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What goes into audiophile headphones?

post #1 of 5
Thread Starter 
I don't want to sound ignorant, but I would like to know how the price of headphones can get as high as it does. I have been browsing through the most expensive products of my favorite brands and I have formed quite a few questions about headphone pricing. What part of the creation process is expensive? Am I paying for the materials, the labor, or the brand? Lastly, what is the difference (in materials) between $1,000 headphones and $1,500 headphones?
post #2 of 5

Price points of just about everything these days has very little to do with manufacturing costs, and everything to do with marketing.  Lets say company A makes 3 different headphones, at 3 different price points.  The cost of manufacturing model 1, the budget model, is $4.  Model 2 is the mid-range model and sounds better but is made with the same materials, but lets say they do driver matching and it takes a bit more hands on time from the employees where they are made and so the cost to manufacture goes up to $5.    Then there's model 3 that is the flagship product and has much nicer materials (wood, metal, leather) instead of plastic and comes in is a nice, satin lined presentation box, but is still more-or-less the same design.  Some serious tweaking of the driver was done during the R&D phase and with the higher cost of materials made the unit production cost go up to $10.

 

Now how do they price these?  Model one is the entry level and marketing research shows that the market will tolerate a MSRP of $59.   Now the mid-tier model 2 sounds better and must have a price point much higher than model 1 otherwise nobody would buy the lower tier product.  So they set the MSRP to $199.   Now the flagship model 3 again improves performance but has much nicer materials.  They can't price it too low or they'll kill the sales of the mid-tier.  And the marketing folks say that there are X amount of people that will pay Y dollars for the absolute best.  The Accountants say that these figures will turn a profit and set the MSRP at $999.   

 

 

Obviously the distributors and retailers have their unit costs somewhere in-between the manufacturing cost and MSRP, so that everyone involved can basically double (or triple or quadruple) their money on each unit, and all the upper management folks can send their kids to Harvord and buy a new Benz every year.

 

Quote:
Originally Posted by JJJMan75 View Post

 Am I paying for the materials, the labor, or the brand? 
 

Yes, yes and yes.


Edited by cswann1 - 11/4/13 at 6:48pm
post #3 of 5
Quote:
Originally Posted by JJJMan75 View Post

I don't want to sound ignorant, but I would like to know how the price of headphones can get as high as it does. I have been browsing through the most expensive products of my favorite brands and I have formed quite a few questions about headphone pricing. What part of the creation process is expensive? Am I paying for the materials, the labor, or the brand? Lastly, what is the difference (in materials) between $1,000 headphones and $1,500 headphones?

All of what you mentioned is what you are paying for. B&W speakers cost a lot but will last decades and sound absolutely amazing. 

post #4 of 5
Quote:
Originally Posted by JJJMan75 View Post

I don't want to sound ignorant, but I would like to know how the price of headphones can get as high as it does. I have been browsing through the most expensive products of my favorite brands and I have formed quite a few questions about headphone pricing. What part of the creation process is expensive? Am I paying for the materials, the labor, or the brand? Lastly, what is the difference (in materials) between $1,000 headphones and $1,500 headphones?

I don't hold knowledge of everything but I have observed that people marketing their products knows that there are people out there that is willing to spend so much or can spend that much. There are plenty off products around that have higher price points than they should be and also some that defy bargain values but there are less off those guys and more overpriced headphones marketed for "audiophile". 

 

Mostly R&D team is what you are paying for which ties in to materials and labor IMO. Branding is also cost, many headphones jack their prices up since they will benefit from apple certification as they can reach a higher market level when they are put into the shelves of apple stores.

 

Lastly, there are difference in materials, orthodynamics are very different from dynamic headphones. Even more are electrostatics. If you understand basic economics, you will understand supply and demand plays a factor in prices. There are very few electrostatic headphone manufacturers, 3 by my count, and so they can jack their prices as they don't have that much competition. There is no reason for headphones to cost $1000 and another $2000 of essentially the same build and tech but there is a market with high enough demand and small enough supply (manufacturers) to warrant the asking price.

post #5 of 5
Quote:
Originally Posted by JJJMan75 View Post

I don't want to sound ignorant, but I would like to know how the price of headphones can get as high as it does. I have been browsing through the most expensive products of my favorite brands and I have formed quite a few questions about headphone pricing. What part of the creation process is expensive? Am I paying for the materials, the labor, or the brand? Lastly, what is the difference (in materials) between $1,000 headphones and $1,500 headphones?


I believe the stronger and lighter the diaphragm is, the better the audio quality.

And I would assume the stronger and lighter somethings is, the more it costs to manufacture.

I believe B&M uses diamond in some of their speaker diaphragms.

I would assume it takes roughly the same amount of to assemble a $1000 headphone as it would a $100 headphone. Hopefully they take a little more time for quality checking and testing of a $1000 headphone, before it goes into the box.

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