111–120 of 338 posts
Alice brings her broken car to bob, a mechanic. He has a quick look at the engine, then hits a specific spot with a hammer. The car was fixed. Then Bob asks for 100 bucks and Alice replies that it is quite expensive for one single hammer strike. Bob then says, the hammer strike is 1 buck, knowing where to strike is 99 bucks.
> The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers. There’s nothing wrong with this. These are standard ratios, not some dirty secret. The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer su…
yeah the person who suggests that COGs (or even BOM) should be more than 30% of MSRP cannot be taken seriously on any other business-related statements. That is shows a gross misunderstanding of the fundamentals of unit economics and electronics business models.
- BOM includes only the materials.
- COGS includes not only BOM, but also the variable costs to combine those materials into the final product (e.g. cost of manufacturing labor).
> The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers. There’s nothing wrong with this. These are standard ratios, not some dirty secret. The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer su…
It doesnt need to be rationalized
To consumers, anyway
Earlier quoted context omitted.
30% COGS surprised me… I always estimated it would have been around 50%. Learned something new.
Just look at the prices on AliExpress. They are a fraction of the prices at retail stores, and it includes the sellers margins. And AliExpress products are not always counterfeits and can be acceptable in quality. A COGS of 30% is, as they say, on the upper end. For brands that have to offer a certain amount of quality in order to sell instead of going purely for ads and brand recognition. 50% is the retail store mar…
> The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers. There’s nothing wrong with this. These are standard ratios, not some dirty secret. The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer su…
> The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers. There’s nothing wrong with this. These are standard ratios, not some dirty secret. The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer su…
Nowhere in the original post is the word “dirty” or any implication that there’s anything wrong with the ratios. The OP qualifies their post with:
> None of this is actually secret (it would be common knowledge for anyone employed in the industry) but isn't well-known outside of it. This audience has a lot of professionals in it so a lot of this might not be news to you.
And after going into many things that factor into the retail price concludes with:
> In that sense, a 3:1 retail to COGS price is arguably very fair or even low, especially for firms that do any R&D at all. I personally wouldn't say something is overpriced until you hit 10:1 or more.
The quotes around “secret” are there in the first place to imply these aren’t actually secrets, much less dirty secrets.
I guess I'm the worst type of customer for audio retailers. I recently switched from buying $50-$100 gaming headphones to $5 wired earbuds with a built in microphone. They are still working perfectly after months, and I got a spare for another $5. The reason I decided to try that is because the wires in my headphones always get partially broken after a few months and so I end up with only one channel. And the cheap B…
The wires are usually the first thing to go out for me too. Have you considered buying a pair of headphones with detachable cable?
I guess I'm the worst type of customer for audio retailers. I recently switched from buying $50-$100 gaming headphones to $5 wired earbuds with a built in microphone. They are still working perfectly after months, and I got a spare for another $5. The reason I decided to try that is because the wires in my headphones always get partially broken after a few months and so I end up with only one channel. And the cheap B…
Watch out, I had a favorite earbud that disappeared from the market, imo for being too good too cheaply, and cannibalizing the new (at the time) category of high-end earbuds for Sony. I luckily realized very quickly that they had gone out of production, and managed to find a case of 24 of them on Mexican Ebay. Each pair probably lasts a little more than a year, so they'll get me through this stage of technology (for…
> The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers. There’s nothing wrong with this. These are standard ratios, not some dirty secret. The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer su…
yeah, it's quite typical that wholesale = 2x COGS and retail = 2x wholesale. for high end stuff it's likely far higher. that $75 Intel AX210 WiFi 6e upgrade is likely a $5 part at wholesale in 10k quantities. upgraded op-amps for $100? probably $4 each on digikey or aliexpress (and thats already marked up from maybe $2 COGS)
People gasp when they hear that, but 2x wholesale doesn’t mean we were making bank. We were spending all that money on wages, utilities, the property itself, taxes, equipment, etc.
If people think that charging $20 for a $10 widget is too much, they can fly to Shenzhen and buy it for $10.
> The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers. There’s nothing wrong with this. These are standard ratios, not some dirty secret. The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer su…
> There’s nothing wrong with this. These are standard ratios, not some dirty secret. Nowhere in the original post is the word “dirty” or any implication that there’s anything wrong with the ratios. The OP qualifies their post with: > None of this is actually secret (it would be common knowledge for anyone employed in the industry) but isn't well-known outside of it. This audience has a lot of professionals in it so a…
So, what, you wanted to be aghast or something and misrepresented the tone of the original comment with a selective quote and addition of the word “outrage”?
Shit HN says. Sheesh.
(This comment was a copy of the one above before it was edited)