Reflections on cable pricing insanity
- Thread starter edorr
- Start date
Price and performance I agree is a nightmare to qualify for cables, and even for some other audio electronics-components (some rile against price of MC cartridges).
But it is not just high end cable factories or even communications products with such targets.
Anyway are you saying the previous cable thread where some explained certain cable brand's pricing having it wrong when they said for a dealer who works exclusive with the manufacturer has roughly the calculation 30% manufacturer 70% dealer?
If you do not disagree with what was said in the other thread, then the margins are just the same for cables as much of the electronic equipment (ignoring the anomalies that can be either lower or much higher).
Furthermore one does not have to purchase the more expensive model in a manufacturers line; how much is the entry Nordost,Atlas,TA or Crystal Cable for high end?
What publications should be highlighting is pointing out in better detail when reviewing cables or doing articles:
- those who are actual cable manufacturers
- those that OEM cables and just terminate it, so other cable firms could be selling very similar product and differences down to connectors and labour quality.
- those that specify a cable structure/geometry to be manufactured for them by an industry expert that they then terminate
- Price (or where it roughly sits in the range) and quality of the terminations-connectors involved for said product, these vary from cents to $100s.
But lets be honest, a successful niche (audio market is pretty niche when looking at global industries) manufacturer SHOULD have a profit margin of at least 40% for a product line in general BEFORE sales channel-dealers.
Look at profit margins on certain car models and relationship to that companies financial woes; Ford, Fiat, etc etc.
And then those that have better margins in the higher end of the market.
Appreciate this is oversimplifying but this is one reason adding to woes in the more mainstream car industry (where they try to reduce product line cost and improve margins these days by sharing same design and parts platform).
I can understand many have different views on this, but I think many forget entry models and just want the best at what they feel is a good price for themselves - I would like Crystal Cable Ultra Diamond set but not going to complain about the profit margin and demand manufacturers and dealers only have 25% to 30% each for said margin, especially when loyal customers can haggle for a 15% discount without too much hassle on new cables.
Andre, you do agree customers can just wait until an expensive product is sold 2nd hand or ex-demo
Not everyone buys a new Ferrari or Porsche 911.
BTW I am not defending those insane cables for $10k+ a pair for 1m speaker cable/$5k+ a pair for 1m interconnect, or extreme statement cables that command further price on prestige, or those that DO fall into bracket 2 above and charge horrendous prices for a moderate priced OEM loom they terminate.
Cheers
Orb
Price and performance I agree is a nightmare to qualify for cables, and even for some other audio electronics-components (some rile against price of MC cartridges).
But it is not just high end cable factories or even communications products with such targets.
Anyway are you saying the previous cable thread where some explained certain cable brand's pricing having it wrong when they said for a dealer who works exclusive with the manufacturer has roughly the calculation 30% manufacturer 70% dealer?
If you do not disagree with what was said in the other thread, then the margins are just the same for cables as much of the electronic equipment (ignoring the anomalies that can be either lower or much higher).
Furthermore one does not have to purchase the more expensive model in a manufacturers line; how much is the entry Nordost,Atlas,TA or Crystal Cable for high end?
What publications should be highlighting is pointing out in better detail when reviewing cables or doing articles:
- those who are actual cable manufacturers
- those that OEM cables and just terminate it, so other cable firms could be selling very similar product and differences down to connectors and labour quality.
- those that specify a cable structure/geometry to be manufactured for them by an industry expert that they then terminate
- Price (or where it roughly sits in the range) and quality of the terminations-connectors involved for said product, these vary from cents to $100s.
But lets be honest, a successful niche (audio market is pretty niche when looking at global industries) manufacturer SHOULD have a profit margin of at least 40% for a product line in general BEFORE sales channel-dealers.
Look at profit margins on certain car models and relationship to that companies financial woes; Ford, Fiat, etc etc.
And then those that have better margins in the higher end of the market.
Appreciate this is oversimplifying but this is one reason adding to woes in the more mainstream car industry (where they try to reduce product line cost and improve margins these days by sharing same design and parts platform).
