The price of things.

[stereofanboy]

A true anti-capitalist wouldn't say "rip-off pricing", they would say "obscene profit".

If people knew how little the parts that go into your piece of consumer electronics cost, they would never pay retail prices. Of course, there are many costs associated with bringing a product to market beyond the cost of parts.

Consider the cost of labor, factory space, utilities machinery, transport, and all the other costs involved. This isn't to say that some companies prices don't result in "obscene profits", but that's the consumers' fault for paying those prices.

 

[JohnVF]

A true anti-capitalist wouldn't say "rip-off pricing", they would say "obscene profit".

If people knew how little the parts that go into your piece of consumer electronics cost, they would never pay retail prices. Of course, there are many costs associated with bringing a product to market beyond the cost of parts.

Consider the cost of labor, factory space, utilities machinery, transport, and all the other costs involved. This isn't to say that some companies prices don't result in "obscene profits", but that's the consumers' fault for paying those prices.

So what about something like the Parasound JC-3, where you're paying for the knowledge of the designer, John Curl, as much as part quality (and he's said that even at the price-point parasound wanted, he couldn't get the parts quality he really desired). You're not going to make a Vendetta Research phono preamp on your dining room table with $100 in parts.

 

[stereofanboy]

The idea that you get what you pay for doesn't mean that you get what you pay for, it means that you won't get what you don't pay for.

Most people that carp about prices would't have a problem with that. Their problem is with paying for what they don't get.

 

[stereofanboy]

So what about something like the Parasound JC-3, where you're paying for the knowledge of the designer, John Curl, as much as part quality (and he's said that even at the price-point parasound wanted, he couldn't get the parts quality he really desired). You're not going to make a Vendetta Research phono preamp on your dining room table with $100 in parts.

I purposely used the word "some" rather than the word "all".

Cost of parts and design would be included in "all other costs involved".

I never claimed that I could make a Vendetta Research phono preamp on my dining room table for $100 in parts, but Felix did say that his friend built a phono stage that blew the Cambridge 640P into the weeds for about $100 Australian.

I've seen the opinion expressed that an individual can afford to use nicer parts than a manufacturer, most often in reference to recapping crossovers. This is counter-intuitive at first; I mean, an individual won't be getting a nice bulk rate discount.

At second glance, a manufacturer must protect his margin if he is to stay in business. Why not just pass the increase to the consumer in the form of higher prices? Well, there is always the fear that the consumer will buy the competitor's lower priced item that doesn't have boutique parts, but looks just as good.

I don't know who first made the discovery (maybe Monster Cable), that there are consumers willing to pay a lot more than previously believed. That still evolving discovery has opened the door for better and better stuff. Unfortunately, it has also made every day Christmas for the competitor that doesn't have boutique parts, but looks just as good, since his prices have gone up and up, too.

DIY is a economical alternative for those with the skills, especially since they rarely consider their own expertise or efforts as part of the cost. Felix's friend invested time and effort, not to mention his training, none of which was probably included in the $100 figure. If I tried to do it, mine would'nt be better than the Cambridge, it probably wouldn't even work, since I haven't invested the time, effort, and treasure to get the necessary training.

 

[JohnVF]

I purposely used the word "some" rather than the word "all".

Cost of parts and design would be included in "all other costs involved".

I never claimed that I could make a Vendetta Research phono preamp on my dining room table for $100 in parts, but Felix did say that his friend built a phono stage that blew the Cambridge 640P into the weeds for about $100 Australian.

I've seen the opinion expressed that an individual can afford to use nicer parts than a manufacturer, most often in reference to recapping crossovers. This is counter-intuitive at first; I mean, an individual won't be getting a nice bulk rate discount.

At second glance, a manufacturer must protect his margin if he is to stay in business. Why not just pass the increase to the consumer in the form of higher prices? Well, there is always the fear that the consumer will buy the competitor's lower priced item that doesn't have boutique parts, but looks just as good.

I don't know who first made the discovery (maybe Monster Cable), that there are consumers willing to pay a lot more than previously believed. That still evolving discovery has opened the door for better and better stuff. Unfortunately, it has also made every day Christmas for the competitor that doesn't have boutique parts, but looks just as good, since his prices have gone up and up, too.

DIY is a economical alternative for those with the skills, especially since they rarely consider their own expertise or efforts as part of the cost. Felix's friend invested time and effort, not to mention his training, none of which was probably included in the $100 figure. If I tried to do it, mine would't be better than the Cambridge, it probably wouldn't even work, since I haven't invested the time, effort, and treasure to get the necessary training.

