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Topping PA5 Review (Amplifier)

tonycollinet

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I understood the 3.49% number you gave was an average. But that was the number you used to say therefore Topping was selling so many units. At your number of about $12 profit per device, even 10K units would just be $120K profit. I think they must be making a much better margin than that, otherwise it does not look like good business to me. (Unless they are selling an order of magnitude more devices than your guess, which I doubt.)
Welcome to the world of consumer electronics.
 

Stinius

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Hi Stein,
Nice to see you here.

Cheers,
Pavel
Thanks

Nice seeing you again.

Believe it or not but I was kicked out at the other place, I answered a post "from Russia with love"
with:
"To hell with Russia, all the best to Ukrainia"

BTW: it would be nice if Scott and Ovidiu would be more active in threads like this.

Cheers
Stein
 

IPunchCholla

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I understood the 3.49% number you gave was an average. But that was the number you used to say therefore Topping was selling so many units. At your number of about $12 profit per device, even 10K units would just be $120K profit. I think they must be making a much better margin than that, otherwise it does not look like good business to me. (Unless they are selling an order of magnitude more devices than your guess, which I doubt.)
Well, Apple is one of the most, if not the most profitable, so you could just use that number. It still gives 1,250 units across the range for 120k in profits. But my guess, and is it is only that, is they are selling units in the high 4, low 5 digit range at a bare minimum. To get larger profits than 5-10%, you need to push into premium/luxury range, where markups can be much larger. If you’re really good you can charge luxury prices for commodity goods and get your margins really up there. Which is where so much snake oil comes from.
 

pjug

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Well, Apple is one of the most, if not the most profitable, so you could just use that number. It still gives 1,250 units across the range for 120k in profits. But my guess, and is it is only that, is they are selling units in the high 4, low 5 digit range at a bare minimum. To get larger profits than 5-10%, you need to push into premium/luxury range, where markups can be much larger. If you’re really good you can charge luxury prices for commodity goods and get your margins really up there. Which is where so much snake oil comes from.
I am not questioning the number of units sold. I have no idea but I imagine this is as you say, or even greater. I just can't imagine margins are this thin at those numbers. But again, I don't really get this kind of business. It always blows my mind that any kind of electronic device like a mouse or whatever can be sold for $5, $10, $20.
 

B&WTube

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Well, Apple is one of the most, if not the most profitable, so you could just use that number. It still gives 1,250 units across the range for 120k in profits. But my guess, and is it is only that, is they are selling units in the high 4, low 5 digit range at a bare minimum. To get larger profits than 5-10%, you need to push into premium/luxury range, where markups can be much larger. If you’re really good you can charge luxury prices for commodity goods and get your margins really up there. Which is where so much snake oil comes from.
I understand where you are coming from, but using a large company's margins doesn't necessarily mean anything here. Book profit vs taxable income can be massively different- just look at Amazon. In a given electronics company, we don't know how the accounting and spending is done (regular and capital expenses). We don't know what the fixed costs (mortgage, rent, utilities, insurance, admin, etc.) and variable costs (materials, labor, delivery, marketing, etc.) are, in relation to a specific product. We don't know the ways it elects to spend money to reduce taxable income (bonuses, R&D, infrastructure, etc.).

There are so many facets and ways look at a company's financial performance. You really have to look at the direct costs of manufacturing a specific item- which is really tough to drill down to. I have mentored several business owner's on how to evaluate new products/services profitability vs their existing margins- so sometimes this is a difficult task, even for business people who know their companies best.

I hope this doesn't sound preachy and/or condescending- that is not my intent. I simply believe that the direct costs of the PA5 still yields Topping a healthy margin. I also think that what they are charging is a very fair price... if it stays working.
 

IPunchCholla

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I understand where you are coming from, but using a large company's margins doesn't necessarily mean anything here. Book profit vs taxable income can be massively different- just look at Amazon. In a given electronics company, we don't know how the accounting and spending is done (regular and capital expenses). We don't know what the fixed costs (mortgage, rent, utilities, insurance, admin, etc.) and variable costs (materials, labor, delivery, marketing, etc.) are, in relation to a specific product. We don't know the ways it elects to spend money to reduce taxable income (bonuses, R&D, infrastructure, etc.).

There are so many facets and ways look at a company's financial performance. You really have to look at the direct costs of manufacturing a specific item- which is really tough to drill down to. I have mentored several business owner's on how to evaluate new products/services profitability vs their existing margins- so sometimes this is a difficult task, even for business people who know their companies best.

I hope this doesn't sound preachy and/or condescending- that is not my intent. I simply believe that the direct costs of the PA5 still yields Topping a healthy margin. I also think that what they are charging is a very fair price... if it stays working.
Not preachy or condescending at all. I just think knowing/guessing the number of units sold would be interesting and was trying to figure out a way to make a wild ass guess given some-sort of information, since none about Topping is readily available. All I had to go by was publically available info for a wide sector with one example of a company in there field. Which is why my WAG spans an order of magnitude between min and max and even then is overly precise.
 

tonycollinet

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I understand where you are coming from, but using a large company's margins doesn't necessarily mean anything here. Book profit vs taxable income can be massively different- just look at Amazon. In a given electronics company, we don't know how the accounting and spending is done (regular and capital expenses). We don't know what the fixed costs (mortgage, rent, utilities, insurance, admin, etc.) and variable costs (materials, labor, delivery, marketing, etc.) are, in relation to a specific product. We don't know the ways it elects to spend money to reduce taxable income (bonuses, R&D, infrastructure, etc.).

