[HN Gopher] "Secrets" about the consumer audio business you may ...
___________________________________________________________________
"Secrets" about the consumer audio business you may find
interesting
Author : jensgk
Score : 555 points
Date : 2022-09-13 22:21 UTC (1 days ago)
(HTM) web link (www.audiosciencereview.com)
(TXT) w3m dump (www.audiosciencereview.com)
| m463 wrote:
| 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 gone.
|
| In consumer audio, I fear that same - maybe we need some way to
| navigate away from the 7-eleven iphone headphones, from the
| bose/beats continuum, and to maybe find something like the
| moondrop blessing2.
|
| is it possible?
|
| EDIT: I do like schiit audio https://schiit.com
| rr808 wrote:
| 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.
| eru wrote:
| And in cases where you did not want that overhead, this is
| exactly how progress looks like.
|
| At least some kinds of progress.
| concordDance wrote:
| 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?
| rr808 wrote:
| Agreed, its really time to start buying reputable brands
| again. Or perhaps go to a shop and dont complain about
| retail markups. :)
| repler wrote:
| 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
| xani_ wrote:
| That's an unfortunate name for a company...
| TylerE wrote:
| Oh no, they very very very much lean in to it.
| Lio wrote:
| From the home page:
|
| _> Yes, that is our name. Shih-tah. It 's a proud German
| name, host to a long line of audio engineers who slaved
| away in crumbling Teutonic fortresses as lightning lashed
| the dark lands outside, working to perfect the best
| amplification devices in the world..._
|
| _> Or, well, no. Yep, Schiit is our name, and it 's
| pronounced, well, like "hey man, that's some really good
| Schiit!" And now that we have your attention..._
|
| I'd not heard of them before, they look great.
| TylerE wrote:
| I've been running one of their Jotenheim headphone
| amps/dacs for years. Killer gear, and not just "for the
| money".
| r3trohack3r wrote:
| They sell branded toilet paper:
| https://www.schiit.com/products/toilet-paper
| ilaksh wrote:
| $5 wired earbuds with built in microphone at Walmart.
| rascul wrote:
| I've found that the local hardware store usually has the same
| or similar stuff as Lowe's or Home Depot, except with a higher
| price tag.
| sokoloff wrote:
| Worse selection, less organized, higher prices, and limited
| online presence? You might be in a local hardware store.
|
| You might snag a deal on some dusty new-old-stock part, but
| for just about anything else, I much prefer the box stores or
| Amazon or supplyhouse.com (I can vouch heavily for these
| guys, who used to be called pexsupply.com)
| jrowen wrote:
| One major difference though (at least in my experience with
| hardware stores in rural Northern California) is that many
| of the employees actually have a good amount of experience
| with the tools and materials and can offer recommendations
| and help you figure things out and make decisions.
|
| Good luck getting most HD employees to do much beyond
| looking up a location on their phone slower than you can do
| yourself.
|
| I'm generally willing to pay for the experience of being
| surrounded by a tenured team who know what they're doing
| rather than a rotating cast operating at inattentive high
| schooler levels, but I do still go to HD a lot.
|
| And there was one store I stopped going to because the old
| guy knew too much and could tell I was doing things out of
| my depth and - while being somewhat helpful - made me
| anxious. At HD if you buy a weird combination of stuff or
| just don't have the air of a pro, nobody's paying attention
| or knows the difference.
| LeoPanthera wrote:
| If you like Schiit and are willing to trade "Made in America"
| for "Best audio at any price", but for about the same price,
| you'd probably like Topping, too. https://www.tpdz.net
| snvzz wrote:
| The Topping DX3 Pro+ sure measures well, with a crazy
| competitive price.
|
| Together with the trusted Sennheiser HD600 headphone set, it
| is my standard advice when anybody asks.
| sidpatil wrote:
| > 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 gone.
|
| Both Lowe's and Home Depot sell metal faucets, taps, knobs,
| etc., in a variety of styles.
| abcc8 wrote:
| They could be referring to a toilet paper roller. Just had to
| replace one of mine and realized while shopping that I
| haven't seen a proper metal one of those in in years.
| asveikau wrote:
| I got one on Amazon.
| sidpatil wrote:
| The toilet paper holders we got for our bathroom
| renovations are metal, and from The Home Depot if I recall
| correctly.
| 8f2ab37a-ed6c wrote:
| As the owner of a pair of high-end Audeze, this article makes me
| wonder how much of the cost is marketing, as opposed to going
| towards "quality", for whatever definition of it. It's nicely
| built, sounds great, very neutral for production work, but..
| $1000 great? Could I have gotten comparable performance for
| 1/10th the price?
|
| Is there an objective way of measuring "quality" in this space
| for premium products?
| JohnBooty wrote:
| Yeah, absolutely. Equipment's not cheap, but there are folks
| out there doing including the guy who runs AudioScienceReview:
|
| https://www.audiosciencereview.com/forum/index.php?threads/a...
|
| https://www.audiosciencereview.com/forum/index.php?pages/Hea...
| lagadu wrote:
| Be aware that measuring FR and THD is just that: measuring FR
| and THD: it's not a measurement of how good or bad something
| sounds. It's the equivalent of measuring a car's quality by
| looking at 0-100km times: it doesn't even tell us how fast a
| car will be.
| jensgk wrote:
| If FR and THD measurements are bad, at least the sound is
| not neutral.
| JohnBooty wrote:
| There is of course room for individual preference, and
| one's hearing and the physical headphone fit play a role.
|
| But essentially: yes, to a reasonable degree we absolutely
| can tell how good or bad a set of headphones will sound via
| measurements. It's the equivalent of
| measuring a car's quality by looking at 0-100km
| times
|
| The "quality" of a car is the sum of hundreds if not
| thousands of factors.
|
| Audio reproduction has basically a single input, and the
| output can be well described using a small number of
| metrics.
|
| We know what sounds good to people. It would be a miracle
| if we didn't, given the fact that the business and science
| of audio reproduction have been around for 125+ years. It
| has been studied and is something of a solved problem.
|
| Sean Olive and others have published some great research
| that's worth reading. The TL;DR is that headphone listeners
| prefer accurate sound reproduction that is fit to what is
| sometimes called the Harman Curve, which in turn correlates
| pretty well with the Fletcher-Munson equal loudness curve.
|
| It's interesting that these debates pop up around audio but
| not video. We know what "looks good" in a television:
| objectively accurate color and motion reproduction. This
| can all be easily measured. Audio can easily be measured as
| well, and yet....
| SSLy wrote:
| https://github.com/jaakkopasanen/AutoEq/blob/master/results/...
| aljgz wrote:
| 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 anywhere on the boxes.
|
| Later that night I asked about the speakers and he went: "What?
| They sound good?"
|
| It turns out his friend works at "Insert big European brand, not
| only audio here" and they decided to make a great pair of
| speakers. Then he brings home a measurement device north of 6
| figure EURs, and they tune it so that you would not be able to
| distinguish a person talking behind you, from the recording of
| them being played with these speakers... Or as close you can get
| to that.
|
| Then they take their product to the company only to be laughed
| at: "for anything below 5000EUR, we don't use any part above
| 50EUR. You have parts north of 500, this is not feasible for the
| market."
| bbx wrote:
| So the friend custom-built these speakers, and then
| "configured" them when installing them? What company did he
| work at?
| suction wrote:
| I've witnessed some hard negotiating in the car industry about
| the price of a cable lug for a 6-figure luxury car. The car
| maker wanted to bring down the price for one lug from 0.05 Euro
| to 0.03 Euro at a order volume of about 100.000 pieces.
|
| This kept about 50 people (on both sides of the deal) busy for
| 3 months: Engineers, CAD-Ops, Buyers, Sales, Project
| Managers...
|
| It was obvious that the amount of extra-work to see if the
| price could be lowered was a multiple of the savings of the car
| maker. Yet nobody complained.
| gambiting wrote:
| Well, maybe it wasn't the saving on this model, but if the
| design persists then the savings add up over several
| generations, right?
| anhner wrote:
| bigfudge wrote:
| This sort of comment just isn't necessary, doesn't add
| anything to the discussion and I'd be happy to see it
| deleted. English is likely not the gp's first language but we
| should be grateful that smart people from all over the world
| want to talk to us in English.
| anhner wrote:
| Fair enough. I don't know how to delete it so I'll edit it.
| I genuinely didn't understand what they were trying to say.
|
| However at some point we WILL need a way to differentiate
| between real humans and AI generated content for farming.
| JohnBooty wrote:
| they tune it so that you would not be able to
| distinguish a person talking behind you, from the
| recording of them being played with these speakers
|
| That's interesting! I'd love to know more about how your friend
| did it.
|
| It's trivial to get perfect on-axis sound (ie, the tweeters are
| pointed at your ears) even with cheap speaker components if you
| add some active DSP to compensate for the speaker's
| imperfections.
|
| In professional studio audio this is more or less the norm with
| monitors from Genelec, JBL, etc.
|
| In nearfield use (ie, you're close enough to the speaker that
| the direct sound from the speaker dwarfs the sound reflected
| off of the walls of the room) this will sound eerily good,
| basically like putting on a pair of headphones.
| mrob wrote:
| >It's trivial to get perfect on-axis sound (ie, the tweeters
| are pointed at your ears) even with cheap speaker components
| if you add some active DSP
|
| Common digital room correction systems can improve the time-
| invariant linear components of an audio system's distortion
| (phase and frequency response) by convolving with an impulse
| response. The best results are obtained at a single point
| listening position, not a whole line. This technique cannot
| restore frequencies that were cancelled out by destructive
| interference, and may increase noise to unacceptable levels
| at frequencies where it has to apply gain. It supplements
| room treatment, not replaces it. It does nothing to improve
| non-linear distortion, e.g. harmonic and intermodulation
| distortion from soft clipping or asymmetries in the speaker
| motor, or time-dependent distortion, e.g. dynamic range
| compression from the coil overheating, or so-called "Doppler
| distortion" (better named phase modulation distortion[0])
| from significant excursion of the cone.
|
| How much distortion matters depends on personal taste and
| listening material. Moderate harmonic distortion can be very
| difficult to hear in some sounds. And as the popularity of
| vinyl and tube amps show, some people prefer more distortion.
|
| [0] https://sound-au.com/doppler.htm
| kthartic wrote:
| 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?
| Jolter wrote:
| They are obviously unwilling to name the brand.
| legohead wrote:
| I bought some cheap "chinese" (very odd named brand) bluetooth
| headphones on Amazon, and they sounded great. Eventually they
| died, so I went with Sony which was twice the price, and the
| sound is quite noticeably worse. Unsurprisingly my previous
| headphones aren't for sale any longer [1].
|
| [1] https://www.amazon.com/gp/product/B07T25NRLZ
| schroeding wrote:
| Which Sony Headphones did you buy?
| [deleted]
| daviddever23box wrote:
| Are any of these observations "secrets", or simply naive
| observations that have come home to roost?
|
| (Disclaimer: I spent two decades in the hi-fi industry, from tech
| to sales mgr to product consultant, and I currently work in
| consumer electronics technology on the software side.)
| projektfu wrote:
| It's the question of whether the Emperor having no clothes was
| a secret before the child pointed it out. No? But, yes?
| comprev wrote:
| Everything said could also apply to the bicycle industry. Two or
| three heavyweights own the factories and produce for everyone
| else.
| edrxty wrote:
| This seems to apply across the entire Small Plastic-covered
| Electronics sector. I worked for an instrumentation/sporting
| goods manufacturer among others and this reads like I wrote it
| myself.
|
| The CEO, even of a small operation, likely has no idea what the
| performance characteristics of their devices are. They exist to
| raise capital and deal with paperwork.
|
| We operated at about a 25% bom cost which was muuuuch higher than
| it needed to be but we were the aforementioned $50 components
| assembled by baboons case. The products were very high end meters
| and sensors with the electrical sophistication of a McDonalds
| toy, just using whatever the highest end parts Arrow et al would
| sell us.
