0 Members and 1 Guest are viewing this topic. Read 39030 times.
I have been buidling high-end gear about 20 years longer than you have. My experience backs up my statement. The people who complain the loudest are usually the first ones sucked in by hype. And since those types are not my customers, I can ridicule them in public.You are right that they are more interested in talking about their gear than whether or not it sounds good. As long as they can read somewhere that it sounds good, that is all that it takes. How else can your explain someone buying cables that cost more than a cheap used car, and are the same in terms of functionality.
C'mon, folks...it's really simple. There are a ton of high end speaker/audio-gear manufacturers serving a relatively small niche of audiophiles. Coupled with the used market, it's just a case of there being more manufacturers and products out there than the demand for products warrants. Some companies are going to go out of business for the simple reason that there's not enough demand to sustain all of these companies.Which companies survive is a function of many things...quality, quality control, ma ...
II think you hit it on the head. All you have to do is go to CES a couple years and there are more companies than you can shake a stick at. All of them are fighting for a small group of customers. The ones successful, like Brian, know their customers and through creative methods, good business sense and hard work scratch out a living.In terms of things made in the USA vs. overseas it doesn't concern me. My products are truly international in origin. Capacitors from the UK, inductors from Poland, drivers from Chile & Taiwan and cabinets made in the USA. I don't value American jobs any more than I do international ones. Why does an American deserve a job more than a European, Indian, or Chinese person?My family probably colors my perception though. My kids are Ethiopian, American (biological) and Guatemalan so I’ve got a broad swath of colors and nationalities.
i agree w/everything here. my only beef is w/companies like red rose music, who sell $1200 chinese korsun amps for $7k. of course if mark levinson can find the suckers, i guess i shouldn't begrudge him that fact. yust not my cuppa...doug s.
The standard pricing model that I've seen in this industry is that retail is about 5x the cost of goods
I think some, myself included, would argue that that pricing model is out of whack. With there being, as you said yourself, many sellers and few buyers that margin should be a LOT LOT less.
...why they didn't declare bankrupcy and use the associated legal protections to work their way out of it is a mystery...
Remember, tho, that the 5x cogs pricing model is for retail pricing. Take into account that a dealer is going to get a margin between 40-60%, and a distributor is going to get a margin as well, the manufacturer is only seeing perhaps a 2x markup on their cogs. So for example, on a pair of speakers that retails for $1000, a manufacturer probably only has a gross margin of $200. After all of his operating and marketing expenses, the manufacturer isn't making a ton of money here...
I am not exactly espousing the manfacturer is all cases. But the margins for the standard retailer and distributor in the hi-end market are often the most problematic, and where the issue really lies imo.
While I agree that Red Rose marked up the Korsun stuff by a lot, I don't think they marked it up as much as people think once you take into account all the costs they incur to offer their products here. Shipping, quality control, spare parts for service, etc can add up.Two years ago, I had an opportunity to participate in a group-buy of Aurum Cantus monitors. The monitors retailed for $300 in China...but after all the shipping and customs duties, they eventually cost me about $600/pair. And of the 10 pairs bought in the group-buy, there was one pair that was dead on arrival. So we're looking at about $660 per pair. The standard pricing model that I've seen in this industry is that retail is about 5x the cost of goods, so that would dictate a $3300 retail price...and that's about what Red Rose priced their version of the Aurum Cantus speaker. Obviously, the $700/pair could be reduced by purchasing in much higher volumes, but still it shows that they weren't all that far off...
while we could argue as to whether or not red rose shoulda sold a $1200 amp for $7k, or mebbe they woulda still been able to make a handsome profit if they sold it for $6k instead, this totally misses the point. which is: red rose adds little (if anything?) to the quality/value equation, & yust rips folks off. i have no problems buying chinese gear, marketed as such, from distributors who take their fair profit. which is why it costs $1325 (shipping included) for that korsun amp, when purchased from a ...
doug...it will be interesting to see if that distributor can stay in business. He's going to have to sell 1000 pairs of Aurum Cantus Leisure II's just to make a $49K salary (assuming he has no other expenses like rent...)
