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  How are Hig-End Speakers Priced?
I recently (early Feb 2012) purchased a pair of Model 61 Human Speakers, intending to build a small office system with them. I've been listening to them through my main system for a few days now, while breaking them in. These were purchased directly from the builder/designer; my cost was only $675, delivered to my door.

I am so very impressed with the build quality of these small speakers and the quality of the music emanating from them (even though they are not yet fully broken in). I'm honestly surprised they are as inexpensive as they are, and have begun wondering how high-end speakers are priced.

The speakers are manufactured in the Northeast US, and (so far as I know) the builder/designer doesn't advertise and doesn't attend trade shows. The speakers are built with only one pair of binding terminals, two hand-built drivers, and a very simple 1st-order crossover using a design I believe is refined from an 1970's-era design. I'm not sure how much the designer is actively pursuing R&D currently.

I'm wondering if there is a formula that speaker manufacturers generally use when designing/pricing their products. For example, does a manufacturer target a price point, and then decide to follow an "industry-standard" formula like (say) 15% for R&D, 15% for materials, 15% for manufacturing/assembly, 15% for marketing, 15% for distribution, 15% for manufacturer's profit, and balance for seller's profit? Certainly, eliminating (or reducing) one or more of the above categories could yield a speaker that is much less expensive than the price point it was designed for.

Any thoughts?
Rx7audio  (System | Threads | Answers | This Thread)

02-16-12
  Responses (1-39 of 39)
Click title to read one, or click date to read all below it.

02-16-12   I'd say the standard model is more like 20% r&d, 20%manufact ...   Jmcgrogan2

02-16-12   Just out of curiosity,where are you guys coming up with thes ...   Tpreaves

02-16-12   "i'm wondering if there is a formula that speaker manuf ...   Snofun3

02-16-12   Jmcgrogan2, i'm one of those people who, with most things, c ...   Rx7audio

02-17-12   5 times the cost..thats the reality of it........   Thorman

02-17-12   5 times the cost is what i was told also. i am building a p ...   Bigkidz

02-17-12   Speakers are priced by what the market will bear. a look at ...   Martykl

02-17-12   I'm guessing there are too many different situations to make ...   Unsound

02-17-12   Any speaker manufacturer's business model will fail if the m ...   Buconero117

02-17-12   For a pair of $25,000 avalons, this is my estimate: compone ...   Edorr

02-17-12   It appears as if most of us feel the same, we are simply sta ...   Jmcgrogan2

02-17-12   Simple. bom x 5   Jtwrace

02-17-12   this all depends on what type of business model the manufac ...   Johnk

02-17-12   I know of a speaker manufacturer who's speaker was priced at ...   Rrog

02-17-12   I didn't realize they made genesis speakers. i bought a pair ...   Donjr

02-17-12   Yes, i know how the price them! on top of mount chargawayato ...   Charker

02-17-12   Thanks, all. it's been very enlightening to read your persp ...   Rx7audio

02-17-12   The reputable speaker manufacurers price their speakers off ...   Lowens

02-19-12   here is my example to my preamp. to develop my preamp it c ...   Bigkidz

02-19-12   I don't know how hi fi companies work, but in the world of h ...   Tonywinsc

02-20-12: Rx7audio
I wish there were a "like" button for individual posts on Audiogon forums.
Rx7audio  (System | Threads | Answers | This Thread)


02-20-12   By what the market will bear.   Schubert

02-21-12   I agree with tonywinsc - i'd be amazed if the average speake ...   Vicks7

02-21-12   The problem is you are looking at just component costs. from ...   Edorr

02-21-12   I don't think 4-5 times the manufacturing cost is unrealisti ...   Jmcgrogan2

02-21-12   I wish not. if i were i could do many stupid things, one of ...   Inna

02-28-12   I had the manufacturer of my us speakers over to visit a yea ...   David12

02-28-12   A grandson runs an import business... sales by internet. he ...   Eldartford

02-28-12   i've heard similar stories before, sometimes even from a ma ...   Jmcgrogan2

02-28-12   Eldartford, makes you wonder how many high end manufacturers ...   Branislav

03-01-12   the editorial in this months hifi+, discusses the new para ...   David12

03-01-12   Do you think if a manufacturer does not have a dealer within ...   Pubul57

03-01-12   branislav, everone of them does without exception!! don't th ...   Bombaywalla

03-01-12   Pubul57, i understand your perspective, but the dealers woul ...   Unsound

03-01-12   Would 200 miles be sufficient protection? at some point the ...   Pubul57

03-01-12   I think that's why we're starting to see catalogue merchants ...   Unsound

03-02-12   I didn't know this thread was still alive. (i'm not receivi ...   Rx7audio

03-02-12   Pubul57 that's a very interesting point you raise. how far ...   David12

03-02-12   Rmaf is the only time i see equipment i or a friend don't ow ...   Pubul57


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