I agree with most of this, especially where it concerns a DIYer being able to put money into a part that wouldn't have seen cost-cutting in manufacture. Because they're making just one, without worrying about breaking even, instead of thinking that one more dollar equals $100,000 over 100,000 units.

 

[vinyl1]

The cost structures of hi-end companies are very unfavorable, and prevent them from making much money.

Let's say your product is a $20K phono preamp and a $12K line stage. Sure, your parts cost is $2K and $1.4K, but putting them together by hand in the US is very expensive because of labor costs, but it's not worthwhile to offshore just to make 50 or 100 units a year.

So you've got the put the costs of a whole company, an office, a website, review samples, a factory, trade shows, advertising onto the money you charge for a couple of hundred pieces a year. The truth is, most people go broke trying to do that.

The really successful high-end guys usually have a regular business that they use to support their high-end audio work. It is much easier if you piggyback it.

 

[rcspkramp]

Hi Felix,
I went to the New York Hi-Fi show, and I knew that the stuff they were showing
were showing was hi priced, that's the way things go I guess and everything's separate
there was a time when you can get a preamp with a great phono stage in it, not any
more and the prices.

Tube

Thank cds for that. Companies dropped phono sections like a hot potato soon after cd came along.

 

[Dadbar]

Catman- I am a marketing guy for a scientific equipment company. Same economics applies to us....it's crazy expensive to attend trade shows, pay multilevel distributor discounts worldwide, support tons of free demo gear, pay tech support people etc etc. You might be surprized at how many customers want demo discounts and want to be able to return stuff for free after they've bought it and get tired of it after a few weeks. We had one customer who wanted to evaluate a new piece of gear for a month prior to paying for it...then after a month he argued for a 50% price break because the new item we sent him was now used. There is so much of a hassle factor built into pricing economics on everything.

Still...when it comes to audio gear I always prefer to build my own stuff rather than add to the infrastructure of someone else....especially if it's something like a phono stage. I am much more forgiving of gear I build myself. As always, it's a self service world.

 

[stereofanboy]

Catman- I am a marketing guy for a scientific equipment company. Same economics applies to us....it's crazy expensive to attend trade shows, pay multilevel distributor discounts worldwide, support tons of free demo gear, pay tech support people etc etc. You might be surprized at how many customers want demo discounts and want to be able to return stuff for free after they've bought it and get tired of it after a few weeks. We had one customer who wanted to evaluate a new piece of gear for a month prior to paying for it...then after a month he argued for a 50% price break because the new item we sent him was now used. There is so much of a hassle factor built into pricing economics on everything.

Still...when it comes to audio gear I always prefer to build my own stuff rather than add to the infrastructure of someone else....especially if it's something like a phono stage. I am much more forgiving of gear I build myself. As always, it's a self service world.

And that guy is breathing air that we could be using for a better purpose.:bash:

 

[sxty8goats]

As would I! Especially if it had a special 62K switch!

There are a couple good DIY phono stages floating around this board. If you are looking for one with variable loading, the CNC-Phono stage has 4 dip switches for 18K, 33K, 47K and 62K. If you need a MC stage, Hypnotoad has a nice design. I've built both. Very happy with the CNC but I haven't had a chance to try the HT-MC version yet. The stages cost me @ $50 each +/- $10 to build. Neither is in a case/housing yet.

Catman is correct. 62k loading really opens the M97ex up.

 

[Brett a]

I haven't read the whole thread, so forgive me if this has been covered, but time is money.

It's the same with cars (sort of). At some point in my life I realized that I'll gladly pay a mechanic their going rate so I can have my weekends free.

Similar with electronics; the DIY learning curve is long and expensive. Expensive if you add up not only the tools needed, but also all the wrong-value resistors and polarized caps we'd inevitably buy along the way as we learned what we did and did not need.

I'm quite certain that if I wanted to arrive at an equally reliable and good sounding phono stage as my Jolida, I could not have done it for under $400 when all was figured in.

 

[Stanton681EEES]

G'day all, please excuse my cynical ramblings! I was just reading a thread on a newish commercially made phono stage and whilst it is apparently very nice, I really get somewhat annoyed at the cost of these things when equivalent or better pieces of gear can be built DIY, at much less cost.

