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Why is there hardly any price competition in hifi?

Bear123

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I've been looking for a new pair of speakers for a while. Currently I've got 2 brands/ranges on my shortlist: Kef R-series and the Revel Performa3. So I looked around if I can find a deal on either of these, but they are priced the same everywhere. Not just in The Netherlands, but all across Europe (to be fair, KEF is 10% cheaper in the UK). Everybody seems to be advertising with the MSRP. So I am guessing there is some unwritten rule by dealers to only advertise the MSRP and not some form of price fixing. Can anyone explain to me why there doesn't seem to be any form of price competition going on (apart from very popular B&W models and such)? Pick any other consumer electronics product and you will find many different offerings, but for hifi it all seems to be exactly the same? Why is that?

Should I just ask for a discount, because paying MSRP seems to be crazy? I work for a big (online) retailer were we sell some hifi speakers (not brands I'm interested in, but very well known and respected brands) and the margins on them are pretty high. Probably the highest of all the electronics we sell...

I'd ask for a substantial discount on the Revels. Things might be a bit different in Europe due to the cost of importing maybe, but I was able to get a $2000 MSRP pair of Revels for $1425 plus shipping. Adding in the $750 MSRP C25 center channel, with shipping for all three was about $1950. Could have purchased F206 for "normal" discount of $2,500, special sale of $2100. MSRP is $3500. I didn't price out any higher lines. This was from a dealer without a brick and mortar demo shop so you may not be able to get those kinds of discounts from a store with overhead. But I would think around 20% would still be feasible, maybe?
 

NoMoFoNo

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What I want to see, as a consumer, is for somebody (most likely to occur in Asia) to manufacture genuinely high-quality speakers and sell them at very attractive pricing for buyers in the west. In other words, an outfit like Topping that makes and offers very high quality, objectively high performing gear at very, very un-boutique prices. No offense to main line speaker manufacturers and dealers, but prices for well-known brand name units are ridiculously high IMO.

When will a Topping analog knock the speaker market on its ass? I'm not talking fringe ChiFi that we all know, I'm talking units that make 'audiophools' rage in all of the forums. High quality, very fair pricing, attractive to western buyers. It's a market ripe for the picking IMO. When I see subjectivists railing against these units the way I see them pick apart Topping on other forums I'll know they've started to hit the sweet spot.
 

maverickronin

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In other words, an outfit like Topping that makes and offers very high quality, objectively high performing gear at very, very un-boutique prices.

Speakers are a lot bigger and heavier than DACs and headamps, which is an impediment to Topping's rock bottom pricing. The volumes yould be a lot lower too. I can't imagine selling that much of anything larger that 5-inches monitor...
 

RayDunzl

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What I want to see, as a consumer, is for somebody (most likely to occur in Asia) to manufacture genuinely high-quality speakers and sell them at very attractive pricing for buyers in the west.

Is there, on balance, anything to propose for the West to produce. with genuinely high quality, and very attractive pricing for buyers in the East?
 

dwkdnvr

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What I want to see, as a consumer, is for somebody (most likely to occur in Asia) to manufacture genuinely high-quality speakers and sell them at very attractive pricing for buyers in the west. In other words, an outfit like Topping that makes and offers very high quality, objectively high performing gear at very, very un-boutique prices. No offense to main line speaker manufacturers and dealers, but prices for well-known brand name units are ridiculously high IMO.

When will a Topping analog knock the speaker market on its ass? I'm not talking fringe ChiFi that we all know, I'm talking units that make 'audiophools' rage in all of the forums. High quality, very fair pricing, attractive to western buyers. It's a market ripe for the picking IMO. When I see subjectivists railing against these units the way I see them pick apart Topping on other forums I'll know they've started to hit the sweet spot.

Well, sure - I want a Porsche Cayman for the price of a Chevy Sonic too, but that doesn't mean I'll get one. We already have ID companies like Ascend offering relatively economical models, and Golden Ear started out with exactly the goal that you describe as far as I can tell - exactly how cheap do you think it's possible to create a decent speaker?

Let's take a staple - the TMWW floor stander. What would you consider a fair price for a 'good' version of that? The Revel F206 is 3500/pair (list). The Wharfedale Evo 4.4 is $2k/pair (MSRP). The SVS Prime tower is $1k/pair. A DIY version is available as the 'mini statements' in kit form here https://meniscusaudio.com/product/mini-statements-bare-bones-kit-pair/ and they're $700 without cabinets - and that is using 'high value' raw drivers for the most part. How much lower do you think you can go and still have a viable business model - offering warranty, accounting for loss due to shipping damage, absorbing shipping costs, offering multiple finishes etc.
 

