[SonicReducer]

Larry:

After the Lexicon/Oppo situation, it seems that everyone is familiar with the practice of rebadging. I'm not pretending to enlighten you. I am, however, very interested in the details. Let's say, for example, that we discovered that all Naim amplifiers are based on existing Pioneer electronics. Two things would happen: One, budget-minded audiophiles would re-consider Pioneer as a legitimate choice (providing them with more cost-effective options), and two, some listeners (and heaven forbid, reviewers), would subject Naim amplifiers to a little less reverence and a little more skepticism.

I'm well aware of the fact that people know about rebadging, but I find it interesting that out of the literally hundreds of tiny, boutique companies that neither "design" (in an engineering sense) nor manufacture their own products, I can find very little information as to who does.

[TheChairGuy]

Chair Guy: I apologize if you took my criticism personally in any way. I still, however, disagree.

No sweat - apology accepted (and disagreements happen in life) & thanks.

But, I think you disagreed on the wrong premise...blissful indifference is probably the point I was trying to make rather than blissful ignorance.

If you're happy with what you have at whatever price you paid so long as it is in your particular budget...why care who made it

Badge engineering is not so cut n' dry....better casework costs more, as does dealer base versus direct selling (generally a 40-50% spread between two identical models) and warranty periods affects cost.  Add in fancier remote, any accessories added and, voila, you may have two remarkably similar/same products that sell for differing prices.

I'm sure this doesn't account for a 600% price difference between the same product...but, does account some portion of it.

I come from a slightly different perspective on this than most here as I have spent the past 24 years selling consumer (durable) goods in the small electrics, housewares, sporting goods, beach, and today, hand truck markets.

We make product badge-engineered (we call it OEM/Original Equipment Manufacturer or, simply, private label) for several folks in the US and Canada. In every case the product in the private brand sells for more than our own as they sell in specific channels of distribution.  We add a bungee cord here, color the plastic pieces differently and change the hangtag and display box entirely, but it's pretty much the same item underneath.

But, the reasons are many for the price differential (I'll detail several)

1.  Two-step distribution (more hands in the mix caused price swelling)

2.  Some are sold to GSA-certified vendors (this means you can sell the US Government and this certification is not easy or cheap to achieve and it means long waits for payment, tho guaranteed when they do)

3.  Some are sold to Industrial resellers who take invoicing from customers rather than instantaneous payments from credit card-equipped consumers.  This is costly and time-consuming.

4.  We offer 1 year warranty and when you buy from us thru any of our thousands of authorized retail locations....we cover the liability costs.  When we sell private label, it releases us from liability as the goods are sold with another label on it, and the selling party must cover it.  Several offer 2 year warranties, thus hiking up liability costs.

There are other factors, too, but this is enough to understand the situation a little bit more.

In the end my goal is to further my brand name in the market....but, we're not blind to the need to just make and sell product and stay profitable.  So, like OPPO and others in the hi-fi business...we WANT to sell our own brand first and foremost, but you cannot be everything to every segment of any business and need partners.  These include folks you can build product for - as it helps your volume and you can purchase materials at greater discounts (called economy of scale in business-speak) and further your lead in a marketplace.

http://en.wikipedia.org/wiki/Economy_of_scale

So, be ticked off if you like about 'spreads' in pricing between substantially similar product....but, there are often tangible reasons for it in the marketplace.

Again, 600% spreads are impossible to rationalize, but normally the cost differences are far more nuanced.

Sorry for the long post - I hope there is something worthwhile it in for someone out there to read

John

[Pez]

Look, what is responsible for the "toxic mystique" as you put it is consumer ignorance in general. People are willing to pay stupid amounts of money because they believe that there is something magical and beyond there comprehension occurring in a design So it's the consumers fault for being stupid and buying it, not the manufacturers fault for having it done on the cheap by chinese manufacturers. Shame on you (you being the consumer).   
DIY is a pretty good way to insure that your amp etc is really what it claims to be. So yes I advocate for everyone to make as much of their own gear as possible. The only standard that matters is your own.

[SonicReducer]

John:

Thanks for your thorough reply. I agree that rebadging is an accepted practice in many (if not all) industries, and that it's here to stay. From a business standpoint, rebadging makes perfect sense. As a consumer, however, I want some knowledge of what I'm buying. To use my hypothetical example of Naim and Pioneer again, if I can buy a Naim amp for $3,000, or a Pioneer clone for only $2,000, then I'd like to know. Maybe Naim has performed some proprietary modification that's so great that I think the extra $1,000 is well worth the money. Perhaps, though, I don't hear a difference when listening, or maybe I'm handy with electronics and know that by performing a few mods, I can make that Pioneer sound just as good. Then I'll go with the Pioneer and pocket the $1,000. That's being a smart consumer. I need, however, to have that initial information, and that's where the audio industry's business practices begin to seem a bit antiquated.

