Manufacturer slams industry

A thing is worth whatever someone is willing to pay for it. Some people pay for performance, some pay for a name. Some get lucky and get both. But those are all individual choices, and my opinion of someone who pays for a name is just my opinion. If I had more money, would I spend more money on my hobby(s)? Hell yeah! But, I don't have that kind of money. So, I have to be a little more careful about where mine goes than some people. Just the way things are. I like to think, tho, that if I did have the disposable income, I would still be concerned about how things sound more than how much something costs.
 
Our margins were set at 40points for Yamaha and Pioneer in 1990/91, worked back from deliberately placed retail prices, usually ending on a 49 or 99.

Speaker margins were much higher.

Once margins got squeezed below that, stores started disappearing, let's face it, and by the mid to late 90s, store numbers had dropped to a quarter of what we had in the high margin era.

Another 20 years on and all we have left are they guys who spent their money wisely, buying the building, leasing the other tenancies out, and in most cases, shrinking their operation to keep the doors open. Most of those guys are in their late 60s now, the ones who made a fortune in the CD player era. Many of those same retailers went nuts in the good years, overseas trips, boats and expensive cars and once the gravy train derailed, they still had ever increasing costs to deal with, on sales that were disappearing fast. It was a slow, painful death for many HiFi retailers and sad to watch.

I have no problem with high margins. It is up to the buyers to determine value for money and make educated decisions on what and where they spend their money.
 
As prices go up so do the margins. I was a store manager for Sears for many years and hardlines (electronics and furniture were considered brown goods and appliances were called white goods) had the lowest margins in the store. Rags (clothes) and jewelry had the highest. A low margin item in jewelry had a 250% markup. Most jewelry had and has over 300% markup. The higher an audio item costs the more it is considered a luxury item, like jewelry. A $15000 Rolex does not have $15000 worth of parts in it, but a Rolex has its name, which is evidently worth a lot to a lot of people. I honestly dont expect a $50000 speaker to have $50000 worth of parts at all. Unless something is made out of something very exotic then the sum of its parts are rarely worth what it costs (including engineering time spent). Not to start yet another magilla but cables are a huge example of this. There is nothing inside of a $15000 audio cable that add up to that much money, but such items are luxury items and have huge markups like luxury jewelry items.
 
The original post quoted an article that said, "... companies are selling inferior products for extortionate prices, and ... the magazine industry is supplying unhelpful and inaccurate reviews which allow the hi-fi manufacturers to get away with it."

That is the complaint that was made, isn't it?

Ehoove's point appears to have little to do with it, and Bodyblue's has everything to do with it.

My quoted comment was not in response to the OP's article, but rather the responses to the article that leaned the conversation in a all too familiar topic of Vintage versus Modern Value wise. The same basic business fundamentals exist/existed in both time periods. Once again as always an uninformed consumer/seller is his own worst enemy. In my opinion there is little or no difference in a business or a individual exploiting the uninformed.
Regards,
Jim
 
So this nothing new, back then we had Stereo Discounters in the DC area where I could buy my first Thorens TD125MkII cheaper than I could at another smaller dealers cost. With today's internet any purchase by a uniformed buyer is at his own risk and not our problem to fix.
No one wants anyone to make a profit, then complains because there are no local shops in their area. They go hand in hand folks.

I can appreciate both of these sentiments--I own my own construction company. It costs money to operate a business--especially a mom and pop B&M operation. Insurance, licensing, physical costs (in my case, warehousing, tools and equipment) payroll, all of it adds up. OTOH, I can purchase materials at 50% (sometimes even less) than what you can go down to Homey Depot and buy stuff for. If I call my Behr, Sherwin-Williams or PPG paint reps and order 100+ gallons of a common/popular color (that I am banking on selling), I can pay 50% of retail (or less) for their best stuff--OR I can get stuck with a barn full of unused/unsold product.

I appreciate and try to support small businesses, since I am a small business owner--but it really jacks me off when a small business expects me to (personally) pay the premium for a local business to put all of their kids through college, pay for their daughters weddings and retirement condo (and maybe a boat too). I work, I know the %'s, and I have to eat too--so there is a certain "breaking point" at which I have to go elsewhere--it is a "global market" now.

