The Cost of Cables


We all know that there have been countless posts with endless debates about cables on every audio forum available. The reason I start this post is to garner thoughts from others on the cost of cables, not necessarily whether they make a difference or not. I find the prices for cables staggering and I (me personally) do not understand where the cost comes from. Some will say R&D, ok, I can go for that to a point, but can the manufacturing of wire really cost much? (In thinking about this, the discussion could be applied to audio as a whole.)

Obviously cable companies survive because we purchase their products, I include myself. But if we quit paying these large prices, would prices fall dramatically or would they just quit making cables such as we know it and/or close their doors?
brianmgrarcom
There's a product (and price) for every buyer.

Reminds me of the story of the $500 apple. Guy on the street has an apple in one hand and a sign in the other that reads, "Apple - $500". A passerby says, "$500? That's an awfully steep price for an apple." To which the apple seller replies, "I only have to sell one!"
I agree with Tvad. In hi-fi in general, sales numbers are too small to bring costs down substantially.

Now this doesn't mean I agree with $3000 power cords. I think there is some overinflation going on too.

Also, have you noticed how many cables (and amps) have actually seen big price increases lately? One dealer told me it is because the cost of copper and silver has skyrocketed.

Arthur
the wire in hi end cables is 'magic'. it costs lots of money to cast a spell on copper...even more for silver. also cable jackets that are cool colors are many times more expensive than colors that are not cool. cables also sounds much better (sweeter highs, and more detailed) when shipped in a wooden box with a lining......i can't believe i'm the only one who knows these facts.
Some cables cost a bit because they are hand made to order. Others may have an exotic construction with strands individually coated in ceramic, etc. Yes, copper has gone up in price lately, but it fluctuates like all commodities. Sometimes it's low in price. Amortization of R & D is also a consideration. However, for the mass market cables from the usual suspects, cables are simply a high margin product that are significantly marked up at the retail level. The big box store that sells you the TV on a small margin will try to make up some profit by pushing an expensive cable. The marketing pitch is that you should get a premium cable in order to get all the benefit and performance you paid for in the expensive TV (or stereo).
RD plays a big role, materials, along with low volume sales cant be dismissed. Cables get a huge mark-up and are many times a cash cow for dealers. And never forget the price of Prestige.
I think the cable prices are inflated more than any other area of audio. They don't have the nickname 'wire bandits' for nothing.
Having said that though, ultimately, the fault lies with the consumer. If I only had a cable for every manufacturer that has told me that the public demanded a new higher priced cable, so they make it. They are simply filling a need. Some people need to spend a lot on cables, so there has to be someone there to fill this niche, don't you think?
I had one manufacturer tell me recently that he had to make more expensive cables because he had customers telling him that while his product sounded excellent, it's cost was too low compared to the customers reference cables to consider purchasing them. So obviously the manufacturer created more expensive cables.

Supply and demand.

Don't blame the manufacturers, they are simply filling the customers demands.

John
There are more subtle and manipulative forces at work which might better explain the high margin greed seen in cable peddlars.

Although cables can cost thousands, of course you can spend thousands more on speakers and all the other associated components.

Having suffered through the pain of that invoice - and with high expectations for joy and happiness to arise from a new system - the customer is in a psychologically vulnerable state, where he would be unusually sensitive to disappointment.

At that point, with those high expectations, and having already blown a considerable sum of money, the last thing you want to worry about is that a) you are not really getting your money's worth, b) not really going to get gloriously high end sound etc etc.

Regardless of the price of the cables, it is neither financially or psychologically the main purchase, so this still big but most likely lesser sum - despite the ridiculous mark up - seems like sensible insurance and often tempts the buyer into a oh what the heck I might as well really go for it - type of a purchase.

Similar psychology is employed when a car salesman will say how attractively priced the car is, before piling on a load of high margin options.

If my theory is correct, the "best" tires, oil, gasoline etc could all be sold at inflated margins to Porsche and Ferrari drivers.

I pay extra for high test gasoline, which some people say makes a lot less sense than expensive cables, but I have no intent to change.