|
| Like they aluded to, ultimately it's all the little stuff that
| gets you. Packaging, whatever voodoo the S&M team is up to,
| random IT bullshit, heath insurance, random FCC compliance stuff,
| etc.
| teuobk wrote:
| Ain't this the truth. If COGS for the electronic gizmo is over
| about 10% of retail price, and you're making boutique-scale
| runs (<10k units) of whatever it is, good luck with that.
|
| I strongly suspect that, to a rounding error, 100% of new
| small-electronics products on, say, Kickstarter, sell at a
| massive per-unit loss. And yet people will still bitch about
| the price.
| mschuster91 wrote:
| > 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.
| bane wrote:
| 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.
| gregsadetsky wrote:
| Fascinating and didn't know about this, thanks!
|
| This goes into the Apple/Atari/FCC story a bit (search for
| FCC):
|
| https://www.fastcompany.com/90432140/how-atari-took-on-
| apple...
| jamiek88 wrote:
| They used a 3rd party dongle to save y'all a click.
| [deleted]
| nomel wrote:
| I worked in a semi anechoic test chamber for measuring
| radiated emissions.
|
| We had a few cases like this that one of the engineers was
| especially good at solving.
|
| In one, we had a cheaper network switch that was failing one
| of the limits. One of our engineers walked in with a can of
| metalized spray paint, applied a single squirt to the inside
| of the plastic case, and fixed the issue. If you bought one
| and opened it, you would see a single squirt of silver
| looking paint on the inside, right where he put his. I've
| seen a few of these squirts in the devices I've taken apart,
| so I guess it's not a secret.
| edrxty wrote:
| I know the ham folks will sometimes coat the insides of
| radios with that stuff to fix cheap radio emi issues
| post-it wrote:
| Oh huh, I've certainly seen that before when I've opened a
| device.
| edrxty wrote:
| Ha! I've seen this. We had one screw that was close enough to
| a trace on the board that it would lock up the device and
| fail ESD testing. Ended up plugging the top of that one screw
| hole with RTV on the whole batch.
| buescher wrote:
| Precompliance EMI test is cheaper than ever to put
| together, but a proper ESD setup is still going to be
| impossible to justify on a shoestring. I've seen other
| people use leak detectors and record zappers and I won't
| even get into the things that won't credibly work. I feel
| your pain.
| tarakat wrote:
| > whatever voodoo the S&M team is up to
|
| Those teams rarely justify their cost, especially if you factor
| in all the sexual harassment lawsuits that they're a breeding
| ground for.
| edrxty wrote:
| They always held a lot of parties I wasn't invited to, but
| after being asked to change random text strings enough times
| to "make it easier for the customer to understand" I don't
| think I wanted to go anyway.
| confounded wrote:
| That might be a different type of S&M team
| yetihehe wrote:
| Buyer definition, sales and marketing?
| KaiserPro wrote:
| 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.
|
| Not only that but "high end" audio is replete with proper
| charlatanism. Without trying the devices, its impossible to
| assess how good they are.
|
| personally, I have a second hand denon HDMI decoder thing, with
| airplay. I have some cheap surround speakers. The thing that
| separates it from "high end" amplifiers is that it has a
| microphone to add some basic DSP filtering during a calibration
| stage. It gives a decent flat reproduction of what's coming into
| the amp (ie its not mid or treble heavy), and cost about PS250
| all in (the amp was second hand)
| brosinante wrote:
| "personally, I have a second hand denon HDMI decoder thing,
| with airplay [..] dsp filtering [..] calibration stage [...]
| decent flat reproduction"
|
| These are certainly words, and everything else being the same I
| absolutely would rather have the "bit wooly" kind of review to
| read.
| KaiserPro wrote:
| i see what you did there! also point taken.
|
| In my defence, "decent flat reproduction" is at least
| measurable. However I should have actually been much more
| precise in my language. It should have read something like
| "the frequency response across the full spectrum is flat,
| which means that what you put in is what comes out, there is
| no extra base or treble, despite the shape and sound
| performance of the room"
| MengerSponge wrote:
| Most amplifier reviews are less informative than the Knob Feel
| YouTube channel: https://www.youtube.com/c/KnobFeel
| n49o7 wrote:
| And they do it in all languages, which is really helpful.
| whyoh wrote:
| >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/
| darkr wrote:
| Yep - reviews of consumer electronics in general are awash with
| useless content-farm generated crap.
|
| IMO the best audio review site currently is
| https://www.audioholics.com/
| andybak wrote:
| The comment you are replying to was criticising "experts" not
| content farms.
| tecleandor wrote:
| It's "funny" how sometimes the "audiophile" equipment people
| use for hearing music is way more expensive (not better,
| necessarily) than the equipment used to record said music.
| Particularly cables.
|
| How come an "audiophile" balanced XLR cable is 10 times more
| expensive (or more) than the ones used to connect the mics in
| the original recording, even when using the best Mogami cable,
| Neutrik plugs and paying somebody for hand soldering it?
|
| More or less same as you, the team made by my "cheap" Denon amp
| plus a couple of Q Acoustics bookshelf speakers (and a
| relatively cheap high quality bluetooth receiver) sounds great,
| and the whole costs just a bit more than some crappy Beats
| headphones.
|
| (Now that I'm venting, brands like Bose have _some_ nice things
| but overprice lots of their equipment. Not to talk about the
| "DSP boards" needed to run their classic 802 PA systems, that
| was so bad)
| MisterTea wrote:
| > It's "funny" how sometimes the "audiophile" equipment
| people use for hearing music is way more expensive (not
| better, necessarily) than the equipment used to record said
| music. Particularly cables.
|
| The simple fact is most "audiophiles" are rich people showing
| off their wealth. It has little to do with actual audio
| reproduction.
| KaiserPro wrote:
| urgh, Cables.
|
| because the studios were pretty well booked, we had a fair
| few repair jobs. Cables break, normally its where they are
| soldered into the XLR. From what I could tell, the main
| difference between cheap and expensive cables was the amount
| of string that was bundled into the core along with the
| actual cable. I suspect now is both string and the woven
| sheathing on the outside.
|
| sure some were copper, others were aluminium coated in copper
| (although they broke more often, I'm not sure because copper
| is more ductile and AL just stress fractures, or because they
| were really cheap and shoddy)
|
| They all sounded the same, apart from when we used phantom
| power on long cables. Then sometimes they turned into
| microphones. You didn't notice it unless you were in the
| theatre, and people would accidentally stand or kick the
| cable, making a massive thud.
| willis936 wrote:
| The root is that at some point (late 20th century) the cheap
| wine became as good as the good wine. So the key
| differentiating metric for most of the space turned from
| performance to marketing. The high-end got pushed into the
| stratosphere (I'll never own a pair of electrostats) and
| everything else is good enough (hopefully, sometimes there is
| incompetence).
|
| So if it's all good enough for the mass market then the
| audiophiles need to look in the mirror and ask what they're
| after. Some will say a mystical, ethereal experience. Some will
| say total control over the signal chain from outside the body
| to inside. These are orthogonal wants crammed into a single
| market.
|
| The second path is harder, but it at least the end result is
| some form of truth. Very few engineers want to devote
| themselves to a pointless crusade for a tiny market of consumer
| goods. There's better things to do on the weekend. However,
| when they do it's special.
|
| http://nwavguy.blogspot.com/
| gambiting wrote:
| On the other end of this you have serious audio reviewers who
| on one hand are professionals and have tonnes of experience,
| but then you see them review an absolute nonsense product like
| an audio-friendly ethernet switch(!!!) or "audiophile" NVMe
| drive, and write an entire article about how transformative it
| was to their sound(for the better, of course).
|
| Then you start to realize that even the best ear is still
| subjective, and people will hear things if they want to hear
| them.
| KaiserPro wrote:
| > Then you start to realize that even the best ear is still
| subjective, and people will hear things if they want to hear
| them.
|
| urgh yes.
|
| When I was recording something, I routed an
| (audio)compressor/gate combo. I was twiddling something on
| the effect and convinced myself that it was making a change.
|
| Looked to my left, the person was vehemently agreeing with
| me, I looked behind, the other person had a face like I'd
| farted. A while later I realised that I had routed the output
| into a muted bus. (ie I couldn't hear the output of the
| effect, only the raw original)
| pbhjpbhj wrote:
| Here's a great example, https://youtu.be/f-QxLAxwxkM -- a CD
| trimmer that (paraphrasing) "improves your audio quality" and
| was lauded by audiophiles.
| gambiting wrote:
| If you want a good laugh, have a look at this forum thread
| - it's like these people are from a different planet. So
| many posters saying that the NVMe drive has improved the
| clarity and "richness" of their sound. Fortunately it's a
| harmless kind of ignorance.
|
| https://audiophilestyle.com/forums/topic/62753-nvme-ssd-
| desi...
| Bakary wrote:
| It's actually beneficial ignorance. Money is transferred
| from those who don't know what to do with it into the
| broader economy.
| badpun wrote:
| I doubt any kind of ignorance is beneficial. Ignorance
| and stupidity are one of humanity's biggest blights, so
| the less we have them, the better.
| chadcmulligan wrote:
| I can see your point, but it makes it very hard for new
| comers. I was talking to someone the other day who had
| bought 3 DACs for different purposes to listen to YouTube
| sound on their edifier speakers and headphones. Its
| difficult to tell them they could probably not bother
| with the dacs, but there's a whole echo chamber about
| these things that confuses the new comers.
| modshatereality wrote:
| 30% seems a bit off, though yeah dense metal magnets in
| transformers and speakers are probably what keeps these products
| >= $100. Transistors, etc, are cheap as hell though. Some of this
| assembled gear is thousands of dollars and beyond, per single
| unit... So if you can build your own magnets, cases and push
| shipping off to the customer while providing 2x greater than
| behringer *quality*, I want to believe.
| ilaksh wrote:
| I guess I'm the worst type of customer for audio retailers. I
| recently switched from buying $50-$100 gaming headphones to $5
| wired earbuds with a built in microphone.
|
| They are still working perfectly after months, and I got a spare
| for another $5.
|
| The reason I decided to try that is because the wires in my
| headphones always get partially broken after a few months and so
| I end up with only one channel. And the cheap Bluetooth earbuds I
| had which were great for several months eventually went to a
| single channel also for some reason.
|
| If that happens again, $5 is no big deal to get more. Assuming I
| can find those cheap earbuds again.
| Cyphus wrote:
| The wires are usually the first thing to go out for me too.
| Have you considered buying a pair of headphones with detachable
| cable?
| Ekaros wrote:
| Just make sure it is standard cable. And not something
| slightly different.
|
| Not that I also haven't had bad experience with general
| quality of headphones. That is other parts just breaking with
| only slightly careless use. Thankfully the wireless Pioneers
| I bought seem to have lasted with Boses I alternate with.
| ilaksh wrote:
| Didn't know that existed, thanks for the idea. Will see if I
| get tired of the cheapos. They sound great to me though.
| gigaflop wrote:
| V-Moda is a bit pricey, but I've had my Crossfade LP
| headphones for somewhere between 6 to 8 years. The cable is
| standard 3.5mm, detachable from the body of the headphones.
|
| They also have a few accessories like a detachable cable
| with a mic on an arm, which I used for a while until I got
| a desktop mic. The carry case that came with the cans is
| also very nice.
| snvzz wrote:
| >They are still working perfectly after months, and I got a
| spare for another $5.
|
| Jesus. "After months".
|
| I have been using my Sennheiser HD600 for 5 years now. They
| don't even seem to show any sign of age. Should anything ever
| break, they're modular and the individual parts can be bought
| separately anyway. But what's most important is that they sound
| really, really good. To me and to a very comfortable majority
| of audio equipment reviewers. Subjectively (ears) _and_ in
| objective measurements (i.e. accurate FR, low distortion on a
| pro head-shaped measurement stand). And there's no shortage of
| these, for a set that was released in the late 90s and has been
| popular audio equipment in the hobbyist/pro markets since. To
| top it off: They're even extremely comfortable to wear.
