there is a difference between cost of goods margin and profit margin....the latter includes all expenses including that ad....i love wilson threads
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My answer to your question is no, they should not, just as your personal finances are none of a seller's business when you're trying to buy something. And I have no reason to think that this is hyperbole. If you choose to not believe it, then don't buy their products. I'm not the absolute biggest fan of their products (though I respect them), but all the Wilson bashing threads I've been seeing just strike me as sour grapes.
I am not sure you should expect a private company to publish their books.
However, the fact this is being discussed suggests that this add has provoked the desired response.....it made someone stop and think....better still it made a few people discuss it!
Better still, I suspect this ad may trigger some praise of Wilson on a discussion thread.
BTW, Dave Wilson makes really great speakers, which are very good value!
come on! You believe David Wilson's rap. His whole ad campaign has him sitting on the king's throne tuning his crossovers. I must say they have a very effective adverstising strategy, but it don't fly with me. Also, I don't paticulary like the Wilson sound. I don't take any ad that seriously except on its' creative/artistic merits. Wilson ads are ho hum at best, but I'm sure they appeal to oodles. They must. They are keeping Sterophile afloat and he ain't hurting for business....
Keeping my finger out of the pie... but just as Bose builds a couple cubes for 10 dollars with marketing and sells for 1000.00 retail, Wilson builds 1500.00 speakers and sells for 7000.00 to a dealer + their markup of probably 30%... Now does that mean they are any worse than other high end markup's?
Don't know but I have seen anywhere from 300% to 500% on speakers mostly, electronics don't seem to reach that high normally. Speakers are the most profit in general in high end for the bigger ticket items, yes cables are even worse but are far lower investment in the first place(sometimes unless you buying pythons at thousands a pair).
I have actually bought speakers at about 75.00 over wholesale, the store payed 310.00 for the pair, I paid about 385.00 floor model, and retail was 1100.00! So go figure it cost about 75.00 probably to build them. Wilson uses off the shelf drivers from famed scan speak, focal etc... same with crossover parts, however they might wind their own inductors not sure, and they supposedly do have the drivers modified I am sure in the hundreds for nominal cost from the Danish and french makers..
But even you can buy wholesale stock drivers like these and still pay double what a manufacture probably would on buying hundreds at a time.
From most defense I have seen or heard as to Why wilsons cost 20,000 or whatever a pair and many other overpriced items is due to the R&D, facilities, fancy car paint, and advertising costs, is all that money into the performance dollar for dollar? absolutly not, but this is how it is for this kinda thing.. Only companies that I know of you will find a tilt the other direction is Tyler acoustics, VMPS, MAybe Montana(very similar to wilson, but a little cheaper) Zu Cable, These guys are the types making U.S.A speakers probably taking home about double what they cost to make in the end, with very little advertising, hype, etc... not nearly as strong as wilsons.
I am not wilson bashing, they are a good speaker in the conventional audiophile terms, will a 18,000 pair of wilsons beat out a similar design at 5,000? More than likely in one way or another, better listen and make a choice of the extreme cost difference's yourself.
The question was asked so I gave my take on it, but if you want to correct me and say the finish and R&D costs 9 times the speakers cost fine I will believe you :)
"... all the Wilson bashing threads I've been seeing just strike me as sour grapes."
I am fortunate enough at present to be able to afford Wilson speakers if I chose to, as are a great many other people who also don't like them. I am sure there are reasonable people who like Wilson speakers, but I confess I tend to assume a large portion of Wilson owners have purchased them on reputation and not through serious competative auditions. This is, Im sure, grossly unfair to some who have carefully made their choice, but I will say that the local Wilson dealer raves about them in his store and then goes home to listen to his active ATC SCM-50s. And who can blame him?
I find it funny that so many of the Zu Cable speaker owners are criticizing the Wilson. Isn't it fun to be gunned for when you are at the top.
Most Wilson owners do compare speakers prior to purchase. They have also probably owned several high end speakers prior to owning a pair of Wilsons. Quite often they base their decisions on proferssioanl experience including studio experience or playing in an orchestar etc. I am sure this would suprise many of the bashers out there. So many fellow Wilson owners do in fact play instruments or are involved in the industry in either recording or manufacturing of equipment that it is impossible to ignore. Mind you any manufacture can get an accomodation from any speaker manufacturer so don't use that as an argument against this point.