Beware the accessories and extended warrantee salesmen!
I have a grandson who makes a good living importing stuff, mostly from China. One kind of stuff is audio equipment. He tells me that he buys some decent-sounding speakers for $50, but had a hard time selling them for $200. He raised his price to $400, and now they sell well. "Who wants a $200 speaker?" is how he explains it.
I pay extra for high test gasoline, which some people say makes a lot less sense than expensive cables, but I have no intent to change.

Using a "high test" gasoline, higher octane, can actually be bad for a car if it doesn't call for an octane that high. The octane ratings correlates to when the gas detonates, so an octane too high can cause wrong detonation. The mistake is made when one uses this gasoline because they think they are using better gasoline. (If anyone wants to correct my crude response, feel free, I am no automotive expert.)

Man, I just took the thread off topic.

Is it determed by most then that cables simply are marked up much more than other audio componants or is there actually something to the cost?

Brian
Is it determed by most then that cables simply are marked up much more than other audio componants...

Brian
Brianmgrarcom (System | Threads | Answers)
IMO, yes.
Regardless of the price of the cables, it is neither financially or psychologically the main purchase,

Cwlondon


Actually, look around this site some more, you may be surprised. Some are using cables as expensive, if not more expensive, than their equipment.

Is it determed by most then that cables simply are marked up much more than other audio componants or is there actually something to the cost?

Brian
Brianmgrarcom


Yes, there is more mark up in cables than other gear. Again though, blame the consumers, not the manufacturers. If you found folks dying to give you more money, wouldn't you take it?

John
If you found folks dying to give you more money, wouldn't you take it?

John
Jmcgrogan2 (Threads | Answers)
For further supporting evidence, see threads about tweaks...
[Using a "high test" gasoline, higher octane, can actually be bad for a car if it doesn't call for an octane that high. The octane ratings correlates to when the gas detonates, so an octane too high can cause wrong detonation.]

There is no such thing as "wrong detonation" by using an unnnecesarily high octane for a particular engine, you just use up unnecessary $.

If you use too low an octane for a vehicle it will preignite and "diesel" (ie compression ignition), or pre-ignition, in advance of the spark, but using a higher octane has no negative effect.
Here's some other conversation too on the subject:

Expensive Cables
When you see a set of cables that cost over twenty grand, what runs through your head? Is it a)ridiculous, or b) well, they HAVE to be the best, so no matter what I buy, I will never reach near perfection unless I have them. Sadly, I think the latter is what audiophiles assume and such products create their own demand.

My opinion, yes cable manufacturing process plays a big role in the cost. But you have to ask - is that process really achieving anything? If you make a toothpick from a tree trunk and a pocketknife, you can say a lot of work and one tree went into the process (hence the exhorbitant price), but is it better than the ones you can buy in a box?
Okay, my two cents. I used to sell this stuff once upon a time and there were HUGE markups on cartridges and also cables, but especially low end cartridges, like at least 200%. In general as the retail got higher, the margins got smaller. Margins on cables were generally at least a hundred percent. I don't know the current industry and I imagine we won't be hearing concrete examples throughout a line from the mfrs or the dealers. Generally audio resale was about 50-100% markup from wholesale.. with variables based on whether a dealer paid cod, bought qty, etc. Actual TVs had terrible margins, 25% markup was awesome.

An interesting story though, we used to sell at the low end, yamaha, sony and denon. Yamaha and Sony were about a 100% markup, Denon was about 60%. Amazingly enough, at the same retail price points, the Denons always sounded better... hmmmm.

If one looks at this somewhat objectively, many, many hardware dealers have had financial problems, even venerated names like Mark Levinson recently, Wadia, McCormack, etc. But when did you hear a cable dealer going out of business? I am sure there is one, I just can't think of one, same thing with cartridges. So if I add what I know of their profit margins to the fact that they don't seem to have near the percentage of failures of the other dealer types, I'm guessing the margins are still pretty healthy.

Now then, having said all of that, I recently had what seemed like a reasonably honest dealer/manufacturer at my nome. He will soon or has come out with cables. For two years, they have been researching the cables, and he feels that the only way they can conceivably break even or make a profit on these cables is to retail them at 6k a pair for the 2 meter speaker cables. He had to buy the test equipment, figure out the manunfacturing, figure out what the key elements to sound were ( he personally thinks it is the leading and trailing edge of an input square wave) market it, advertise it, etc. He is absolutely convinced that if he cannot get this money in the market, than it will not be worth the developemental costs.

