Thread: Enough room for all? The ultra high end electronics mfrs...

Recently been in the market for either a pre or perhaps a new "Super integrated". Researching all of these companies, CH Precision, Soulution, Constellation, Dartzeel, Vitus, Audionet, Gryphon, Pilium, Rowland, Ypsilon, Ayre, D'Agostino, Aries Cerat....the list goes on. Amazing products, but perhaps too many amazing products? Starting to see more sit on TMR, Audiogon or Audiomart at 1/2 retail with no takers.
Do prices represent appropriate margins, or Covid demand (which is past)? Will there be casualties over the next 12 to 24 months? Is the asian market still strong, or has it been waning too? Are these companies built to withstand up and down cycles?

Originally Posted by Ricky64

Recently been in the market for either a pre or perhaps a new "Super integrated". Researching all of these companies, CH Precision, Soulution, Constellation, Dartzeel, Vitus, Audionet, Gryphon, Pilium, Rowland, Ypsilon, Ayre, D'Agostino, Aries Cerat....the list goes on. Amazing products, but perhaps too many amazing products? Starting to see more sit on TMR, Audiogon or Audiomart at 1/2 retail with no takers.
Do prices represent appropriate margins, or Covid demand (which is past)? Will there be casualties over the next 12 to 24 months? Is the asian market still strong, or has it been waning too? Are these companies built to withstand up and down cycles?

Don't think prices reflect margins per se -- more like overhead (rent, leases, insurance, employee costs, e.g) shipping and inflation in general. I've spoken to audio manufacturers and dealers alike (audio and non-audio) and the consensus is that they're shipping costs have gone through the roof because of COVID, etc. What goes up doesn't necessarily come down. Remember in August 2023, there was a pile up of 154 ships in the Panama Canal, also in 2021 the Suez Canal was blocked for six days by a container ship. Port of Los Angeles was backed up for 2 years (Oct. 2020 - Nov. 2022). East coast ports also had there problems. With respect to the Asian market, from what I've heard is still going strong.

Basically, COVID threw a huge wrench in world-wide distribution chains that will probably take a long time to work itself out. Companies worldwide probably could not have anticipated a pandemic and the existing system wasn't designed to withstand or deal with one beyond the typical up/down business cycles. In the previous pandemic (Asian Flu 1956-1958), globalization (interdependence) wasn't a thing, so world markets weren't impacted in the same way.

There may be other factors at play but inflation (post COVID high demand and not enough product or services) methinks has been the primary culprit. People forget - inflation is a worldwide issue, not just here in the states.

Originally Posted by acapella48

Don't think prices reflect margins per se -- more like overhead (rent, leases, insurance, employee costs, e.g) shipping and inflation in general. I've spoken to audio manufacturers and dealers alike (audio and non-audio) and the consensus is that they're shipping costs have gone through the roof because of COVID, etc. What goes up doesn't necessarily come down. Remember in August 2023, there was a pile up of 154 ships in the Panama Canal, also in 2021 the Suez Canal was blocked for six days by a container ship. Port of Los Angeles was backed up for 2 years (Oct. 2020 - Nov. 2022). East coast ports also had there problems. With respect to the Asian market, from what I've heard is still going strong.

Basically, COVID threw a huge wrench in world-wide distribution chains that will probably take a long time to work itself out. Companies worldwide probably could not have anticipated a pandemic and the existing system wasn't designed to withstand or deal with one beyond the typical up/down business cycles. In the previous pandemic (Asian Flu 1956-1958), globalization (interdependence) wasn't a thing, so world markets weren't impacted in the same way.

There may be other factors at play but inflation (post COVID high demand and not enough product or services) methinks has been the primary culprit. People forget - inflation is a worldwide issue, not just here in the states.

Thanks for your reply. Good points. I was looking at a few nice pieces and just struggling with their new asking prices, especially when lightly used units pop up at much lower costs. Add into the the sometimes merry go round of distribution, lack of local service centers, etc, it makes buying some of these pieces tough to justify. One high end pre amp I was considering retailed for $21K in 2001, and now has an asking price of $27K. I see it on sale in Europe for $21.5K with VAT. The distributor certainly deserves his share., but.... The other challenge is not being able to demo...again, tough to justify a pay to play strategy. Perhaps some of these lines have more sales in Europe and Asia.