|
| And the worst part: Is, it is, by now, near impossible to do
| even cursory research on what headphones are good and not hear
| about them.
|
| It remains a mystery to me, to this day, why it isn't the case
| that everybody owns a pair already. Particularly, as they're
| not even expensive. They cost only a little more than the
| average gaming headset everybody seems to own. Instead... utter
| crap sounding, ear-exploding "cordless" trash from "popular
| brands" do sell well, alongside awful-sounding, fickle, gaming
| headsets.
|
| Consumers are this easily misled by marketing, and seem
| incapable of doing even the most basic research.
| ilaksh wrote:
| Lol, sure of course, everyone should spend $300 on
| headphones. And, of course they will never have to replace
| them. Otherwise, they will have no idea what music actually
| sounds like. Jesus.
| mrweasel wrote:
| There's a sweet spot for electronics. I got a pair of EUR7
| Bluetooth earbuds, with a mic. Sound quality was good enough to
| listen to podcast, but not music, the mic didn't work well
| enough for phone calls, and they lasted maybe 3 months. After
| that I bought a pair for 6-7 times the price, but I had those
| for 4 years now, to their clearly the better investment long
| term.
| pessimizer wrote:
| Watch out, I had a favorite earbud that disappeared from the
| market, imo for being too good too cheaply, and cannibalizing
| the new (at the time) category of high-end earbuds for Sony.
|
| I luckily realized very quickly that they had gone out of
| production, and managed to find a case of 24 of them on Mexican
| Ebay. Each pair probably lasts a little more than a year, so
| they'll get me through this stage of technology (for around
| $100.) So instead of buying $100 gaming headphones, buy $100
| worth of those (hopefully with a bulk discount.) If you get
| sick of them one day, they'll make great gifts.
| ilaksh wrote:
| Actual Mexican Ebay or you mean Mercado Libre or something?
| pessimizer wrote:
| Actual Mexican ebay. It's just ebay. You can get Mexican
| hits on US ebay searches as long as you allow international
| results. If you think you're charming, you can try to
| convince people that normally don't ship internationally to
| ship to you, but people who don't ship internationally
| won't come up on US ebay searches.
| lostgame wrote:
| Many, many mid-to-high end headphone manufacturers offer
| headphones with detachable cables, both for exactly this
| reason; and also sometimes to allow it to either be bluetooth
| or cabled.
|
| You probably have to spend more than $100 for that, though.
| NonNefarious wrote:
| A few years ago I decided to move up from what I'd call "good
| consumer" receivers to something high(er)-end. So I shelled out
| $1400 for an NAD A/V receiver.
|
| This thing is unmitigated trash. It's riddled with design defects
| and bugs that render it unfit for purpose, some of which are
| acknowledged by NAD but with no solution. For example: You can't
| watch 1080p content through it because it reports incorrect EDID
| info to the source player, saying that the max resolution of the
| display device is 720p.
|
| Another: Dirac audio processing is well-regarded by many to fix
| room acoustics, so that was a major factor in the purchase. Welp,
| the NADs will simply "lose" or stop using your laboriously-
| sampled Dirac EQ curve at random. Another defect admitted by NAD,
| but "we don't know why it happens."
|
| An authorized repair guy said NAD simply contracts out their
| designs, and the gear is often built by a hodgepodge of suppliers
| out of low-grade components. This was after driving two sets of
| speakers from one set of terminals apparently caused on over-
| current condition... which didn't throw a circuit breaker or blow
| a fuse, but rather destroyed the entire amplifier and rendered
| the receiver permanently inoperable unless the main board was
| replaced. Brilliant design.
|
| I have replaced it with a Pioneer, which only suffers from one
| insufferably stupid design flaw that I've discovered so far (also
| shared by the NAD): You can't play digital sources through
| secondary zones ("zone 2" speakers). I mean... WTF.
| potmat wrote:
| Possibly the problem is the "V" in "A/V". AFAIK NAD was always
| an audio components company. Introducing video adds a huge
| amount of complication they were probably not prepared for. But
| that's just a guess.
|
| As a counterpoint I have an NAD integrated amplifier I bought
| because it has a Chromecast built in. Even though it was a
| floor demo model it has never once put a foot wrong for me.
| fasteddie31003 wrote:
| 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 myself.
| eru wrote:
| I assume you mean for under $200 of materials; and you did not
| charge yourself for the labour?
| jstanley wrote:
| Why would you charge yourself labour for doing something you
| enjoy? If anything you should be paying yourself!
| analog31 wrote:
| I've dabbled in this area too, both for home audio and musical
| instrument use. The thing I like about building my own is that
| I know exactly what I'm getting. I can either do my own
| analysis to my heart's content (of course at my own risk) or
| plug into the DIY community. Some of the design articles I've
| come across indicate that there are some very serious hobbyists
| out there, with interest in understanding both theory and
| measurements. And no marketing hype.
| jonhohle wrote:
| Were there any guides or tutorials you followed? 20 years ago
| or so, I knew someone who built their own speaker cabinets and
| I couldn't believe DIY speakers could match companies that
| spent hundreds millions on audio engineering. I've heard enough
| anecdotes that I would be interested in learning more.
| bolt7469 wrote:
| You might like this playlist from DIY Perks: https://www.yout
| ube.com/playlist?list=PLOJU8YJjFwGOeh6BgCWVh...
| fasteddie31003 wrote:
| I sized my subwoofer box using https://subbox.pro/en/ . I
| built the foam board speakers the same way built here https:/
| /www.youtube.com/watch?v=CKIye4RZ-5k&ab_channel=TechI... .
| The amplifier is a class D amp from amazon somewhat like this
| one https://a.co/d/8XgEEsG
| jasonwatkinspdx wrote:
| https://www.diyaudio.com/community/ is the main online forum.
| There's a fair bit of discussion over at parts-express.com's
| forums as well.
|
| There's a variety of books out there. Sound Reproduction by
| Dr Toole is a very comprehensive reference to the big
| picture, but doesn't really get into speaker and crossover
| design specifically. There's other books you can find for
| that, but I'm unaware of the most recent good ones as I read
| most of this stuff decades ago. In that era the Vance
| Dickenson book was a big one.
|
| The main reasons DIY can rival hifi are: 1. Good components
| are available to DIY builders. Yeah there's some proprietary
| stuff that's cool you can't get. But there's a ton of very
| top quality stuff you _can_ get. 2. Retail hifi has insanely
| restrictive costs. They 'll save every penny possible. So
| simply by buying better capacitors, etc, or using a slightly
| more complex crossover, or building a bigger box than is
| fashionable you can gain an edge. 3. The digital room
| correction systems offered on most home AV receivers today do
| a lot to fix simple flaws in DIY designs, giving more slack.
| JohnBooty wrote:
| For those who want the ultimate TL;DR on Dr. Toole's book,
| it's something like this:
|
| Listeners prefer objectively accurate (ie, the input
| matches the output) audio reproduction, with some added
| emphasis on the bass frequencies. Because most of the sound
| we hear indoors is actually _reflected,_ it is crucial that
| frequency response of the speakers remains constant as we
| move off axis.
|
| This might seem blindingly obvious, especially the first
| part, but it's groundbreaking work as far as demystifying
| audio is concerned.
|
| For so many decades, the snake oil salesmen dominated the
| hifi industry with bogus claims. They wanted us to think
| that building speakers was like crafting the perfect wine.
| But it's not. It's engineering. =)
| archi42 wrote:
| The alternative (or an engineering trade off!) can be
| doing the opposite: Only care for on-axis sound, and
| while at it put most of the energy on the axis to reduce
| energy of reflections. Drawback: Works best with one or
| at most two listeners, plus speakers and listener are
| constrained in their relative positions. Bad for the
| living room, not an issue in a study.
|
| The bundling is a matter of membrane diameter and
| frequency. Bigger diameter result in stronger beam
| forming, however lower frequencies have less beam
| forming. You can see the effect very well in the
| directivity pattern of this 8" wide band speaker: https:/
| /www.visaton.de/sites/default/files/dd_product/B%2020...
|
| I've a FAST/WAW with a 4" wideband (250Hz XO). As
| personal monitor speakers these work great with an
| amazing stage and "resolution" (the illusion of being
| able to pinpoint the exact spatial location of a single
| instrument).
|
| //woah: Thanks you two (you&GP) for triggering me on this
| (not /s)! While grabbing a coffee I spent a few minutes
| thinking about beam forming in audio applications; and
| came up with the line array. Not so novel, I know, but
| I'm happy to have gotten there on my own.
| jasonwatkinspdx wrote:
| Yeah, I should have elaborated more.
|
| What I love about Toole's book is it's basically the
| whole big picture of audio, completely sourced and
| grounded in real deal empirical research, but research
| that also worked to correlate objective measurements to
| subjective preferences.
|
| All those internet arguments over the years about what
| matters and what doesn't, tubes vs transistors, class A
| vs class AB amps, you name it... Toole's book is the
| cliff notes of what's actually real. It's such a huge
| advantage vs when I first started reading this stuff in
| the 90s and it was a lot harder to find information that
| wasn't just someone's "golden ear" opinion imagined out
| of thin air.
| archi42 wrote:
| I honestly believe crossover design is overrated these days
| (for DIY). It was a necessity in the past, but today we
| have cheap amps and great DSPs. "The age of the active
| speaker" I'd call it. The smallest ADAU145x can do the
| crossover (and corrections) for a 2-way speaker. If
| necessary even as a FIR. Products I have are the freeDSP-
| aurora (8 channel DSP, 300EUR) and a Beocreate (4 channel
| DSP+amp, 170EUR). Both use the ADAU145x family, but the
| aurora is more powerful.
|
| Of course this only applies to DIY. Though I wonder what's
| the cheapest commercial speaker one can get with an
| ADAU145x in a crossover-less design.
| jasonwatkinspdx wrote:
| Yeah, I didn't wanna just blather at people but I should
| have mentioned that with minidsp and all its descendants
| you can treat the crossover design as a software problem,
| which definitely simplifies.
|
| But also what I was getting at with mentioning the common
| room correction systems is these days, you can do
| something like take a textbook Linkwitz Riley 4th order
| crossover, do the little bit that's necessary to match
| levels, and then just call it good and let the receiver's
| DSP handle the large scale FR response. That advice might
| annoy some more knowledgable people, but the blunt truth
| is it'll work and done with reasonable care you'll have a
| truly impressive system for the price.
|
| I don't know pro gear that much but my understanding is
| there's a bunch of vendors now that package DSP + ClassD
| amps in a way the speaker companies can white label as
| their own. Kinda like half the AV receivers on the market
| are ultimately mildly tweaked Audyssey designs.
| matthew-wegner wrote:
| If you're in the US, this is a great first kit ($160 shipped
| for a pair): https://www.parts-express.com/Overnight-
| Sensations-MT-Speake...
|
| These are a good step up for a living room, although $240/ea:
| https://www.parts-express.com/Amiga-MT-Tower-Speaker-Kit-
| Wit...
|
| There are a few other sites that sell kits, either just the
| electronics or including pre-cut cabinets, i.e.
| https://meniscusaudio.com/product-category/speaker-kits/
|
| I have a pair of these in my garage to build as a summer
| project (although getting a bit late for "summer"):
| https://www.parts-express.com/Solstice-MLTL-Reference-
| Tower-...
|
| Paul Carmody has quite a few designs:
| https://sites.google.com/site/undefinition/diy
|
| Jeff Bagby is another big name in the DIY speaker world,
| although he died of COVID in March 2020 and I'm not sure
| there's a centralized site of his designs :(
| Yhippa wrote:
| Thanks for these links. Do they make kits for soundbars?
| I'd like to get something short to put in front of the TV
| and it feels like I should be able to make something. I
| guess the problem would be integrating ARC into it.
|
| Edit: nevermind there is one with ARC: https://www.parts-
| express.com/AudioBar-powered-1.5-way-2-cha...
