Reflections on cable pricing insanity

[edorr]

It can be. It depends if the dealer is ok with an exclusive. They get "rewarded" for excluding the competition.

Even at 70% its a raw deal for the consumer. Hence, the rise of direct to customer cable companies.

With som much margin to play with, why isn't there a thriving grey market for cables selling new at 50% discount.

Some dealers will be happy to supply a middleman and take 20%-30%. It happens with other components plenty. I bought brand new JL113 subs for 50% of MSRP this way.

 

[Andre Marc]

With som much margin to play with, why isn't there a thriving grey market for cables selling new at 50% discount.

Some dealers will be happy to supply a middleman and take 20%-30%. It happens with other components plenty. I bought brand new JL113 subs for 50% of MSRP this way.

Cable companies may be brazen, but they are not stupid. Every sale is tracked.

 

[edorr]

Cable companies may be brazen, but they are not stupid. Every sale is tracked.

So what? As long as the end buyer does not register the cable, the manufacturer will never find out where the cable went. I actually bought a grey market marantz ud9004, had a warrenty issue and called marantz. They refused to help me. I ended up sending my unit back to the dealer (that sold it out of region through a middleman), and got a new Marantz trough him.

 

[Andre Marc]

So what? As long as the end buyer does not register the cable, the manufacturer will never find out where the cable went. I actually bought a grey market marantz ud9004, had a warrenty issue and called marantz. They refused to help me. I ended up sending my unit back to the dealer (that sold it out of region through a middleman), and got a new Marantz trough him.

Some of the cable guys have quite a racket going..they are not going to let anyone screw that up. Marantz makes mass market products. Totally different scenario.

 

[edorr]

Some of the cable guys have quite a racket going..they are not going to let anyone screw that up. Marantz makes mass market products. Totally different scenario.

You could call it a price fixing cartel. I guess you're right - they have a vested interest in keeping the racket going, and violators can probably count on a visit from Luca Brasi.

 

[Andre Marc]

You could call it a price fixing cartel. I guess you're right - they have a vested interest in keeping the racket going, and violators can probably count on a visit from Luca Brasi.

ExactaMundo!

 

[lapaix]

A bargain amidst cable madness?

Shouldn't cables be purchased on the basis of sound and system match rather than based on price ?

A $3k speaker cable may sound better than a $10k cable in one system and then the opposite occurs in another system. What really seems outrageous is the price of cables that have little engineering involved other than decisions regarding metallurgy, guage, dielectric and winding pattern. Those same decisions are made in $1000 cables up to $40,000 cables....Siltech double crown for ie. The engineering has changed little in 20 years. Network designs, on the other hand are engineered way beyond the run of the mill straight wire conductor models that permeate the market at huge swings in price level.They are not cheap either, but to me deliver real value in sound satisfaction for the money. YMMV.

In my decades long pursuit of audio nirvana, a fool's errand, I actually found a cable bargain, and so did many others: the Dartzeel 50 ohm cables cost a small fraction of other high performance cables. The "downside" is that you need Dartzeel electronics connected to something like a Playback Designs player/DAC. The consensus is that they're not "what's best." Perhaps "next best" in this context does not equal "bad."

 

[Bruce B]

In my decades long pursuit of audio nirvana, a fool's errand, I actually found a cable bargain, and so did many others: the Dartzeel 50 ohm cables cost a small fraction of other high performance cables. The "downside" is that you need Dartzeel electronics connected to something like a Playback Designs player/DAC. The consensus is that they're not "what's best." Perhaps "next best" in this context does not equal "bad."

Well that takes care of the IC's, just need the more expensive speaker cables and PC's.

 

[paskinn]

So many claims about cables; every manufacturer/distributor has a different narrative. As far as I know, none has ever produced any solid, generally accepted, bit of scientific proof. Just endless talk, endless claims. With reference to Transparent, I have a simple question. If their account is correct, why isn't such 'evidence' incorporated into the general body of electrical engineering/ physics? I'm not surprised that the sound changes, so do the electrical components stuck into the boxes. It's hard not to be a little cautious about all this, even if you do accept that cables can sound different. As I do.

