[Ableza]

List price IS what the market will bear, that's marketing 101.  Since the whole purpose of any business is to make money, selling your wares at the max people will pay for them is the standard (and smart) practice. 

 

[BeyerMonster]

  List price is far too often exactly what the market will bear, in other words what the maker thinks they can get away with based on implied status, manipulated supply, anticipated demand, (mis)represented performance and the alignment of the stars. R&D, parts cost, labor, shipping etc. may have little relation to the asking price.

If all else is equal, why sell 1M units for $1 if you can sell 1K units of the same thing for $1000? That's just bad business.
 
As others have touched upon, price elasticity is a curious thing.

 

[Ableza]

Also realize, since this is a Schiit thread, if you were buying Schiit products in a B&M retail store - and if Schiit was asking the prices they now get from the public as their wholesale price to distributors - you'd be paying at least 3X what you do now.  This is one reason why the ID model is killing B&M retail, but why it is a good thing for consumers.

 

[Armaegis]

  Wait until you find out that your hood fan motor bearings aren't high temperature material.  Good times...

 
The fire wasn't as big a problem as the eruption of resin that now caked the walls of the fume hood. Good times indeed

 
 

 

[marcoarment]

Econ 101 supply-and-demand curves don't cover all of the realities of real-world pricing. Among many other frequently ignored factors:
 
- Higher-priced items are usually perceived to be better than lower-priced competitors.
 
- High-priced items sell in such low volume that the portion of your fixed costs that you amortize to each unit sold is higher. In other words, the $99 amp that sells thousands of units can be priced much closer to its component/assembly costs while leaving a narrower margin to cover R&D, while the $1699 amp that only sells a few hundred units needs each one to bear more of the cost of its R&D. So to make the higher-priced items worthwhile, you need the margins to be a much bigger percentage than on the more mass-market items.
 
- Price/demand curves aren't straight. Certain price points are psychological barriers: for example, the demand difference between $90 and $110 is not linear, with a distinct dip after $99/100.
 
- Very-high (and very-low) prices tend to get more undesirable customers who are more likely to cause aggravation, bad reviews, returns, high support costs, or fraud (as Jason has discussed, or at least suggested).
 
- If you're so expensive and specialized that you need to sell through a boutique retail channel, you need a much higher price to cover the big percentages that they'll take (as Jason has definitely discussed right in this thread).
 
It's never as simple as "The parts in this amp seem to cost a sum of $X, so a fair price should be (X + $20).", and the idea that you should charge the maximum price the market will bear is much more complicated and not always advisable.

 

[doublea71]

I wonder what Jason thinks about crowd-funded (or should it be rube-funded?) products, such as the Geek stuff from Light Harmonic....I suspect it goes against his philosophy of doing business, but perhaps he'll speak to this. I don't think it'd break any MOT rules since he'd be commenting on a business model rather than a specific company. What say you, Jason?

 

[EraserXIV]

He's commented on it in the past, in short: it's not his style.

 

[David Aldrich]

I can't speak for Jason or Schiit, however after watching the whole Geek Pulse delay chain issues I can't imagine using the crowd sourcing model for a product. Especially from a company that has capital to do it's own R&D and roll it into production.
 
You're taking money from customers without a product even existing, which for most companies charging before shipping isn't even part of the business model. Even with a well run company product delays are inevitable, I personally wouldn't be willing to sit on someone else delays with my own money with nothing to show for it.
 
Schiit has done an excellent job with their current modus operandi I don't see any logical reason to even consider crowd sourced funding. Especially not on electronics.

 

[Otheronek]

  I can't speak for Jason or Schiit, however after watching the whole Geek Pulse delay chain issues I can't imagine using the crowd sourcing model for a product. Especially from a company that has capital to do it's own R&D and roll it into production.
 
You're taking money from customers without a product even existing, which for most companies charging before shipping isn't even part of the business model. Even with a well run company product delays are inevitable, I personally wouldn't be willing to sit on someone else delays with my own money with nothing to show for it.
 
Schiit has done an excellent job with their current modus operandi I don't see any logical reason to even consider crowd sourced funding. Especially not on electronics.

 
 
This exactly... 

 

[BeyerMonster]

  I wonder what Jason thinks about crowd-funded (or should it be rube-funded?) products, such as the Geek stuff from Light Harmonic....

In some ways, this is what happens when you put a deposit down on a HeadAmp, but the model is pretty terrible for the consumer unless there is no other option. It's like being an early stage investor with no equity and no guarantee of product delivery.

 

[marcoarment]

Kickstarter projects that most people end up hearing about (and funding) are often much more ambitious and complicated, with far less predictability, usually by people who don't have a strong record of properly estimating, executing, and supporting the type of project they're funding. Electronics and software (especially video games) have especially poor track records on Kickstarter because they're so time-consuming to get right and nearly impossible to estimate.
 
The specialty amp builders making high-end amps to order are generally far more experienced at what they're doing, are tackling simpler tasks (relatively), and are working with fewer unknowns. They've built amps before, they know how long it takes, they know what it'll cost, and they've often even made the same or a similar design already.
 
Making amps isn't easy or without unforeseen delays, but it's much more predictable and likely to be completed than, say, a 22-year-old trying to make a first-class 3D game world or a complex piece of consumer electronics depending on software and services.

 

[kkcc]

I tracked the Geek projects with interest initially but soon the drama and hassle is too much for me. Having seen their most recent geek wave campaign I'm totally dumbfounded that there would be so much backers. 1) their track record on the earlier Geek Out is rather poor with delays and massive confusion in fulfilment/communication. 2) the wave campaign itself is a mess which resulted in "reboot" 3) they put up "perks" left and right with stuffs that should have been basic product function (e.g. paying more to get an "IEM perk" so that your DAP won't hiss with IEM).... might as well put up a "I'm a sucker perk"! I can go on but this is definitely BAD for the consumer.

I think Jason and Schitt has too much sanity and integrity to go down that path. We need more Schitt, we don't need more LH.... my 2c

 

[EraserXIV]

They know how to steer the hype machine, that I'll give them credit for.

 

[Anavel0]

I tracked the Geek projects with interest initially but soon the drama and hassle is too much for me. Having seen their most recent geek wave campaign I'm totally dumbfounded that there would be so much backers. 1) their track record on the earlier Geek Out is rather poor with delays and massive confusion in fulfilment/communication. 2) the wave campaign itself is a mess which resulted in "reboot" 3) they put up "perks" left and right with stuffs that should have been basic product function (e.g. paying more to get an "IEM perk" so that your DAP won't hiss with IEM).... might as well put up a "I'm a sucker perk"! I can go on but this is definitely BAD for the consumer.

I think Jason and Schitt has too much sanity and integrity to go down that path. We need more Schitt, we don't need more LH.... my 2c

This is exactly why I didn't go the Geek route. On paper the Wave looked very interesting; but their business model just doesn't sit well with me.

 

[jeremy205100]

They know how to steer the hype machine, that I'll give them credit for.

The hype machine is very powerful. And if you don't deliver, it will run you over. Just ask Jason about the Ragnarok. Plenty of hype, but even if the product is good delays don't sit well with people. Best to wait until you're 100% sure you can deliver, which is when the product is ready.