Now to my personal experience. I own a calibration laboratory and a test equipment rental/sale business. I look at the materials, the retail cost of the plugs used, the cost of the wire and shielding, as we often make our own cables and connectors, and I can definitely say that the cost is not in the componenents, absolutely not. Now then, look at the cost of accutron drivers direct from the mfr, and a good scanspeak tweeter from Audio Express. Even at full retail, and purchasing the parts for a crossover, and then having a cabinet maker make a one-off cabinet, I could duplicate a pair of 40 grand speakers for well under six grand. So I wonder how much at wholesale, and in quantity, making your own multiple cabinets, the speaker maker has as materials cost, maybe 1/2? However, I don;t have time nor inclination to make audiophile cables, experiment with different connectors and cables, inductors in parallel, etc, etc. so I experiment with various cables and yes, in a high resolution system, there are huge differences in sound, especially in my experience, in speaker cables. So I pays the money whens I hears da difference, and when I don't, I don't.

On the last part of your post, I bet prices wouldn't go down for existing cables, many cable manufacturers just would come out, as they did during the tech downturn, with "amazing new technology able come within 98% of our very best cable due to incredible advances in metallurgy techniques and connector manufacturer".

Having sold hi-end retail, I can tell you I never pushed the top cables when I sold a system, that could have been death to the whole system. I would try to get them to buy a cable I felt was a relatively good value for the particular system, but even if I thought an expensive cable was the best for a system, I would never ever push it because in the eyes of most of the initial buy consumers, I would then lose any credibility I had. If they came back, after they were familiar with their systems at home, at that point I would recommend loaners, and they got to make their own decisions as to whether different cables were worth it. Any dealer I have dealt with, and when I sold hi-end, the challenge was always to try to find the cheapest cable that would make the speaker or system sound the best, and I personally probably did 65% of down time listening trying different cables in different systems to find the best synergy at the lowest price. I have, however seen some very unscrupulous things go on when my friends do their hometheatres. They get charged as much as 20 bucks a foot for hometheatre cable for stuff that doesn't cost the dealer even 2 bucks a foot, because the consumer looks at the total cost, or they look at what they think is the big part... ie projector, and by the time they are getting to the wire, they are so worn out, that they really don't notice the perfoot price, because it is either totalled, without noting the actual linear footage, or it is a relatively inexpensive line item compared to the projector for instance.

Wow, that was some good therapy :)



...doesn't a kia and porsche accomplish the same goal...that of going from point A to point B ..most of the time at the same allowed speed....if you can afford the porsche...and like its' ride and experience better...you're going to buy it...if the $3000 power cord sounds better in your system ..and you can afford it..guess what?...you're going to buy it...this isn't rocket science!!..is there $70,000 more car in the porsche then in the kia?..probably not.
The pride of bragging about the cost of possesions seems to be relativley common human nature. For many, spending big relieves insecurity and promotes a feeling of self worth when others see a possesion and respond to it. Also, one component of the high end of anything is that there are some individuals who enjoy shopping and buying as an activity all to itself.
I think of mega buck cables, or the desire for same, as a tax on folks who won't blind test. Some folks do seem to enjoy paying the tax however, so perhaps they are getting what they want.
...is there $70,000 more car in the porsche then in the kia?..probably not.

Maybe, maybe not. But I can look at a Porsche and a Kia next to each other and easily see huge cost differences. On the other hand, while one can (sometimes) see cost differences with wire, for me it is hard to understand the huge differences in cost. And there certainly doesn't seem there would be the overhead in cable as in other aspects of audio and warranty work would seem to be lower and easier.

As for percentages of mark up, some of these cables must be far above the 100% - 200% range listed above.
....brian...you're probably right, but as long as audiophiles have the financial ability to buy the expensive cables and believe they are sonically better then a less expensive cable .....ie .whatever the market will bear...there will continue to be that niche market.
the moral of all this is to spend less on cables, and buy a porsche.
I can understand that Calloway, I guess my question all along is, are cables marked up FAR more than the rest of audio or legit reasons for the costs. The concensus is that they are marked up far more.
I sold my Porsche and bought a Triumph Daytona 675 motorcycle and more audio equipment.