I can understand many have different views on this, but I think many forget entry models and just want the best at what they feel is a good price for themselves - I would like Crystal Cable Ultra Diamond set but not going to complain about the profit margin and demand manufacturers and dealers only have 25% to 30% each for said margin, especially when loyal customers can haggle for a 15% discount without too much hassle on new cables.
Andre, you do agree customers can just wait until an expensive product is sold 2nd hand or ex-demo
Not everyone buys a new Ferrari or Porsche 911.
BTW I am not defending those insane cables for $10k+ a pair for 1m speaker cable/$5k+ a pair for 1m interconnect, or extreme statement cables that command further price on prestige, or those that DO fall into bracket 2 above and charge horrendous prices for a moderate priced OEM loom they terminate.
Cheers
Orb
Dude, you are killing me.
We can go on all day with economic theory, economies of scale, etc.
At the end of the day, I personally sum up the cable market as they found a system
to profiteer, with the help of much of the audio press, and there is no turning back.
No blind tests, much pseudo science, and clever marketing. Fine. They created Cable Lust,
and maybe we should be commending them for their cleverness.
In the end I should be thankful that people with money to burn are buying 6 figure cables. Maybe it subsidizes
my middle of the line purchases.
Andre, I for one am thankful that you enlightened us as to the pricing strategy of many cable dealers. I had long suspected this was the case. Personally, I have no problem with a dealer attempting to maximize his profit, if that is what the market will bear. However, what really gripes me is when a cable dealer begins to cry foul and moan about the fact that he is losing money on the sale when one tries to negotiate a better sale price. A while back, I had a local dealer do exactly this with me;I had bought some expensive cable from him, and he still cried about the deal...even though I found out later he made a bundle. I will NOT be buying from this guy again. BTW, I have a suspicious feeling that anyone with money to burn who buys 'stupid priced' cabling isn't going to have money to burn for too long. Just IMHO.
is when a cable dealer begins to cry foul and moan about the fact that he is losing money on the sale when one tries to negotiate a better sale price. A while back, I had a local dealer do exactly this with me;I had bought some expensive cable from him, and he still cried about the deal...even though I found out later he made a bundle. I will NOT be buying from this guy again. BTW, I have a suspicious feeling that anyone with money to burn who buys 'stupid priced' cabling isn't going to have money to burn for too long. Just IMHO.Davey,
I agree that sadly there are a fair few dealers around that do more damage than good, this means a good dealer may not be that local
I have had the same experience in the past, but then I have also seen and experienced some really great dealers who are very fair.
Cheers
Orb
I agree that sadly there are a fair few dealers around that do more damage than good, this means a good dealer may not be that local
I have had the same experience in the past, but then I have also seen and experienced some really great dealers who are very fair.
Cheers
Orb
Andre thanks
Do you disagree with the previous cable thread that suggested profit margin is roughly 100% but this is split at best for dealers 30%manufacturer (talking about large brand name such as TA that was mentioned) and 70%ish dealer if they sell exclusive?
Do you agree there are entry model cables from nearly all the high end cable manufacturer?
Do you agree that one should not have the mindset of ignore cheap-middle range models and want the top tier at a cheap price.
Do you agree that it is just as important important understanding what type of cabling manufacturer a company is (in context of OEM looms, price and connectors used, bespoke made to spec,true cable manufacturer,manufacturing process involved)?
If prices were cheaper would you drop demand for 10% to 15% discounts by dealer?
Should the same case you propose then be put to MC cartridge and other high priced small audio component manufacturers and again we demand the price and margins are lowered?
I do not see you complaining about MC cartridges for the recognised quality high end
Do you agree that dealers must spend at least several hundred thousand of their own cash upfront on stock and demo gear (talking about high end dealers)?
What is the resale value of said demo stock?
This is not being made up and one of the more painful aspects of being a dealer, even though a good distributor can assist a bit at times with certain loan demo stock.
I cannot see the point complaining about profit margins unless one knows the specifics of a cabling product and appreciate business models and what differentiates between a failing business and one that survives.