| MrBuddyCasino wrote:
| Some suggestions from the german DIY scene:
|
| A step up from the overnight sensations, the _Twiggy BR_ :
| http://www.hifi-
| forum.de/index.php?action=browseT&forum_id=2... Built them
| myself, hard to improve on price-performance ratio. They
| have no right to sound this great given their size &
| budget.
|
| The _Bantams_ are supposed to be very good as well,
| suitable for eg desktop use, haven 't heard or built them
| myself yet: https://techtalk.parts-
| express.com/forum/speaker-project-gal...
|
| There is also a more fancy version called _Bantam Onyx_ ,
| for when looks matter: http://www.hifi-
| forum.de/viewthread-205-1154.html
|
| Reference class monitors _DXT-MON 182_ , 36-20000Hz,
| completely flat frequency response: https://heissmann-
| acoustics.de/dxt-mon-182/
| criddell wrote:
| I'd like thank you and the GP for posting these links. My
| daughter has a synthesizer that she would like some
| monitor speakers for and making them might be a fun
| project. These links are great.
| MrBuddyCasino wrote:
| Especially for monitors there are several very good
| plans, and sound quality can be reference class.
|
| If you don't have a workshop to work on wood, you can buy
| pre-made speaker cases for some of the speaker plans, I
| only know german shops though:
|
| - https://lautsprecherbau.info/de/
|
| - https://www.speakercase.de/produkt-
| kategorie/gehausebausatze...
|
| Very important: price and sound quality are at best very
| loosely related in the consumer market! I mean off-the-
| shelf products here. Never assume expensive stuff sounds
| great. This is counter-intuitive but true.
| criddell wrote:
| I have a semi-crappy Onkyo CR-N575 bookshelf receiver[1] on
| my desk because I wanted a small system that could play
| CDs, radio, Bluetooth, Spotify, etc... (there's not much
| out there for this anymore).
|
| I've always wondered if buying (or now I'm thinking about
| making) better speakers would make a noticeable difference
| in the mediocre sound? I only ever play at pretty low
| volumes and the receiver itself is no gem.
|
| The manual says RMS output power is 20W + 20W, 1kHz, 10%
| THD 6 ohms, but then a couple of lines later says THD is
| 0.05% line in, digital in 1kHz 1W. That's pretty bad,
| right? If so, then speakers may not be worth upgrading. If
| they are, how could I tell if these[2] are compatible?
|
| [1]: https://www.intl.onkyo.com/downloads/manuals/pdf/cs-n5
| 75d_ma...
|
| [2]: https://www.parts-express.com/HiVi-B4N-4-Aluminum-
| Midbass-Ro...
| tinco wrote:
| No one spends hundreds of millions on audio engineering. Or
| at least, not at achieving the best audio experience. The
| company that spends the most on audio R&D are probably Bose,
| and their whole goal is to produce speakers that _look_ good
| and sound acceptable.
|
| The reason DIY audio gear matches really expensive factory
| built gear, is that the secret to good sounding audio is good
| sounding speakers, and good sounding speakers are heavy and
| big, and have intricate cones made out of expensive
| materials. Imagine how expensive it is to manufacture such a
| thing and have it marketed and shipped, and you'll realise
| they need large margins on something that's already
| expensive. Combine that with that the actual construction of
| speakers is very simple anyone could it do with a basic set
| of woodworking tools, not to mention that many people _enjoy_
| doing it as a hobby.
|
| Of course good amplifiers are also part of the story, but
| their development is a sort of by product of the computer
| industry, as better transistors has generally meant better
| amplifiers, with class D amplifiers basically being the state
| of the art right now.
| JohnBooty wrote:
| I knew someone who built their own speaker cabinets and
| I couldn't believe DIY speakers could match companies
| that spent hundreds millions on audio engineering
|
| Yeah! The good news is that in many ways, audio is a solved
| problem - the industry is over a century old, so all the fun
| tech has had lots of time to trickle down to DIY folks. =)
|
| That said, designing your own high quality (I'm defining
| "high quality" as "measures objectively well") speaker "from
| scratch" is quite a bit of work.
|
| https://sites.google.com/site/undefinition/diy-speaker-
| faqs/...
|
| Most folks, even designers, start by building other peoples'
| designs. If you really want to design your own speakers, then
| absolutely go for it. It's not rocket science, but it's
| somewhat involved if you want to do it right.
|
| If you just want a pair of high quality speakers for cheap (I
| am one of those people!) then use an existing design w/ a
| flat-pack kit from Parts Express or elsewhere.
| mc32 wrote:
| Class D amps: https://www.hypex.nl/
| sireat wrote:
| If anything 30% is already high and the company will have
| problems staying in business as the article notes.
|
| The rule of thumb used to be 1/5 of retail should be COGS.
|
| Source: 25 years ago my father co-founded a pro audio company
| that later pivoted to prosumer/consumer space. 4 VC rounds later
| the company was sold to major manufacturer for 9 figures. My
| father had less than 1% left after dilution.
|
| PS The biggest source of growth for the company was a massive ad
| campaign by Apple that also featured device by the company.
| Another key factor was being next door to a major channel for
| distribution. Of course the hardware was nice too but for the
| first 10 years the company had less than million in sales.
| anuvrat1 wrote:
| > Most Chinese factories and engineers are perfectly capable of
| producing high-end equipment... but their customers don't ask for
| it.
|
| Now there is a market for good sounding IEM's and headphones,
| Chinese brands such as Moondrop and HiFiMAN are dominating every
| price bracket.
|
| They are even innovating, earlier for Planar IEM's you can either
| have good sound or usability (Audeze isine). Now you have both
| with 7hz timeless.
|
| The stagnated market has finally started moving, and the pace is
| insane.
| DrJaws wrote:
| HiFiMAN has really destroyed the audiophile market for other
| brands. Every single bracket of their products perform like any
| other company +50% extra price product
|
| Sundaras were amazing, but the new edition XS were just the
| last straw for competitors, never a headset of that quality was
| so affordable, the equivalent from other brands can even cost
| 2x the price.
| manv1 wrote:
| This is actually true of many businesses/industries.
|
| There was an article just like this about the clothing business,
| and how at the high price points the quality is equivalent - any
| price delta is due to branding.
|
| Once you use the highest quality material, the highest quality
| stitching for the price point, well, you're stuck. That's when
| you sprinkle the magic fairy dust on it to raise the price, which
| usually consists of a nameplate or logo.
| Ericson2314 wrote:
| I'm just happy niche communities using old school forum software
| still exist!
| Lio wrote:
| So am I. As someone that doesn't use Facebook or Reddit it's
| sad as hell when you join a club or society and they don't
| really use the forum on their own site any more.
|
| I've often wondered if there's something not quite good enough
| with open source forum software that Facebook is getting right.
| I suspect it's push notifications, but it's just a guess.
| orangetuba wrote:
| There is a lot of talk about DIY here, which sounds cool, but I'm
| also pretty lazy and I have started way too many projects. What
| are some really underestimated systems that you can buy?
| acallaha wrote:
| As an example, these $50 headphones just released, co-designed
| by respected headphone reviewer Crinacle - he measures
| headphones on an expensive rig simulating the human ear, which
| can then be used to EQ the headphones to comply with a standard
| target response (typically, the "Harman curve").
|
| These new headphones seem to comply stunningly well with that
| target curve.
| https://www.audiosciencereview.com/forum/index.php?threads/t...
| ehnto wrote:
| I think part of the discussion is that there are no 'hidden
| gems' at fair prices. You have cheap products sold for cheap,
| and cheap products sold for a lot, and then you have expensive
| products sold for much much more. There is no good products
| sold for a fair amount, just bargains on commodity gear. I
| could be wrong, but it seems to me that the 'middle market' is
| only such in price, not product quality.
|
| I would say though that Audio Technica, while still commodity
| products, do seem to get better the more you pay up into the
| middle market. I think you get diminishing returns in their
| higher end range though.
|
| I've had the same Audio-Technica ATH-500's for perhaps 14 years
| now. I drop them all the time too, like daily. I had to buy
| some replacement earpads as the pleather wore out, but that's
| it. Still perfect audio. I'd wager they'd have 10,000+ hours of
| use easily.
| VLM wrote:
| Most marketplaces are like that including food, lumber,
| fasteners (screws and nails and stuff) and clothing.
|
| Cheap junk at cheap prices, cheap junk at medium prices for
| the aspirational shopper, good stuff at luxury brand prices,
| nothing else.
|
| If you do woodworking you can buy inconsistently zinc plated
| insta-rust steel for $1 online, $5 (of which $4 is pure
| profit) for the same junk at big box stores, or about $50 at
| a specialty store for stainless steel and solid (not plated)
| brass that looks nice and will last a lifetime.
|
| Another example: Cell phone chargers. The one apple ships
| with their phones actually follows all FCC/UL specs and is
| legal. Dollar store charger, not so much...
| pedalpete wrote:
| Any thoughts on how you would price a HaaS product. Would you aim
| for 30% of LTV?
|
| I've been looking at Whoop, and I think they have a great
| business model. Based on my estimates, the COG of their product
| is probably $8-12. The monthly cost is $35 - but you have to
| subscribe for a minimum of 12 months so $420.
| tradewinds wrote:
| I think you're looking for a business/economics hybrid field
| called "unit economics". Its all about churn, customer
| acquisition cost, etc. There's a guy who works for Microsoft
| named Tren Griffin who tweets case studies of this stuff -
| might find it interesting.
| frankzander wrote:
| I wonder if it's the same or similar with music making products
| or especially with this unbelievable amount of guitar effect
| pedals.
| PaywallBuster wrote:
| I think the most interesting is that brands that claim to have
| the best R&D and most advanced technologies are simply picking
| supplies from 3rd parties.
|
| The 3rd parties and universities are actually doing the
| research&development and manufacturing.
| PragmaticPulp wrote:
| > 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 support, warranty replacements, lost
| shipments, fraudulent orders, etc.). That's not even counting the
| R&D investment costs that go into making the product, as the post
| says.
|
| Salaries, warehousing, shipping, insurance, and all of the others
| costs of doing business add up.
|
| It's not actually realistic to expect an entire company to be
| selling you a $300 product that costs them something like $250 to
| build. Every business in existence must build in enough margin to
| pay the _people_ who do all of the work to make it happen and
| support it.
|
| 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.
| leeoniya wrote:
| yeah, it's quite typical that wholesale = 2x COGS and retail =
| 2x wholesale.
|
| for high end stuff it's likely far higher. that $75 Intel AX210
| WiFi 6e upgrade is likely a $5 part at wholesale in 10k
| quantities. upgraded op-amps for $100? probably $4 each on
| digikey or aliexpress (and thats already marked up from maybe
| $2 COGS)
| formerly_proven wrote:
| You can buy those Intel cards (single quantities) for around
| 12-15 bucks at retailers.
| kube-system wrote:
| Yeah, last time I worked retail, our prices by default were
| 2x our cost.
|
| People gasp when they hear that, but 2x wholesale doesn't
| mean we were making bank. We were spending all that money on
| wages, utilities, the property itself, taxes, equipment, etc.
|
| If people think that charging $20 for a $10 widget is too
| much, they can fly to Shenzhen and buy it for $10.
| wellthisisgreat wrote:
| yeah the person who suggests that COGs (or even BOM) should be
| more than 30% of MSRP cannot be taken seriously on any other
| business-related statements. That is shows a gross
| misunderstanding of the fundamentals of unit economics and
| electronics business models.
| butterNaN wrote:
| Just to be clear for the people reading the comments only,
| the author of this article is not that person.
| rahimnathwani wrote:
| For those who don't know the difference between COGS and BOM:
|
| - BOM includes only the materials.
|
| - COGS includes not only BOM, but also the variable costs to
| combine those materials into the final product (e.g. cost of
| manufacturing labor).
| tshaddox wrote:
| There's nothing wrong with it, per se, but surely if you're at
| all a proponent of a market economy for the typical reasons,
| you would like to see prices as close as possible to marginal
| cost.
| wmf wrote:
| This _is_ as close as possible because all the stuff that 's
| not included in COGS also has marginal cost.
