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Thread: Epiphany Acoustics

  1. #21
    Join Date: Mar 2012

    Location: Gloucestershire

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    I'm Paul.

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    Quote Originally Posted by SLS View Post
    The thread was about Epiphany closing. The product I was referring to was from JDS Labs, which I understand Epiphany rebadged. I am an accountant and it took me 10 minutes speaking to them to work out that there was no way of profitably importing into the UK. There is just no space for a dealer margin when the product is being sold direct online. There are an increasing number of such suppliers. I've been considering a passive pre-amp and all three options are direct online - Khozmo and Hattor (the same guy in Poland) and Tortuga Audio (in Florida). All such items are relatively cheap as there are no distributor or dealer margins, have been reviewed so they are likely to work, and are cheap to send internationally. Just remember to add the VAT to the price.

    I also see that Epiphany tried to sell JDS Labs products on Amazon UK. My wife is an Amazon reseller. I know the costs. It is not viable. Cannot compete with buying it direct from JDS Labs online. (I bought their superb DAC for $165.)

    I cannot see any future for electronics manufacturing in Europe other than volume direct sales (JDS Labs in the USA sell many thousands of units per annum) or at the very high end where price is almost irrelevant. A small cottage industry may well remain, but of no significance to the market overall.

    Speakers are slightly different because they are sometimes bulky and the electronics are a relatively small proportion of the manufacture cost. Still, most are made in the Far East. I've had UK made speakers, PMC and more recently two pairs of Harbeth. The cabinets are production-line made in the same factory to a very high standard. Made bespoke would cost about three times the price. I know because I once got a quote. Curiously, the SHL5+ probably costs more to make than the PMC Fact.8, but sells for half the price. PMC market heavily, Harbeth hardly at all (they don't need to). You can't copy a Harbeth speaker because the heart of the range is the Radial 2 driver, made in-house and not sold to third parties.

    The relevance of China is that I replied to a post that implied Chinese goods have an advantage through fraudulent non-payment of tax. Not true. My family made products consisting of brass hand-turned in Birmingham and coloured glass made in France (extremely difficult to make, has to be cooled over 2 days). The business was profitable for 80 years. Then the Taiwanese worked out how to make the glass, they managed to make the same product to the same quality and it arrived in UK bond at half the price. So still a third cheaper even after paying VAT and Duty. So my father closed the company.

    I used to go to the brass factories as a kid. I was in Birmingham a year back - not a lot of brass turning going on.

    I don't consider there to be separate business models for large or small companies. Ever since commerce started the basic principle is to generate enough gross profit to cover overheads and make a profit. It doesn't matter if you focus on high margins/low volume (UK cottage hifi, Waitrose), low margins/high volume (Japanese hifi, ASDA) or low product costs (Chinese hifi, Tesco - when Jack Cohen started he focused on buying cheap), it comes to the same thing - you need enough gross profit to pay overheads - and if anyone thinks they can cheat that system, they won't last long.

    We'll simply agree to differ then . Many small businesses selling direct do not need the profits of larger companies and that affects business model as does turnover required to stay afloat. Yes, electronic goods are certainly an example of where we cannot compete with China on productivity but there remains a variable quality issue with many goods which is undeniable. That's down to quality control and how much companies are willing to invest in it. I've seen some of the loudspeakers coming out of China and wouldn't give you tuppence for most of them...Always exceptions but you're dealing with two very different markets when trying to compare mass produced boxes of MDF to bespoke high quality pieces made to fine furniture standards. Companies tend not to mass produce those because it's uneconomic to do so and stay in competition. This brings us neatly back to the business model of smaller companies, often based upon materials costs plus hourly rates commensurate with skills involved, and not a quadrupling of manufacturing and materials costs.

  2. #22
    Join Date: Nov 2013

    Location: N London

    Posts: 566
    I'm Steven.

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    It should also be noted that the Amazon rule is that any dissatisfaction is met with an immediate refund or replacement - or both. It actually works because of the volume sales Amazon can generate. In my wife's Amazon business experience, the cost of this policy is minimal. Amazon also has a rule that if the product is faulty they bear the return delivery cost, if the customer simply does not want the item the customer pays the return delivery cost.

    This should be the rule for all online sellers. It makes the concept of fixing things irrelevant. It is also why I buy just about everything, including electronics, on Amazon.
    Wilson, Devialet, Innuos, Puritan, Claro

  3. #23
    Join Date: Nov 2013

    Location: N London

    Posts: 566
    I'm Steven.