TimVG

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I've been looking for a new pair of speakers for a while. Currently I've got 2 brands/ranges on my shortlist: Kef R-series and the Revel Performa3. So I looked around if I can find a deal on either of these, but they are priced the same everywhere. Not just in The Netherlands, but all across Europe (to be fair, KEF is 10% cheaper in the UK). Everybody seems to be advertising with the MSRP. So I am guessing there is some unwritten rule by dealers to only advertise the MSRP and not some form of price fixing. Can anyone explain to me why there doesn't seem to be any form of price competition going on (apart from very popular B&W models and such)? Pick any other consumer electronics product and you will find many different offerings, but for hifi it all seems to be exactly the same? Why is that?

Should I just ask for a discount, because paying MSRP seems to be crazy? I work for a big (online) retailer were we sell some hifi speakers (not brands I'm interested in, but very well known and respected brands) and the margins on them are pretty high. Probably the highest of all the electronics we sell...

I'm from Belgium (hi neighbour) - It's true, Revel tends to be msrp over here. I bought mine used, but came with the original invoice - which was (or close to) msrp. Which model are you interested in btw?
 
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Koeitje

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I'm from Belgium (hi neighbour) - It's true, Revel tends to be msrp over here. I bought mine used, but came with the original invoice - which was (or close to) msrp. Which model are you interested in btw?
M106
 

amirm

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If I can ask, Amir....isn't that how most whole-home solutions would be sold? How does the manufacturer really know what the customer is charged for their component(s) in such a case?
Home automation doesn't have this exact issue. But has a similar problem with a desperate dealer telling the customer whatever our bid is, he will do it for 10% less! We wind up doing all the analysis, writing up a design and paperwork, and they run away with the business. Meanwhile they don't make any real money.

To the topic of this thread though is that the customer tells them! Case in point. Years ago someone reached out to me online asking if we would sell our demo unit of a product at a discount. I asked him if he was working with a local dealer and he swore he was not. So we sold the unit at demo prices. Immediately I get an angry call from the manufacturer saying we had screwed another dealer the guy was working with. He had spent hours at his showroom, even borrowed a unit to listen, only to come to us to buy it at a discount. And of course he had gone an told the dealer he had bought it from us at a discount. :( Even though I was personally friends with the manufacturer, he was ready to rip out our dealership until I showed him the trail of messages. Then he was fine.

Often the person wants to get the same discount but buy locally. So they go and tell the dealer they bought something at lower price elsewhere so surely they should match the price. Or be proud of telling others they bought something at a discount as some of you are doing here. :)

Bottom line is that selling expensive products despite high margins, often turns out to be a money loser. Retail space, salesman base salary and commision is not free. On top of that there are business taxes and paperwork. This is why my company completely got out of retail sales years ago.
 

mansr

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He had spent hours at his showroom, even borrowed a unit to listen, only to come to us to buy it at a discount.
Such behaviour could perhaps be deterred by allowing auditioning only for a fee which would then be deducted from a subsequent purchase.
 

NoMoFoNo

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That's a much larger question than audio IMO. We were all placed on this train 40 years ago. The global economy, production chasing lowest labor, wages having not increased almost at all in the US in decades now. That leaves the consumer to chase after best answers for the least dollars out of pocket. I don't have answers to the big questions underlying your question.

Is there, on balance, anything to propose for the West to produce. with genuinely high quality, and very attractive pricing for buyers in the East?
 

NoMoFoNo

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How much lower could those prices go? Much lower most likely, IMO, but it would require higher volume and much lower production costs, such as those found in Asian countries these days. Do I have ANY doubt that a manufacturer in China, or Vietnam, or Malaysia could sell us high-performance speakers for much less than we have become conditioned to pay? I have zero doubt.

If I had told you ten years ago that Asian companies would sell world-class audio gear, gear that embarrasses equipment costing multiples more from boutique brands, most hobbyists would have been skeptical. Yet here we are.


Well, sure - I want a Porsche Cayman for the price of a Chevy Sonic too, but that doesn't mean I'll get one. We already have ID companies like Ascend offering relatively economical models, and Golden Ear started out with exactly the goal that you describe as far as I can tell - exactly how cheap do you think it's possible to create a decent speaker?