| lambdasquirrel wrote:
| Yeah... the COGS here is really not dissimilar to what it
| is across all consumer products, for the nerds out there
| who like to find out about these things. That's a pretty
| good indicator that this is the equilibrium.
| js2 wrote:
| > There's nothing wrong with this. These are standard ratios,
| not some dirty secret.
|
| Nowhere in the original post is the word "dirty" or any
| implication that there's anything wrong with the ratios. The OP
| qualifies their post with:
|
| > None of this is actually secret (it would be common knowledge
| for anyone employed in the industry) but isn't well-known
| outside of it. This audience has a lot of professionals in it
| so a lot of this might not be news to you.
|
| And after going into many things that factor into the retail
| price concludes with:
|
| > In that sense, a 3:1 retail to COGS price is arguably very
| fair or even low, especially for firms that do any R&D at all.
| I personally wouldn't say something is overpriced until you hit
| 10:1 or more.
|
| The quotes around "secret" are there in the first place to
| imply these aren't actually secrets, much less dirty secrets.
| Razengan wrote:
| Nowwhere in the GP comment is the word "outraged". That's
| your word.
|
| So, what, you wanted to be aghast or something and
| misrepresented the tone of the original comment with a
| selective quote and addition of the word "outrage"?
|
| Shit HN says. Sheesh.
|
| _(This comment was a copy of the one above before it was
| edited)_
| js2 wrote:
| Okay. I've edited my comment for tone and to stick to the
| facts. I still think the comment I replied to misrepresents
| the original piece by quoting very selectively and adding
| the word "dirty".
| [deleted]
| eyelidlessness wrote:
| > Shit HN says. Sheesh
|
| Indeed. I read the article, then I read these three
| comments. The first one reiterates points that the article
| made but seemingly doesn't recognize the article made them.
| The second does recognize that but with a combative tone.
| The third is just combative.
|
| Y'all can carry on as usual but none of that conflict was
| actually warranted.
| RHSman2 wrote:
| HN is so Tone Deaf
| coldtea wrote:
| Lest not forget the fourth comment, meta-hammering on HN
| comment quality
| Razengan wrote:
| The third comment parodied the second word for word
| before the second was edited :-)
| eyelidlessness wrote:
| I don't think that reflects better on the third comment
| :)
| akrymski wrote:
| By contrast products on Amazon have COGS closer to 10%
| PinguTS wrote:
| 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.
| urthor wrote:
| *loser.
| mrweasel wrote:
| > There's nothing wrong with this. These are standard ratios,
| not some dirty secret.
|
| Standard, absolutely, but I think many are surprised by how
| much of that is profit for the company that sells the product
| to the consumers. I worked for a company that had 40-45%
| margins on most consumer electronics. Less than 40% and the
| buyers didn't really want to deal with it.
| golergka wrote:
| Revenue, not profit. They have pretty huge costs of doing
| business, too.
| samstave wrote:
| * ___exactly__*_
|
| -
|
| If you have ever whore'd yourself out as a 1099 "consultant"
| <=== you're typically paid ~30% of bill rate... the company
| claimed all this "I have to pay insurance" bullshit - but if
| you are paid $50 an hour, the contract is likely $150 an
| hour... and the company's fat margins are within....
| brtkdotse wrote:
| 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.
| onemiketwelve wrote:
| 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
| Cthulhu_ wrote:
| I'm sure manufacturing costs is like 10% or even less, but
| between the factories in e.g. China and the US or Europe,
| there's container transport overseas, import taxes and fees,
| and other such transportation and logistics overhead.
|
| I freqently find myself in a supermarket and think that the
| packaging for the products there was more expensive than the
| product itself. Plus the logistics.
| umanwizard wrote:
| Shipping over the ocean from China to the US is very cheap.
| achow wrote:
| 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...
| refulgentis wrote:
| Cost of Sales is not Cost of Goods Sold
| ac29 wrote:
| 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...
| jhugo wrote:
| To be clear, the OP discusses COGS in an
| electronics/manufacturing context, which refers
| specifically to the cost of manufacturing the product,
| and excludes things like marketing, logistics, R&D,
| salaries etc.
|
| It is not _at all_ comparable to the Xiaomi Cost of Sales
| figure in GP which includes many things beyond the direct
| cost of manufacturing their devices.
| tomnipotent wrote:
| COGS is completely company-dependent, there is no
| universal exact definition so long as it can be verified
| to be GAAP/IFRS compliant (which is more art than
| science).
| refulgentis wrote:
| This is broadly correct but specifically incorrect: cost
| of sales includes ex. salaries and capital investments
| and cost of goods sold includes the literal cost of the
| raw materials for a good
|
| It's quite jarring to see someone jump in with another
| misunderstanding, derailing the correction, especially
| given this is a "hoofbeats, think horses, not zebras"
| situation. Any argument they're kinda sorta the same
| thing or it's ambiguous, they could be the same thing,
| leaves open the Q of how exactly Xiaomi can possibly fund
| itself if 83% of it's costs are raw materials
| j16sdiz wrote:
| Cost of sales include wage and salary for the storefront.
| alain94040 wrote:
| Cost of sales includes marketing expenses. Possibly also
| operations cost.
| TheOtherHobbes wrote:
| 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 to cover
| those expenses.
|
| Selling at scale - even at small scale - is _completely
| different_ to buying a bag full of bits and assembling them
| with a soldering iron.
|
| Having said that - audio and music are particularly susceptible
| to snake oil. Never mind all the cable nonsense, you can
| literally buy magic pebbles and boxes full of rocks to
| "improve" your audio.
|
| The people in those markets are either delusional or knowingly
| scamming their customers.
|
| At some point branding and market positioning become the
| biggest driver of perceived value, and spending $$$$$$ just to
| prove you can - under the pretext of "purer sound" - becomes an
| exercise in consumer narcissism. In the classic Veblen mode,
| the product being sold isn't the item, it's _the consumer 's
| perception of themselves._ And some people will pay huge sums
| for that.
|
| Which is you can buy magic hifi rocks, magic watches that don't
| tell the time very well, magic handbags, and all manner of
| other trinkets, for very silly prices.
| chrismcb wrote:
| Ironically a box of rocks will probably "improve" (well
| affect) your audio more than a cable will. As sounds does
| bounce off objects. That being said there are cheap,
| worthless cables as well. I'll pay a bit more for a cable
| where they connection won't fall off after two uses.
| systemvoltage wrote:
| "Why are Fluke meters so expensive?":
|
| https://www.youtube.com/watch?v=ay9wFQAW19Y
|
| Dave Jones breaks it down, as usual, very informative.
| onemiketwelve wrote:
| 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-...
| em500 wrote:
| This seems similar as the point made in the well known
| essay _I, Pencil_ (1958)[1]. You can buy a box of pencils
| in Staples for something like $0.10 apiece. But no
| individual, and probaly no small businesses would be
| capable of making some pencils from raw material (skipping
| even the step of harvesting the raw material).
|
| [1] https://en.wikipedia.org/wiki/I,_Pencil
| aaroninsf wrote:
| Used to work for a hardware manufacture that did small runs of
| professional AV products (runs in the thousands, costs in the
| hundred to thousands of dollars).
|
| The standard in the industry at this scale was and is 8x COG.
| That was what was required to pencil things out.
|
| At that ratio we were initially 5x cheaper than competing
| products in an niche that had a de facto duopoly. Which we
| disrupted.
|
| For a while.
| jiggawatts wrote:
| > 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... They said something like
| $500K.
|
| Where did the other $99.5M get spent on, you ask?
| Inefficiencies such as having PhDs doing welding and riveting
| instead of hiring contractors with _more experience_. Even if
| you say you need aerospace-grade rivets, Boeing and co hire
| thousands of people with those skills at a much lower cost.
|
| Similarly, if you look at retail prices, the _majority_
| disappears into having staff stand around the store while there
| are no customers, lighting, cooling, retail shopfront rents,
| etc, etc...
|
| You're not paying for an "HiFi amplifier model X", you're
| paying for a "storefront in a shopping centre with a HiFi
| amplifier model X thrown in almost for free."
|
| This issue is most obvious when in some industries, returned
| items are simply _discarded_ , because they're not even
| remotely the majority of the total cost! Repackaging and
| restocking the item would cost more than manufacturing it half
| way around the world and shipping it across an ocean. That's
| nuts.
|
| Even EBay and Amazon have only just started chipping away at
| this problem. There is still enormous inertia.
|
| For example, I recently purchased a flagship TV that costs
| $5,995 retail. Nobody had it for more than a $500 discount,
| including _online stores_ that are just warehouses! The actual
| TV probably cost about $800 to $1000 to manufacture _and_ ship
| internationally.[1] Where did the other $3500-$4000 go!?
|
| What's happened here is that _traditional retail_ has forced
| the prices up, and then Amazon -- a near monopoly -- doesn 't
| feel the need to compete on price because they win sales even
| if they're just a _little bit_ cheaper.
|
| True competition would be if I could buy the TV for
| manufacturing cost +30%, not manufacturing cost x3.
|
| This won't happen while traditional retail is propping up
| prices and has no real competition. We need a "SpaceX" to shake
| things up. Unfortunately, Amazon wasn't it.
|
| [1] This isn't the cost of running the machines in a factory.
| It's _everything_ up to the point of getting the goods into a
| cardboard box and on a ship. Design, profit, staff costs,
| material costs, energy costs, capital, etc...
| mk_chan wrote:
| It's not so simple. Many manufacturers set a minimum
| advertised price which would require legislation to change.
|
| Additionally advertising a certain price and actually selling
| at a different price is a surefire way to get delisted from
| google for example. This is why the whole promotion
| codes/voucher concept is popular.
| [deleted]
| Max-q wrote:
| 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.
| mc32 wrote:
| That other 3500 - 4000 is definitely not majority profit. If
| they could make better profit on your purchase they would,
| they really don't want to leave money on the table. MFG,
| shipping, handling, warranty, returns, accidents, fraud, R&D,
| operations staff, etc. It's not getting done by volunteers.
| tuatoru wrote:
| > ... 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
| realising that there was a large latent demand for launch-to-
| orbit services. Well done, that chap. But you can't
| generalize from that to everything else. Or anything else,
| really.[1]
|
| 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.
| Those factoids don't square with your argument that Amazon is
| making excess profits.
|
| 1. Take luxury yachts for example, which are about as
| expensive as rockets. The bill of materials would be a
| slightly larger fraction of the final cost than for rockets,
| but the same reasoning would seem to apply. Why has no-one
| "Musked" luxury yachts?
| thayne wrote:
| > 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.
| adgjlsfhk1 wrote:
| part of the reason is that the point of a luxury yacht is
| to be expensive.
| Bakary wrote:
| The real insight I'm gettimg here is just to curb our
| consumption to a great extent. The fact that shipping new
| products is cheaper than reinventoring used ones is an
| indication that we are on a death spiral. Having the move
| fast and break things crowd come up with a solution to
| consumer electronic prices is just going to accelerate
| pollution that much more. And I am aware of the sweet irony
| of typing all this on a phone whose low price depends on
| complex supply chains.
| mc32 wrote:
| Definitely agree. People who rail against this don't understand
| economics much further than my mom sold yard bird eggs for less
| than the corner store --corner stores are opportunist
| capitalists with no heart who take advantage of people. If they
| had to sustain a business I'm afraid they could not. Every
| wannabe post-capital economist should try to run a restaurant
| (profitably).
| II2II wrote:
| Corner stores also have their own expenses to deal with. They
| rarely have the same access to suppliers as grocery stores,
| nor do they have the access to the same prices for their
| goods. They may be paying the same for labour, but they are
| typically dealing with much lower volumes. I don't have a
| clue on how the cost of their leases compares, but it is
| going to affect the price consumers pay. If it really was as
| simple as them being opportunist capitalists yaking advantage
| of people, we would see far more corner stores in this world.
