Hi all
I have absolutely no knowledge of electronics and the costs of manufacturing.
I have always wondered out of curiosity what sort of costs are involved in the manufacturing of Naim electronics. I know labour is very expensive and R&D. I have no problem in the costs and what we pay, just interested as to roughly the percentage of costs that are likely to be in materials?
Cheers
Popeye
Hard to figure. Perhaps you can take into account that most dealers get the stuff at half price and if NAIM wants to have the same percentage of profit you are left with 25% of retail price for materials, labor, R&D, marketing and everything else. Richard is the most qualifiers person to answer your question.
Really, as big a margin as that? i wonder if the same applies other brands… And makes we wonder we don’t see more difference in prices between dealers, given that I understand price fixing is illegal in UK.
Price control is illegal. Shutting down retail is not. Behave or you are out…
Headphone industry BOM cost is roughly 1/5 of retail price. If that is the same in this business I’m not sure. Distribution 10% and retail around 50. The company themselves had 30-50%.
It’s really just a case of finding the right dealer, and, over time, establishing a relationship with them.
It’s worked well, for me, at least. 
It is an estimate. Our dealer offered (at the time) an automatic 10% discount off list and it made sense that they needed 40% for profit and to cover cost. The largest Hi Fi store in Chicago (they do not carry NAIM) insists on selling everything at full retail price. You can see dealers selling brand new fancy gear on Audiogon in the US at 30%-40% discount and I am sure that they are still realizing a profit.
I use a rule of thumb of 40% dealer mark up, they’ll give you 10% off though but still a healthy profit
So what sort of money is the circuity and transformers within a box. Obviously it varies but I assume it’s hundreds for a decent transformer like those within a black box?
Try 10% of your cost of the box?
Max, cost of parts is fairly minimal especially when you have buying power
No, they do not get 50%! I know exactly what they get, but i won’t say on here, however 50% is very optimistic.
Just three weeks ago a NewYork Goldmund dealership was offering on Audiogon their integrated amp which list for $25,000 brand new for $13,000. Do you think that they are loosing money on it?
No idea, but last time i looked, Naim had not changed their name to Goldmund.
I’m not sure it really helps anyone to know how much the materials cost. So what? It costs what it costs and you decide if you want to pay. Does it matter how much the materials in a Rolex cost? Or a tin of beans? Both the manufacturer and the dealer have to make a living and you’ll rarely get rich selling HiFi. You won’t get rich working for Naim either, as I know when I once thought about applying for a job there. The dealer percentage isn’t 50% - I know what it is but it would not be right to say it here. There are of course significant special offers - like on the Qb when it was being superseded - and the price drop is shared between Naim and the dealer.
Also, the price you pay isn’t just covering manufacturing costs and profit margin, its covering R&D, warranty, distribution and investments.
As per my original post, curiosity. And I also said don’t have a problem in paying the prices.
What’s wrong in being interested?
I did say that in my original post.
Brilliant. I don’t see any reason why NAIM dealers should be willing to work for less profit than the industry average especially that it is not an easy product to sell in the US.
Well i guess it’s not really your problem.