Your local Wilson dealer you refer to does love the Wilson Maxx IIs. I know who you are talking about. He often does private demos for people & loves the Maxx IIs. The fact that he owns ATC's is indicative of his love for a 2nd type of sound at home. The ATC's are an active speaker & in that regard will sound incredible in ways the Wilson can not. I do love quite a few speakers but the ones for me that have the least amount of compromise and the best overall balance are Wilson Speakers. That is for my ears & my opinion. If Dave Wilson gets rich from this good for him. He has spent years in developement & is "there" so he can charge a premium. Won't you pay more to go to the best car mechanic if you own a Ferrari even though a lesser mechanic can do the same work most of the time? Just to be sure?
Even though I'm not crazy about the
Wilson sound, or like their ads and very high prices: This is America. Wilson can charge whatever he wants. Fair? Not a factor. We have the freedom to buy or not to buy? Many factors are involved in speaker purchase for some, and sound isn't always the deciding factor. IMO, the cream usually comes to the top. Bottom line?-- if their speakers do not deliver the goods, they will ultimately go under. The Mont Blanc ball point pen that goes for a $100? I know for a fact costs them $6 to manufacture. Unfair to charge a retail of $100? Of course not. Outrageous? Maybe, but they certainly sell oodles of 'em. It always boils down to "what the market will bear." New York's Newsday has bashed teachers for years. Whether rightfully so, or not, teachers complain the hell about it, but still purchase the paper. If every teacher decided to stop purchasing the paper, do you think things might change?
It is so exciting, after several head to head fights directly with Wilson, to see them reducing their dealer counts. It is also great to see them having loads of issues with quality control. Many issues like the plastic 'save the finish' wrap, when removed from NEW speakers is actually PEELING the finish off. Great job Wilson.
I don't dislike the sonic characteristics of the entire Wilson line, rather feel they are acceptable even for the price. However, their customer service, business practices, and now quality control drives me to every speaker but their own. Any, quite frankly, that is a good thing. I would be one person that would entertain the idea of Wilson folding.
Selling $20,000 average proiced speakers requires better service. Surely reducing dealers can't HELP margins, but maybe making fewer will help get it right.
"I find it funny that so many of the Zu Cable speaker owners are criticizing the Wilson. Isn't it fun to be gunned for when you are at the top."
Ha, criticizing wilson? No way Zu owners criticize all other speakers..
But seriously where did anybody specifically put Zu against wilson? I mentioned some direct non-advertising companies above but that was all.. Tyler, Vmps, Zu?
To keep it constructive however not picking on Wilson, but the question was "WILSON AUDIO/ cost vs. value" and All the big audio firm's KRELL, Audio Research, Mark Levinson etc.. Are guilty of the same thing. If it costs that much more to build these type units than I don't know how to explain the little guys surviving at half the cost.
I heard the Wislon line 5 yrs ago in New Orleans, was not impressed in the least. They could price em at whatever, I'm not interested. Then throw in the weight issue and amkes me wonder how/who/why anyone would buy. What Mr Wilson should explain is that they put big $$$'s in ads so they can keep the hype up and runnig hot.
Come to think of it, how could Wilson possibly claim that their profit margins are the lowest? This is a ridiculous statement as the whole high-end audio industry consists of private companies who do not release their financial data. So how could Wilson possibly know how other speaker manufacturers set their profit margins??? Seems a bit insulting to the reader, in my opinion.