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    The idea that the Chinese or other Far East manufacturers cannot make quality products is the oldest excuse in the book and plain wrong. It is down to the customer to specify. If you want cheap crap that has a high failure rate they will make it, if you want high quality tested close to destruction they will make it at a higher cost. Negotiating wth the Chinese is simple as you just pay for each additional process required.

    There is a simple business concept. Starting on 1 January, by what date do you expect to generate enough gross profit to cover annual overheads? In my small business it is 2 February. In some of my larger competitors it is early October. If it after 31 December, then a rethink is required. I fear there are a lot of UK audio companies, or ex-audio companies, who never thought about things like this.
    Wilson, Devialet, Innuos, Puritan, Claro

  4. #24
    Join Date: Nov 2013

    Location: N London

    Posts: 566
    I'm Steven.

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    Whilst having a rant about bad business practices, I have always been of the view that if people are prepared to trust to luck as opposed to planning a business, they might as well go to the casino as it will be more fun and if they lose it will be over quicker.

    I previously posted (possibly somewhere else) about Linn. Love them or hate them, they have a clear business strategy, they state it in their annual report, they achieve it and make a nice profit - in a highly competitive market and not necessarily with superior products. So I take my hat off to them.
    Wilson, Devialet, Innuos, Puritan, Claro

  5. #25
    Join Date: May 2008

    Location: A Strangely Isolated Place in Suffolk with Far Away Trains Passing By...

    Posts: 14,535
    I'm David.

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    Quote Originally Posted by SLS View Post
    Speakers are slightly different because they are sometimes bulky and the electronics are a relatively small proportion of the manufacture cost. Still, most are made in the Far East. I've had UK made speakers, PMC and more recently two pairs of Harbeth. The cabinets are production-line made in the same factory to a very high standard. Made bespoke would cost about three times the price. I know because I once got a quote. Curiously, the SHL5+ probably costs more to make than the PMC Fact.8, but sells for half the price. PMC market heavily, Harbeth hardly at all (they don't need to). You can't copy a Harbeth speaker because the heart of the range is the Radial 2 driver, made in-house and not sold to third parties.

    The PMC's, these and the '20' series, are made for high profit margins for themselves and their dealers I understand, the drive units being rather 'ordinary' and 'basic' it appears. The 'H' company are doing very well indeed at present and have done for years, but this is down to fastidious and almost paranoid company management and very thorough product research, design and marketing, even if you're not keen on the finished products. Spendor also look to be back on track now after a bad time some years ago (I'm suspecting over-expensive product builds rather than lack of business) and now they own a successfully speaker cabinet maker too, they should be alright I hope.
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  6. #26
    Join Date: Feb 2008

    Location: South Wales

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    I'm NotTakingLifeTooSeriouslyTheseDays.

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    I did respond earlier, however, i decided, what's the point, in the grand scheme of things, folk who genuinely care, and appreciate products made by small companies here in the UK, will be in the minority for some time to come, However, as has been seen' time and time again, once these businesses are gone, thats it.
    When you build something bespoke, on a small scale, you put a large part of yourself, and time into that product.
    "Today scientists have substituted mathematics for experiments, and they wander off through equation after equation, and eventually build a structure which has no relation to reality"
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  7. #27
    Join Date: Mar 2012

    Location: Gloucestershire

    Posts: 3,377
    I'm Paul.

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    Quote Originally Posted by SLS View Post
    The idea that the Chinese or other Far East manufacturers cannot make quality products is the oldest excuse in the book and plain wrong. It is down to the customer to specify. If you want cheap crap that has a high failure rate they will make it, if you want high quality tested close to destruction they will make it at a higher cost. Negotiating wth the Chinese is simple as you just pay for each additional process required.

    There is a simple business concept. Starting on 1 January, by what date do you expect to generate enough gross profit to cover annual overheads? In my small business it is 2 February. In some of my larger competitors it is early October. If it after 31 December, then a rethink is required. I fear there are a lot of UK audio companies, or ex-audio companies, who never thought about things like this.

    Oh dear...there are some things that you simply cannot specify for mass production and expect to remain competitive or to retain ultimate quality control plus you lose that more personable relationship with clients for more bespoke work...this is all very relevant to small businesses like mine which you appear to totally misunderstand as understandably you probably lack experience in some of these more specialised fields. I am surprised at your attitude as with your business experience you should know better. But what the heck, no amount of reasoned discussion will sway you from your "you're wrong and I'm right" attitude. There are grey areas which appear to have past your black and white view of the world. Nothing personal but I'll bow out of this discussion now and leave you to your world of amazon

    I did respond earlier, however, i decided, what's the point, in the grand scheme of things, folk who genuinely care, and appreciate products made by small companies here in the UK, will be in the minority for some time to come, However, as has been seen' time and time again, once these businesses are gone, thats it.
    When you build something bespoke, on a small scale, you put a large part of yourself, and time into that product.
    Spot on Anthony

  8. #28
    Join Date: Feb 2013

    Location: W Lothian

    Posts: 99,005
    I'm Grant.