There are so many facets and ways look at a company's financial performance. You really have to look at the direct costs of manufacturing a specific item- which is really tough to drill down to. I have mentored several business owner's on how to evaluate new products/services profitability vs their existing margins- so sometimes this is a difficult task, even for business people who know their companies best.

I hope this doesn't sound preachy and/or condescending- that is not my intent. I simply believe that the direct costs of the PA5 still yields Topping a healthy margin. I also think that what they are charging is a very fair price... if it stays working.
Though gross margin tells you little about profitability after that margin has covered all the indirect costs. Especially r&d, sales and support. none of which are cheap.
 

B&WTube

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Though gross margin tells you little about profitability after that margin has covered all the indirect costs. Especially r&d, sales and support. none of which are cheap.
Yes, BUT the system is incentivized towards spending extra money on growth and cool toys, to avoid taxes. Escalade, G-Wagon, GLS450, Range Rovers all has gross weight over 6,500- making them a write off, which is many businessmen have them (I have 2 years left on mine). There are charity balls, concerts, and dinners that you can spend a fortune on. Tech can get written off quickly. Office decor counts too- 12 foot granite sculpture for the lobby, to replace the old 8’ one. (Cooler than paying taxes on it). Accelerated/itemized depreciation go from writing of the entire cost of building over to 27.5 years, to getting the bulk of the building back in the first 5 years- then you sell it and 1031 it into the next.
Want to take tax free profit from your company by selling off a piece- roll it into an asset protection trust before the sale, and after the sale roll it through an IRS provision to place the funds in an interest bearing insurance plan that you can then borrow against it tax free. Company lost a profit center- but you have now have access to all the money.
Ultimately, it is geared towards expansion, which is great for the economy and jobs- but it does make it tricky to separate out the real numbers- especially on the big companies. When a company has a vary profitable year- often that is a reflection on them not having enough time to spend enough profit, OR having greater sales than projected.
I can geek out all day (which is why I am offering business consulting as part of my latest company), but since this is an audio forum I will stop. PM me if you have any questions.
 

tonycollinet

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Yes, BUT the system is incentivized towards spending extra money on growth and cool toys, to avoid taxes. Escalade, G-Wagon, GLS450, Range Rovers all has gross weight over 6,500- making them a write off, which is many businessmen have them (I have 2 years left on mine). There are charity balls, concerts, and dinners that you can spend a fortune on. Tech can get written off quickly. Office decor counts too- 12 foot granite sculpture for the lobby, to replace the old 8’ one. (Cooler than paying taxes on it). Accelerated/itemized depreciation go from writing of the entire cost of building over to 27.5 years, to getting the bulk of the building back in the first 5 years- then you sell it and 1031 it into the next.
Want to take tax free profit from your company by selling off a piece- roll it into an asset protection trust before the sale, and after the sale roll it through an IRS provision to place the funds in an interest bearing insurance plan that you can then borrow against it tax free. Company lost a profit center- but you have now have access to all the money.
Ultimately, it is geared towards expansion, which is great for the economy and jobs- but it does make it tricky to separate out the real numbers- especially on the big companies. When a company has a vary profitable year- often that is a reflection on them not having enough time to spend enough profit, OR having greater sales than projected.
I can geek out all day (which is why I am offering business consulting as part of my latest company), but since this is an audio forum I will stop. PM me if you have any questions.
That sounds like a very USAnian specific set of tax incentives. I've recently retired from a major EU based manufacturing organisation making (for a world market) industrial control electronics. There was no room in our cost structure for any of the extravagances you have just mentioned, and if you are spending money just to avoid tax on it, it is still money not going to shareholders. Our target profit for the higher volume end of the product range (still no-where near the volume of consumer electronics) was just 10% - we didn't always achieve it. Margins are squeezed further the higher volume you go.
 

B&WTube

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That sounds like a very USAnian specific set of tax incentives. I've recently retired from a major EU based manufacturing organisation making (for a world market) industrial control electronics. There was no room in our cost structure for any of the extravagances you have just mentioned, and if you are spending money just to avoid tax on it, it is still money not going to shareholders. Our target profit for the higher volume end of the product range (still no-where near the volume of consumer electronics) was just 10% - we didn't always achieve it. Margins are squeezed further the higher volume you go.
Sounds condescending towards the US, but I’m not sure why, in light of how the US’s per capital GDP outpaces the EU between 40-52%, depending on how you look at the numbers. It simple- if people are offered spend more money, or pay it to the government- they spend it on something someone else made, who is doing the same thing and the economy runs. How much the shareholders receive is a matter of company strategy. Many companies don’t even pay dividends and shareholders benefit from the rise in stock price.