This is why I DIY most everything electronic I use in hi fi and definitely all my phono stages. :yes: My preferred ESP P06, P99 and P05B power supplies not to mention my breadboarded VSPS DIY effort, may not be too overly pretty to look at, but they are all excellent pieces of gear and perform superbly. I really shake my head in utter disbelief at the prices charged by manufacturers for their commercially made gear. Rant over. :yes: Regards, Felix aka catman.

Felix it's nice that your able and skilled enough to build your own pieces but some of us me included either don't have the expertise or aren't very good with a soldering iron. So please take that into consideration as well. Also some people would rather buy something already built with the bugs worked out so to speak.

 

[JohnVF]

The truth is, most people go broke trying to do that.

That's the big hole in the argument that all of this stuff is one giant ripoff. As they say, the best way to make a small fortune in audio is to start with a large one. Look through a 15 year old audio magazine and count the number of companies that no longer exist. Or just look at the ads- many if not most from companies that went under or that you've never even heard of.

But Brett's point is why I tend to buy, and not build. I'm in this to listen to stuff, and my time is very important to me- and building electronic things isn't something that I find all that enjoyable. So I'm left to pay for somebody else's time, and overhead. I'm ok with that, as long as I have my time and can do something else with it.

 

[Br1ck]

I read an article some time ago in an audio magazine that did a very good job of explaining how a company had to charge $2000 for $200 worth of parts. It broke down cost in terms of R and D, rent, shipping, servicing, retail markup, etc. After that, I chose to buy or not, but not question why the product cost what it cost.
I DIY because it gives me great satisfaction and do not hesitate to buy the tools I need to build a project. Some don't enjoy the process. To each his own.

 

[Gary Francks]

I'm not sure that I don't agree with most of Catman's feelings on this.
Without wishing to offend anyone, in my experience a lot of audio hardware is way overpriced and often no better built than some of the offerings from the multi-nationals.
Agreed that if someone is prepared to pay over the odds then why shouldn't manufactures and dealers charge them for it.
The arguments about labour rates for hand built gear don't hold water with me either, I've looked inside some expensive gear and found the quality of some of these hand built wonders to be wanting and even flaky. One highly rated British integrated amp of some pedigree immediately springs to mind here. Unreliable, dodgy construction with ill-fitting metalwork in places and no thought put into serviceability.
How do I know?
Because I bought one for a whacking amount of money second-hand and spent hours and hours replacing faulty transistors ran at the extreme operating points together with 'boutique' pots and switches that had intermittent contacts and were practically un-removable from the double sided pcb's even though many of the solder joints were of dubious quality.
Compare all that with the early A&R A60 it replaced that was a model of quality assembly and reliability and inside looked like a perfect example of the pcb and wiring art.
At the time the A&R cost new around £150 and the other nearly £1000 when new.
Granted we're not talking mega bucks but given that the £1000 bad boy when working correctly didn't sound considerably better then rest assured that when it went I was not sad.
Nowadays I use a 25 year old Adcom pre-tuner with an home assembled T-Amp based on a kit from 41hz.com and it sounds loads more relaxed, musical and satisfying than that £1000 wonder that all the mags raved about, and still do!
I'm not wishing to start an argument here or brand all manufactures of high-end the same, just pointing out that as with all things in life not all high end (or budget) audio equipment is equal and there are many sharks in the water.

 

[catman]

G'day all, many thanks for the interesting thoughts. Thinking about things overnight I had rather forgotten the whole chain of events that had led to my fondness for audio DIY.

At one point my main Hi Fi system was all NAD commercially made gear and I was happy with it. The phono stage on my NAD 3155 was a slight disappointment though being slightly low gain and a little hissy, so I thought about an external phono stage.

Soon after I found the ESP site and saw the P06 design for the first time. It seemed so simple to me, but I knew nothing about op amp circuitry (at all) at that time, even about 'split rail' power supplies which seemed a bit odd to me, so I was forced to learn!

I built a P06 breadboarded style on a piece of copper clad board and it worked first off and beautifully using batteries for power. I eventually donated it to a friend, and I'm told that it's still working fine after all these years.

I then bought the ESP boards and built another P06 powered by two 12 volt gel cells. A P88 stereo line preamp and a P05 power supply followed, all using the NAD solely as a power amp. Eventually the NAD died (a mid 1980's amp with DC coupling is very hard to fault find), and I seriously thought about buying a commercially made power amp but in the end opted to build ESP's P19 chip amp.