Here we go again ...

Check out Reuters article dated December 19, 20239:02 AM PST "Suez disruption: a new inflation risk on the horizon"

I can't include a link to the article because I don't have enough posts

I read an article about how inflation has dropped by 3.1% but corporations are not willing to drop prices. Audio gear was not cheap before but they are crazy now. Just as an example, there are worse examples, amps that were once fairly reasonable like Bryston or Halo have gone up by at least $2k which comparatively maybe not that bad. I look at it as paying more for the same product diminishes value.

Many variables on used gear, a brand may be well known to us but not so much to other audio shoppers. Also, there's a perception that the economy is bad despite a roaring stock market, low unemployment and drop in inflation, which may keep someone from hitting "buy now".

Bottomline the prices will remain as long as someone is shelling out the bucks. I don't know about ultra high end but some manufacturers have been advertising discounts, ie. Harman lines. I've seen a couple others I can't recall now.

Originally Posted by Mr Peabody

I read an article about how inflation has dropped by 3.1% but corporations are not willing to drop prices.

There are very narrow factors the government takes into to account to measure it's version of inflation - which is artificial - and then there is the real inflation that takes into account ALL the factors in real world real life.

Monetary policies that caused the real world inflation have not changed since they began 3 years ago. Therefore prudent corporations are not going to lower prices to match a fake inflation number that does not take into account their real expenses knowing that it will likely go right back up at the crazy inflationary spending/policies have not changed. Look at the trillions added to the debt in the last 3 years by this spending.

I am not defending prices as high or low, only saying that the governments inflationary number is purely fictitious that excludes real world/real life. This is NOT a political statement as I am not blaming either political party, merely stating a fact no one can dispute.

There are certainly companies that have chosen to take advantage of this, and there are certainly many companies that are just trying to keep up with how their costs have gone insanely high. And, they need to raise prices MORE than what their costs have gone up as then need to make more money to make themselves to try and keep up with the real world inflation - so it's a double hit.

You are lying you fully intended and did make it political. And, your facts are wrong. The prior administration drove the deficit up more than any in recent history, so forego the spending crap.

Originally Posted by MichaelsMinute

There are very narrow factors the government takes into to account to measure it's version of inflation - which is artificial - and then there is the real inflation that takes into account ALL the factors in real world real life.

Monetary policies that caused the real world inflation have not changed since they began 3 years ago. Therefore prudent corporations are not going to lower prices to match a fake inflation number that does not take into account their real expenses knowing that it will likely go right back up at the crazy inflationary spending/policies have not changed. Look at the trillions added to the debt in the last 3 years by this spending.

I am not defending prices as high or low, only saying that the governments inflationary number is purely fictitious that excludes real world/real life. This is NOT a political statement as I am not blaming either political party, merely stating a fact no one can dispute.

There are certainly companies that have chosen to take advantage of this, and there are certainly many companies that are just trying to keep up with how their costs have gone insanely high. And, they need to raise prices MORE than what their costs have gone up as then need to make more money to make themselves to try and keep up with the real world inflation - so it's a double hit.

Originally Posted by Mr Peabody

You are lying you fully intended and did make it political. And, your facts are wrong. The prior administration drove the deficit up more than any in recent history, so forego the spending crap.

LOL. What ever you say. LOL

Originally Posted by Mr Peabody

You are lying you fully intended and did make it political. And, your facts are wrong. The prior administration drove the deficit up more than any in recent history, so forego the spending crap.

Just so you(and others) know, the presidential influence over budget deficit doesn't begin until after the federal fiscal year ends on Sept 30th, of their first year in office. So in essence the current administration has almost two years to go with regards to 'accountability'. With that being said, to date, no greater deficits have been 'wrung up' than those under Bush, Obama and Trump.