I have been under-bid by as little as 1-2% for some large jobs, and watch all the trucks with out of state plates doing work in my back-yard, so to speak--so 6 months or a year later when all of that money you saved has turned to s**t--don't come crying to me to "fix" it, or at least be prepared to PAY.

Everyone that owns a business HAS to make a profit--I fully understand that--you need to eat, I need to eat, my employees need to eat, we all need a roof over our head.

Rant Over--Sorry...
 
My quoted comment was not in response to the OP's article, but rather the responses to the article that leaned the conversation in a all too familiar topic of Vintage versus Modern Value wise. The same basic business fundamentals exist/existed in both time periods. Once again as always an uninformed consumer/seller is his own worst enemy. In my opinion there is little or no difference in a business or a individual exploiting the uninformed.
Regards,
Jim

I still fail to understand your reference to an individual "exploiting" anybody. I am sure it happens all the time but I have never seen anybody on AK bragging about scamming the uninformed. Unless you think buying anything at a yard sale is "scamming" of course. Yard sales usually have many items selling at a fraction of their value but if the seller is happy about selling those items then who cares? There is no moral equivalency. Thrift stores are the same thing. Sure they often sell things for far less than they are worth, but they paid nothing for them. I have a closet full of Tommy Bahama shirts that I bought from thrift stores that I usually pay around $12 for. TB shirts are around $100 new, so are you saying that I am scamming Eco Thrift for $88?
 
Obviously, you miss my point, and yes there are many instances of a scroe on AK. It appears the definition of scroe is when someone finds an amazing deal on a vintage piece that usually is obtained from a uniformed seller. I'm not being judgemental, just pointing out an existing double standard when members cheer on about a scroe, but lament when they feel the shoe is on the other foot. This is just my opinion which I do not need to justify to you, so I'm out of this conversation.
Regards,
Jim
 
I still fail to understand your reference to an individual "exploiting" anybody. I am sure it happens all the time but I have never seen anybody on AK bragging about scamming the uninformed. Unless you think buying anything at a yard sale is "scamming" of course. Yard sales usually have many items selling at a fraction of their value but if the seller is happy about selling those items then who cares? There is no moral equivalency. Thrift stores are the same thing. Sure they often sell things for far less than they are worth, but they paid nothing for them. I have a closet full of Tommy Bahama shirts that I bought from thrift stores that I usually pay around $12 for. TB shirts are around $100 new, so are you saying that I am scamming Eco Thrift for $88?

"Morality" is highly subjective--and I don't want this to become a moral or political debate, but if I go to an estate sale, I WILL tell the grieving widow what she has and what a fair market value is, and pay that if it is something that I want--even if it ends up being a few hundred bucks more. Sorry, I can't rip off an old lady selling her husband's estate knowing nothing about what she has and just trying to get through and pay for a funeral. If it is just greedy-ass kids or grandkids looking to get what they can get right now--f**k em, now I don't care. As a contractor, I have done many estate "prepping" jobs--get the house emptied and ready for sale at max market value, and stuff either goes to the dumpster or the back of my truck, because the kids are only interested in selling the house--and taken home tens of thousands of dollars worth of "junk". It is (to me) a "sliding scale". If the family needs the money, I will go out of my way to tell them that they should keep or sell things--if they appear just "greedy" and looking for a short sale--all bets are off, but that is just me.
 
It is (to me) a "sliding scale". If the family needs the money, I will go out of my way to tell them that they should keep or sell things--if they appear just "greedy" and looking for a short sale--all bets are off, but that is just me.

I have never seen "morality" described as a sliding scale before. A rather unique way of looking at the world.


Obviously, you miss my point, and yes there are many instances of a scroe on AK. It appears the definition of scroe is when someone finds an amazing deal on a vintage piece that usually is obtained from a uniformed seller. I'm not being judgemental, just pointing out an existing double standard when members cheer on about a scroe, but lament when they feel the shoe is on the other foot. This is just my opinion which I do not need to justify to you, so I'm out of this conversation.

