

The answer is simple, I don't see myself with the knowledge/experience to write a "decent" review. Right, when I write to others on a "formal" way I want to know what I'm talking abt, is like speaking in public if you know and are experienced of what you are talking abt you felt secure and talk easy, if you dont better dont do the speech.

So I guess that to myself having done three 1801's and heared a few hifi systems for a while does not give me enough authority to write absolute words.

Now, having said that, if the request happens to participate more actively in a forum dedicated to help new or future users of 1801's I will be more than happy to do it.

Salva

David Ellis · « **Reply #12 on:** 23 Jan 2005, 01:28 pm »

Quote

Get a review sample going. Charge $50 just for ware and tear. Possibly build a pair in a cheap cabinet??? I know it won't show off the finish, but it may save on repairs.

As mentioned above, there is a review pair of 1801 loudspeakers touring the country. They have been doing this for about 4 years. They are pretty beat-up, but that's okay.

Quote

If you can stay off the net more you would have more time for family/building.

Yep, I totally agree with this too. I jammed my left thumb at the gym on Friday playing volleyball. I took a dive and another guy caught my thumb with his knee during his jump. We are pretty agressive, but my thumb isn't quite well enough for tasks in the worshop. Hence, my excessive time on the keyboard yesterday, and much of today too.

Oh, being a Vikings fan, I couldn't help but to notice the Packer's helmet. I really envy the Packers football organization. I wish the Vikings were run like the Packers. However, I didn't envy the Packers when Antonio Freeman caught the pass bouncing off Chris Dishman's back in the rain on Monday nigth about 3 years ago.

That moment was most likely the most intense emotional time I have experienced watching Vikings football (or TV for that matter). The Vikings and Packers are pretty equal teams over the years, but being a Green Bay Packer's fan seems, well, better from the business end of things.

pem · « **Reply #13 on:** 23 Jan 2005, 08:40 pm »

Dear all,

I am quite new to Hi-Fi, but I have studied the (french) audiophile community and the market during the last three months.
As fas as I understand, in a schematic way, there are at least two kind of audiophile.
On one side, we have people who want to have the best sound for a given budget. For them, a speaker is like a luxury product. This mean that instead of looking for a sound quality, they first look for a price, and then see what they can have for this price. For example, they look for a 2000$ or a 3000$ pair of speakers and then study the market, asking advices and reading reviews. In a last step, they usually try to get the most expensive speaker with the best rebate.
In one sense, this is comparable to luxury product. When you buy a
perfum, you fist decide whether you want to pay 10$ ou 100$, and then
select the best one for your taste.

The second kind of people are member of the DIY community. They try to have the best (based on drivers' specifications) for a good price. For them, the price does not make the quality, they are interested by the tehcnology which is inside.

I think that it is very difficult to target both with a single product. Dave has seduced the second community by offering a wonderfull quality kit at a very competitive price. As a consequence, the finished product is not expensive enougth (1300$) to interest the high-end audiophile community. To make the Ellis 1801 interesting, the price should at least be raised by a factor 2. But, this increase cannot be done on the kit, otherwise the DIY community will hardly continue to order kits.

Suppose now, that you only increase the price of the finished product. People cannot understand the gap between the two prices. Let us consider a finished pair of Ellis at 3000$ for example, it cannot be considered as a good speaker since the kit only costs 675$. People to pay 3000$ are not happy if someone can have the same product for only 675$.
So, in my opinion, the solution is to target the two communities with 2 different products:
- a good kit like the Ellis 1801
- an "improved" version of the Ellis 1801 (using the W18EX instead of W18, and OW3 instead of OW1 for example). A good approach could also consists in designing a cabinet more difficult to build and to clone (have a look at B&W705, 805 signature or Dynaudio Contour), using a stange shape with round corner for example.
You find a "good" name (not base on technology) like "Ellis Audio Reference", "Ellis Audio Prestige", or something that sounds luxury (using french words for example

I strongly believe that people (and reviewers) will like to buy a
3000$ pair of speaker because:
- it is expensive
- it sounds good (like the 1801)
- it cannot be build via a kit

In France, a good speaker starts approximatively at 2500$ (B&W 704, Dynaudio Contour S1.4, PEL Reference, for example), but very good speaker are priced around 4000$ (805 signature, JM Reynaud Offrande, etc). By choose your price, you choose the quality of your speaker.
My analysis may be bit simple, but it could give some ideas...