Let's take a staple - the TMWW floor stander. What would you consider a fair price for a 'good' version of that? The Revel F206 is 3500/pair (list). The Wharfedale Evo 4.4 is $2k/pair (MSRP). The SVS Prime tower is $1k/pair. A DIY version is available as the 'mini statements' in kit form here https://meniscusaudio.com/product/mini-statements-bare-bones-kit-pair/ and they're $700 without cabinets - and that is using 'high value' raw drivers for the most part. How much lower do you think you can go and still have a viable business model - offering warranty, accounting for loss due to shipping damage, absorbing shipping costs, offering multiple finishes etc.
 

Wes

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Is there, on balance, anything to propose for the West to produce. with genuinely high quality, and very attractive pricing for buyers in the East?

jet turbines; aircraft - other industrial products
 
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Koeitje

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There's 5 pair (new) on eBay UK for 999GBP /pair - if you ask nice they'll probably ship.
Yes, I noticed and I'm already in contact with them. Waiting for a shipping quote.
 

digitalfrost

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As noted, the contractual requirement is to not advertise below certain price. So you will not be able to use online price shopping tools to find a discount.

As said dealers are afraid of getting dropped by some brands so they won't advertise lower prices online.
Here in Germany many believe that for example for B&W you always pay the list price, but if you get your butt up and go to a dealer and have a honest and serious talk you can get some very serious discounts.
The problem is that "generation internet" thinks prices can only googled or asked per email and exactly there you won't get any discounts as its a written evidence which dealer don't want.

I have to agree.

I usually buy everything online, but I have made very good experiences with independent hifi stores. I was intimidated to walk in at first, the window had Accuphase, McIntosh, you name it. Couldn't find anything affordable there. My friend wanted a stereo speaker set with amplifier for ~ 2000€. I thought the guy would laugh us out of the store.

But he told us to come back next week, and of all 3 dealers we went to, he had the best speakers (KEF and Focal), no bullshit and gave us a discount that I couldn't find anywhere on the internet.

I'm recommending that store to everyone now. For the german readers: https://mt-hifi.de/

The whole listening experience was a huge amount of fun, and we got a deal we couldn't have had online. TL;DR: Go to independent hifi dealers and talk with them. It's worth it.
 

dwkdnvr

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How much lower could those prices go? Much lower most likely, IMO, but it would require higher volume and much lower production costs, such as those found in Asian countries these days. Do I have ANY doubt that a manufacturer in Chins or Vietnam could sell us high-performance speakers for much less than we have become conditioned to pay? I have zero doubt.

Well, I'm rather baffled. Do you really think that nobody has had this idea before? That every audio manufacturer in existence isn't already building everything possible in China to take advantage of the cheapest possible pricing? (or even that every single example I gave isn't already built in China?) That they aren't using the cheapest possible supplies that meet their criteria? I mean even Revel stopped using SB Acoustics drivers and started using their own clones just to save some money.

IMHO the sad reality is that there just really isn't a particularly big market for good standalone speakers at this point. Soundbars, tiny 'lifestyle' HTIB setups, bluetooth speakers or headphones off their phones is where people are these days. Smaller and cheaper is what is winning the market since very very few people will do anything other than stick the speakers onto a shelf or into an entertainment unit - the sophisticated ones may run an Audyssey correction, if you're lucky. And where a market DOES exist for something better, 2-way active DSP monitors are going to provide the best performance per $$$ by far. Add a sub to that if you're serious. Having gotten that far, how much of a market is left over for a decent 3-way or floorstander? Virtually none, and what is left is really not all that price-sensitive since you're already talking about the "high end" guys. Even on this forum which is largely free from the sillyness of the boutique high-end world, do you get the impression that there are a bunch of people who can't afford $1k for speakers but would be all over a $600 floorstander? I doubt it because those guys are buying JBL 305s and adding a sub.

AND, lets not lose sight of the lesson of the Harmon preference rating - BASS is first and foremost the largest driver of immediate subjective preference. A HTIB system could easily be perceived as 'better' than say a Elac UF5 by a huge swath of the buying public simply due to the sub. And if you're going to use a sub anyway a floorstander is superfluous.

So, round and round. Cheap 2-ways are a dime a dozen - if you think there is any money to be made there through supply chain management, I wish you luck. Get into 3-ways and floorstanders, and there just simply isn't enough market to do what you're describing IMHO.