So, you are 100% correct about economies of scale. My beef is with the paucity of detailed, specific information on this subject beyond the general knowledge of rebadging itself.

Pez:

I agree that consumers are to blame. If people held audio companies to the same scrutiny with which they hold auto makers, a huge swath of tiny, "me-too" companies that don't truly offer any real value would disappear. I find it frustrating, however, that as a proactive consumer, I have so far been unable to uncover very little hard information about design and manufacturing origins.

I realize, by the way, that efficient market theory essentially says that these "me too" companies will disappear anyway if they truly don't offer value for the money. As a consumer, however, I would rather know in advance that my Lexicon was really an Oppo, and then make the decision before my dollars go down the drain. I'm not an economist, so I can't really say how extensively one can apply efficient market theory to every situation.

[Pez]

but rebadging and obsolescence are two of many problems with consumerism. There is no way to tell especially for early adopters until it is often times too late. What Lexicon did was the same thing Swiss watch manufacturers do, what appliance companies do, what I have seen throughout my life. The only reason people are up in arms over Lexicon is because they did it so blatantly and the price differential was so absurd. I wonder how quickly you would blow a gasket when you found out how much you could have bought the Tag Heuer watch on your wrist directly from the Chinese factory that made it, you know, the same one that stamped "Swiss Mov't" on the face plate.

In other words, this is nothing new and you will fall victim of it over and over and over again most likely unwittingly.

[TheChairGuy]

SonicReducer,

In the end, highest cost rarely wins out.  Consumers seek to buy the most they can for their finite resources - that's just human nature.

Look only at the woeful state of US department store chains today (a dying environment) versus the rampant growth of deep discounters like Wal-mart and Costco the past 3 decades.

So, eventually, you'll have your just-redemption for your beliefs...it just won't necessarily be anytime soon

John

[SonicReducer]

Pez:

I agree that capitalism isn't all wine and roses, but that doesn't mean that consumers should resign themselves to getting screwed over and over again. After all, buying is just as important as selling in any capitalist equation. I love to keep going back to both the auto and appliance industries (see the link in my first post, if you already haven't; I think that chart is fantastic). Why should consumers be so methodical and demanding in those two industries, but be so resigned with regard to high-end audio? If you look at any industry, you'll probably see a mixture of savvy and gullible consumers, and I would bet that there are many audiophiles who either don't care or simply don't know that many boutique audio companies are nothing more than capitalized and organized modders who don't actually "manufacture" anything. These small boutique companies don't supply the information, and consumers, for the most part, don't really demand it (making the transaction not unlike that between a drug dealer and a user).

John:

I agree that the twin forces of the economy and the internet will eventually topple a number of these companies. I find it odd, however, that such a huge gulf still exists between perception and reality in the audio industry. I'm not interested in "just redemption" so much as useful knowledge that can help me make smarter purchases. When one really scrutinizes high-end audio, the lack of both relative transparency and obtainable knowledge is amazing.

[zybar]

...As a consumer, however, I would rather know in advance that my Lexicon was really an Oppo, and then make the decision before my dollars go down the drain. I'm not an economist, so I can't really say how extensively one can apply efficient market theory to every situation.

Just because you feel that the your dollars would be going down the drain by buying the Lexicon inside of the Oppo doesn't mean all people feel that way.  The price differential to some might be absolutely fine due to them valuing the improved case work, better dealer support network, etc...

I am not saying that I feel this way, but I think we all need to stop assuming that every single Lexicon buyer is wasting their money. 

George

[SonicReducer]

I say as much in one of my posts above, where I speculate that there are probably people who are still buying the Lexicon precisely because they want the pretty case and the high-end dealer "experience". I don't have a problem with this at all. I do have a problem with the fact that this particular rebadging wasn't common knowledge, and that even a very proactive consumer would not have been able to find out this information before making a purchase.

People knowingly buy a Lexus instead of a Toyota all the time, and that's fine. Consumers in the auto industry are much better informed than high-end audio consumers, which is probably the result of both consumer demand and industry transparency, neither of which exist to the same degree in high-end audio.

