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Speaker Asylum General speaker questions for audio and home theater. |
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Speaker Asylum General speaker questions for audio and home theater. |
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In Reply to: Re: Fun Manufacturer's Cost Questions... posted by truthseeker on March 22, 2000 at 17:31:08:
Speaking as a small manufacturer who has fought with this issue for some time, I don't see the basic business model changing much. The mainstream high-end business is more similar to making toasters and coffee pots than not. It's about marketing and distribution. Actual production costs are usually about 20% of retail. This means that for every $100 you spend for a set of speakers, about $50 goes to the dealer, about $30 goes toward marketing, advertising, review samples, kissing-up to various entities for the good of the business, etc., leaving the final $20 to actually manufacture the product.The only real advantage that using the internet as the focal-point of one's marketing thrust is that you can have a much greater number of people seeing your advertisement for less money than you would pay for the same exposure in any print media. However, the price you pay is in nervous clients who aren't yet sure of you or your products. They are comfortable with certain recognized brands utilizing conventional marketing and distribution channels. The whole idea of dealing at arms-length is less appealing than being able to look someone in the eye. It's one thing to spend a few dollars on flowers, a book, or a CD. It's quite another to spend serious money on an audio product without seeing or hearing it first. Offering a 30-day audition period, full money-back guarantee, and even paying for the shipping doesn't overcome the perceptions in the minds of the average consumers.
To more directly answer your question using our Eire loudspeaker as an example; our cost to manufacturer is right at $1,500 per pair. Retail is $2,995 per pair. The difference is what we cover all our other costs with including shipping to the client, lights, ISP, web site, food, TP, etc.
Mike
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Follow Ups
- Re: Fun Manufacturer's Cost Questions... - Mike McCall 21:29:11 03/22/00 (2)
- Re: Fun Manufacturer's Cost Questions... - truthseeker 22:21:23 03/22/00 (1)
- Re: Fun Manufacturer's Cost Questions... - Mike McCall 08:19:56 03/23/00 (0)
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