I find this discussion rather silly. If you don't like a speaker....don't buy it. As to Wilson's profit margin...most companies operate on a similar set of margins within a given industry....which will vary somewhat if the sell directly to the end user...or indirectly through dealers. Part of my experience comes from helping to manage a hifi speaker manufacture...there are certain relationships between the DIRECT cost of goods and the consumer LIST PRICE. Typically it ranges from 4 to 5 times the cost of parts and labor to put the finished speaker in the box. Consequently if a speaker LISTS for $10,000....parts and labor would thus be approximately $2,000....dealers typically purchase the product from 30% to 40% of the list price....and usually the dealer pays for the freight (not an inconsequential item for Wilson Dealers)...thus the Dealer would make $3,000 - $4,000 our of which he usually pays freigh. It costs the typically dealer about 20% of the selling price....$2,000 to pay his overhead and g&a...the sales person is likely to earn about $1,000 on the sale. This leaves about 40% of the LIST price...or in this example about $4,000 for the manufacturer to pay his overhead, g&a, research and development and marketing/sales promotion. This analysis change if you were dealing with extremely high volume sales....but I suspect this is close to the financial model for Wilson....and other quality loudspeaker manufacturers.
I spent a long time before I purchased Wilson speakers...I understand that they may not appeal to all parties...but they work for me and some percentage of the market. I WANT them to make enough money to stay in business...which they seem to be doing...which is important to someone who carefully selects a given product and wishes to keep for a long time.
just my thoughts
hikejohn's cost analysis is quite accurate......i think the heat wilson takes is more about 'performance for the money' rather than profit margin.....a diminished return in this area of course is true with most expensive audio components.......today's advertising campaign focusing on workmanship, performance and low margin seems quite bizarre, given how long they've been around and their wide acceptance as a market leader......ads are generally intended to attract new customers, but these appear to be preaching to the choir.
Profit margin depends on what you claim as your 'cost'. I've worked in the energy industry for 20 years, and realize what a joke it is when oil companies say they are only making a 10¢ 'profit' on a $3 gallon of gasoline. It's because they control internally what they call 'costs' like transportation, refining, marketing, advertising, distribution, etc. When they artificially inflate those 'costs' they can say that their 'costs' are $2.90, when in reality they are internally retaining $2 - split between/within the production company, the refining company, the pipeline, the gas station, etc. Poor guys, only making 10¢ on a gallon of gasoline. Yeah right. And Wilson has the smallest profit margin in the industry.
Macro, is it a sign of their guilty conscience to feel justified with their prices, or yet another another tactic to try to convince us that their speakers are priced right and so worthy of our hard earned $'s.
I couldn't care at what price they sold at, the sound offered was nothing I'm interested in.
I am looking forward to hearing the new WP8 in LA this weekend.
With their current ad campaign, I think Wilson is trying to build a brand with similar attributes as those enjoyed by McIntosh in its heyday: quality, engineering excellence, overall excellence, the brand to own. Think of it as the Lexus or MBZ of loudspeakers. It's a good strategy for them, I think. They are trying to build a sustainable, long-term business, as they should. At this stage, they are less interested in the tweaky dickheads that hang out on Audiogon, and with good reason.
As to the profit margin statement, they probably do have a pretty good feel for what their competitors' margins are: they know component costs, they have intel about dealer margins, they know. Whether or not their margins are lower is hard to say, but perhaps they truly are.
Sure ol Wilson could care less about the few members here at Audiogon, what we say here will not affect their sales even at 1%. but its our OPEN freespeech forum and we can express our opinions in a friendly manner. And offer advice to others here. I can assure you I'm not at all interested in how much money Wilson makes. Good for him, sad for those who buy. As long as he does not get any of mine.
I purchased the MAXX2's after carefully considering and auditioning a great many competitive products. I auditioned or owned a great many other top o' the line speakers from Aerial, Audio Physic, Kharma, Talon, ProAc etc. There is no pride of ownership value for me as my room is dedicated (Rives) and I rarely entertain strangers. When I do, I don't show the room lest they think me daft.
Every speaker has their strengths, weaknesses and signature traits, as do Wilson speakers.
Unquestionably, from my _experience_ the Wilson speakers rank at or near the top in terms of the apparent care and attention that has gone into their design, fit, finish, packaging and user adjustable performance. The support from the staff has also been impeccable.
Most importantly however, they perform as well or better than my expectations would allow.
Too many people in these forums state negative impressions and opinion as if they have first hand, direct-in home experience, when the truth is they merely heard something at a show or dealer showroom. I've heard countless speakers and systems that sound like crap at shows, but performed extremely well in my home. Wilson speakers are precise, calibrated instruments, and their set up has to be just right, just like any other top performing speaker of their size (speaking of the MAXX2's/X2's).
