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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

#231

Post by Jolter »

kthartic wrote: post #195
aljgz wrote: post #147

Years ago I visited a friend in emmm..., "Europe". He was not home and the neighbour let us in. He asked us to entertain ourselves until he gets back. It took little time to notice the pair of speakers: 50cm cubes, almost. I managed to turn them on and connect them to the TV. There I heard the most lifelike sound I ever heard from any speakers. I wondered: these should be some crazy European brand... no brand names a…

I'm confused. So were they actually good speakers to begin with, or was it the measurement device + tuning that made bad speakers sound good? Mind sharing the brand of speaker?

They are obviously unwilling to name the brand.

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

#232

Post by akrymski »

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…

By contrast products on Amazon have COGS closer to 10%

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

#233

Post by tecleandor »

wmf wrote: post #73
fruit2020 wrote: post #42

Earlier quoted context omitted.

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?

So when I buy an OLED TV, does the store procure it for half the price from the distributor? Generally yes. can the distributor force them to keep prices up not to upset the other resellers? Retailers upsetting other retailers is called channel conflict and is often solved with minimum advertised price policies. High-end companies like Apple and Sony often have this policy which is why you see the same price everywhe…

Also, the margin in Apple products for retailers is quite, quite low. I'd say 10% or less. That's why lots of "Apple authorized resellers" have either closed or expanded their business to accessories and services in the last 10 years.

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

#234

Post by onemiketwelve »

TheOtherHobbes wrote: post #204
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…

I used to be a naive DIY hobbyist who was outraged by how much more expensive commercial products were compared to the parts cost. But of course what you say is true. Electronic and software design, physical design, productisation, marketing, distribution, packaging, support, business premises, logistics, and backup business services (payroll, accounting) all cost money. Even a nominal markup of 40% may not be enough…

I think that response is natural especially for anyone who builds things, software or otherwise.

But my mindset completely changed after listening to a lot of economics stories on planet money. There was this dude who tried to make a simple toaster on his own, down to refining metal. None of us can make even the simplest consumer product, let alone an consumer electronic product economically.

https://www.npr.org/2014/09/12/342138931/how-do-you-build-a-...

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

#235

Post by repler »

concordDance wrote: post #154
rr808 wrote: post #103

Earlier quoted context omitted.

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.

Amazon is flooded with products. Often duplicates with fake reviews. How can someone actually find a quality item and know that's what it is on Amazon?

Exactly - these days you can’t tell:

- what’s actually going to be in the box

- how soon is it going to break after you open said box

- is the thing so cheaply made it’s going to give you cancer

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

#236

Post by onemiketwelve »

brtkdotse wrote: post #164
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…

I’m actually surprised it’s as high as 30%. Would’ve expected 10% tops. Reminds me of that Planet Money special where they made their own tshirts from scratch, as “finding a cotton farmer to buy cotton” from scratch. The thing that added the most cost was the transport from the dock in NYC to the store.

Ah damn, I just commented about planet money. Seriously, it was totally perspective changing. Anyone who even has a modicum of interest in econ/business, especially as it pertains to the topic here, should listen to the t shirt saga. It's excellent storytelling even for those who aren't economics nerds. Still have my squirrel t-shirt I bought to this day :)

https://apps.npr.org/tshirt/#/title

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

#237

Post by bbarn »

I have an inexpensive surround sound system from Sony with a soundbar on my TV. I enjoy it a lot when we're watching movies.

For everything else I use a JBL plastic covered bluetooth speaker. I used to be really into speaker quality, swallowed all the audiophile pills. Wired my first home for audio. You know what made the difference for me? Portable, water proof, long battery life, and good enough sound to play music while hanging out with my friends or cooking in the kitchen. I know I'm no longer the target audience that I was in my 20s, but comparing the small 150$ unit I have now to literally anything made 20 years ago at that range is crazy to me.

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

#238

Post by PinguTS »

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…

Actually, that is what I learned over 20 years ago at the university while studying electrical engineering. Basic business class (and law) was part of the courses to get the diploma.

The general rule of thumb was, that a product in parts and production shall not be more 30% of the final price of the product. If its more, it will be a money looser. With that 30% you have 30% for marketing and distribution, and 30% for research and development. Then there you have about 10% of overhead costs for all over. Then you can play with the numbers. If, like in consumer products, marketing and distribution goes up, you have obviously less either for R&D, which means less innovation or less innovative products, or less for production, which means less quality.

That's what I learned for electronic products. Other industries maybe a little bit different. I think of these sometimes when I see a plastic box in the store for 10 bucks or so, and I know this plastics costs only a few cents in production in injection molding, of course not counting what the machine for the manufacturer had cost, what the production form cost and that it can only be used for a few 100 000 items before wearing out and so on.

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

#239

Post by kangalioo »

flalslsm wrote: post #85
dcx wrote: post #81

Earlier quoted context omitted.

This sounds interesting, why is this no longer true?

Isn't it obvious? China is still doing lockdowns. Disruptions to supply chains raise costs. It's not complicated to figure out.

Thanks, although it would have been friendlier without that first and last sentence

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

#240

Post by whyoh »

KaiserPro wrote: post #197

The problem with audio in general is that its really difficult to find decent reviews of the product. I used to work as a tech in a recording studio (along with a theatre and TV studio) We have a set of nearfield speakers, and that was about it. However audio reviews are basically: "Its got punchy bass" and "sounds a bit woolly" or "has brilliant clarity in the upper regions" are about as descriptive as review get. N…

>The problem with audio in general is that its really difficult to find decent reviews of the product.

The website linked here is in fact trying to solve this problem, with reviews based on measurements:

https://www.audiosciencereview.com/forum/index.php?reviews/

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