 

[Orb]

So many claims about cables; every manufacturer/distributor has a different narrative. As far as I know, none has ever produced any solid, generally accepted, bit of scientific proof. Just endless talk, endless claims. With reference to Transparent, I have a simple question. If their account is correct, why isn't such 'evidence' incorporated into the general body of electrical engineering/ physics? I'm not surprised that the sound changes, so do the electrical components stuck into the boxes. It's hard not to be a little cautious about all this, even if you do accept that cables can sound different. As I do.

Because whats measured would be said by many to be negligable in terms of audibility.
Same can be said about ground reference, most will measure within tolerances in a house, yet improving the ground from the mains-house or indeed implementing a clean ground can at minimum improve noise floor even if the original ground-earth seems ok and in theory should have no audible effect.
This is something I have experienced myself using a mains regulation certified engineer with PAT tools.

Cheers
Orb

 

[microstrip]

I thought it was higher

Steve,

Unhappily in a previous thread some people indifferently referred to markup, markup percentage, profit margin and discount margin and ended up making a cocktail of numbers, that was sometimes very far from reality and gave a wrong idea of cable pricing. We can find it neatly explained in Wikipedia:

http://en.wikipedia.org/wiki/Markup_%28business%29

Percentage markup

Cost x (Markup + 1) = Sale price
or solved for Markup = (Sale price / Cost) ? 1
or solved for Markup = (Sale price ? Cost) / Cost

 

[Andre Marc]

Steve,

Unhappily in a previous thread some people indifferently referred to markup, markup percentage, profit margin and discount margin and ended up making a cocktail of numbers, that was sometimes very far from reality and gave a wrong idea of cable pricing. We can find it neatly explained in Wikipedia:

http://en.wikipedia.org/wiki/Markup_%28business%29

Percentage markup

Cost x (Markup + 1) = Sale price
or solved for Markup = (Sale price / Cost) ? 1
or solved for Markup = (Sale price ? Cost) / Cost

Huh???????????????????

Far from reality? No, the thread you are probably referring to was not off from reality. It just made a lot of people angry
when they found out they were making their dealers rich. Sorry.

 

[Orb]

Andre,
so the technology market is a rip off then?
You will find most manufacturers who create switches/routers/VoIP products/etc have a profit margin of around 65% for a model, this is the manufacturers own profit margin before sales channels.
In the past it used to be even higher.
I thought a fair amount of the audio high end gear (not mass market stuff although some of these have similar margins) had a dealer margin (separate to manufacturer) of around 50%.
From what I remember in the other thread cables had a complete margin (manufacturer combined with dealer) of 100% and the dealer could receive 70% while manufacturer 30% - cable manufacturers become rich quicker due to amount sold globally and have better logistical and storage costs compared to audio equipment.
Regarding profit margin for audio equipment; it has roughly a 50% for manufacturer and 50% for dealer going by previous threads.

I must admit I have no problem with what was discussed as pricing for cables in the past, especially as the higher margin was for dealers who focused on said brand name exclusively.
The dealers I know are far from rich, and cables are one area that helps to tie them over or provide some flexibility in deals.
No-one is forced to buy new cables or pay RRP without pushing for say 15% discount, or wait and buy ex-demo cables for between 30% to 45% discount.
Cheers
Orb

 

[microstrip]

Huh???????????????????

Far from reality? No, the thread you are probably referring to was not off from reality. It just made a lot of people angry
when they found out they were making their dealers rich. Sorry.

I fail to see why any one would be angry what has been said- non proved or non documented claims about a reduced number of exceptional cases of pricing in specific situations were presented, and as usual a lot of noise around it. Any one having an educated view of manufacturing, distribution and sales numbers would not be upset by such debate. Sometimes distributors sell some products at non-profit or even loss and must compensate it with other products where they have high margins. Some people will find it is not fair for those buying the high margin products, they are free to say it. Cables have a generous margin. For me it is known and accepted.