I started this thread not to bash Lexicon, but rather to hopefully provide a place for people to share their knowledge about similar products that co-exist in the marketplace under different brand names. Everyone agrees that rebadging is rampant, but not too many people (myself included) seem to be able to come up with more than a few specific (and high-profile) examples. As a consumer, I think that this needs to change. So far, however, examples have been hard to come by.

[Freo-1]

Just because you feel that the your dollars would be going down the drain by buying the Lexicon inside of the Oppo doesn't mean all people feel that way.  The price differential to some might be absolutely fine due to them valuing the improved case work, better dealer support network, etc...

I am not saying that I feel this way, but I think we all need to stop assuming that every single Lexicon buyer is wasting their money. 

George

George, I think you may be missing the point here.  The OP is saying that most folks who are putting out 3K plus for the Lexicon are most likely unaware that it's six times the price of an Oppo (which is essentialy the same unit).

[viggen]

Certain brands just have better appeal to certain consumers through certain types of channel distribution.

I think Sonic just wants to find the best value product regardless of brand and distribution channel.

I don't see anything wrong with that. 

Some people prefer seeking the best option for their earned dollar.

 

[SonicReducer]

Viggen:

You are exactly correct. Manufacturers in high-end audio can't be relied upon to disclose the often pedestrian electronic heart (or drivers, or plinths, or cabinets, etc.) of their products. Many tiny, boutique companies neither design nor manufacture anything, but simply "mod" existing products and charge a prestige-based premium. The upside of this is that there exist excellent (and probably overlooked) "mainstream" (possibly even "big-box") components that are probably far better than anyone realizes, and that provide quite a bit of value. The people who run boutique companies don't want you to know this, not because they're evil, but very simply because they're businessmen. If they will not supply this information, however, then I think we owe it to ourselves to search for and share our findings.

[JimJ]

Who actually designed and manufactured your gear, and could you find similar products for less?

My amps were designed by Eric Barbour, speakers by Terry Cain and the guys on DIYAudio who optimized the design...

Manufactured by me

[SonicReducer]

I'd just like to add that I don't think that every small audio company merely takes existing products and mods them. Obviously, many small companies have amps built to spec for them by other companies that specialize in hi-end audio manufacturing (like Cullen Circuits: http://www.cullencircuits.com/). According to their website, Cullen have been involved in the manufacture of many hi-end audio products, including PS Audio and Genesis. Now, I'm not going to claim that these companies offer identical products. I wonder, however, just how similar they might sound given that Cullen not only manufactures products, but also "consults" in the design. The possibility exists that the same designer or team of designers may have had a hand in designing both PS Audio and Genesis amps. In fact, both the top-of-the-line PS Audio Trio A100, and the bottom-of-the-line Genesis GR180 are Class D/ICE amps. As the Genesis costs roughly $4,800 and PS Audio only $1,000, I think it would be foolish not to cross-shop and compare (what would you have to lose, aside from $3,800?). I would love to see more of this kind of information being exchanged in audio forums.

[cloudbaseracer]

SonicReducer,

Have you ever thought that the price difference you seek is made up is some ways by the amount of work you yourself have to do to determine what products out there are most similar (or identical)?  If it were as simple as having a list then there would not be this disparity - or at least it would be highly minimized. ALL manufacturer do this and they go to great efforts to make sure that they will be able to continue to do this.   If not, then manufacturers would sell on the differences. Which is what happens almost every time. 

As to your Toyota/Lexus analogy- I do not think it fits here.  There is  clear difference in quality between the two brands.  At least in quality of parts. Almost anyone can see that.  These are not subjective opinions but the collective truth.  They may share some common parts but not all and specifically not the ones that the manufacturer as well as the consumer deems to be better.  I drive a Toyota and love it but I do know that a Lexus is much quieter and more plush.  Does not make me begrudge the Lexus or their owners.  The difference is that there IS a difference.  Drive a Toyota then drive a Lexus and choose the one you think is best for you. 