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    Quote Originally Posted by DSJR View Post
    The PMC's, these and the '20' series, are made for high profit margins for themselves and their dealers I understand, the drive units being rather 'ordinary' and 'basic' it appears. The 'H' company are doing very well indeed at present and have done for years, but this is down to fastidious and almost paranoid company management and very thorough product research, design and marketing, even if you're not keen on the finished products. Spendor also look to be back on track now after a bad time some years ago (I'm suspecting over-expensive product builds rather than lack of business) and now they own a successfully speaker cabinet maker too, they should be alright I hope.
    jeez, we are back in the 14th century now, owning people

    PS no business model is black n white, just shades of both and occasional red
    Last edited by struth; 12-02-2016 at 13:00. Reason: Typo
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  9. #29
    Join Date: Nov 2013

    Location: N London

    Posts: 566
    I'm Steven.

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    Quote Originally Posted by DSJR View Post
    The PMC's, these and the '20' series, are made for high profit margins for themselves and their dealers I understand, the drive units being rather 'ordinary' and 'basic' it appears. The 'H' company are doing very well indeed at present and have done for years, but this is down to fastidious and almost paranoid company management and very thorough product research, design and marketing, even if you're not keen on the finished products. Spendor also look to be back on track now after a bad time some years ago (I'm suspecting over-expensive product builds rather than lack of business) and now they own a successfully speaker cabinet maker too, they should be alright I hope.
    Correct in all respects. I heard some of the PMC drive units cost £12 in a speaker costing £6,500. That said, they make most of their drivers in-house and their world-renowned 15" Radial driver is in all their larger (SE) consumer units and pro units. PMC and Harbeth are two of the most successful pro studio monitor companies, along with B&W.

    I think the PMC '20' range is a brilliantly conceived consumer range - very domestic friendly (a major factor in their design, my wife loved the Fact.8's), voiced for target market needs with a clear upgrade path. They are expensive relative to cost, but well marketed with many happy customers.

    I love Harbeth simply because of their sound. I actually hate the look and listen with the lights dimmed most of the time. Nothing comes close to performance in my experience, particularly the retained dynamics at low volume. There is some market pressure for the BBC licensed designs to be in roughly the same price territory, but Harbeth are a bit more expensive and can't manufacture fast enough for demand. I understand the cabinets and drivers haven't changed in decades, the only changes in recent years have been modification from Radial to Radial 2 and cross-over voicing in consumer units more to consumer than pro demands.

    In business terms PMC and Harbeth are small companies, started from nothing and relatively new (PMC about 1990 and Harbeth 1977, under Alan Shaw since 1986), but well managed in different ways and consistently successful and growing, pro and consumer, mostly exporting. What they have in common is a supremely good product. Without that, you have nothing.

    It is also noticeable that Peter Thomas and Alan Shaw both front their companies around the world, are technically and business astute, and passionate about what they do. I have spoken to both (I meet a lot of successful businessmen) and find them both very impressive.

    I was doing some research recently and recall seeing that Pioneer had sold its audio division to Onkyo. Pioneer was operating its audio at a loss. Even with their volumes and efficiencies and cheap distribution (Amazon, Richer Sounds in the UK), if they can't make a profit, the idea that some home-baked little electronics company can compete is almost laughable.
    Wilson, Devialet, Innuos, Puritan, Claro

  10. #30
    Join Date: Aug 2009

    Location: Staffordshire, England

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    I'm Martin.

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    I agree it isn't quite black and white.

    A large company can sell a product at a loss for a long time without going under - this may be by accident (poor cost control, bad maths) or a deliberate attempt to gain a market presence. I believe Sony used to sell some of their CD players at a loss for that reason. If they have other products that make a profit this can be kept going indefinitely.

    The biggest mistake small operations tend to make is not to have enough capital to cover themselves, especially if they have contracts with larger companies who will pay when they feel like it.

    There is also the issue with smaller companies in that they are started by someone who is unemployable, either because they are useless or because their personality is so extreme they wouldn't last long working for someone else. They fail because they decide on their selling price first, instead of setting the selling price at costs plus profit. Then they don't notice that isn't working until the bank freeze their overdraft facility.
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    TEAC VRDS 701T > Sony TAE1000ESD > Krell KSA50S > JM Labs Focal Electra 926.

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