To sum up this quite long post, I think that you should not modify
modify the Ellis 1801 kit, but you should rather create a new line of
product, based on your experience, which will be considered as a
high-end version of the kit.

This was my 2 cents (of euro

hubert · « **Reply #14 on:** 23 Jan 2005, 09:48 pm »

Hello DAVE,
This post to give you my "travel" to my 1801b ordering. Because I'm french and (it seems) the first 1801's buyer in this country, maybe this will help you for your business (in any case for your "foreign affairs")
FIRST: I'm new on web, new on diy-community but an old diy speaker-builder. So, what I'm writing below is valid for me, perhaps not for all.
1 I discovered your website...in Northcreek-site...linked with Lee Taylor cabinets site...!!! Hu!!!, what's this nice 2 ways-cabinet!!??and go to your site!!! I haven't seen your site (with Google) when I was looking for a kit with words like "DIY Loudspeaker", "loudspeaker kit" or other similar words.
2 I discovered a lot of European kit seller's sites. None gave me confidence in their products like some US sites.
3 I was on the way to buy a Northcreek-kit when I falled to your 1801.
4 After having read all your site and e-mailed with you, I ordered a kit because I have enough technical knowledges to understand that 1801 will work. If I did not have this knowledges and if you had not losed time with me, I'm not sure I had ordered.
5 Shipping prices (70 USD by air-mail), customs taxes (4.5% of kit-price), french entry taxes (19.6%) are expensive, but your kit is cheap and... see points 2 and 4.
6 Another french guy, new commer in diy speakerbuilding saw one of my post, e-mailed with you Dave, then with me and...ordered (that's what he said to me).

It's all, Dave, others will give you opinions about your business, I...not.
YES, one: Who is this guy who SELLS an amazing speakers-X/over-kit and PASS his time to BUILD CABINETS AT CHEAPEST PRICES ALL AROUND THE WORLD ?

David Ellis · « **Reply #15 on:** 23 Jan 2005, 10:44 pm »

What do you think about Accuton drivers?

Dave

David Ellis · « **Reply #16 on:** 23 Jan 2005, 10:57 pm »

Hubert,

I apprecaite your enthusiasm and confidence in me. I am certain it will be solidified when you complete your speakers.

Also, thanks for speaking my language. I really appreciate this. I know how difficult foreign languages are to learn, and maintain. Americans are generally bad in this regard, and I am among the worst. My knowledge of German, and classical Greek is totally gone.

Sincerely,

JoshK · « **Reply #17 on:** 23 Jan 2005, 11:57 pm »

Ich hab' zu viele vergessen.

Rocket · « **Reply #18 on:** 24 Jan 2005, 12:31 am »

Hi Dave/Guys,

I have extensively heard accuton drivers used in a couple of different designs. There is a local company in perth who designs speakers utilising, accuton, phl, cabasse, focal and raven (orca) products.

My current speakers are an mtm design utilising the raven 1 ribbon tweeter and 2 x 7k4211db focal kevlar drivers. Quite a nice sound imo, however the accuton and phl drivers sound much better than focal products. They are basically more transparent. Accuton drivers are hideously expensive in Australia and i think a 3.5 inch midrange sells for about $700au each.

Have you considered the phl range of drivers? They are cost effective and have a wonderful revealing sound quality.

Regards

Rod

David Ellis · « **Reply #19 on:** 24 Jan 2005, 03:27 am »

Quote

Have you considered the phl range of drivers?

Yes, until I heard them. They really did not impress me. It appears they are best oriented toward hi spl pro sound applications.

Dave