The "great" Mr. Wolf of Magico states that he uses the Odyssey amps as "substitues" for the Solutions which are something like 100k or so.  Crazy money.  Now these are not the same topology and no one is saying that they are.  But the BASE Odyssey amp is "shockingly close" to the Solution.  That is great value to me and in my opinion is the direction you should look (not endorsing nor dismissing Odyssey).  Find products that compete well above their price point - TO YOU - and don't worry about the guts that are inside.  Gold plated, cryo-ed or gerbils in a plastic box- if what you are wanting is the sound and not the prestige- seek that out.  This hobby is subject to the law of diminishing returns greater than anything else I can think of.  Some are want to pay more and get more - it is a very subjective though as we will all admit. I will state that I

For the record- I have absolutely no problem with someone charging whatever they want and believe they can sell a product for.  Why does it matter if they make more money?  These people on the other thread that wanted to litigate against Lexicon is just asinine and points to a big problem with our country.  No one was actually damaged. NO ONE!! No one forced them to pay more money for a Lexicon. Nor did anyone force them to believe that the Lexicon was in some way superior.  I will state that I believe the Lexicon owners got exactly what they paid for!!

By the way, I am a manufacturer of a relatively high-end consumer household product.  There are others that are cheaper and others that are more.  Honestly, within my specific small market segment, there is not much real difference between the products on the things that should matter most.  Styling differences exist but performance ones do not.

 

[zybar]

George, I think you may be missing the point here.  The OP is saying that most folks who are putting out 3K plus for the Lexicon are most likely unaware that it's six times the price of an Oppo (which is essentialy the same unit).

Gotcha

[SonicReducer]

Cloudbaseracer:

Perhaps I should clarify a few issues. Being familiar with both the auto industry (out of a love of cars) and the home appliance industry (out of recent needs), I find the relationship between the manufacturers and consumers in high-end audio to be rather strange by comparison.

Rebadging is an absolute fact in all three industries, but the manufacturers and consumers in high-end audio seem to have a, "don't ask, don't tell" relationship regarding the design and manufacture of audio products. Every now and then a Lexicon/Oppo-type scandal will surface and the forum boards will light up, but for the most part, people don't really seem too concerned about rebadging in the same way that consumers of autos and appliances are concerned. Consumers in the auto and appliance industries frequently and enthusiastically trade information about rebadging, with the sensible consumer goals of maximizing their dollars and minimizing their risk.

My only point in starting this thread is to hopefully provide a place where people can share rebadging information so that they too can maximize their dollars and minimize their risk. Considering some of the mark-ups on rebadged equipment, I think that the effort is worth it.

I also think that finding this information is so difficult for one reason: the consumers in high-end audio have historically been so laissez-faire about rebadging and mark-ups, that the manufacturers have had zero incentive to disclose information. The proliferation of information on the internet, in combination with the tanking economy, however, is now causing both consumers and manufacturers to pay more attention to this issue. I fully accept the reality of rebadging as a legitimate business practice, but as a consumer, I want the best value for my money, regardless of the name on the case.

Regarding Toyota/Lexus: As an avid follower of the auto industry, I'm going to have to disagree with you on this one. Even the most cursory research will show that a Lexus ES350 is 90% Toyota Camry and 10% leather and sound deadening. If you still want the Lexus, that's cool with me, but many people are well aware of the similarities. My real point about Lexus/Toyota, however, was to give an example of a rebadging with which almost everyone is familiar. The auto industry is far more transparent, not because the manufacturers are more "moral", but because the consumers have demanded (and created, in forums) more transparency. In other words, I don't have a problem with buying the Lexicon AFTER you know about the rebadging, but obviously buying it before anyone knew anything is a little less black-and-white.

Other posters have also brought up the issue of simply buying what you like and not worrying about "the guts that are inside". If people like a product, can afford it, and don't care if a cheaper alternative exists, then that's great for them. I happen to be on a stricter budget, and I don't want to pay the high mark-up for "prestige". Accordingly, I am willing to take the time to do my research and ferret out audio bargains. I'm just surprised that more people haven't been doing this kind of research all along, considering the fact that rebadging is probably just as rampant in high-end audio as it is in the auto and appliance industries.

[viggen]

This thread seems to hit a lot of tangents.

Here goes:

JVC produces their own projectors but also OEMs for Anthem, Pioneer and Meridian.  So, save your buckaroos and buy  from JVC instead of paying additional mark up to a rebadger.

[SonicReducer]

Viggen:

Thanks for the information. That's exactly the kind of information that I'd like to see shared in this thread (and in forums in general). Given the reputation of both JVC's DAC's and Pioneer's Elite products, I'm not surprised to see the relationship with Meridian.

[doug s.]

sonicreducer, also being an auto fan, i can relate to the toyota camry-lexus es350 analogy.  but what toyota is comparable to the is-series lexus?  and, what nissan is comparable to the g37 series infiniti?   toyota doesn't make a rwd car, and nissan's only rwd offering is the z-car. 

doug s.