[jesusfr3ak4evr]

There are lots of threads discussing whether that $200 cable upgrade makes a difference, but few that mention why the cables cost so much. That's where you come in - explain to me, and everyone else, why cables cost so much. Are there gold wires?

 

[gritzcolin]

Materials used aren't typically cheap but more importantly they are almost always handmade and take a decent amount of time and skill to do right. Try making your own cable its a pain if you don't have a good work station or tools to do it.

 

[royalcrown]

Yes, there are gold wires - take a look at Pear audio cables.

I'll just offer the two reasons (one from each camp). Yes, I'm stereotyping, but if you disagree feel free to post your own theory. I'm not saying one side or the other is correct; I have an opinion on the matter but don't want to get involved in the cable debate.

Aff Cables:

- Research and development
-Supply and demand

Neg Cables:

-Supply and demand
-Ripping off people; using marketing/placebo/etc. as leverage to trick people into overpaying

These are the reasons I've heard, and yes, I've heard S&D from both camps.

This is just from what I've noticed; I'm sure many others have their own theories and beliefs.

 

[royalcrown]

Quote:

Originally Posted by gritzcolin /img/forum/go_quote.gif Materials used aren't typically cheap but more importantly they are almost always handmade and take a decent amount of time and skill to do right. Try making your own cable its a pain if you don't have a good work station or tools to do it.

Never thought about labor, mainly because it only took me, some bum with no formal soldering experience/training and mechanically inept, an hour to build a cable from star quad and 1/8 inch jacks. But I guess if you did it all day long it'd get pretty ridiculous. I dunno if that alone can justify some of the price tags, but it probably accounts for some of the variance.

 

[grawk]

There are all kinds of things that factor into what people charge to make cables, but at the end of the day, it's economics. People sell things for what the market will accept.

 

[gritzcolin]

Quote:

Originally Posted by royalcrown /img/forum/go_quote.gif Never thought about labor, mainly because it only took me, some bum with no formal soldering experience/training and mechanically inept, an hour to build a cable from star quad and 1/8 inch jacks. But I guess if you did it all day long it'd get pretty ridiculous. I dunno if that alone can justify some of the price tags, but it probably accounts for some of the variance.

Yeah and look at custom things like the Sennheiser cables where they need to hack old plugs or magically make new ones.

 

[jesusfr3ak4evr]

Quote:

Originally Posted by grawk /img/forum/go_quote.gif There are all kinds of things that factor into what people charge to make cables, but at the end of the day, it's economics. People sell things for what the market will accept.

Ok, so basically what you're saying is that, hypothetically and theoretically speaking, assuming the lowest price for a product among all the competition costs $200 and it costs $50 in labor and materials to make that product, if I start a business and sell the same cable for $100, then that business should be quite successful. Am I right?

 

[gritzcolin]

Quote:

Originally Posted by jesusfr3ak4evr /img/forum/go_quote.gif Ok, so basically what you're saying is that, hypothetically and theoretically speaking, assuming the lowest price for a product among all the competition costs $200 and it costs $50 in labor and materials to make that product, if I start a business and sell the same cable for $100, then that business should be quite successful. Am I right?

If you can get enough people behind the product yeah. I am all for nice cables but I like many others have alot of trouble paying the prices most of them cost.

 

[monolith]

Quote:

Originally Posted by grawk /img/forum/go_quote.gif There are all kinds of things that factor into what people charge to make cables, but at the end of the day, it's economics. People sell things for what the market will accept.

There you go. They're expensive because expensive is what people are willing to pay, especially bearing in mind that a lot of people (and particularly a lot of audio people, it seems) equate higher price with better product. If all the consumers got together and said, "Wait a minute, we're paying thousands and thousands of dollars for wires! We're being played for fools here!", and all decided to stop buying them, the prices would fall.

It's like an exaggerated version of the expensive coffee trend. I was watching in interview with one of the guys who founded Second Cup (which preceded Starbucks and Timothy's and such in North America), and to paraphrase him, first they started selling coffee, then they had the idea to charge a lot more for the coffee than anyone else so people thought they were buying better coffee. Then the lineups formed. Clearly it's slightly different in that different coffees clearly taste different whereas there's no evidence to show that different cables (of reasonable built quality) sound different, but the main point is still there.

 

[grawk]

The cable market doesn't flock to the cheapest. It flocks to equilibrium. People buy what they perceive to be the best value. If you're supplying that, you'll do well. There are lots of ways to succeed. But the market isn't simply a forumula of (parts+labor)*markup.


People will spend what they think something is worth. Cost to manufacture isn't a factor at all.

 

[Zorander]

Quote:

Originally Posted by grawk /img/forum/go_quote.gif There are all kinds of things that factor into what people charge to make cables, but at the end of the day, it's economics. People sell things for what the market will accept.

x2.

It's not so much about the material & labour cost. It's what the market is willing to pay for them (hence opening the market to sellers).

Not saying you can simply start making cables and expect to make bucks from them. You need good reputation and good marketing to convince consumers you are the builder to go for. Customers, after all, want the assurance they are going for the best for their money.

Cheers!

 

[Chu]

You're also completely ignoring marketing costs. There are going to be hundreds of cables at your price point, how are you going to convince someone to even listen to your cables?

The hi-fi world is as brand conscious as the average consumer. It's a tough battle.

 

[fordgtlover]

Quote:

Originally Posted by grawk /img/forum/go_quote.gif There are all kinds of things that factor into what people charge to make cables, but at the end of the day, it's economics. People sell things for what the market will accept.

Nail Head <----- Bang

 

[fordgtlover]

Quote:

Originally Posted by Chu /img/forum/go_quote.gif You're also completely ignoring marketing costs. There are going to be hundreds of cables at your price point, how are you going to convince someone to even listen to your cables? The hi-fi world is as brand conscious as the average consumer. It's a tough battle.

Why are there hundreds of cables at a price point? Because it's a lucrative market, maybe.

I think a great example of cost is the movie industry. Say a film costs $150M to make, the studio will easily spend that much to market the film and often more. When calculating film profit the studio (of course) includes the marketing/promo costs.

This is a typical scenario in many industries. Marketing/promotion can easily cost more than the product R&D costs.

 

[oicdn]

FWIW, the largest money margins in office or electronics retail is cables. USB cables have a mark-up of 95% whereas other various cables and adapters are around the 90% mark.

I suspect it holds pretty true for other cables, but in the audio industry, I suspect those margins are a quite a bit smaller since they're all hand made...and alot of the time, by ONE individual....yikes.