I did not say you had to justify anything, I just do not agree with what appeared to be your definition of a "score". Its not like AK posters are bragging that they bought a SX 1980 from a blind nun for a nickel. There are moral and ethical codes that most of us live by and if you feel that those that you live by dont jibe with some posters that is perfectly fine, I just wanted to understand a bit more where you were coming from.

And if a buyer is happy and fine with what they get for their money? who cares?

I completely agree. My entire adult life was spent in the retail industry, either selling things or managing people selling things. If the seller is happy with a price and the buyer is happy with a price then there is no moralizing required.
 
"Morality" is highly subjective--and I don't want this to become a moral or political debate, but if I go to an estate sale, I WILL tell the grieving widow what she has and what a fair market value is, and pay that if it is something that I want--even if it ends up being a few hundred bucks more. Sorry, I can't rip off an old lady selling her husband's estate knowing nothing about what she has and just trying to get through and pay for a funeral. If it is just greedy-ass kids or grandkids looking to get what they can get right now--f**k em, now I don't care. As a contractor, I have done many estate "prepping" jobs--get the house emptied and ready for sale at max market value, and stuff either goes to the dumpster or the back of my truck, because the kids are only interested in selling the house--and taken home tens of thousands of dollars worth of "junk". It is (to me) a "sliding scale". If the family needs the money, I will go out of my way to tell them that they should keep or sell things--if they appear just "greedy" and looking for a short sale--all bets are off, but that is just me.

In order to help my widow after I check out I made up a list of items I think have some value and what I think they should go for. I try to keep the list up to date but I always tell her to check eBay/CL/etc. to see how the market is.

I can recall being in a gun shop and some widow walks in with her husband's S&W Mod 29 (or whatever) and they offer her $200 bucks. I want to take her aside and tell her to check the gun action sites for a value to start with. But that got me thrown out, well at least she didn't get taken. I mostly buy anything of interest on-line/eBay/CL. Not much to see at GW or other Thrift shops. Some of that stuff has been sitting on the shelf for over a year. They won't even negotiate. They pull out their "blue book of whatever" and always give you the lowest value even if the item is in new/unused condition. I just learned to never try to get a deal on a trade with an established sales outlet, i.e. cars/stereo/firearms/etc. I think they have all realized that theirs is a dying breed, all they have to do is look around at all the brick and mortar establishments that have dried up or how they have had to downsized their operations. It's tough to see your livelihood going out the door. I completely understand that because although I am a skilled electronics technician I couldn't find a living wage job to save my life and feed my family. I had to get retrained in order to be competitive. It's a different world and it changes daily!
 
When I briefly sold audio in the late 70's, our store had a price code on a sticker on each display item. The middle digits were the nominal retail price. The first and last digits combined would indicate the percentage of profit at that price, referred to as "points". Mainstream electronics were usually sold at near 40 points, but speakers and oddly enough, cartridges could vary considerably in the number of "points", or percentage of the sale that was profit. A cartridge that sold for $45 might cost us as little as $5 - the code would read 8459 - 89 points - 89% profit. Such items would often be discounted rather heavily so the buyer would feel like he was getting a good deal. ICs and cables are probably similar today. A boom-and-tizz off-brand speaker might be 80 percent profit for the store, and you didn't try to argue anyone out of them if they were impressed by the sound...

My first job in high school was selling shoes retail. It was there I learned that in retail, the markup is almost always highest in accessories, not the big ticket items the store specializes in. There was way more money to be made in socks, purses and shoe polish than in shoes. In HiFi, it's cables and tweaks, not amps.

The opinions so gained likely ARE unbiased. Unfortunately, they are also likely uninformed.

"Uninformed" by bias, perhaps, but otherwise they're as informed as the listener is experienced.
 
I did not say you had to justify anything, I just do not agree with what appeared to be your definition of a "score". Its not like AK posters are bragging that they bought a SX 1980 from a blind nun for a nickel. There are moral and ethical codes that most of us live by and if you feel that those that you live by dont jibe with some posters that is perfectly fine, I just wanted to understand a bit more where you were coming from.
I have nothing relevant to add, just my thanks for using the correct word here.
 
