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“Secrets” about the consumer audio business you may find interesting

audiosciencereview.com

121–130 of 338 posts

Re: “Secrets” about the consumer audio business you may find interesting

#121
post #116

Earlier quoted context omitted.

> 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…

Nowwhere in the GP comment is the word “outraged”. That’s your word. 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)

Okay. I’ve edited my comment for tone and to stick to the facts. I still think the comment I replied to misrepresents the original piece by quoting very selectively and adding the word “dirty”.

Re: “Secrets” about the consumer audio business you may find interesting

#122
post #116

Earlier quoted context omitted.

> 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…

Nowwhere in the GP comment is the word “outraged”. That’s your word. 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)

> Shit HN says. Sheesh

Indeed. I read the article, then I read these three comments. The first one reiterates points that the article made but seemingly doesn’t recognize the article made them. The second does recognize that but with a combative tone. The third is just combative.

Y’all can carry on as usual but none of that conflict was actually warranted.

Re: “Secrets” about the consumer audio business you may find interesting

#123
post #82

> 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…

In contrast in 2021 Xiaomi's Cost of Sales (COGS?) was 82.3% of their annual revenue Source: 2021 Annual report https://ir.mi.com/static-files/b85f34c0-0010-4a8c-94b9-269d8...

Cost of sales include wage and salary for the storefront.

Re: “Secrets” about the consumer audio business you may find interesting

#124

> 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 it, per se, but surely if you're at all a proponent of a market economy for the typical reasons, you would like to see prices as close as possible to marginal cost.

This is as close as possible because all the stuff that's not included in COGS also has marginal cost.

Re: “Secrets” about the consumer audio business you may find interesting

#125

> 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…

> If this seems shocking, consider that the COGS of software as a service products are much lower by comparison. Doesn’t matter, though, because you have to pay all of those expensive salaries to make it happen.

By definition, in a successful business, a significant amount of that markup goes to profit, not anything that's actually productive like salary.

Re: “Secrets” about the consumer audio business you may find interesting

#126

Earlier quoted context omitted.

> There’s nothing wrong with this. These are standard ratios, not some dirty secret. There's a lot wrong with this, but not in a moral sense. For all his faults, Elon Musk made a good point about the space industry near the beginning of SpaceX. He asked a team of "rocket scientists" how much a rocket cost. They said something like $100M. Then he asked them to sum up the material costs. Sheetmetal, tubing, rivets, etc…

> ... how much a rocket cost.... The "rocket" example is as silly as the "Moore's Law applied to vehicles" arguments that used to crop up on Slashdot decades ago. "If cars improved according to Moore's law, they'd get XXXX miles per gallon and go YYYY miles per hour". Yes, and they'd also be smaller than matchboxes while seating thousands of people. Exceptional situations are exceptional. Good on Elon Musk for realis…

part of the reason is that the point of a luxury yacht is to be expensive.

Re: “Secrets” about the consumer audio business you may find interesting

#127
post #7
post #2

Articles like these make me appreciate my business degree, because this list is the basics of any business. 30% COGS, high shipping costs, outsourced manufacturing, big box focusing on low end market, etc is all very normal for almost any industry.

30% COGS surprised me… I always estimated it would have been around 50%. Learned something new.

Try like 10–15%

Re: “Secrets” about the consumer audio business you may find interesting

#128

Earlier quoted context omitted.

Nowwhere in the GP comment is the word “outraged”. That’s your word. 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)

> Shit HN says. Sheesh Indeed. I read the article, then I read these three comments. The first one reiterates points that the article made but seemingly doesn’t recognize the article made them. The second does recognize that but with a combative tone. The third is just combative. Y’all can carry on as usual but none of that conflict was actually warranted.

The third comment parodied the second word for word before the second was edited :-)

Re: “Secrets” about the consumer audio business you may find interesting

#129
post #15

Earlier quoted context omitted.

I already knew the rule of thumb that a retail store needs 50% markup, so 30% seems reasonable in that context (indeed I'd've guessed 25%).

So when I buy an Oled tv, does the store procure it for half the price from the distributor? Sounds like a huge margin. How about from an ecommerce store, which a lot of times have slightly less but close prices to regular stores, can the distributor force them to keep prices up not to upset the other resellers?

It’s a sheet of plastic glued to another piece of plastic. Yes.

Re: “Secrets” about the consumer audio business you may find interesting

#130
post #124

Earlier quoted context omitted.

There's nothing wrong with it, per se, but surely if you're at all a proponent of a market economy for the typical reasons, you would like to see prices as close as possible to marginal cost.

This is as close as possible because all the stuff that's not included in COGS also has marginal cost.

Yeah... the COGS here is really not dissimilar to what it is across all consumer products, for the nerds out there who like to find out about these things. That's a pretty good indicator that this is the equilibrium.
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