Downgraded to cheaper cables, however.
Chrisla, I just want to compliment you for that very thoughtful, well written piece. This was an excellent read!
jd
The sad impression I have is that cables work and expensive ones in general work better. There are companies importing cheap Chinese cables and sticking there own labels on them. There are other companies hyped by the magazines ad nauseam, with, to me an unjustified reputation, one beginning with N comes to mind. Others clearly give real benefits to my system, near to a component upgrade, which can be more expensive. I am sure other names will come to you, but Acoustic Zen, Audience, Wireworld, Ridge street, have really made a real impact on my system.
How to go about trying them out, 2nd hand if possible, or sale or return, or loaners. The inescable finding in my system, is that cables and tweaks have really had a strong impact. Kemp power conditioner, Walker HDL links and SST contact enhancer, Marigo stealth signature CD mat, have all worked , darn it
The sad impression I have is that cables work and expensive ones in general work better.

The question is not whether they make a difference or not but rather why do they cost as they do. What makes the more expensive ones, more expensive?

There are companies importing cheap Chinese cables and sticking there own labels on them.

What makes the Chinese versions "cheap" in comparison? (Labor cost is obvious, but is there anything else?)
gentlemen:

it's all about economics, namely cost and value.

the value in use equals the value in exchange. i have indicated this well-known law several times. it applies to cable as well as any component.

if a buyer considers that the price of a component is less than or equal to the value for a product, it is purchased. an audiophile who receives pleasure from the purchase of expensive components is receiving value for the purchase. the value may be of a psychological nature.

value may inhere in the listening or the "pride" of ownership.

two audiophiles may differ as to the value of a component and one may be willing to pay the price , while the other considers the product over-priced.

thus, the price of a cable represent's an estimate of the value to a potential customer.

it is also based upon the possible deman for the product.

whenever considering questions of the price of components, think economics and perhaps psychology as well.
Snofun wrote:
"There is no such thing as "wrong detonation" by using an unnnecesarily high octane for a particular engine, you just use up unnecessary $."

Not true. Higher octane gas is harder to burn, it requires more cylinder pressure to detonate. If you run too high an octane you'll end up with carbon deposits in your cylinders and on your pistons and valves. The key to buying gasoline is to use the lowest octane you can without pre-igntion (pinging). This gives you the maximum power output and the cleanest burn. This is not an arguable point, it is scientifically established...

-RW-
That's how I thought it to be also RW, but as I say, I am no automotive expert.

JayDee, great to see your name appear, I haven't seen a post from you in a LONG time. (Good chance I just haven't seen your posts.)
Having owned many Porsches including factory race cars, I will tell you I get in far less trouble in my dedicated music room. Also, I can share the audio/music passion with my "reference" wife and some very good friends and I know before I turn it on what the maximum potential will be....I have had days at the track where that was DEFINITELY NOT the case...
The cost of most vices is not always obvious at first blush..
"Higher octane gas is harder to burn, it requires more cylinder pressure to detonate.". This is good to know, I had thought you could light it with a match at atmospheric pressure.
Jeff, it's the timing of the detonation...
Nrchy - Understood :).
04-06-07: Brianmgrarcom

The question is not whether they make a difference or not but rather why do they cost as they do. What makes the more expensive ones, more expensive?


Sigh......because people WANT them to be more expensive. Simple, basic economics of supply and demand. Human psychology 101: 'who has the biggest johnson?'.
If you're looking for something deeper than that, you will be sadly mistaken.

Brian, if you were a cable manufacturer, and your potential customers told you that they wanted a pair of $10,000 speaker cables, would you make them $10,000 speaker cables, or tell them they are nuts and offer them $500 speaker cables? If you chose the latter, you are missing the boat, and will not make it in the cable business. ;^)

John
john..with your obvious complete understanding of 'human psychology 101'..you should begin making audio cables immediately.i am sure you would be a huge success and make millions off the 'potential customers' that surely exist in the thousands ready to buy the most expensive cables you could make....just to have them...never mind if they were good or not.
I think John basically has it nailed, FWIW...