It was there I learned that in retail, the markup is almost always highest in accessories, not the big ticket items the store specializes in.

Will is right about accessories. Printers are the-30 loss leader but the cartidges, that is their bread and butter.

This is indeed true in all aspects of retail--accessories are the real money makers. Sure, you can buy a brand new, bare bones econobox car for $15K (even today)--but once you are on that lot, you really want the one with all the "bells and whistles" that is more in the $25-30K range. Yeah, you can buy a new flat screen TV on sale for dirt cheap, but now you NEED that $50 HDMI cable to hook it up, the $100 wall mount and the $100 universal remote to make everything work seamlessly--and don't forget the overpriced batteries! So $600 later, you walk out with your "door-buster" bargain $250 TV--it is what it is. "There's one born every minute" holds true--the un-informed consumer might as well have "victim" tattooed on their forehead when they walk in--but that is THEIR job--that's how they make the mortgage and car payments, put food on the table and send the kids off to college--I do a lot of work for friends and family for nothing or next to nothing, but that is just me, BUT somebody has to pay my bills as well--again, it is what it is.

The printer/cartridge reference really rings home--I had an old but trusty HP printer that never let me down, but the ink cartridge prices skyrocketed to the point of where it was cheaper to buy a cheap-ass printer, run it out of ink and buy another one, rather than replace ink cartridges. Another sad example of our "throw away" society.
 
Will is right about accessories. Printers are the loss leader but the cartidges, that is their bread and butter.
This also goes a long way towards explaining why otherwise well intentioned people are complicit in some of the outright nonsense in the audio industry. Overpriced tweaks keep the lights on at your local HiFi store or internet dealer. People buying that stuff are subsidizing the sensible stuff for everybody else.
 
I know this thread has drifted down a fork in the stream, so I feel ok joining the current...

Isn't it amusing how culturally correct behavior (i.e. "morality") gets abandoned when it comes to making money ( i.e. "business") ?
This is something that first captured my attention 20 years ago when I became aware of such phenomena in college. There is a disconnect, a dichotomy, an ability to compartmentalize our actions to allow for hypocrisy...especially when it comes to moo-lah. I think I'll turn up my music and muse upon this no more... us humans!
 
I know this thread has drifted down a fork in the stream, so I feel ok joining the current...

Isn't it amusing how culturally correct behavior (i.e. "morality") gets abandoned when it comes to making money ( i.e. "business") ?
This is something that first captured my attention 20 years ago when I became aware of such phenomena in college. There is a disconnect, a dichotomy, an ability to compartmentalize our actions to allow for hypocrisy...especially when it comes to moo-lah. I think I'll turn up my music and muse upon this no more... us humans!

I judge "morality" by the simple fact if I can sleep at night--plain and simple--would this be acceptable for me to see my parents or grandparents treated like this? Yes--we all have to make a living, but being a contractor, I have seen my share of "less than acceptable to me" business practices and I try to hold myself to a higher standard.
 
savatage1973
see your quote below


"The printer/cartridge reference really rings home--I had an old but trusty HP printer that never let me down, but the ink cartridge prices skyrocketed to the point of where it was cheaper to buy a cheap-ass printer, run it out of ink and buy another one, rather than replace ink cartridges. Another sad example of our "throw away" society."

In the early 2000 I got fed up with ink jet printers that would not work if not used daily and whose ink cost an arm and leg. My brother worked on copy machines and told me about toner black and white printers and told me the one he had a HP LaserJet 1022 printer. Toner is used on xerox copy machines. I found several used on eBay and picked one with the lowest number of copies from its meter and paid about $ 75. The toner cartridges cost about $12 and last for 6 to 12 months, or thousands of copies.

The best part is it copies every time and rarely jams, and uses inexpensive, plain copy paper. I does not matter if it sets for months it goes when needed. You can not find a more reliable or cheaper copier per copy than a toner printer.

You can pay more for a newer toner printers at Best Buy that may be wireless etc.or buy other manufacturers or models but get a toner printer. The 1022 can be had today for $50 to $100 still.

Charlie
 
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