Originally Posted by acapella48

Don't think prices reflect margins per se -- more like overhead (rent, leases, insurance, employee costs, e.g) shipping and inflation in general. I've spoken to audio manufacturers and dealers alike (audio and non-audio) and the consensus is that they're shipping costs have gone through the roof because of COVID, etc. What goes up doesn't necessarily come down. Remember in August 2023, there was a pile up of 154 ships in the Panama Canal, also in 2021 the Suez Canal was blocked for six days by a container ship. Port of Los Angeles was backed up for 2 years (Oct. 2020 - Nov. 2022). East coast ports also had there problems. With respect to the Asian market, from what I've heard is still going strong.

Basically, COVID threw a huge wrench in world-wide distribution chains that will probably take a long time to work itself out. Companies worldwide probably could not have anticipated a pandemic and the existing system wasn't designed to withstand or deal with one beyond the typical up/down business cycles. In the previous pandemic (Asian Flu 1956-1958), globalization (interdependence) wasn't a thing, so world markets weren't impacted in the same way.

There may be other factors at play but inflation (post COVID high demand and not enough product or services) methinks has been the primary culprit. People forget - inflation is a worldwide issue, not just here in the states.

Excellent, accurate, and informative. I concur.

Originally Posted by Puma Cat

Excellent, accurate, and informative. I concur.

and we can add to that the current Red Sea / Suez canal debacle ..........

Originally Posted by Ricky64

Recently been in the market for either a pre or perhaps a new "Super integrated". Researching all of these companies, CH Precision, Soulution, Constellation, Dartzeel, Vitus, Audionet, Gryphon, Pilium, Rowland, Ypsilon, Ayre, D'Agostino, Aries Cerat....the list goes on. Amazing products, but perhaps too many amazing products? Starting to see more sit on TMR, Audiogon or Audiomart at 1/2 retail with no takers.
Do prices represent appropriate margins, or Covid demand (which is past)? Will there be casualties over the next 12 to 24 months? Is the asian market still strong, or has it been waning too? Are these companies built to withstand up and down cycles?

A lot of these companies are very small and have to amortize their cost base over a small number of units. The high end is a fun place to play but the air here is rarified. There have been lots of casualties and there will be more to come. Manufacturer stability is important to me which is why I use what I use, even though it is not considered to be high end by most.

Originally Posted by W9TR

A lot of these companies are very small and have to amortize their cost base over a small number of units. The high end is a fun place to play but the air here is rarified. There have been lots of casualties and there will be more to come. Manufacturer stability is important to me which is why I use what I use, even though it is not considered to be high end by most.

Well said.

Unfortunately the basic economics 101 you're explaining is beyond the grasp of most people who prefer to simply have a company be an evil villain.

Originally Posted by MichaelsMinute

Well said.

Unfortunately the basic economics 101 you're explaining is beyond the grasp of most people who prefer to simply have a company be an evil villain.

That is a pretty cynical view... I'm guessing there is some reluctance to adjust to lower demand post covid, but the concept of recouping development, marketing, and shipping costs for pieces that are not high volume...not that complicated, and very real. The consideration is for the purchaser. I would love to try a product like ypsilon, but it's a stretch to consider buying something like that in the US...
Even more mainstream brands here create pause...Vitus, for example, has limited dealer network. Ayre, who is here locally...I'm concerned about their longevity..

Originally Posted by Ricky64

That is a pretty cynical view... .Vitus, for example, has limited dealer network. Ayre, who is here locally...I'm concerned about their longevity..

Unfortunately we are surrounded by people on forums, comments on news articles and in the press telling us non-stop about "evil corporations". So it's a very real reality that that is how many people have been led to believe. I view it as pretty simply - if you don't like the price or what someone is charging, then don't buy it. But don't whine about the price (I'm not suggesting the OP is - I know you are having normal discussion).

I agree with you 1000% about wanting to have brands with longevity. I had mentioned in another post there are brands I'd like to try/own but will not for concern over exactly what you talk about - not only longevity but my ability to resell if I ever chose to. There are some realign nice streamers and DAC's I'd like to try that are supposed to be VERY good. However they have virtually no footprint in the US and to your point I question support / ability to resell based on that.

Auto dealers sold product at over MSRP. So much so it worried the manufacturers who had to step in. Dealers still found ways around to sell above retail. You are a fool if you believe the auto companies are the only ones to take advantage. Just because the auto companies did doesn't mean all companies did. As I said in my OP the bottomline as long as someone is paying no incentive to lower prices.