Expounding negative opinion on performance should at least be qualified by context, as should opinions regarding value-- which often times is literally impossible to judge accurately without visiting the factory, talking to the staff and going over materials, parts lists.
Opinions are great, and the internet provides terrific forums for all to share theirs. I just wish opinions that get tossed around like rotten tomatoes, casting snide remarks and aspersions were accompanied by, oh, just a little persoanl context and responsibility to facts rather than conjecture.
I don't understand, yet, what all the hoopla is about regarding profit margin, R&D, advertising, outrageous prices, and outrageous justifications. Wilson, JMlabs, Zuaudio, Kharma, whoever: they can charge whatever they want. I don't believe, in a free market,- in calling prices unfair, unjustified, etc. Are the new Wilson 8 Watt Puppys worth, what?--$28k. If they sell them and audiophools are happy? Yes indeed. Anything is worth what someone is willing to pay for it. Manufacturers don't have to make their products accessible to everyone. Don't like it? Too costly? Too much bad PR? Don't buy it. I think we've heard that on this thread before. It's more fun to find the $5k speaker with the $15k sound. That is until we find out that the $5k speaker costs $250 to produce..
The greatest arbtiter of "value", both intrinsic and percieved, is the resale value of used products being sold on e-bay and AudioGon.
Based on the numbers I see, Wilson is without peer in terms of resale value. Smoke and mirrors? Crunch the numbers.
The selection of any speaker is an intentionally personal pursuit. Internet opinion that seeks to attack a company or anyones _choice_ of a loudspeaker system, better be willing to state specifics, context and comparison instead of short-hand conjecture and second or third hand opinion.
The market speaks with precision when evaluating essential commodities unless it is deliberately altered by successful manipulation. Current fuel prices might be an example.
In the case of non-essentials, pricing is driven to a great extent by perception which, in turn, is driven by advertising. Reviews are advertising.
Wilson was innovative in design and extremely well connected to the primary arbiter of value at the time, when he started making the Wilson Audio Tiny Tot nearly 30 years ago.
Harry Pearson helped his friend achieve primacy in the premium speaker realm alongside his other buddy Arnie Nudell and both guys made a ton of money off of the illusion that their products provided something unavailable elsewhere.
Arnie wasn't as adept as Dave at keeping his balls in the air so Wilsom emerged as the ne plus ultra for many of you Chivas Regal drinkers.
I agree with Warren that Wilson is entitled to every nickel he can scam from you guys. Why not? This is how our free enterprise system is supposed to work. You pay your money and you buy "the best" and you don't need anybody who can't afford them to tell you otherwise.
Dave just keeps changing the product a little here, a little there and keeps changing the Model designation and keeps raising the price and you keep buying them and all is well.
Why should anyone object?
Now and then some pipsqueeck like me comes along and suggests that you are being duped and that there are better products for less money. Stupid of me. I'm so sorry. Listen, can I borrow your Cadillac? It's the best, right?
I recently heard Wilson Alexandrias, Dali Helicons, and DeVore Gibbon Super 8's. All were set up at dealers with electronics befitting their pedigree. I liked the DeVores best, then the Dalis. I expected amazing things from the Wilsons, a reorientation of my "north" arrow. Rather, I heard a collection of drivers, poorly integrated and obviously originating from different points in space. The cymbals sounded like they were 5 feet above my head.
These are the only Wilsons I've heard and who knows, maybe the less expensive models sound better. But, based on sound quality alone I wouldn't have chosen them over the other $130k less expensive "competition" I heard that day.
FWIW, I was there with a buddy and his thoughts echoed mine.
Hi Pip, I mean, Macro
Nice history and economics lesson. Outside of the agenda, it's a nice try.
Please tell me of all the speakers you've _personally_ auditioned that are better for less money--as if there could ever be such a thing related to ones _preferences_. And of course you've had a current in home sampling of which Wilson products, when, which models?
The "best"? There's no such thing, and I never stated that. I merely pointed out a market arbiter of value, one of the only "valid" ones available to us, er, snobs/dupes as you accuse. Which is it? If I'm a dupe, that'd make it hard for me to be a snob. :) Cadillac? You really are on a flight of fancy, eh?
