A Cynical Introduction to Speaker Pricing

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I like the almost "soviet" approach: massive and global diy support to the LM1 cause will lower the cost of blameless loudspeaker performance another tenfold... :p

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I like the almost "soviet" approach: massive and global diy support to the LM1 cause will lower the cost of blameless loudspeaker performance another tenfold... :p

Hi GDO!

Heh, it is a little radical now but frugality and self-reliance were, until the late 20th century, uncontested American values. I heard a rumor that Monsanto is trying to pay the Boy Scouts of America to have them remove "thrifty" from the Scout Law. :D :D :D

Having said that, thanks for your support, I really like your turn-of-phrase: "blameless loudspeaker performance" :D:D:D

Best,


Erik
 
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Hi GDO!

Heh, it is a little radical now but frugality and self-reliance were, until the late 20th century, uncontested American values. I heard a rumor that Monsanto is trying to pay the Boy Scouts of America to have them remove "thrifty" from the Scout Law. :D :D :D

Riiight. from about 1950 on the average American wouldn't understand frugal if it hit them. Consumerism had hit big time. Go back to the 30s and things were very different, but still every country with a lower GDP (as in nearly all) would contest your statement. I'd accept that 1840s wyoming was pretty damned frugal tho :)

Doesn't stop it being annoying about the 5:1 cost to shop markup, but that's sadly how retail works. I could dream that the JBL M2 would kill the high end speaker market, but that aint going to happen. It's lifestyle baby. Ferrari:check, plastic wife: check. Bling watch:check. $200k wilson speakers: check.
 
I am curious to know the dark list of the Be tweeters.... fun :)

PS : and soon we will be avle to listen to the zylon 's drivers of the Yamaha NS-5000 ! Hurk : 12 000 USD or more ! An ATC dome for the mid should be good enough ;) for saving money...
 
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I think 5x markup from cost of parts is about right and fair. That's what it costs to run a business of making anything that's a piece of hardware. 30x is markup for luxury items. That's standard practice and varies for the market and the item. But you can't compare the cost of drivers vs cost of a finished product. You are providing your own sweat labor, your own shop, your own procurement, your own utilities, insurance, etc. all those things cost a business. So the 5x savings we get from a DIY is very real - but ask yourself how much you would have to charge people if they wanted to buy the speakers from you and you had to support yourself with sales of speakers alone? Probably 5x.

So for the most bang for the buck - we should aim to build speakers that are the equivalent of the 30x markups. To do that you would need to spend $3k to $5k (DIY price) on the cabinet and the paint or veneer. The high end speakers exude fit and finish like a luxury automobile.
 
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I am curious to know the dark list of the Be tweeters.... fun :)

PS : and soon we will be avle to listen to the zylon 's drivers of the Yamaha NS-5000 ! Hurk : 12 000 USD or more ! An ATC dome for the mid should be good enough ;) for saving money...

Eldam,

For a while there was a lot of phony Be making it into otherwise well respected brands. You can still find this sort of stuff on Alibaba, or "berryllium copper" which really means 99.9% copper, and the remaining 0.1% might be Be.

Fortunately, it's not possible for you to buy really terrible Be tweeters among the reputable brands. Only those that come in speakers. You can recognize them from having a motor and magnet structure the size of an olive. :) OK, I exaggerate but only a little.

Best,


Erik
 
I think 5x markup from cost of parts is about right and fair. That's what it costs to run a business of making anything that's a piece of hardware. 30x is markup for luxury items. That's standard practice and varies for the market and the item. But you can't compare the cost of drivers vs cost of a finished product. You are providing your own sweat labor, your own shop, your own procurement, your own utilities, insurance, etc. all those things cost a business. So the 5x savings we get from a DIY is very real - but ask yourself how much you would have to charge people if they wanted to buy the speakers from you and you had to support yourself with sales of speakers alone? Probably 5x.

So for the most bang for the buck - we should aim to build speakers that are the equivalent of the 30x markups. To do that you would need to spend $3k to $5k (DIY price) on the cabinet and the paint or veneer. The high end speakers exude fit and finish like a luxury automobile.

From how would you or I try to make a business you are right and it's what I have expected to find. It's not however how I have observed things working in the so-called high end world. After a lot of analysis I've come to discount that anything matters but driver costs to estimate final costs.

And this goes completely out the door when maker's make their own drivers, then the final price to parts cost is shattered. It's probably closer to 40:1.

In addition, when manufacturers (probably correctly) see that consumers are buying perception as much if not more than performance, it's further incentive to drive down parts cost and quality and instead sell the brand. Less and less incentive to provide good products.

Also, remember that the ratios I'm talking abuot is paying full retail price for drivers. You buy enough and you can get up to 45% off of the high end brands, even more from the Asian suppliers.
 
And by the way, the real point for me isn't the markup... it's the cynical pricing. If you are going to price something at $10k it should be f*ing outstanding. Instead we have reviewers discussing the various scents of poop from $2,000 all the way up and selling it to us as fine meals.

"blameless loudspeaker performance" really hits it on the head.

That's my real objection, it's not the part about making money via knowledge, expertise or labor. It's that the high end has become so corrupt and insufferable that few of these branded titans deserve their place among the lofty pedestals they've been put on. As I wrote somewhere else, the high end has become the cynics selling to the gullible.