| mc32 wrote:
| Absolutely. One cannot compare one's own subsidized hobby
| with an enterprise that must maintain itself to survive. As
| my other example of making your own sandwich vs getting one
| at a deli. One cannot compare the naive costs vs the
| reality the delikatessen deals with.
| barrysteve wrote:
| In your restaurant experiment, are we allowed to use robots
| to make and sell food to the customer? Or will they walk out?
| mellavora wrote:
| Do you mean will the robots walk out?
|
| It is good to know the failure modes of your AI.
|
| Also the cost to develop, deploy, and maintain your robots.
|
| BTW, most fast food does use robots as far as possible;
| these are highly automated processes. The robot might not
| look like you'd expect, but that aint a problem with the
| robot.
| barrysteve wrote:
| Well I mean people won't order from a 100% automated fast
| food shop. The customers expect human hands to touch and
| labour over the food, even if it's financially unviable.
| freedom-fries wrote:
| Yes, please! Anyone who hasn't run a business should
| definitely try to run one with Robots to appreciate that
| human factor isn't going anywhere.
| mc32 wrote:
| Doesn't matter. Make food people want to go in enjoy and
| pay for, pay the bills (ingredients, rent, insurance,
| marketing, labor, management, equipment, etc.) and remain
| profitable. No dipping into moms coffers.
|
| That'll put an end to "I can make myself a Reuben with
| store bought stuff for $3!!!, $13 at the deli is goddamned
| capitalist pig ripoff"
| robocat wrote:
| > Every wannabe post-capital economist should try to run a
| restaurant (profitably)
|
| I would guess most people don't start a restaurant to be
| financially profitable, instead they start it for ego and
| status. A failed restaurant is both an example of capitalism,
| but also some very uncapitalist incentives.
| buro9 wrote:
| For most consumers I'm not sure COGS is something that they are
| aware of.
|
| The big takeaway from understanding COGS is using that to
| understand fast moving and disposable goods and merchandise.
|
| In the UK a recent (last decade) thing has been fast fashion,
| Primark and the like are leaders at this. It is possible to
| purchase a pair of straight leg jeans for GBP 12. Understanding
| COGS means you can quickly realise that the absolute maximum
| amount spent on materials and manufacturing is GBP 4.
|
| An awareness of COGS reveals to buyers unethical manufacturing,
| low quality, and essentially planet damaging goods and
| merchandise.
|
| On a more individual level, i.e. the Beats headphone example in
| the article, it can also reveal when you're being ripped off.
| Where what you're buying isn't the goods as much as it is the
| sticker on the side and the status.
|
| COGS may not be a secret to most people on HN, but they're an
| unknown part of the magic of how global commerce works to the
| majority of people.
| AussieWog93 wrote:
| If you're on Windows, alt-0163 inserts the PS character on a
| US keyboard. 0164 is EUR.
| greggsy wrote:
| SaaS is a different subscription model, not a one-off product
| sale.
|
| Odd comparison, unless I missed something.
| NoraCodes wrote:
| > 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.
| eru wrote:
| How is profit any less 'productive' than any other expense?
| Ma8ee wrote:
| Removing any other expense will be detrimental to the
| business, that is, make it work less well. Nothing will
| happen to the business if the owners don't get any
| dividends.
| ReptileMan wrote:
| Yes it will. Not wanting to scale up or bail out and
| invest their capital in something more profitable. Like
| SF or London real estate.
| foldingmoney wrote:
| >Removing any other expense will be detrimental to the
| business, that is, make it work less well. Nothing will
| happen to the business if the owners don't get any
| dividends.
|
| I'd say two things.
|
| 1. A listed business wouldn't exist in the first place
| (or in its present form) if owners hadn't been enticed to
| put up capital in the hope of getting dividends.
|
| 2. The purpose of a listed business is to pay the owners,
| not to produce goods or services - producing goods or
| services is just a means through which to pay the owners.
| rowanG077 wrote:
| > 2. The purpose of a listed business is to pay the
| owners, not to produce goods or services - producing
| goods or services is just a means through which to pay
| the owners.
|
| This is true only in the simplest of world views. Let's
| take this idea to the real world. Let's say all food
| producer would say today to stop and instead start
| producing toilet wipes(or insert anything here) or
| whatever because the can make more money that way. Now
| suddenly we won't have any food producers tomorrow and
| billions will starve. Clearly food productions companies
| only purpose wasn't to make money for owners, it was also
| shockingly to keep people from starving.
| eru wrote:
| Food prices would go up, as producers leave that market.
| rowanG077 wrote:
| over time yes. But that assumes not every producer leaves
| the market in a short time frame. The bounce back effect
| would be devastating. In fact food production is already
| a pretty non-profitable endeavor and yet the companies
| don't stop doing it.
| Ma8ee wrote:
| Amazon has never paid any dividends.
|
| Further, you are just plain wrong about both of your
| points. At least as general statements.
|
| 1. Of course there are some businesses that are created
| to be able to pay the owners of the capital dividends (or
| more common, to be able to sell the business later to
| someone who hopes to be able to collect dividends). But a
| lot of businesses are created to for people to just being
| able to do their job. Say a gardener who wants to work
| with tending gardens. Their main purpose of the business
| is not to collect dividends, and they may never do.
|
| 2. That a business sole purpose only is to pay the owners
| is a quite recent (popularised in the eighties)
| neoliberal idea and far from any universal truth. The
| purposes of any single business can be whatever the
| business owner wants, which range from the obvious,
| become rich, to serving the community with some
| particular goods or service, providing employment and
| security to the local workforce or creating opportunity
| for people work with some craft they love.
|
| The stakeholders in a business are far from only the
| people that invested capital in it. They also include the
| local community, the employees and the family, and of
| course the customers.
| v-erne wrote:
| The ultimate goal and purpose of any economic system is
| to serve whole society - those people own anything
| because we as a society recognize that we are not able at
| present moment to build better system without their rent
| seeking behaviour. But this does not mean that they have
| some god given right to unlimited dividends from work of
| others. It all seems backwards (as in tail wagging the
| dog).
|
| And don't get me wrong - I know that their behaviour is
| just part of human nature, that our culture tries somehow
| to tame and this behaviour is no different from monarchs
| and aristocrats of old days, but it does not mean that
| this is the ultimate system and there is no metaphorical
| guillotine waiting for them all somewhere in the future.
| eru wrote:
| > The ultimate goal and purpose of any economic system is
| to serve whole society [...]
|
| Sure. But that's not in contradiction to individual parts
| of the system having individual (and different) purposes.
|
| Btw, not all companies have to make a profit. That's just
| a pretty common goal. (And if you want your business to
| stay afloat in the long run, you have to at least break
| even.)
|
| > But this does not mean that they have some god given
| right to unlimited dividends from work of others.
|
| Duh, obviously you only get dividends from businesses you
| own.
| v-erne wrote:
| >> Sure. But that's not in contradiction to individual
| parts of the system having individual (and different)
| purposes.
|
| But those purposes are only allowed because they serve
| greater purpose. On their own they are meaningless.
|
| >>Btw, not all companies have to make a profit. That's
| just a pretty common goal. (And if you want your business
| to stay afloat in the long run, you have to at least
| break even.)
|
| Maybe if You mean non profits like charitable fundations
| that holds water, but those are mostly not real
| businesses. I do not think is feasible to break event for
| normal companies. Its like with birthrate - if You naive
| You could believe that with birthrate equal to 2 (one
| children for each parent) to preserve status quo. But in
| real life minimal rate is around 2.1 to prevent
| population collapse. The same is with profits - You need
| some to account for future risks.
|
| >> Duh, obviously you only get dividends from businesses
| you own.
|
| It's only obvious if You ignore platform effects (amazon
| anyone?) and monopolies, but that's besides the point.
| The point is that owners collectively as a class are able
| to extract too much from the system. And by owners I do
| not mean the hatted guy from monopoly, or rather not only
| him, but also german pensioner with ever increasing life
| expectancy crashing his hundred thousand euro camper
| around Europe. Even here in Poland I personally know
| people that are retired for decades and their work life
| was mostly sitting around doing nothing (my own grandma
| was retired for almost 50 year and before that was a
| housewife and got pension from my grandpa work).
| Meanwhile most of younger generation will probably never
| be able to afford to buy own house (unless someone old
| dies and leaves them inheritance).
| chucksmash wrote:
| > But those purposes are only allowed because they serve
| greater purpose. On their own they are meaningless.
|
| This gets it backwards. In most places, we haven't
| arranged society as "everything is banned except for this
| list of allowed activities," more as "everything is
| allowed except for this list of banned activities."
|
| We're not necessarily good at divining utility of actions
| when deciding what should be banned, either.
|
| That any individual activity serves some greater good is
| a happy accident, there's no natural law that individuals
| will take actions that are net positive when you zoom
| out.
| v-erne wrote:
| I was trying to build value framework, not legal one - it
| does not matters what is allowed or banned if we cannot
| assess its value in context of sth (I used society in
| this case).
|
| The free for all strategy (libertarianizm?) may be a
| great diacovery strategy but it does very little for
| building and preservin things that works (that were
| discovered by it). I sincerlly believe that real freedom
| ends with strongest psyhopaths stomping down on week that
| are on their way to fullfill their desires.
|
| So even if its all happy accident on the lowest level
| there is a meta game of rules far above it that prevents
| our world from collapsing (at least for now)
| thaumasiotes wrote:
| > Nothing will happen to the business if the owners don't
| get any dividends.
|
| This was the theory of communism.
|
| Empirically, we can see that things will happen to the
| business if the owners don't get any dividends.
| Ma8ee wrote:
| Amazon has never paid any dividends.
|
| I don't think anything more needs to be said.
| eru wrote:
| What is that supposed to prove?
|
| Btw, Amazon has done stock buybacks. Which are
| economically equivalent to dividends, but get different
| tax treatment.
| Ma8ee wrote:
| That the two things that the comment I answered too
| claimed are wrong:
|
| 1. Not paying dividends is communistic. Few people would
| accuse Jeff Bezos of being a communist.
|
| 2. Bad things will happen if no dividends are paid. No,
| nothing bad has happened to Amazon because they didn't
| pay dividends. Another example is Apple that didn't pay
| any dividends between 1995 and 2012.
| eru wrote:
| > Removing any other expense will be detrimental to the
| business, [...]
|
| If you put it like that: just don't pay any interest on
| your debt.
|
| The only thing that will happen is that the old owners
| will be wiped out in bankruptcy, and the older creditors
| will be the new owners.
|
| Since you don't care about the owners, and only about the
| 'business', this is means 'nothing will happen'.
| Bakary wrote:
| This is a strawman in the sense that such a change of
| ownership can be highly disruptive to the business
| djbebs wrote:
| Profit is the cost of capital.
|
| Good luck trying to make anything without the capital to
| buy the materials and hire the people to make it.
| softfalcon wrote:
| > None of this is actually secret (it would be common knowledge
| for anyone employed in the industry) but isn't well-known
| outside of it. This audience has a lot of professionals in it
| so a lot of this might not be news to you.
|
| They said none of this is a secret in the 3rd paragraph of the
| article.
| yieldcrv wrote:
| Profit isn't controversial either way
|
| It doesnt need to be rationalized
|
| To consumers, anyway
| thedebuglife wrote:
| From my own reading and experience, paying salaries still has
| less overhead.
| idontwantthis wrote:
| > Most Chinese factories and engineers are perfectly capable of
| producing high-end equipment... but their customers don't ask for
| it
|
| You can also get cheap and really good Chinese gear now. I bought
| KZ-ZS10 Pro IEMs for $45 on Ali Express and they are fantastic.
| Very clear sound and isolation that beats my Sony XM4 around
| ears. Unfortunately the bluetooth adapter you can buy for them is
| static-y garbage.
| jcronenberg wrote:
| I don't know if you are interested in this, but for anyone who
| wants the audio quality of wired headphones while also using
| bluetooth, I can highly recommend a bluetooth DAC, like the
| Qudelix 5k[1]. It has excellent audio quality and their app is
| quite nice and allows for some very in depth customization.
