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

audiosciencereview.com

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

#131

Post by alain94040 »

achow wrote: post #82
PragmaticPulp wrote: post #65

> 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 includes marketing expenses. Possibly also operations cost.

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

#132

Post by thedebuglife »

PragmaticPulp wrote: post #65

> 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…

From my own reading and experience, paying salaries still has less overhead.

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

#133

Post by ac29 »

refulgentis wrote: post #90
achow wrote: post #82

Earlier quoted context omitted.

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 is not Cost of Goods Sold

In this accounting context, yes it is

edit: source here, since other people are making the same mistake https://www.investopedia.com/ask/answers/112614/whats-differ...

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

#134

Post by laristine »

yewenjie wrote: post #17
soared wrote: 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.

Is there some online course I can take to learn the crux of a business degree?

Another business major here. I don't have an online course to recommend, but the BUSN book basically taught me all I needed to know to get started in business administration. https://www.amazon.com/BUSN-Marcella-Kelly-ebook-dp-B079QD31...

After a decade working post graduation and nowadays being comfortable negotiating and managing millions-dollar projects, I still find the book covering all the fundamentals you need to know about modern business.

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

#135

Post by eru »

NoraCodes wrote: post #125
PragmaticPulp wrote: post #65

> 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.

How is profit any less 'productive' than any other expense?

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

#136

Post by eru »

fasteddie31003 wrote: post #57

I built my own speakers for under $200 and I honestly think they are some of the best I've ever heard for a personal setup. They were inspired by https://www.youtube.com/watch?v=CKIye4RZ-5k (Tech Ingredients) . I built the speakers from foam board, the subwoofer from car audio parts and the amp is a standard class D amp. The best part is whenever someone comments on how good my speakers sound I can say I built them m…

I assume you mean for under $200 of materials; and you did not charge yourself for the labour?

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

#137

Post by eru »

rr808 wrote: post #103
m463 wrote: post #18

What I'd like as a consumer is the antidote to this. I saw something like this trying to get a replacement plumbing fitting at my parent's house a few years back. The local hardware store with the high-quality stuff had been closed down by the big-box stores. Perusing the possibilities at lowes and home depot showed plastic and fake chrome when I would have paid extra for high quality brass or even metal. It was just…

Amazon and other high volume low margin retailers are a is pretty good antidote "for this". Good shipped from manufacturer to consumer with smallest markup possible. Of course it kills service, local shopping, city taxes, retail employment along the way but that was the overhead.

And in cases where you did not want that overhead, this is exactly how progress looks like.

At least some kinds of progress.

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

#138

Post by thayne »

tuatoru wrote: post #110
jiggawatts wrote: post #86

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…

> With respect to the rest of your argument, I understood that Amazon makes most of its profit from AWS, while stories about its ruthless exploitation of its warehouse staff are legion.

Sure, but from what I understand, businesses generally list goods on Amazon for close to MSRP, possibly for contractual reasons. Some of that certainly pays for Amzazon fees, but where does the rest of the difference from wholesale price go?

> Why has no-one "Musked" luxury yachts?

Well, for one thing, a luxury yacht is a status symbol. If it became less expensive, more people would be able to afford them, and the wealthy would feel less special about being able to own one. Certainly not the only reason, but I'm sure it's a contributing factor.

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

#139

Post by [deleted] »

bane wrote: post #54
mschuster91 wrote: post #9

Earlier quoted context omitted.

> random FCC compliance stuff Nothing better than designing a product and actually producing a batch of it... and then finding out you have some EMI problem requiring a redesign. If you're lucky, you can remedy it by manually adding some shielding tape, if not... you might as well file for bankruptcy in the worst case.

Ancient history, but the way Apple skirted around FCC regulations for the Apple II while Atari got bogged down in expensive remediations for their 400/800 systems that added to the BOM is an interesting business study.

[deleted]

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

#140

Post by Max-q »

jiggawatts wrote: post #86
PragmaticPulp wrote: post #65

> 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. 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…

What Elon saw, was that the rocket companies was multiplying BOM with 200, when it could have been a smaller number.

There is nothing wrong to multiply BOM with 10. It’s almost as low as you can get it when operating a business.

But when you find a market which is marking up with 200, you have found yourself an opportunity for a competing business.

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