You have a point regarding product changes, there have been a number of them the past few years. However, I don't think the recent changes are for Market reasons, rather, from my experience, Wilson speakers have improved dramatically since the Watt 6, which I never would have purchased because of it's IMO forward, analytical character. Nor did I like the original MAXX or Grand Slamm, finding them overly dry in the uper freq's and, well, stiff sounding-- unlike my previous fave, the Audio Physic Calderas.
I believe the Wilson speakers have evolved a great deal, starting with the Sophia, into a very coherent, time accurate line that has found a balance--rich mids, more linear treble, better pitch differentiation (earleir models (6) (5.1)had mid-bass and mid-treble issues).
Are the newer models perfect? Of course not, I can pick nits, as I can after long term audition or ownership of any speaker. Are there "better" speakers for less? Who do you wish to appoint as the arbiter of quality and value? You?
I demur to your stated expertise..
I drive a Toyota Minivan not a caddy, have two little ones and a pretty serious mortgage. I stretched to buy the MAXX2's, stretched to build a room for them (thanks Richard) and get the rest of my gear, Atmashere MA2 amps, Audio Aero Prestige CD, racks, room treatments etc.
I've a right to my choices and aknowledge they might not be for everyone. I'm not the one on these boards shouting "scam" and calling people "dupes".
There are lot's of great, maybe even better sounding systems that can be had for less $ than mine. But I'm really happy with my choices, and it bothers me to see contextless posts, slamming what I think are decent products with little to no context or responsibility.
Your post sums up my previous points regarding the net, and the fact that anyone is free to target and defame, without risk.
It's ok to disagree, it's ok to have an opinion that is contrary. Open dialogue is fine. Your sarcastic comments exist outside that realm.
You're the one with the "Cadillac" metaphorically. Enjoy it.
Nice call. I like the Dali and Devore speakers too, based on what I've heard at shows.
Keep in mind, that the head units of the Maxx2 and X2's need to be precisely calibrated to listener distance and height, so it's possible-in any "dealer showroom" demo, that the performance might not gel based on set up.
That said, speaker preference is more of a personal choice than _any_ other product in this hobby, and everyone has a different opinion. Many think they have it "figured out" or think they can intelligently dump on products they don't own and have scant experience with. That's a lot of what I see in this thread, outside the last couple posts.
The people that have it "figured out" are those that follow their own path, while understanding that there is no "best" or "greatest value", and don't judge companies or hobbyists because "they know better". Largely, the "I'm smarter than you" crowd are the people with the least experience and the greatest need to pad their ego.
The rest of us are just hobbyists with an open mind--and too often--an open wallet. :)
When did this turn into whether wilsons are the best? Got nothing to do with WHAT DO YOU GET FOR YOUR MONEY? PERFORMANCE Vs. PRICE Ratio as the thread originally started..
I agree profit margin has nothing to with sound or PRICE Vs. Value, who cares if wilson makes 5000.00 a pair Or 50,000 a pair in the end, it has to do with ARE you getting a Performance Relevant to the price, Fine you love wilsons, Okay I'll play and say so do I! But are they truely worthy of the cost, Nothing is it just depends on how much more a certain company can Gouge out at this point, discussion if they are Good Scan speak multi driver designs or not is irrelevant to the question, they are good, but they are not 4 times better than a comparable designed speaker at 1/3 the cost everytime, people buy Wilson kinda like ferrari, they have the money, and it does what they feel it needs to do, but yes there is a 80,000 Mercedes that can be just as enjoyable and effective for the main 9 out of 10 points that the ferrari hits at 200,000.. You decide if status, Fancy finish with spacelike material suits you in the end. Sound is not even a factor at this point, cause of course you can do better than a 130,000 dollar speaker for far less money.
