Speaker markup? (1 Viewer)

[Joe Koenig]

It amazes me that some speakers go for as much as they do. Yes, I know a lot of money is put into research, but being that a typical speaker is a couple of drivers, a crossover, and a cabinet as the main components, I have a hard time believing there isn't an insanely high markup on mid to high end speakers.
What is the average "cost" (in materials, not counting R&D) to build a $500, say, pair of speakers>?

 

[Joe_Jensen]

High end stuff has pretty low volumes. I don't have the data in front of me, but I remember reading an industry report somewhere, and the high end speaker revenue in North America for all manufacturers was in the $100M range. Divide that up into dozens of guys, and the revenue per company is only a cople of million per company. By the time they pay a few salaries, markup for the distributor, markup for the store, the price is way high. I understand the typical markup on manufactured goods is 4 times the bill of materials....joe

 

[BryanZ]

For most companies it probably is around $100 - $150. The rest is all in markup. For nOrh, a pair of $700 speakers (pair of marble 4.0) costs them $490 to make. The rest of the markup is all company salaries, R&D, etc. The online companies can offer better value for the money and produce higher quality products.

 

[mctague]

I forget the % that I was told, but I was told NHT super zeros' cabinet cost substantially more than the drivers.

 

[mctague]

I was once told a large % of speaker cost is wrapped up in the enclosure. NHT Super Zero's were the topic, but I don't remember the %s.

 

[Bob McElfresh]

I think that is why the Advanced Topics area is full of DIY speaker and sub-woofer builders.
It's funny, but for things like speakers (and cables) the cost of the materials is swamped by the manufacturer costs.
Even Tom & Ron have often said you can build your own subs and get better sound than many good-name commercial units. Several people have pressed them to offer their speakers un-assembled. This way we can trust that the various parts have been designed to work together. Perhaps it's time to re-visit the issue with their new ultra-output woofers...

 

[TysonN]

I have generally been told 400%, but after a little more research, that # is based on the retail price of the parts. But many times manufacturers can buy parts in bulk and get substantial discounts. If this is taken in to account, retail can actually aproach 900%. But you also have to realize that this is not entirely the fault of the manufacturer - the usual distribution model accounts for enormous ammounts of markup between markup for the distributor, markup for the store owner, and markup to cover the salesman's commision. That is one reason like comanies like ACI, SVS, nOrh, Outlaw, and HSU all offer such great value.

 

[Ted Robinson]

when i worked at CC and at GG the markup from their cost was just about 50% on every speaker and piece of audio gear. Of course the ceapest stuff has the least amout of markup, but this is just a general rule for when i worked there.
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Ted Robinson

 

[Andrew W]

I believe that the cost of materials and shipping used to be a big part of the speaker cost. That is why the industry has decided to make much smaller speakers and try to tell us they sound as good as big ones. They can sell a pair of 4x4 inch cubes for close to the same price as nice pair of 3 ways with a 12" woofer and stick you for the price of a subwoofer as well. The cost of materials is less and the cost of transportation is a lot less, thus maximizing profits. Hmmm, shouldn't they have passed the savings on to the consumers?
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Andrew in Austin
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Sony DVP-S530D DVD Player
Sony STR-DA333ES A/V Receiver
Sony KP-57XBR10W Rear Projection TV (16:9)
Infintiy SM 120 (L & R)
Infinity SM Video (center)
Infinity SM 165 (surround)
Infinity BU-120 (subwoofer)

 

[Eric S]

I've seen evidence again and again of 900%-1000% (yes, thats 10 times) markup on many of the commercial, mass produced speakers. Thus, in a typical $500 pair of speakers, you may have somewhere near $50-75 worth of drivers and crossovers. Often, the cost of the cabinets will be about this same figure. This seems to apply to the high-end retailers as well. There are lots of research & design costs, salaries, marketing, etc. that need to be recovered once a finshed product hits the shelves.
This is one reason why DIY is popular, and why speaker kits costing $500 will absolutely blow away "off the shelf" speakers costing the same amount!

 

[Dave Dahl]

Hi all,
I agree with most everything on this thread with the exception of:
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quote:
The online companies can offer better value for the money and produce higher quality products.
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Value is a very subjective determination. While online retailers may be able to sell me a unit at a lower cost than a local store I believe that the personalized service of a local store is worth the extra money spent and therefore a better value. It also seems that the quality of a product has no relationship to whether the manufacter is an online company or not. Companies like Krell or B&K offer tremendous quality within their product line.
-Dave

 

[SimonT]

A 30 to 35% mark up is very common...and they usually come back with 5 to 10 % after all their overhead.
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MY HOME THEATER

 

[Phil A]

Also do not forget that it is not uncommon for speakers to come with 5, 7 or 10 year warranties. The manufacturers who make their won drivers generally have higher R&D costs and those that buy there drivers do not get 5, 7 or 10 year warranties from the driver manufacturers. The costs also do vary based on the design and cabinet construction too for boxed speakers.

 

[Nicholas A. Gallegos]

In my experience (working at various retail stores), mass-produced speaker brands generally have about a 2-fold (100%) markup.
And so do interconnect cables.........

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[Kendall Welsh]

The markup for speakers varies greatly with the type of speaker and the company. I have found that it does not necesarily raise with the level of the speaker. Some high and mid range speakers have higher profit margins, and some have much lower margins. Many that are in the extreme high end (lunatic fringe) range have very little mark up.
I have both purchased and built mid to high to lunatic fringe speakers. Most of the box type speakers do tend to have lower material costs. Speakers like planars and especially electrostats tend to have extremely high construction costs. For many of the crossovers and filters components such as poly capacitors can be as high as 300 to 400 each.
Speakers such as planars do not conform to the basic cabinet crossover driver category. They must have greater stability in the filtering as they do not use a multitude of drivers to create sound. They must therefore have the equalization built into the filtering system, as well as power supplies and resistor banks for electrostats.
I will have to say that the highest markup I have found is in entry level to mid entry and subwoofers. It has been that way at the several places where I have been employed.