|
| [1] https://www.qudelix.com/
| fumeux_fume wrote:
| Neither secret nor interesting, just clickbait.
| xcambar wrote:
| > Many companies don't even employ any engineers or design their
| own products. Many audio execs would be totally lost reading
| threads here, and have the critical listening skills of a
| shriveled potato. They're in the role for business, not
| functional reasons.
|
| As for most companies in most industries. It's still worth
| repeating over and over again.
| alex3305 wrote:
| This doesn't at all surprise me. I consider myself a enthousiast
| with a limited budget. For instance I have a pair of Sennheiser
| HD 25-1 II for maybe 15 years now and I still enjoy them. Same
| goes for my KRK Rokit monitors. But recently I wanted to buy some
| Bluetooth headphones, since you know, the 3.5mm is absent from my
| new phone.
|
| For those headphones I just went to the local MediaMarkt. First
| looked at crazy expensive Sennheisers, than at some boomy JBL's
| (Samsung) until I finally settled at some House of Marley
| Positive Vibration II - Bluetooth. It was the least expensive set
| of Bluetooth headphones in store with the poorest reviews online.
| But for me the sound was great. At that moment I realized that I
| had forgotten an important lesson for audio devices: Choose with
| your ears. Especially when you have a limited budget, like
| myself.
| andybak wrote:
| My gut feeling for headphones is that the $40-$80 price point
| is optimal and everything above that is smoke and mirrors. (or
| more charitably "a difference without a difference" - something
| that is perceptible but which doesn't improve the pleasure
| derived in any meaningful way)
| SpaceLawnmower wrote:
| Major consumer speaker vendors don't make it easy to compare
| speakers. When I was looking for a portable speaker to play
| outside I was surprised to see that for most of the speakers
| you'll find at big box stores, there are no statistics for
| loudness or how it sounds. The best we get is size and rarely
| amperage, which I found through trial and error are dubious
| measures at best. I ended up returning two overpriced soft
| sounding speakers before the third one was sufficient. Price
| doesn't make as much of a difference as I thought it would
| either.
|
| As a consumer, I don't know what to trust because the marketing
| on these things can be pretty useless.
| JohnBooty wrote:
| You're absolutely right.
|
| Power ratings are like, useless^2
|
| There's no great way to measure power output for an amp,
| surprisingly. The old FTC rating system was something like
| continuous wattage at a fixed voltage at all audible
| frequencies. This was decent, although actual music isn't
| anything like white noise. =)
|
| So manufacturers give absolute BS "power ratings" like "40W"
| which usually means the amplifier can produce that much output,
| at a _single_ frequency, for a zillionth of a second at 10%
| distortion which doesn 't much resemble real music either.
|
| But even if they were truthful about the rest of that, it
| wouldn't matter because knowing the power output of the onboard
| amp is useless without taking into account the efficiency of
| the speaker drivers themselves.
| chadcmulligan wrote:
| The world of consumer audio makes very little sense. The beats
| headphone mentioned is often poo poo'd by anyone interested in
| sound reproduction, they are very over priced, but most people
| don't pay for the technical reproduction its the brand they want,
| and the belief that because its expensive its better.
|
| It used to be that more expensive was better, but that has
| decoupled now with many products, now it's a lot of marketing
| you're paying for.
|
| Sound is one of those things that used to be you'd pay more and
| get better stuff - in the days of record players and onkyo amps.
| Now you can get a class D amp for peanuts that's as good as
| anything else on the market, all sound is digital so there is no
| real need to spend more. The only thing where you can spend more
| on is speakers, there's still some engineering there. The world
| of audiophiles and golden ears is a crazy place, where you can
| spend as much money as you want on things that don't make a
| difference.
| lvl102 wrote:
| I sold a very limited run electronics once. Less than 1,000. Most
| of this is true. The key is to make something niche enough that
| you can justify that fat margin. Pre-pandemic, it was quite cheap
| to produce even proof of concept products in Shenzhen IF you knew
| where to go for quality. Not anymore. 2016-19 was a special
| period for hobbyists.
| dcx wrote:
| This sounds interesting, why is this no longer true?
| flalslsm wrote:
| Isn't it obvious? China is still doing lockdowns. Disruptions
| to supply chains raise costs. It's not complicated to figure
| out.
| kangalioo wrote:
| Thanks, although it would have been friendlier without that
| first and last sentence
| varispeed wrote:
| Components shortage. It's a hit and miss - you created a
| design, all components are available. You come to order e.g.
| 100 unit run, turns out the manufacturer already ran out of
| stock on one crucial component. Ok you can source that
| component elsewhere (and someone asks 5x mark up), but that
| manufacturer won't take your stock of components. So you
| order 100 units anyway, just without that part assembled and
| you will finish the assembly locally. That complication might
| have already wiped off any profit you could get on that unit.
|
| Alternative example - one crucial component is out of stock,
| but manufacturer has a different model of a microcontroller,
| that is pin compatible but has half of the RAM. You run an
| analysis and your firmware should run fine, but you may need
| to do some tweaks here and there. You place an order with an
| alternative part.
|
| Suddenly you have to support multiple versions of the same
| product. Then imagine your product team comes up with a new
| feature that also users ask for. Problem is that it may not
| work with the revision with half the RAM. Would you offer an
| update only to a section of customers? Would you replace the
| boards for free once they become available? Or do you make a
| completely new version of a product (which is going to piss
| customers who just bought the "old" version).
|
| Etc. Etc. These supply chain problems make any planning not
| possible. The common "solution" is to only start making a
| product once you have all parts physically available. But
| this can be an enormous upfront cost, as you can't order
| parts as pre-orders for the product come in. Then let's say
| you created 1000 units, sold all. In the meantime 5% of
| crucial components go out of stock and lead time is 52 weeks
| and growing. You can probably sustain the company for a year
| and re-design the product to use different parts, but
| experience shows that they may get out of stock too. You are
| going to have to focus 90% of your time chasing components
| than developing the product. This is not viable. Many
| businesses are closing now because of this.
| killion wrote:
| This is why I like Monoprice, they have a limited selection of
| high-quality products at reasonable prices.
|
| I just wish they would make an AV receiver - that seems like a
| space where they could bring the price down but still have good
| room correction and Atmos. The Monolith is a good start, but
| something for the average consumer is what I'm thinking of.
| sylware wrote:
| Alice brings her broken car to bob, a mechanic.
|
| He has a quick look at the engine, then hits a specific spot with
| a hammer. The car was fixed.
|
| Then Bob asks for 100 bucks and Alice replies that it is quite
| expensive for one single hammer strike. Bob then says, the hammer
| strike is 1 buck, knowing where to strike is 99 bucks.
| im3w1l wrote:
| > the hammer strike is 1 buck, knowing where to strike is 99
| bucks.
|
| The hammer strike and knowing where to strike should both be
| accounted as cost of goods sold. 30% cogs would mean a price
| tag of $330.
| yeuxardents wrote:
| Always an enjoyable one
|
| https://quoteinvestigator.com/2017/03/06/tap/
| nottorp wrote:
| > Most Chinese factories and engineers are perfectly capable of
| producing high-end equipment... but their customers don't ask for
| it.
|
| For cheap ish stuff, for example: do you want a test done in the
| factory? That will raise the manufacturing price by 50% or more,
| depending on how cheap your widget is.
|
| So you get your DOA widgets from the store and just return them
| instead.
|
| Source: I worked for a company that did direct manufacturing in
| China.
| anonymous344 wrote:
| is this because 90% of consumers are stupid or even idiots and
| getting more stupid every year?
| projektfu wrote:
| I think it's because nothing has any meaning anymore. Brands
| used to pride themselves on quality, but then they realized
| that the listener perceives quality based mostly on price and
| aesthetics. Even people who know better.
|
| I remember about 30 years ago, my father was shopping for a
| stereo receiver. The salesman happily let him listen to them
| all, and he said, "You know, there's two people in this
| industry. There's the guys with the lab coats and measurement
| devices, who say that there's no difference in the line output
| quality between these amplifiers, and there's the guys who
| smoke a lot of weed and they say they can tell the difference."
| My dad, a CS professor, didn't really like that description of
| reality and still wanted to hear each one, of course. Past a
| certain level of amplifier fidelity, the speakers, their
| placement, and their wires are responsible for all of the sound
| quality.
|
| My dad even used to tell a story about how an acoustics
| professor at his school used to take a car stereo speaker
| (cheap, think 1962) and he would put it into his own enclosure,
| and it would sound better than the expensive store-bought
| speaker. So he was well aware of this.
|
| But, still, he listened to each receiver and considered its
| sound quality. But I bet he bought mainly on functional
| features and his perception of the brand.
|
| Unfortunately, in these days, where the brand can be sold
| randomly, and old quality brands are recycled by formerly
| generic suppliers, our perception of the brand is way off. So
| many people choose based on price.
|
| And, yes, they do think we are idiots. Remember when Sennheiser
| was selling identical headphones for two different prices, and
| the $300 ones actually had something added to make them sound
| worse than the $500 ones, which when removed gave you the same
| sound? Not only did this happen, but people who presumably were
| happy with their Sennheiser gear were on here defending the
| practice like any fanboy.
| yalogin wrote:
| This post answered the one question that I couldn't find answer
| for many years, that is why he did Dr.Dre get into the beats
| business or the other way why would the founders include Dr.Dre
|
| Now I understand that the equipment manufacturing is already
| commoditized and so the onus is fully on marketing and so he
| provides a great value.
| pbhjpbhj wrote:
| Companies have long done this sort of aspirational marketing.
| President Cigars (made up) didn't need to be used by the
| president; the unnamed cowboy, on a poster, smoking your brand
| of cigarettes conferred some level of vicarious living and
| cool; etc.
|
| But, which company/companies were first with celeb staff
| members/owners (ie not just endorsement)?
|
| Planet Hollywood seems like it was an early version of this.
| Victor Kyam's (sp?) "I like it so much I bought the company" is
| on similar lines but not quite there. Thoughts?
| Nition wrote:
| Reminds me of Intel hiring will.i.am from the Black Eyed Peas
| as Director Of Creative Innovation.
| christoph wrote:
| While we're here, let's not forget Alicia Keys having the
| role of Global Creative Director at BlackBerry.
|
| https://www.blackberry.com/us/en/company/newsroom/press-
| rele...
| jccalhoun wrote:
| Lady Gaga creative director of specialty products at Polaroid
| in 2010 https://www.huffpost.com/entry/lady-gaga-named-
| creative_b_41...
| willhinsa wrote:
| Obligatory Kanye interview clip (NSFW, explicit language):
|
| https://youtu.be/uYUCUrzrF5E
| distantsounds wrote:
| Watch the documentary "The Defiant Ones" it goes into great
| detail about the story between Dre and Apple.
| rr808 wrote:
| This was a great show. I had great respect for Dre when
| everyone said he should bring out a shoe and he said he wore
| the same shoes every day, headphones though...
| vt240 wrote:
| I work for an old, but small pro-audio manufacturer, and I just
| started watching AudioScienceReview's YouTube videos. Amazing
| stuff. I love his commitment to the consumer end, audiophile
| products, actually testing out many of these, with industry
| standard test-equipment and test procedures that we use.
| twobitshifter wrote:
| I recently purchased a bluetooth speaker from "ultimate ears"
| which is a logitech brand. It's great and seems to sound better
| than what you can get from marshall or beats.
| NoPicklez wrote:
| Logitech make good products, their speakers have always been
| quite good IMO.
|
| I'll never forget in high school a buddy and I had two of the
| same Logitech X-540 speakers. We plugged the speakers together
| and pumped it through effectively a 10.2 setup.
| Firmwarrior wrote:
| I've been having terrible luck with Logitech, and decided to
| never buy from them again. An $80 speaker set's audio input
| jack broke, and Logitech absolutely refused to fix it or help
| me in any way since it was a month or so past the one year
| warranty. I live right down the street from Logitech and
| could have just driven out to their HQ, but they completely
| stonewalled me.
