Manufacturing costs?

Nothing, of course. But you won’t find out and even if you did the knowledge wouldn’t really help. I was told once that the most expensive part of a Naim box was the aluminium case. I’m sitting on my sofa - I know what I paid for it (the removable cover was £800) but I’ve no idea how much the wood, springs, stuffing and covers actually cost. If I knew how would it help? I’ve just bought a wall light from Original BTC. It cost me £140. Does it matter if the materials cost 20p? It’s a nice light and that’s what matters. I’m not going to go on the Original BTC Forum and ask for the cost of components. It would be rude and I’d probably be told to piss off. If the Forum existed, which to my knowledge it doesn’t.

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It would not be easy to calculate this. Many components are measured, matched, and graded, with a large number being rejected completely. Then they are stored, as gear is made to order, which costs money. Then many parts are stored for very long periods for use as replacements by the service dept. Maybe their accountant has done a long and boring calculation of what all this costs. Personally, it’s information I can live without.

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HH,
I still think that the original cost is a point of interest, especially nowadays when HiFi manufacturers are unable to sell their products in high volumes and are compensating by designing very expensive gear sold to fewer people with a much larger profit margin.

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Makes absolutely no difference, correct.
Again I say it, curiosity. I suppose like anything that is pitched and sold as a premium product I would suspect uses premium materials.
It’s a great business model if it’s entirely made of knowledge and skill and using materials on a par with say JVC (just an example)

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Haim, I understand where you are coming from and it’s indeed something I’ve pondered. My pair of SL din to XLRs retail at £3,200 or something like that. Stupid money. What is the cost of materials? £200? £300? When you start drilling down it becomes meaningless really. Staff must be paid, there is the factory, rates, power, profit, R&D advertising, VAT, dealer markup - they need to eat - and all sorts of costs. I buy beer at trade prices for our concerts and so I know exactly the markup. I don’t expect people at the concerts to ask me how much I paid for the beer, just as I don’t expect them to ask how much we paid for the band. Sometimes they do ask, and I tell them. Where to go. With a smile of course.

The Original BTC Forum?..don’t please…and some think our cable threads are tedious :roll_eyes:

Not asking naim, asking between one another, again out of interest

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Original BTC lights are infinitely more interesting than ethernet cables. Maybe there are people buying six lights and getting a panel of their geeky mates to rate them on a meaningless scale. But hopefully not.

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It’s a reasonable question, it gives you a sense of value for money

Don’t care about manufacturing cost but my advice would be to stay away from exotic cables and with money saved buy better boxes!

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As others have said dealer mark-up is c40% so even taking into account overheads there is a fair profit to be made on higher end gear.

From weyback the margins were a third, a third and a third which translated into manufacture, dealer cost and dealer profit. That may not now apply? I suppose its back to percieved value for money?
Naim 500 power amp or a cable for £20K? the buyer decides.Its a free market.
You might/ would feel happier wearing a Rolex than a Timex on your wrist. The luxury of disposabile income. Makes life a little nicer?

Douglas.

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No it doesn’t. Value for money has nothing to do with the price of the raw materials and everything to do with what the buyer is happy to pay. You are buying decades of knowledge and expertise in design and music reproduction electronics- not a box of components thrown together.

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Quite.

Yes you’re absolutely right but at the same time if you knew something cost 2 quid to make and it was selling for 3 grand you may feel slightly ripped off ( I’m not suggesting anything from Naim costs 2 quid by the way!)

That’s exactly why we shouldn’t know. Such knowledge may lead to discontent. Who wants to be unhappy?

It’s an interesting thread - I would welcome greater transparency in many areas where money is concerned. It would take some of the mystique out of the world, and upset those who still think such things are sacrosanct.

However, as can be seen with issues of equal pay, it’s complex and raises strong feelings.

Price isn’t based on manufacturing cost plus percentage. That’s an old simplistic way of thinking. You charge what something is worth.

Hypithetically, if Naim could build a Nova for $1 would it make sense to sell it for $3 ($1 for Naim and $1 for the deaier)?

Of course not. Naim aren’t Apple. Even if the competition’s products are still $7000, selling for $3 gets you nowhere. They’d have to sell thousands of Novas to make as much profit as selling one at a more market calibrated price. Assuming any buyers were not put off by the comparatively low price.

The above is an extreme and silly example but it illustrates the point. The economics of price are more involved than manufacture cost plus percentage.

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That’s one side of the coin. If someone is taking you to the cleaners (more likely with a super expensive component) wouldn’t you care to know? Personally, I cannot disconnect the end result (quality of the sound) from the perceived value/cost of the gear.

I’m always very uneasy with these threads. The old forum is full of them with sentiments like:

It takes X to build a 250. But Naim charge Y. How dare these companies turn a profit!

Try and remember that what it costs to build is largely irrelevant. How it performs relative to other offerings on the market at that level is where we should be focusing. It goes without saying that the price anyone sets for a product should be the one that maximises profitability. That means as high as you can go before demand elasticity sets in and the price puts people off to a point where you make less money.

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