Is it me or is Hi-Fi getting even more over priced ?

[Yomanze]

Of your £5K 20% is VAT, that's a grand right away, of the remaining £4K about £2K is dealer and distributor margin, and assuming a standard 10-1 ratio of cost to sale, the parts to build it cost the maker £200 tops.

What about the costs for R&D, employing a team, tooling required, renting of a business premises etc.?

[Macca]

What about the costs for R&D, employing a team, tooling required, renting of a business premises etc.?

R&D for a totally conventional 2 channel stereo amp? Come on. All the R&D was done a hundred years ago. The rest is taken into account with the 10 to 1 cost of parts to cost of sale (to the distributer). Anything needing tooling, which is only the case and chassis, will be done by a third party already set up to do it. Probably in China.

[swampy]

I have to agree. This has been awarded a "Best Buy" at £4995.

http://www.the-ear.net/review-hardwa...ated-amplifier

Best Buy at 5K !!! Best buy should be at the few 100 pounds end imho. Case in point of my original post. For 5k I could have a budget car which has far more materials and construction labour all be it machine made mostly.

[swampy]

You could have this for $1200 usd (£900) but the import and vat spoil the deal. Amazing build and design if you see inside.

https://goo.gl/images/qcdjq6

[Yomanze]

You could have this for $1200 usd (£900) but the import and vat spoil the deal. Amazing build and design if you see inside.

https://goo.gl/images/qcdjq6

It will certainly have a lot of character judging by these specs:

Distortion: 0.6%
Signal to noise ratio:90dB (A standard)

[Spectral Morn]

Nuts, isn't it? If they wanted to market an amp that was actually impressive in terms of specification how much would they have to charge for that at retail once you take everything into account? Probably twice as much.

Now if they did not have to take care of the dealer, the distributer and HMRC, how much cheaper would it be for exactly the same item? Too many people wetting their beaks.

And that is the way the world works on everything, from selling goods to providing services, its called commerce, earning a living, and then having money to pay for stuff.

[Sherwood]

The discussion seems to have shifted from super expensive hi-fi to the economics of consumer electronics. Yes, there are many factors that escalate the costs of materials and labour to arrive at a retail price.

First, some maths. The vat on a £5,000 amp is £833 not £1,000. £1,000 is the vat you would pay on a £5,000 amp before vat!

Yes, there are other fixed or semi-fixed costs above materials and labour. R&D and tooling costs are incurred before a single unit is sold, but their relative importance depends on the total sales volume. Many of these super-priced products only have limited production runs, so these fixed costs account for a greater share of retail costs than would otherwise be the case. Marketing can be another important cost and looking at the marketing channels used for some elite products, I am sure that the marketing cost per unit sold for elite products is very high. Dealer margins are a big element which is why some of the best bargains are now to be had from direct sell companies. Most of my recent purchases have been from direct sell companies. Ultimately, though I think that many companies are simply making huge profits on some of their products because that is what the market will bear.

Geoff

[montesquieu]

What am I prepared to buy new? These days, really only stuff that wears out, like cartridges and tubes.

For everything else I'm happy with older or at least second hand gear in fact as I sit behind my 1967 amp, 1964 turntable and with a late 50s-design SPU cartridge, 1974 speaker drivers in a (albeit improved using modern materials and modelling techniques) 1961-style cabinet, and my early 00s DAC which uses a valve output stage based on the then brand new Audio Note M5, I wonder what a lot of modern gear really brings to the party.

Very little at Munich really floated my boat (a couple of speaker designs, a couple of bits of valve stuff), most of it left me cold, especially some of the fugly blinged up turntables designed to go in designer rooms in designer houses of the sort mine isn't at all, though more generally also the whole standard contemporary hifi template, which with with a few honorable exceptions seemed to be about mediocre streaming solutions pumping out forgettable muzac into overly shiny and very inefficient multi-multi-driver speakers, driven by large, shiny solid state muscle amps. Musicality? Forget it. What a yawn fest.

Of course that's being a bit unfair .... there was some very good kit and some of it reasonably priced, I'm thinking the little single driver Hecos for example or some of the boutique valve stuff and general bits and bobs. But this was the exception to the rule, room after room of the same shiny alloy faceplates, blue LEDs and TTs made from chromed girders.

Actually I apply the same notion to cars I'm running an 8 year old Jaguar XF (the then top of the range) that cost me £11k and I'm really not missing much compared to the £50k new one.

Of that means I miss out on the thrill of visiting car showrooms and indeed hifi dealers - no point if I'm not going to be a customer. But I think I can live with that. I'd rather take my chances on the private sales forum.

Tight git? Maybe. I prefer sensible.

[alphaGT]

I recall reading an interview with the owner of Focal, about his Utopia speakers. His R&D staff made these speakers as a landmark accomplishment, to invest everything they knew into one speaker design. To take on the road to all of the hi-Fi shows to show off, but only as a demonstration. It was not a production speaker, it wasn’t meant for production, but just a feather in his company’s hat. But, when the public saw them, they wanted them! Rich people were hounding him to made them a pair! At any cost. I forget the price, something like $170,000 a pair. But he couldn’t make them fast enough to meet the demand. I think the speaker industry is one of the most overpriced, speakers over $100,000 abound! And most are just particle board with a nice veneer finish, and components I can buy online, I think to myself I could make a pair just like them for under $3k. But it’s all about the demand! If rich folks are begging for hi end companies to take their money, who can blame them?


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[struth]

Fit and finish can be expensive to produce, as its usually skilled craftspeople that do it. Even making a machine to do it as good would cost a fortune and would probably fail. You look at Marco's kitchen, and you can see where the money went as its crafted, and not banged together on a Wednesday early closing