Thanks for understanding Samuel. I've been around audio for 30 yrs and I feel my ears have a pretty good judgement. I'm known for telling it like it is. I'm straight up, if I step on toes of famous brands, sorry, its the way I am. I suspect we will have more truth and less hype as the yrs go by. As it is this hobby is still in the hype stage.
profit margin on a 50,000 dollar speaker should be less than the profit margin on a 1000 dollar speaker. its just the way business is, audio and otherwise. people think that wilson audio speakers are over-priced and over-hyped, so? the care and pride they put into building a speaker is top notch. if there are issues with build quality, they handle them. i havent read where someone has bought a wilson speaker and been left holding the bag if the item was damaged. If there is such an issue, perhaps it is due to the poor service of the audio store and not wilson themselves. Maybe that is why wilson is dropping dealers. these dealers are not selling enough to warrant their wilson dealership. it is easy to take shots at the guy sitting up top.
i have heard every wilson speaker from the cub to a apir of x-2's. the experience i have had was awesome, but i didnt buy them because I cant afford them. so when i read all this negative comments it makes me feel one of two things about the author.
1. they cant afford them, so they consider them overpriced
2. they dont know what they are talking about and just like to hear themselves ramble on.
either way, if you dont like wilson audio thats fine, but i guarentee you respect their products and respect the care and effort devoted to every single speaker. thats what the ads are about, letting you know that you are getting a product that is tweaked and produced under the strictest standards. Thats what you are paying for and thats what they deliver.
Just returned from HE2006 in LA. After hearing a 15-minute demonstration of the new Watt Puppy 8's by Dave Wilson himself, my wife said, "Twenty-eight thousand dollars, is that all they are?" This was, by far, the best I've ever heard Wilson speakers sound. The speakers disappeared, the music evenly pressurized the large room, and the tone, texture, and dynamic swell was closer to live reproduction than I've previously heard from the Sophia's, the 6's or the 7's. In my opinion, the 8's are worth every penny, and I'm betting that the market will agree.
I've used that spin on my wife for many an upgrade. How's this? I'm looking at $20k speakers. Really considering them. Decide, however, on $10k speakers, and go to my wife all excited that I just saved her $10k, so my new speakers won't cost anything...you married guys know the deal...It's an Abbott and Costello routine...
I also thought the Wilson room featuring the WP8 sounded very, very good. The state-of-the-art Audio Research amplification/preamplification didn't hurt, either. They used a selection of music that I suspect lended itself to the speaker's strengths...but perhaps that's too cynical. I wish Wilson had also used some large orchestral music and some rock, or at least some driving jazz in addition to the vocals. Would I spend $28k on them. No. I'd break out in hives.
I also thought the Sophias in the Lamm room sounded exceptional, and I could easily live with the sound in the Lamm room.
I have WP7s. I heard a demo of Alexandrias presented by Dave Wilson just recently. He struck me as a gentleman, far from a hypster. If he was working us, he's a master. You could see the pride he had when talking about how he felt for his workers. He did not disparage the competition, even when asked about them.
I used to haunt all the audio sites, but lately have become so satisfied with my system that while I still visit it's without the 'striving for better' (or wishing for better) that I once had. FWIW: I find Audiogon less shrill than Audio Asylum these days.
In my new Rives designed room, my WP7s sounded wrong to me at first. Only after experimentation and some changes did I find the level of great sound I hoped to achieve. My point is that I wonder how many really have heard any speakers as good as they can be? It takes synergism.
As for cost/price, a manufacturer confided in me that a well known cable brand builds them for $75 and sells for multi-thousands. (He was not a competitor.) He said he got that from the owner of the company who laughed about it.
I can't swear that's true, but after selling their cables which I had used for years, I found a much better match for my circumstances.
To sum it up: it's all about synergism. And Wilson, love him or hate him, follows his vision of what a speaker should be and do. It's a free country (mostly.)
Boa2 & Tvad,
What equipment, source components & cabling did they use for the Demo. I am very curious.
What are you using for your system cables?
I agree it is all system synergy & setup is critical. All I need to do is change one thing to make my system sound terrible. Every system is as strong as the room & the weekest link.
"I've used that spin on my wife for many an upgrade. How's this? I'm looking at $20k speakers. Really considering them. Decide, however, on $10k speakers, and go to my wife all excited that I just saved her $10k, so my new speakers won't cost anything...you married guys know the deal...It's an Abbott and Costello routine..."
Brilliant! After a few more upgrades and all the savings, you should be able to retire and get that vacation home in Tahoe.