Best,


Erik
 
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Don't forget that there are a number of levels of distribution & profit as well as a whack of shipping in any speaker.

Let's look at the local hifi emporium.

Say a speaker costs 1,000 units. Let's say they are buying enuff quantity to get the good price. When i worked hifi that was 40 points (but the dealer pays shipping from the disturb), so the distributor sells them for 600 units. He buys them from the manufacturer. I'm not privy to what distribs mark-up but lets say they buy for 400 units (and pays shipping, which if it has to cross an ocean can be significant). So if the retail has drivers at 10:1 (probably too low a ratio) say, then the manufacturer is 4:1. And each of these has (at a minimum) rent, wages, advertising, utilities, insurance, shrinkage, interest, (hopefully) profit, and if profit, taxes… the manufacturer also has to pay for speaker boxes and shipping boxes.

The "closer" you are the the manufacturer then the more "reasonable" the driver to retail margin.

An example of direct from the manufacturer would be us selling an assembled and finished Frugel-Horn Mk3… the flat-pak is $550 with A7.3eN, we charge $250 to assemble, $400 to veneer, $150 to pack for shipping = $1350. Drivers are $290/pr retail so $1350:$290 = 4.7:1. We have very low overhead and still do not make a profit at the end of the year (we do it because we enjoy it, day jobs required).

Add all the additional costs a retailer has to cover and 20:1 isn't looking so bad. The extreme hi-end i don't know, but it is a lot more than $10k.

dave
 
I aI haven't heard a lot of DIY stuff...well not anything higher end anyways. But when I was looking to build vs. buy a few a few things jumped out at me:

A) There is a lot of proprietary stuff OEM's are doing that you can't DIY. This is sometimes marketing, sometimes not. Look at KEF's drivers for an example.

B) Keeping with the KEF example (just because I own a pair...no other reason), the R700 3-way is $3500 or so and the drivers are around $250 each (I am sort of guessing here, but I have seen them quoted around this price). That's over $1K in drivers. When I had to buy replacement drivers for a set of Focal 714V (about $1K retail) they were $100 each. That's $400 + tweeters in a $1K speaker.

This is retail of course, but you also have to pay retail if you use scanspeaks or SEAS or whatever.

C) I haven't seen a lot of OEM driver vs hi-end SEAS or scanspeak or SB comparison. Zaph has a review of the B&W FST driver and it's VERY favorable. I think the big manufacturers like KEF or B&W with big research capabilites should be able to match or exceed what SEAS or whoever can do. I bet there are more B&W FST woofers in the world than Revelators so I don't think it's a quantity of manufacture issue.

D) DIY lets you use A LOT better crossover parts if you want.

In the end I know I can't make a truly good looking cabinet. I would have had to buy a lot of woodworking stuff I didn.t have. And I have two little kids, a hectic job and can't cut wood at night (little kids). I knew it would be challenging for me to DIY something. DIY amps and electronics can be done at night when the kids are asleep...speakers can't. And I couldn't convince myself that something like a ZAPH ZRT or Kairos would be better than something I could buy commercially (used) for the same price.

Maybe DIY is better, but I couldn't hear any of them beforehand. In the end I bought a used set of KEF r700 (which is a very well reviewed speaker) for around $2K USD which I really like. I don't know if it's better than a set of $2K DIY speakers. I'd really like to hear from someone with a unbiased comparison between something like the R700 and say a ZRT 2.5 way. It would be interesting.

But I do know that a $1K DIY amplifier (Pass or whatever) will crush whatever you can buy for $1k new. This is fact.
 
Not an anti Capitalist, quite the contrary, but average product distribution from actual maker to end user is HORRIBLE .
4:1 end price is about the least you have, worst is that happens on everything, not "unnecessary" or "Hi Tech" stuff as we are discussing but even *commodities* , the m ost generic unbranded stuff you can have.
Even *milk* has such a markup, from the just milked bucket by the cow (I'm being romantic about it but you know what I mean) to said milk packed in a carton or plastic bottle in the Supermarket.
And all was made as processing was boiling/packing/cooling/distributing it, ZERO Tech level.
Machinery to make tons of it at high speed and with minimum human hands involved *is* impressive and high Tech, not denying that, but the process itself is very simple and inexpensive, yet ........

It pays a lot to get as much upstream as you can, in house manufacturing being best, if quantities involved justify the investment.

I make Guitar amplifiers commercially, and can compete successfully with the Chinese (in my target area) , beating them in price (at retail level) , but I always invested in machinery in the last 46 years; even if seemingly expensive at the beginning it self paid quickly and then made a difference.

For years now I have been making my own chassis and panels, own speakers, transformers, PCBs, plus the usual carpentry and finishing, electronics assembly, etc.

Only problem (there is always a catch) is that end product incorporates a lot more work hours than others, because parts have to be made before end manufacturing, but in general it pays up.
 
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Nicely done. Thanks. And it's a real problem.

Funny that you mention Gérard Chrétien, because he comes from a DIY background, as well as publishing. We were good buddies back in the 80s ad worked on a few projects together. Very business savvy fellow and fashion conscious. Not bad qualities for someone in the high end speaker business.
 
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