It was my most ambitious project to date including building a fairly hefty separate power supply for it, but everything was assembled without any real difficulty and everything is still working just fine. Since then I have built quite a few more P05B's, P06's, P99 sub bass filters, P88's and three kit power amps using the smaller LM1875T chip amp. I think that although my project building came out of a 'need', the whole process has taught me a great deal, and I have certainly learned a lot through DIY building.

My metal working skills still aren't great, but even they have improved too. Regards, Felix aka catman.

 

[Muddywaters]

Sorry... with apologies to Felix I find the whole initial premise (as I read it) faulty. I love the thought of DYI and am jealous of those that can do it. This is from someone who has destroyed one DAC trying to mod it:yes:and certainly not an idictment of the DYI culture. I've taken advantage of that cultures inquisitiveness a couple times myself at least if I didn't need to use a soldering iron.

Let's see, I have buddy build a piece of equipment costing $100 in parts not including my buddies time and a decent case and it sounds better than one $179 phono stage and that means everything done by manufacturers is overpriced? I'd be bummed if it didn't sound better not withstanding the psychic satisfaction of building it oneself and how that might influence one's perception of value and sound.

I find the $$$ charged by the hi-end to be abhorrent most of the time but I'm not blind to the fact of what it cost to do business. Let alone actually design something oneself. I think a lot of us realize that and trade in gently tested (used) gear or attempt the DYI route if capable. Are there ripoffs out there sure. One of the most recent examples was a noted manufacturer putting a purty "audiophile" skin on a decent DVD/sacd palyer a few years ago and charging an ungodly amount of money.

Sometimes though you get what you pay for. That can go both ways. When you build a "free" design maybe you're getting what you paid for too.

 

[catman]

G'day mate, fair enough comment. :yes: Yet sometimes one still has to wonder. One of my other interests is 'high fidelity' AM radio reception and just in the last few days I've whipped together a simple circuit of my own design using a FET 'infinite impedance' detector coupled into a FET common source FET stage and plugged into my crystal set 'front end'.

The total cost of parts? About five dollars and this things sounds more Hi Fi than anything I've heard commercially made, including 'professional' tuners. So I guess you can be lucky sometimes! :yes: Regards, Felix (vk4fuq) aka catman.

 

[Muddywaters]

Felix you're a trooper for putting up with my comments gracefully as always. Plus remember you are speaking Greek as far as your Field Effect Transistor design to me. Is that anything like chrome reverse lug nuts?

G'day mate, fair enough comment. :yes: Yet sometimes one still has to wonder. One of my other interests is 'high fidelity' AM radio reception and just in the last few days I've whipped together a simple circuit of my own design using a FET 'infinite impedance' detector coupled into a FET common source FET stage and plugged into my crystal set 'front end'.

The total cost of parts? About five dollars and this things sounds more Hi Fi than anything I've heard commercially made, including 'professional' tuners. So I guess you can be lucky sometimes! :yes: Regards, Felix (vk4fuq) aka catman.

You need to come to market but price it appropriately at least two hundred $ to cover your start up costs and infrastructure, marketing, hazardous waste disposal etc. Or hustle over to China and get a contract mfg lined up to produce it. But remember to lock them into a secrecy agreement and protect your rights to the design and trade mark. Get the patent application started first.

 

[lini]

Personally I'm all for DIY from an educational point of view, 'cause one can learn a lot regarding how things actually work et cetera - and it also helps to better judge the actual part value of as well as the effort that has been put into commercial equipment. Whereas from an economical point of view DIY in my view makes most sense, the less complex and, maybe even more importantly, the less mass-market the project. I.e., for example good quality phono stages typically aren't overly complex and also not really mass-market items, so it's just to be expected that one can achieve better performance for the price with a DIY solution - while it would be rather hard to build one's own surround receiver for anywhere near the price of a decent commercially offered model...

And I think, as Scott has already hinted to, one would rather have too look into specific examples for individual discussion - 'cause on a general level it doesn't really make much sense (too many examples either way...). And I'd also say it would depend on one's personal definition of "rip-off", "overpriced" or whatever - especially regarding what one would be most disappointed about. For example, in my own book Scott's example of the Pioneer player in very expensive Goldmund disguise would certainly qualify at least as borderline rip-off - but so would the Grado RA1, which I'd rather consider as a very basic CMOY (and made of comparatively cheap parts at that) in a fancy cigar box. Whereas I'm less offended by stuff that would seem worth its price in terms of circuit design and part quality, but just doesn't sound as good as one might expect from that - which in my view could still be regarded as overpriced in a way, but not really as a rip-off.

Greetings from Munich!

Manfred / lini