John DeVore's primer on HiFi Economics - Any thoughts?

Devore made video about cost of high end:


Some numbers from the video:
-Devore O/baby

Fixed cost: 1500 usd
Retail cost: 5700 usd
Price to dealer: ??

Speculation:
He says he can make 300% normal margin by selling trough online without dealers,
also say that 30% discount from 5700 is still more than normal margin:

-5700 usd about 300% normal margin = 1900 usd
-30& discount still more than normal margin trough dealer = 3990 usd

1900 < ? > 3990
33% < ? > 70%

So around 40-50% margin probably?



-Any thoughts? Is this honest?
-Is this fair margin what you have to have to survive as small scale high end manufacturer?

-I think this is self serving and bit dishonest video since he used as an example the lower margin product in his line..
You will not have much more fixed cost for Devore 0/96 (probably 2000-2500 usd) that is retail $15,900..
 
Speaker burn-in? One one hand I have measured that the impedance does change after a few hours of playback and on the other hand I think speaker sellers like to add a layer of confusion and delay to the process of buying a speaker. The ear does take time to adapt and I think this is what some people think is a "speaker burn-in". Dealers use it to eat up the return time. In Devore's case, he makes it seem like a value added service.

Devore has also said mics are not as complex as the ear. It seems like he likes to sell smoke.

Retail cost: 5700 usd for a silk dome and a most likely a "Dr. Kurt Müller" paper cone in a monkey coffin? No thanks.

Passives are easy but feel like a horse and buggy to me. They are an old way to get around.
 
Even a brief review of audio literature, especially that dealing with localization effects, shows that the ear is a very complex structure. For example, pinnae of ear and the shading of the lobes is crucial in localization.

I suggest that a literature review would be highly informative.
 
Even a brief review of audio literature, especially that dealing with localization effects, shows that the ear is a very complex structure. For example, pinnae of ear and the shading of the lobes is crucial in localization.

I suggest that a literature review would be highly informative.
I've read a paper or two. I understand how the ear shape and head shape play a role in how we hear. (search my username and the word 'paper'_

Complexity still does not mean it is accurate or repeatable. If anything, complexity introduces more issues.

A person can only focus on a 2-4 tones at a time, a musician even more. A mic can record data that is beyond perception.

If one is trying to be objective, ears are not the answer. I do use my ears for a final say.

I know there are people who are against mics and only trust ears. I get this because each person is really hearing things their own way.

I did debate an AI about this earlier. I asked it to put the perception in terms of data for a 4 minute song.

Microphone (Mic)

    • Generates more data than the human ear
    • Can capture a wider range of frequencies and amplitudes
    • Data generation is more complex, with a higher sampling rate and bit depth
    • Approximately 8.5 MB of data generated for a 4-minute song

Human Ear

    • Generates less data than a microphone
    • Limited by tone simultaneous masking, can only process 2-4 tones simultaneously
    • Data generation is less complex, with a lower effective sampling rate and bit depth
    • Approximately 0.002-0.004 MB of data generated for a 4-minute song (a rough estimate)
 
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So around 40-50% margin probably?



-Any thoughts? Is this honest?
-Is this fair margin what you have to have to survive as small scale high end manufacturer?

-I think this is self serving and bit dishonest video since he used as an example the lower margin product in his line..
You will not have much more fixed cost for Devore 0/96 (probably 2000-2500 usd) that is retail $15,900..
5700-1500=4200 is a 300% margin, which means the normal margin must be 1400, and the price to a dealer is 3900.

I would say it is the minimum margin to survive, but I don't believe in 1500 USD of material costs unless they don't have their cabinet production and have to buy them.

From my experience, if they build cabinets themselves, the material and components cost must be twice less than that, and the dealer margin in the US is at least half of the retail price.

High-end loudspeakers are low-quantity production businesses requiring well-qualified workers and high salaries. A 40-50% margin added to material and components cost doesn't work even for the mass product industry. For High-End business, it must be over 100%.