| stordoff wrote:
| FWIW, I've had the opposite experience with Logitech for
| mice:
|
| 2010: replaced a ~18-month-old MX400 with an MX620 under
| warranty after the left mouse button became unreliable
| (without proof of purchase)
|
| 2013: replaced that MX620 with an MX705 after I asked if it
| was possible to buy a replacement wireless receiver (part
| of the USB connecter had broken off IIRC) - I had assumed
| it would be well out of warranty as the original purchase
| was back in 2008.
|
| I can't say if the difference is because I'm in Europe,
| they've changed their practices more recently, or it's just
| luck of the draw.
| bbarn wrote:
| I have an inexpensive surround sound system from Sony with a
| soundbar on my TV. I enjoy it a lot when we're watching movies.
|
| For everything else I use a JBL plastic covered bluetooth
| speaker. I used to be really into speaker quality, swallowed all
| the audiophile pills. Wired my first home for audio. You know
| what made the difference for me? Portable, water proof, long
| battery life, and good enough sound to play music while hanging
| out with my friends or cooking in the kitchen. I know I'm no
| longer the target audience that I was in my 20s, but comparing
| the small 150$ unit I have now to literally anything made 20
| years ago at that range is crazy to me.
| 1-6 wrote:
| I was waiting for a Amazon purchase link recommendation but was
| disappointed.
| intrasight wrote:
| In addition to "secrets" there are "mysteries" - like why doesn't
| anyone make an "Amp" except Sonos, and why is it that one so darn
| expensive? I guess because they are the only one.
|
| https://www.sonos.com/en-us/shop/amp
| other_herbert wrote:
| I'd point you to many smaller retailers...
|
| https://outlawaudio.com/shop/
|
| https://emotiva.com/collections/amps
|
| and parts-express...
|
| I've owned things from all of these places so there's that I
| guess :)
| intrasight wrote:
| Outlaw looks nice. And great name. But pricey.
| chipotle_coyote wrote:
| Other companies make streaming amplifiers of various types --
| Bluesound's Powernode immediately comes to mind, and one could
| argue virtually any AV receiver that has streaming services
| built-in can do the job (e.g., any Marantz or Denon with HEOS,
| any NAD amp with BluOS). The Sonos's price is actually pretty
| middle-of-the-road in this category, though.
|
| If I were looking to undercut it, I'd look for a two-part
| combo, like a $99 WiiM Mini streamer coupled with something
| like the $329 Emotiva BasX stereo amp. That's not going to get
| you any of the Sonos-specific ecosystem woo, of course.
| cschneid wrote:
| What do you mean? An amplifier that can drive speakers that's
| also a streaming device? That exists at various price points.
| Anywhere from a raspberry pi taped to a "dumb" amplifier all
| the way to various Roon streamers. Although at both super-low
| and higher price points, things tend toward individual
| components for flexibility and diy reasons. But that's easy
| enough to work with to get something that both looks and sounds
| good.
|
| Sonos's one plays nice w/ Sonos's ecosystem, but if you don't
| need that there are other solutions.
| intrasight wrote:
| I mean an amp with only: HDMI eArc in, 5 speakers out, sub
| out, power button. And <$500. I don't actually want or need
| the Sonos ecosystem. I also don't want or need a huge,
| visually intrusive box with dozens of knobs and seemingly
| hundreds of rear connectors - as is the case with the AVRs. I
| guess it's too niche for Apple to make one.
| IgorPartola wrote:
| Any time this comes up I wonder: isn't the ideal setup aimed at
| giving you a flat frequency response curve? Why reviews? Why
| experts and subjective opinions of online reviewers? Sure other
| factors can be a part of it like longevity of the product, price
| for performance, power, but at the end of the day sound quality
| can be objectively measured, no?
| 323 wrote:
| With our current technology it's impossible to make a flat
| frequency response speaker. It's possible for amps, mics, DACs,
| but not for speakers, unless you talk about million dollar
| facilities.
|
| So you need to pick from different non-flat speakers, which
| means listening test if you really care. You can't figure out
| which one you'll like just from looking at the frequency
| response graph.
| diroussel wrote:
| If you look at measured frequency response of any audio
| equipment then you never see a truly flat response. At least I
| haven't. And the phase shift of often far from flat.
|
| So if you have two systems that have near flat responses it's
| possible that one sounds better for certain inputs.
|
| Also Bose plot (frequency and phase plot) is a type of analysis
| that assumes the system is linear. If the system is not linear,
| what is the plot showing you? I imagine many systems are very
| close to linear, but at the edges of dynamic range they can't
| be.
| soared wrote:
| 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.
| yewenjie wrote:
| Is there some online course I can take to learn the crux of a
| business degree?
| laristine wrote:
| 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.
| MarcelOlsz wrote:
| I'm not joking when I say this, I have _no_ idea how business
| works. I get it in theory, hell I even sold one. But I still
| don 't know. One of my space-cadet day dreams is trying to
| figure out just what someone could possibly learn in business
| school and I can't come up with anything.
| Spooky23 wrote:
| Mostly how to make certain types of spreadsheets, some
| finance stuff and how to talk business crap with other
| business people.
|
| It's not rocket science.
| organsnyder wrote:
| A good business school teaches organizational dynamics,
| change management, and leadership skills. Not rocket
| science, but potentially just as hard.
| [deleted]
| tradewinds wrote:
| Accounting (for example the poster in the link states
| marketing does not make up COGS, which to someone who
| studied accounting is obvious). Simple economics (poster
| reveals "secret" that Price*Quantity can equal higher total
| revenue when price/quantity change disproportionately).
| Consumer behaviour (Dr. Dre can lead people to believe crap
| from pile A is better than crap from pile B). This is
| apparent insider-knowledge from someone who spent several
| years in industry - or you can go to school for the first
| 1.5 years of a business undergrad program and learn it that
| way across many more industries. In the final years of
| business school once you've chosen a specialization, you
| may learn advanced corporate finance (stocks, bonds,
| weighted cost of capital, different types of break-even
| measurement like economic break-even vs accounting break-
| even). Or you may specialize in accounting, operations,
| marketing, yada yada. Then an MBA is apparently much of
| what is taught in a good business undergrad but perhaps
| faster-paced and you get a shit ton of networking value.
| saberience wrote:
| Apparently I've absorbed this knowledge via osmosis
| working in management at Tech Companies. All of what you
| said just seems mostly common sense to me. Even stocks,
| bonds, cost of capital and other "advanced" topics don't
| really seem very advanced.
| mod wrote:
| I doubt it's uncommon for people with long careers in
| management to gain the equivalent experience of a degree
| in a field so diverse and therefore generalized as
| "business."
|
| 22 year olds know this stuff when they leave school,
| right?
| tradewinds wrote:
| For sure, I shouldn't have called them advanced, they're
| by definition broad enough to be industry agnostic and
| are typically taught in lower years. But if it were
| common sense it wouldn't take a degree or years of
| experience to acquire that knowledge.
| leephillips wrote:
| I don't have a business degree, but every point in the post was
| totally as expected...nothing particular to audio in there.
| bloodyplonker22 wrote:
| I don't mean to be rude, but you don't need a business degree
| to understand the very basic things that you mentioned. I am
| fairly sure that most people using Hacker News understand those
| simple concepts in business.
| calvinmorrison wrote:
| If you are in IT, and you're not a fantastic engineer. Level
| up your business skills.
|
| ERP administrators are an untapped source of business
| knowledge, because they map all the crap business is up to
| and are forced to learn about all the weird metrics,
| acronyms, reports, and so forth a business uses to survive.
| tdeck wrote:
| I think OP is saying that they're gaining a new appreciation
| for the fundamentals they learned which aren't necessarily
| common knowledge. Not that those fundamentals are so
| sophisticated that you need a degree to grasp them.
| wmf wrote:
| I don't know; I've seen so many people (including my younger
| self) who have completely wrong intuitions about business.
| This often manifests as FUD and hating that can be hard to
| dispel.
| [deleted]
| bo1024 wrote:
| I don't have a business degree and yeah, I think I comprehend
| what was written, but before reading it I wouldn't have
| guessed at much of it, a lot of my intuition or assumptions
| would have been wrong.
|
| More generally, sure, you never "need" an X degree to
| understand X, but most people won't have spent the time
| learning X on their own unless they have an X degree.
| [deleted]
| tradewinds wrote:
| Exactly. I too majored in business and I read through to the
| end waiting to see where the "secrets" were. This is super,
| super basic stuff that has more to do with really simple
| microeconomics driving firms' investment decisions. Most
| frivolous consumer-oriented sectors of the economy are all the
| same.
| caned wrote:
| Normal don't make it right!!
| crims0n wrote:
| 30% COGS surprised me... I always estimated it would have been
| around 50%. Learned something new.
| tdeck wrote:
| There is an excellent video about designing electronic
| products that breaks this down in more detail:
|
| https://m.youtube.com/watch?v=UwrkfHadeQQ
| GuB-42 wrote:
| Just look at the prices on AliExpress. They are a fraction of
| the prices at retail stores, and it includes the sellers
| margins. And AliExpress products are not always counterfeits
| and can be acceptable in quality.
|
| A COGS of 30% is, as they say, on the upper end. For brands
| that have to offer a certain amount of quality in order to
| sell instead of going purely for ads and brand recognition.
|
| 50% is the retail store margin. I thought it was 40%, but
| that's probably a global rate, with electronics being higher.
| ezconnect wrote:
| I was surprised to see that retail stores get 50%. I was
| looking at fake leather bags the other day and they really
| look very high quality and sells for 10USD. I can't imagine
| making that bag for 5USD and making a profit off of it.
| Spooky23 wrote:
| For consumer electronics? More like 15%. Less for
| competitive SKUs.
|
| Retailers make more money on cables and mounting brackets
| than a TV, for example.
| iggldiggl wrote:
| I bought my current digital camera when one big-box
| electronics retailer had a special "we're paying your
| VAT" offer going on - over here, VAT is 19 %, and when
| the shop assistant entered the rebate, the POS system
| popped up a warning that the sale price was less than the
| shop's cost price.
|
| I don't remember the exact price, but it does indeed mean
| that the margin must have been less than 16 %.
| Spooky23 wrote:
| When I worked a big box retailer in the 90s, usually the
| stuff that had fancy displays had a more generous margin.
| There's also below the line margin from paid shelf
| placement and other things.
| pclmulqdq wrote:
| I thought the retail margin was related to (essentially)
| how much floor space your product takes and how often it is
| stolen. High-end electronics should be less than 50%. I
| certainly doubt that a flagship smartphone has 50% retail
| margin, for example.
| justsomehnguy wrote:
| > and how often it is stolen
|
| And how often it is returned to the store because buyer
| didn't like it. Some things can be resold, but most of
| the time the seller eats up the costs. It is always
| amusing for me to see people being outraged by the costs
| and seeing nothing wrong with returning something to the
| store just because they can.
| aembleton wrote:
| The store could sell it on for a 20% discount though. I
| would have thought there'd be enough of a market for
| that.
| HeyLaughingBoy wrote:
| Lord no. I was surprised that it was as high as 30%. I was
| always taught to aim for no more than 20% and that was for
| industrial products that sold in relatively low volumes.
| edrxty wrote:
| You can do better if you're selling the stuff yourself, but
| that follows a bathtub curve with totally bespoke on one end
| and Apple on the other. It seems it becomes a struggle to
| keep up sales unless you're on Amazon and stacked on big box
| retailer shelves.
| peyton wrote:
| Try like 10-15%
| lmm wrote:
| I already knew the rule of thumb that a retail store needs
| 50% markup, so 30% seems reasonable in that context (indeed
| I'd've guessed 25%).
| fruit2020 wrote:
| 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?
| wmf wrote:
| _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 everywhere.
| tecleandor wrote:
| 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.
| bombcar wrote:
| Yes, the 50% "retail margin" is average, there are many
| things that are much more razor-thin. Commodities and
| valuable brands, for example.
| peyton wrote:
| It's a sheet of plastic glued to another piece of
| plastic. Yes.
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