I’m guessing there margins were tough for your company because you were in a highly regulated country going up against Asia in building electronics. Even Apple’s Foxconn is in China, because it’s darn hard to beat them- not because they are especially good but competing in manufacturing against any country that has almost slave labor rates and doesn’t have strong environmental, workers benefits, and safety is damn hard to do, unless you have a patent that is way ahead of everyone else and in demand.

This is why I think there needs to be some sort of tariff system that the US and EU adopt, where if your country has close to the same EPA, wage, safety, and benefits package- no tariff. However, you wanna run slaves and dump toxic waste- you get the max tariff. The playing field needs to be fair, IMO.
 

Koeitje

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Sounds condescending towards the US, but I’m not sure why, in light of how the US’s per capital GDP outpaces the EU between 40-52%, depending on how you look at the numbers. It simple- if people are offered spend more money, or pay it to the government- they spend it on something someone else made, who is doing the same thing and the economy runs. How much the shareholders receive is a matter of company strategy. Many companies don’t even pay dividends and shareholders benefit from the rise in stock price.

I’m guessing there margins were tough for your company because you were in a highly regulated country going up against Asia in building electronics. Even Apple’s Foxconn is in China, because it’s darn hard to beat them- not because they are especially good but competing in manufacturing against any country that has almost slave labor rates and doesn’t have strong environmental, workers benefits, and safety is damn hard to do, unless you have a patent that is way ahead of everyone else and in demand.

This is why I think there needs to be some sort of tariff system that the US and EU adopt, where if your country has close to the same EPA, wage, safety, and benefits package- no tariff. However, you wanna run slaves and dump toxic waste- you get the max tariff. The playing field needs to be fair, IMO.
GDP isn't really a good measure though. It doesn't really say much. In the end it's about the wellbeing of citizens, and life in Western Europe is pretty much better in every single important metric. That excess GDP is used to fuel overpriced and/or inefficient industries.
 

Bleib

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GDP isn't really a good measure though. It doesn't really say much. In the end it's about the wellbeing of citizens, and life in Western Europe is pretty much better in every single important metric. That excess GDP is used to fuel overpriced and/or inefficient industries.
USA is also deeply in debt no matter which sector you look into, be it business, private or government (not that it had to be this way but the propaganda on the people from the rich is so vast).
A large portion of the public live paycheck to paycheck and can't afford even an sudden expense of 400 USD, so things aren't exactly looking good, not even if you compare how much of the economy millennials have vs boomers.
 

tonycollinet

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Sounds condescending towards the US, but I’m not sure why, in light of how the US’s per capital GDP outpaces the EU between 40-52%, depending on how you look at the numbers. It simple- if people are offered spend more money, or pay it to the government- they spend it on something someone else made, who is doing the same thing and the economy runs. How much the shareholders receive is a matter of company strategy. Many companies don’t even pay dividends and shareholders benefit from the rise in stock price.

I’m guessing there margins were tough for your company because you were in a highly regulated country going up against Asia in building electronics. Even Apple’s Foxconn is in China, because it’s darn hard to beat them- not because they are especially good but competing in manufacturing against any country that has almost slave labor rates and doesn’t have strong environmental, workers benefits, and safety is damn hard to do, unless you have a patent that is way ahead of everyone else and in demand.

This is why I think there needs to be some sort of tariff system that the US and EU adopt, where if your country has close to the same EPA, wage, safety, and benefits package- no tariff. However, you wanna run slaves and dump toxic waste- you get the max tariff. The playing field needs to be fair, IMO.
Condescension not intended - sorry if it came across that way. My intent was just to show that what applies in one part of the world is not necessarily globally applicable.

And we manufactured both in EU and in China. Our china manufacturing was not as much lower in cost levels as you might expect - which is why the little factory I worked at in UK was still in existence. The gap is also closing as Chinese living standards rise. Slave labour and poor environmental performance also not tolerated by most western companies (all ethical ones) in their overseas factories. Even companies in the supply chain are vetted for their ethics in this respect.
 

MAB

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I have been considering buying this amp but have been told there have been problems with it for many people. Is this true?
Yes, this is true:
 

Zek

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I have been considering buying this amp but have been told there have been problems with it for many people. Is this true?
There is thread about this
;)@MAB was quicker...
 

JeffGB

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A little update on my PA5 that is powered by a 32v PSU from an Aiyima a07. It's still working perfectly and has survived it's first heat wave (room temp 31c) and a power outage caused by a fire. The unit was turned on when the power interruption occurred. I have my fingers crossed that the lower voltage (well within TPA3251 specs) will continue to protect the unit. I will post again if I have any problems.
 

Laserjock

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A little update on my PA5 that is powered by a 32v PSU from an Aiyima a07. It's still working perfectly and has survived it's first heat wave (room temp 31c) and a power outage caused by a fire. The unit was turned on when the power interruption occurred. I have my fingers crossed that the lower voltage (well within TPA3251 specs) will continue to protect the unit. I will post again if I have any problems.
Where to get a 32V PS ? Link or specs? Thank you
 
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