HiFi Subjectivist ¦ Audio Forum ¦ NVA User Group

I was mulling this "whats its worth" issue over the other day after watching a John Devore youtube clip. Before a small, often owner run business embarks on setting a price they surely must debate do we want to sell a small number of very high margin items knowing full well that's a limited market (Devore is one) or do want sell lots of product (Schiit is a good example) at lower margins.

I suspect many business decide its easier to sell 50 to 100 units of X worldwide and gross a million than make circa 800 to a 1,000 units to gross a million. Obviously as the unit price rises the addressable market shrinks but there must be buyers for > £150k turntables and >£200k speakers.

NSNO2021 wrote: ↑Tue May 31, 2022 12:20 pm I was mulling this "whats its worth" issue over the other day after watching a John Devore youtube clip. Before a small, often owner run business embarks on setting a price they surely must debate do we want to sell a small number of very high margin items knowing full well that's a limited market (Devore is one) or do want sell lots of product (Schiit is a good example) at lower margins.

I suspect many business decide its easier to sell 50 to 100 units of X worldwide and gross a million than make circa 800 to a 1,000 units to gross a million. Obviously as the unit price rises the addressable market shrinks but there must be buyers for > £150k turntables and >£200k speakers.

I had a conversation with one Italian amp and headphone amp manufacturer and that's exactly what he said
There is only 4 people working + owner - everything is made by hand ( from populating PCB to case assembly )
their gear starts from 22k Euros to I think 60k+
- and simply speaking the price is made up from calculation: number of units they can assemble and sell in one year
and make a healthy profit...

Ithilstone wrote: ↑Tue May 31, 2022 12:44 pm
- and simply speaking the price is made up from calculation: number of units they can assemble and sell in one year
and make a healthy profit...

R&D does not enter calculations?

CN211276 wrote: ↑Tue May 31, 2022 2:39 pm
R&D does not enter calculations?

Isn't that funny that they never mention R&D right? ;]

Ithilstone wrote: ↑Tue May 31, 2022 5:18 pm

CN211276 wrote: ↑Tue May 31, 2022 2:39 pm
R&D does not enter calculations?

Isn't that funny that they never mention R&D right? ;]

If there is no R&D the implication is that it is existing technology and will not sound better than something a fraction of the price.

CN211276 wrote: ↑Tue May 31, 2022 6:19 pm

Ithilstone wrote: ↑Tue May 31, 2022 5:18 pm

CN211276 wrote: ↑Tue May 31, 2022 2:39 pm
R&D does not enter calculations?

Isn't that funny that they never mention R&D right? ;]

If there is no R&D the implication is that it is existing technology and will not sound better than something a fraction of the price.

And that's where the marketing comes in and creates a bit of mystery and where there's mystery there's margin

And now we've reached the point where we're looking at the difference between something that costs £40K and something that's worth £40K.

NSNO2021 wrote: ↑Tue May 31, 2022 7:38 pm And that's where the marketing comes in and creates a bit of mystery and where there's mystery there's margin

Where there's a mystery, there's Scooby Doo and the gang to solve it.

It's all done with mechanised monsters and speakers playing scary recordings (Kate Bush, my dad's favourite jazz etc).

And they would have gotten away with it, it if weren't for...

CN211276 wrote: ↑Tue May 31, 2022 6:19 pm
If there is no R&D the implication is that it is existing technology and will not sound better than something a fraction of the price.

Well they never said that there is no R&D... One of them said that they listen to every component - they just never mention cost of R&D being a factor of the final price - It my be that cost of R&D is negligible or that they have very crappy business model or something else entirely.

If we take NVA as an example. The cost of the initial R&D would have involved Richard trying various designs, listening to them, trying something different, listening etc etc. I get the impression that he never incorporated these costs into the selling price of NVA. Effectively the R&D was seen as a personal hobby / passion / interest and the costs were written off and Richard never directly compensated himself for this time and materials cost.

In the post Richard Dunn era, it seems that this approach has been carried on?

For someone like a Richard Dunn or a Colin Wonfor or a Les W - going into the design of an amplifier, they have so much expertise already that we're not talking about a lot of R&D. They know what they're doing. And it's just a case of going ahead, making what they think will work well, listening to it and going into production if it's good enough for the price.
If a company were to claim that they needed a huge amount of R&D for a minimialist hi-fi product, then I'd be questioning the expertise of the designer. Or his sanity.
For something like a Devialet, I can see why they had upfront R&D costs.

When the Linn Keel came out, there were people on forums saying that the high price was a reflection of the R&D. Seeing as it was produced by a company that had been selling mechanical engineering products for over 30 years, with claims that they were the best in the world at what they did, they should have so much mechanical engineering expertise that coming up with the Keel would be a piece of cake.