He did not state that uber expensive cables were not the result extensive R&D, or excellent craftsmanship, or high-grade parts.

He stated that the retail prices of cables are often set at prices that certain buyers demonstrate a desire to pay...for whatever psychological reason underlies the customer's desire.
Just an observation in support of John and Tvad re cost equals value. Poster signs in with a system which is known by critical listeners to be unspectatular, i.e. not exceptionally resolved/detailed etc. Wants a recommendation for speaker cable. Told that some Canare at cents for the foot are good benchmark cables, he takes offense and wants 'real cables'. You know, those ones that the guys use with their expensive well though out systems which have been properly set up. What I have learned is that when someone asks about cables the only thing he doesn't want to hear has to do with money management v sound. :-)
...told that some Canare at cents for the foot are good benchmark cables, he takes offense and wants 'real cables'. You know, those ones that the guys use with their expensive well though out systems which have been properly set up.
Newbee (System | Reviews | Threads | Answers)
Does that mean Canare are not used by guys with well thought out systems which have been properly set up?

BTW, I agree with your theory. The vast majority of equipment question threads aren't asking for what the poster needs, but rather they are requesting validation for what the poster wants (which is usually to spend more money on an already identified target purchase...required or not). IMO.
Tvad, Re "Does that mean Canare are not used by guys with well thought out systems which have been properly set up"?

Not by a long shot I know of several, including one guy for whom I have undying respect! In his case it replaced some Cardas due to length requirements. :-)
Re "Does that mean Canare are not used by guys with well thought out systems which have been properly set up"?
I know of several, including one guy for whom I have undying respect! In his case it replaced some Cardas due to length requirements. :-)
Newbee (System | Reviews | Threads | Answers)
Clearly, that knucklehead doesn't have a clue about high end cables! :)

Can someone recommend the best speaker cabling under $10,000 for an 8 foot pair?
John, I certainly don't disagree with what you are saying; as I stated in the original post, I think cable costs are staggering. I only recall one person in this thread making a case for the possibility of cables costing a lot.
the issue is not the cost of the cable but rather what is a cable worth to a consumer ? if a cable is expensive some will think it is overpriced, while others may consider the cable worth the price.

there is no rational reason for a subjective evaluation of what something is worth.

what is the relevance of the cost of the product to its price ? if it has value to someone it will be purchased. if there is an sufficient demand to ensure the viability of the product, it will be removed from the market, reduced in price or perhaps, recast in a different "package" at a lower price.
How common is reverse - price psychology I wonder? Some of the motivations that drive some to the reach for huge prices seem to drive others to the reach for the exceptional values. If you split folks into three groups, high price seekers, price indifferent, high value seekers, I wonder how the percentages would come out.
The issue, in general, may not be the cost of the cable, but the issue (question) Brian is raising IS the price (cost) of the cables. He isn't disputing that "better" cables cost more and/or work better. I have to assume that at this point in the thread, he is also convinced that some of the high price of cables is "because somebody will pay that price".

Theoretically, the forces of capitalism should drive down the price of anything where the profit margin greatly exceeds other manufactured items. Since that doesn't appear to be happening in audio cables, they either genuinely cost more to make, and therefore to sell, or there is some other mystical thing going on. Just glancing at the situation, it seems like it has to be the latter, not the former. The market for high priced cables is so small that even though the margins are fantastic, it's not a logical place for capital to divert itself towards to refine the process and the cost structure.