 

[Andre Marc]

Andre,
so the technology market is a rip off then?
You will find most manufacturers who create switches/routers/VoIP products/etc have a profit margin of around 65% for a model, this is the manufacturers own profit margin before sales channels.
In the past it used to be even higher.
I thought a fair amount of the audio high end gear (not mass market stuff although some of these have similar margins) had a dealer margin (separate to manufacturer) of around 50%.
From what I remember in the other thread cables had a complete margin (manufacturer combined with dealer) of 100% and the dealer could receive 70% while manufacturer 30% - cable manufacturers become rich quicker due to amount sold globally and have better logistical and storage costs compared to audio equipment.
Regarding profit margin for audio equipment; it has roughly a 50% for manufacturer and 50% for dealer going by previous threads.

I must admit I have no problem with what was discussed as pricing for cables in the past, especially as the higher margin was for dealers who focused on said brand name exclusively.
The dealers I know are far from rich, and cables are one area that helps to tie them over or provide some flexibility in deals.
No-one is forced to buy new cables or pay RRP without pushing for say 15% discount, or wait and buy ex-demo cables for between 30% to 45% discount.
Cheers
Orb

Orb, I cannot comment on the communications equipment market. I have no experience there and I have no knowledge
about the idiosyncrasies of that segment.

Cables are a different story. I have been to many high end cable factories. I have spoken to many of the giants in
the cable world. While some build recipes are more complicated than others,
there is a far, far less materials, storage, and build time for cables.

Heck, most are wound by machines at the more established companies.

In the end, I still think many believe that there is zero correlation between performance and price in many instances in the cable sector.

 

[garylkoh]

Just as it is well known that restaurants make a generous margin on drinks. They do that to keep the business viable as rent, staffing costs, utilities, taxes, etc. need to be paid.

Dealers have to sell cables to stay in business. Can you say "would you like a drink with that steak sir?"

 

[Andre Marc]

I fail to see why any one would be angry what has been said- non proved or non documented claims about a reduced number of exceptional cases of pricing in specific situations were presented, and as usual a lot of noise around it. Any one having an educated view of manufacturing, distribution and sales numbers would not be upset by such debate. Sometimes distributors sell some products at non-profit or even loss and must compensate it with other products where they have high margins. Some people will find it is not fair for those buying the high margin products, they are free to say it. Cables have a generous margin. For me it is known and accepted.

If for you it is known and accepted, all the better. Some on that thread were in a state of disbelief.

Unfortunately, expensive cables have become a status symbol.

 

[paskinn]

I think people like Andre Marc have done a real service to the hobby. Of course manufacturers and dealers can charge whatever they like in a free market. By the same standard, we consumers have every right to be well-informed about the market...that's how we can make rational (well, sort of) choices. If people are happy with the incredible mark-ups that's fine. But first they need to have some idea of what is involved. And, beyond all that, there is no real evidence that well-made cables sound much different.
Again, that is for the consumer to decide. But it can all begin to look like a rather cynical exercise in emptying the pockets of the gullible. And as someone who has moderately pricey cable (Cardas) I might be one of them.

 

[Andre Marc]

I think people like Andre Marc have done a real service to the hobby. Of course manufacturers and dealers can charge whatever they like in a free market. By the same standard, we consumers have every right to be well-informed about the market...that's how we can make rational (well, sort of) choices. If people are happy with the incredible mark-ups that's fine. But first they need to have some idea of what is involved. And, beyond all that, there is no real evidence that well-made cables sound much different.
Again, that is for the consumer to decide. But it can all begin to look like a rather cynical exercise in emptying the pockets of the gullible. And as someone who has moderately pricey cable (Cardas) I might be one of them.

Don't give me any credit please! The information is all out there for a curious consumer.

And I hope no one got the impression that I believe that their are no differences between cables. No cable skeptic here.
I actually believe they are components in and of them selves.

But there no way on earth you can justify speaker cable that cost DOUBLE what the ARC Reference 250 mono blocks cost.
Unless the justification is that some sucker is willing to pay for them.

 

[microstrip]

(...) By the same standard, we consumers have every right to be well-informed about the market...that's how we can make rational (well, sort of) choices. (...)

I agree with you. Unhappily I can not consider the thread in question as quality, complete and reliable information. Just some diffuse information of unique cases. The type of information that IMHO will not help consumers to make rational choices. MHO.