If I had told you ten years ago that Asian companies would sell world-class audio gear, gear that embarrasses equipment costing multiples more from boutique brands, most hobbyists would have been skeptical. Yet here we are.

Apples and oranges.
a) electronics manufacturing is almost completely automated - inherently low per-unit cost
b) volume required for price breaks is rather low
c) warehousing and shipping costs are very low compared to speakers
d) warranty service is infrequent due to easier QA and is cheaper; shipping damage is significantly less of a problem
e) most of these are being sold into the headphone market, which at this point is much larger than the high-end home speaker market
f) electronics aren't subject to the laws of acoustics - unfortunately bigger IS better with (passive) speakers
g) active DSP monitors will always have big advantages over passive equivalents
 

Geert

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Well, I'm rather baffled. Do you really think that nobody has had this idea before? That every audio manufacturer in existence isn't already building everything possible in China to take advantage of the cheapest possible pricing?
Hegel amplifiers. Strictly controlled pricing with the risk of loosing dealership, pretty expensive, made in China applying budget build quality. They might have good technology and perform well, but I couldn't spend my money on it.
 

carlob

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By the way, why Revel has such a terrible distribution in Europe? For sure in Italy the Salon2 are impossible to listen to, in the past I've contacted a couple of dealers and seems it's difficult to find also the cheapest models.
 

NoMoFoNo

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Points well taken, especially the viability of powered DSP monitors paired with subwoofer. To take my point even further though, the JBL 308s are $500 for a pair, likely assembled in Asia (not confirmed by me though). Three weeks ago, I would have wondered aloud how long it would be (assuming powered DSP monitors sell well) before Asians would crank out 'JBR 309' models for $300 for the pair. In a coming-new-world after Coronavirus, now I wonder if globalism is going to become a victim of this virus. Will the world be willing to trust in supply chains that reach around the world again anytime soon? A question worth asking for sure, assuming we all survive this mess.


Well, I'm rather baffled. Do you really think that nobody has had this idea before? That every audio manufacturer in existence isn't already building everything possible in China to take advantage of the cheapest possible pricing? (or even that every single example I gave isn't already built in China?) That they aren't using the cheapest possible supplies that meet their criteria? I mean even Revel stopped using SB Acoustics drivers and started using their own clones just to save some money.

IMHO the sad reality is that there just really isn't a particularly big market for good standalone speakers at this point. Soundbars, tiny 'lifestyle' HTIB setups, bluetooth speakers or headphones off their phones is where people are these days. Smaller and cheaper is what is winning the market since very very few people will do anything other than stick the speakers onto a shelf or into an entertainment unit - the sophisticated ones may run an Audyssey correction, if you're lucky. And where a market DOES exist for something better, 2-way active DSP monitors are going to provide the best performance per $$$ by far. Add a sub to that if you're serious. Having gotten that far, how much of a market is left over for a decent 3-way or floorstander? Virtually none, and what is left is really not all that price-sensitive since you're already talking about the "high end" guys. Even on this forum which is largely free from the sillyness of the boutique high-end world, do you get the impression that there are a bunch of people who can't afford $1k for speakers but would be all over a $600 floorstander? I doubt it because those guys are buying JBL 305s and adding a sub.

AND, lets not lose sight of the lesson of the Harmon preference rating - BASS is first and foremost the largest driver of immediate subjective preference. A HTIB system could easily be perceived as 'better' than say a Elac UF5 by a huge swath of the buying public simply due to the sub. And if you're going to use a sub anyway a floorstander is superfluous.

So, round and round. Cheap 2-ways are a dime a dozen - if you think there is any money to be made there through supply chain management, I wish you luck. Get into 3-ways and floorstanders, and there just simply isn't enough market to do what you're describing IMHO.



Apples and oranges.
a) electronics manufacturing is almost completely automated - inherently low per-unit cost
b) volume required for price breaks is rather low
c) warehousing and shipping costs are very low compared to speakers
d) warranty service is infrequent due to easier QA and is cheaper; shipping damage is significantly less of a problem
e) most of these are being sold into the headphone market, which at this point is much larger than the high-end home speaker market
f) electronics aren't subject to the laws of acoustics - unfortunately bigger IS better with (passive) speakers
g) active DSP monitors will always have big advantages over passive equivalents
 
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