My own opinion is that the cost structure remains in place somewhat to support the R&D costs of bringing these products to market, coupled with the cottage industry nature of the field. In the lower ends, where people are buying HT receivers and surround systems, you see many more people buying Monster cabling which, while it doesn't necessarily hold its own against high-end cable, is a definite upgrade over the cheap interconnects that come with a standard A/V component. There is a level of cabling that is above what you need to get any sound at all that has been successfully marketed to at least some of the masses. It could happen at a higher level if there was some lever that caused more people to demand what they get out of a high-end cable, and then prices would plummet just based on volume and manufacturing efficiencies.
This is a very interesting thread,well balance opinion
were also being said.I agree for those who can afford
expensive cables they should buy the best cables out there,
One member said,He bought 7k ic,and he thinks its worth it.
His system is also very expensive.How much did it cost the
cable company to make this 7K IC?
After trying to discover which cables is good for the money
I found out an average system like mine did perform well
with pc less than $400,sp cables less than $400,IC less
than $300.My friend made me a speaker cables for less than
$150 it sounds better than most of the $1000 sp cables
I tried in my system.After this experience,I am not willing
to pay more than $500 on any cables.
I also know having the siltech LS 120GS edition years ago.
This cable is on a differrent league, but it is very costly.
Is it worth the price?I say 100% yes.But I cant afford to
keep it.
My only advise to fellow agoners,try different cables in your system from the average price to the more expensive
one,so you will know for yourself.
Good Luck.
systems,
system
Quite frankly, I started this thread because it appears to me that the purchase price of cables are just plain rediculous, but wanted an open discussion if anyone could enlighten me/us differently.

Obviously there is nothing wrong with companies making a profit. But the profit margin on cables would appear to me to FAR exceed that of the rest of the audio industry.

I lay my cards on the table and say that cables make a difference to me from my experience. So with that said, I understand when people say, "if one hears a substantial improvement, the price is worth it to them". It seems to me that cable companies are gouging us for this in comparison to the rest of the industry.

Brian
Well said Brian. Now you seem to grasp the situation.

That being said, I don't have inexpensive cables/cords, I'm probably over the old 20% ratio that cable manufacturers intiated 20 years ago (blame power cords).
However, I still cannot understand those who spend MORE on cables than on their gear and speakers. When your cable budget goes over the 50% level, I have to scratch my head.

I mean $15,000 speaker cables on $10,000 speakers and $13,000 power cord on $8,000 cd players does still confuse me.
Maybe it is the answer, maybe the paradigm has shifted and I'm not aware of it, maybe I just don't get it.

John
John, I can't relate to the prices for cables you refer to. I start scratching at much less than 50%. :-) But I can't blame the manufacturers of any tweaks for getting as much money as they can, while they can. Its the old American free market in full bloom.

And I can't criticize someone who has already optimied his equipment and set up who finally takes the last step in fine tuning the system, regardless of cost. His choice, his preferrences, his ears, his wallet. I would imagine that his expectations would be to get the most neutral yet revealing wire available. I can't imagine him getting wire tone controls although I'm sure that happens.

The person who I do feel for is the wantabe/wantahave who, for example buys an inexpensive SS (or tubed, but I can't imagine it :-)) integrated based on 'user' or reviewer testimonials, matches it to high resolving speakers, and then tries to compensate for the tonal problems by chasing after cables, IC's, and PC's, instead of just investing in, very selectively, some higher quality goods in the first place. FWIW, I think this is what drives a great part of the demand (and prices) for wire, the more exotic appearing, or described, the higher the price.

FWIW
Well said Brian. Now you seem to grasp the situation.
I wouldn't say that I have now gotten a grasp of this situation, I already felt this way; I was open to being shown I am wrong.

Brian
I wouldn't say that I have now gotten a grasp of this situation, I already felt this way; I was open to being shown I am wrong.

Brian
Brianmgrarcom


Certainly the results could not have surprised you though Brian, could they? I would have been stunned to the point of disbelief if someone tried to validate/justify the cost of cables.

If they do, I bet you'll find the catch all phrase being R&D costs. The customer is expected to pay for the designer's cable/cord purchases from competitors and his hours of listening. You see, they 'have to' buy competing products to test against their own. They have to buy a reference system of three to use as 'synergestic testing lab equipment'. Then they 'have to' listen hours a day for years sometimes, to tune in their products. That's a lot of time and money spent on research and development. Now you may say 'hey, that's what I do for a hobby'. However, when you are selling products it is no longer your hobby, it is a job, and you can write this in as R&D costs.

There is simply no way to justify the material/labor costs, it's all in the 'R&D' department.
Some manufacturers could have HUGE R&D costs. Maybe they have a million dollars or more tied up in R&D assests alone. Someone has to pay for that, and it's certainly not going to be the manufacturer.

Nobody said it would be easy. You must have very expensive audio gear and comparison cables in your 'R&D lab'.

Does that help?

John