Hence why it is useful understanding the car industry (where households on average has 2 cars and this is massive compared to audio industry) is in such trouble that has manufacturer-dealer setup and too competitive profit margins, and why higher end car industry is doing just fine at both the associated dealers and manufacturers.
For good cables manufacturers, their products do seem to follow similar profit margin to that of electronics but the structure is a bit different; both have at the point of the customer reached 100% of original cost - if removing anomalies such as extreme statement cables.
Anyway for me it would make better sense for audio publications to show those cabling manufacturers who do the complete cycle and costs in comparison to others and how it relates to composition and what used for cable and terminations.
This then provides some kind of benchmark and understanding; after all there is a massive price difference between using basic connectors and say top model Furutech cryogenic one, and same could be said about cable conductors-construction process-dielectric-etc.
This does not answer whether there is actual benefit to such expensive design-connectors compared to cheaper ones, but that is a different subject to what is discussed here.
This is digressing, but another major problem for the audio industry and especially front line dealers is there are just way too many manufacturers these days for such a niche market.
At some point there needs to be a large consolidation, because there are just too many manufacturers competing for an ever decreasing circle of dedicated 2-channel quality sound criteria customers - this puts strain on dealers on what to stock.
Again though no audio publications has done articles focusing on the challenges of audio dealers include their own business model (including their up front costs and depreciation of demo gear they pay and critically store) - such articles are needed to appreciate full context of manufacturer-dealer and what is required for them to not just survive but enough revenue and profit to actually bother being a dealer.
Cheers
Orb
Do you disagree with the previous cable thread that suggested profit margin is roughly 100% but this is split at best for dealers 30%manufacturer (talking about large brand name such as TA that was mentioned) and 70%ish dealer if they sell exclusive?
Do you agree there are entry model cables from nearly all the high end cable manufacturer?
Do you agree that one should not have the mindset of ignore cheap-middle range models and want the top tier at a cheap price.
Do you agree that it is just as important important understanding what type of cabling manufacturer a company is (in context of OEM looms, price and connectors used, bespoke made to spec,true cable manufacturer,manufacturing process involved)?
If prices were cheaper would you drop demand for 10% to 15% discounts by dealer?
Should the same case you propose then be put to MC cartridge and other high priced small audio component manufacturers and again we demand the price and margins are lowered?
I do not see you complaining about MC cartridges for the recognised quality high end
Do you agree that dealers must spend at least several hundred thousand of their own cash upfront on stock and demo gear (talking about high end dealers)?
What is the resale value of said demo stock?
This is not being made up and one of the more painful aspects of being a dealer, even though a good distributor can assist a bit at times with certain loan demo stock.
I cannot see the point complaining about profit margins unless one knows the specifics of a cabling product and appreciate business models and what differentiates between a failing business and one that survives.
Hence why it is useful understanding the car industry (where households on average has 2 cars and this is massive compared to audio industry) is in such trouble that has manufacturer-dealer setup and too competitive profit margins, and why higher end car industry is doing just fine at both the associated dealers and manufacturers.
For good cables manufacturers, their products do seem to follow similar profit margin to that of electronics but the structure is a bit different; both have at the point of the customer reached 100% of original cost - if removing anomalies such as extreme statement cables.
Anyway for me it would make better sense for audio publications to show those cabling manufacturers who do the complete cycle and costs in comparison to others and how it relates to composition and what used for cable and terminations.
This then provides some kind of benchmark and understanding; after all there is a massive price difference between using basic connectors and say top model Furutech cryogenic one, and same could be said about cable conductors-construction process-dielectric-etc.
This does not answer whether there is actual benefit to such expensive design-connectors compared to cheaper ones, but that is a different subject to what is discussed here.
This is digressing, but another major problem for the audio industry and especially front line dealers is there are just way too many manufacturers these days for such a niche market.
At some point there needs to be a large consolidation, because there are just too many manufacturers competing for an ever decreasing circle of dedicated 2-channel quality sound criteria customers - this puts strain on dealers on what to stock.
Again though no audio publications has done articles focusing on the challenges of audio dealers include their own business model (including their up front costs and depreciation of demo gear they pay and critically store) - such articles are needed to appreciate full context of manufacturer-dealer and what is required for them to not just survive but enough revenue and profit to actually bother being a dealer.
