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Re: Dan, are you listening?

For mass market electronics, the suggested retail price is often between 5 and 10 times the actual cost to manufacture. If high end manufacturer's products markups differ widely from this, it is because they are extremely ineffecient at minimizing cost and their markups are lower or they price their products because they feel they can achieve a market niche and their markups are higher. One area which is a joke to consumers are fancy panels and enclosures. They are very expensive to buy OEM or make in small quantities. High end speaker manufacturers produce cabinets built to very high fit and finish standards unnecessarily and they invariably get marred, scratched, gouged in use anyway so that's a complete waste of money from the customer's point of view. Most manufacturers of loudspeakers use off the shelf drivers or custom manufactured variants. You can practically identify them going through a Madisound and Parts Express catalogue. I'll bet Audax pulled its Aerogel line off the retail market because of complaints from OEM customers seeing hobbyists buy them to reverse engineer high end designs. Take the retail price of the drivers and knock down at least 40% to 60% off them to get an idea of what manufacturers pay when they buy them OEM in quantity. That $100,000 pair of VS or Wilson speakers probably has less than $5000 worth of drivers in it, perhaps a lot less. If you are clever enough, you can identify the drivers and build the systems yourself. The single most expensive item in an amplifier is the power transformer. You can buy one hell of a transformer for an amplifier for about $200 or less at full retail. OEM made in China they are probaby about a tenth of that or less. Transformer prices are almost all directly related to their volt-amp ratings. Torroidals cost more than other types. The next most expensive components are the enclosure and filter capacitors. The rest is gingerbread. Here's another example of actual retail markup. In a virtual war over a $26,000 UPS I had with Square D about 20 years ago after it failed one month out of warranty, they agreed to supply replacement batteries not at the $200 each normal price but at $37, their actual cost. Even industrial equipment gets marked up heavily.

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