Cheers
Orb
Last edited:
No doubt someone will come up with an audiophile device to clean up the ether in your room to get better transmission of the wireless signal.
Andre, I for one am thankful that you enlightened us as to the pricing strategy of many cable dealers. I had long suspected this was the case. Personally, I have no problem with a dealer attempting to maximize his profit, if that is what the market will bear. However, what really gripes me
Again, I deserve no special mention. I too have NO problem with all parties involved making a profit. I am FOR capitalism.
You are doing the right thing by not shopping with this dealer again. We vote with our dollars. That is why information to consumers is KING.
The reason I take a stand against brazen pricing that caters to the rich is because it drives up prices FOR THE REST OF US when they all follow suit.
+1.
BTW, nobody that I know stays rich for very long if they don't take good care of their money and spend it wisely. Again, IMHO.
+1.
BTW, nobody that I know stays rich for very long if they don't take good care of their money and spend it wisely. Again, IMHO.
Ah, then that does not bode well for that [fill in the blank] hedge fund manager who just bought a Picasso for 150 Million.
Last edited by a moderator:
(...) Personally, I have no problem with a dealer attempting to maximize his profit, if that is what the market will bear. However, what really gripes me
DaveyF,
You are very emotional - some people will always have this attitude of cry foul and moan. It is part of their nature, I hope your view on cables is not due to poor human experiences with dealers. Can you quantify with an exact number what you mean by "stupid priced"? For many people this applies to something costing more than zip cord.
I fail to understand why any debate about cables needs to use the words "stupid" or "sucker" to expose points of view.
Ah, then that does not bode well for that [fill in the blank] hedge fund manager who just bought a Picasso for 150 Million.
If he is in the hedgie's major league, he had to put in all of one month of hard work to scrape that together (after he paid his hefty 15% taxes).
Last edited by a moderator:
The logic is fine...but only if consumers have sufficient knowledge to make rational choices. Cable manufacturers won't give it to them. Quite the opposite.
There is an even greater problem....none of us audiophiles have ever produced solid evidence that well-made cables sound different. Us audiophiles keep claiming it, but we never prove it. And that opens the possibility that notions like 'high' or 'mid' price have no meaning outside marketing. It's a minefield.
What? I've proven it with my own ears. Come listen to my system. Bring what ever cable you want...I can easily hear these differences. Now if you argue if it's worth the price I paid..that becomes a opinion (which you are certainly entitled to)...it is a fact the cables I have now are better than what I had before...
Hello, paskinn. Actually, cable differences have been proven. With measurements and with an overwhelming amount of empirical evidence. All due respect but perhaps you are not looking in the right places for this proof.
Tom
Tom
The last thing I want is to get into the cable wars; but there has never, to my knowledge, been any 'proof' that decently specced cables sound different. Any of us can insist we hear differences (I think I hear differences) but every time there is a double blind test, we flunk it. We do ourselves no favours by loudly proclaiming 'facts' that aren't facts to the general observer. What's more, note that every cable seller has a different set of 'facts' to boost their claims.If the guys who make and sell cables can't even agree among themselves about the physics, why should anyone else?
As I said, I think cables can sound different ; what I don't believe is that we can offer any real,solid, evidence to back our beliefs. And individual claims about what they hear are valueless if those claims fail all public tests Belief in'cables'has more in common with religion than science. Which doesn't make it untrue, just impossible to prove. You either believe or you don't. I won't say more because I don't want to get entangled in one of thos interminable debates which have no truth conditions. Believe, or don't believe.
Cables are worth exactly what you are willing to pay for them. Every hardware store and home improvement store sells zip cord for those who *know* that cables make no difference. It's all relative. To Joe six-pack who may not even have $1000 invested in his entire home theater/stereo system, someone who would spend $1000 on a pair of speaker cables is stone-cold crazy.
Similar threads
 | Steve Williams Site Founder | Site Owner | Administrator |  | Ron Resnick Site Co-Owner | Administrator |  | Julian (The Fixer) Website Build | Marketing Managersing |