Roger Skoff writes about when a ripoff is really a ripoff
I read recently in another publication that Asian manufacturers are now copying ultra‑High‑End brand audio products and selling them, just as one cited example, a US$95,000 amplifier for under US$1000. I think I was supposed to be outraged, but the article said that the “cloners” were doing it legally and that even the manufacturers of the cloned products weren’t complaining.
Hmmmm.
If they’re really doing what the article says, all kinds of possibilities come to mind: For example, if the products really are “clones” – meaning, in the biological sense, “genetically identical copies of an original” – I have to wonder how their manufacturer can make them so cheaply.
If ordinary manufacturing/distribution standards apply, a product with a US$1,000 retail MSRP must cost its manufacturer no more than an absolute maximum of about US$200 to build, with the rest of the retail price going to the manufacturer’s profit and (the bulk of it) to paying the costs and profits of any involved distributor and dealer. If an Asian manufacturer can really do that – can make that exact same US$95,000 amplifier for just US$200 or less – how can it possibly be – even if labor and overhead costs elsewhere are ten times as high – that the original manufacturer had to price the “real” product at US$95,000?
Even at twice the cost for parts and overhead and ten times the cost of labor (assuming labor to be 25% of the total cost of the Asian product), the total suggested retail price of the amplifier still only calculates out to be US$4,000 ($150 for parts and overhead x 2 = $300. $50 for labor x 10 = $500. $300 + $500 = $800. $800 x 5 = US$4,000).
The stated US$95,000 price tag for the original branded product is nearly TWO DOZEN times more than that! (US$95,000 ÷ US$4,000 = 23.75, or, stating it differently, 2375% more money.)
Now I know there’s a rat in there somewhere. Either the Asian manufacturer is losing a lot of money on every unit sold (highly unlikely); the original manufacturer is charging hugely for his brandname and stuffing his pockets with profits (we should all be so lucky); the cheaper products really aren’t “clones” at all, but are made of inferior – or at least greatly cheaper – materials, as well as cheaper labor; the original manufacturer (as he is certainly entitled to) has priced his product to offset or amortize VAST R&D costs; or the article is simply mistaken or being purposely misleading about something. None of these explanations, however, comes close to justifying a 24× multiplier.
And, if I/you/we can actually buy a US$95,000 amplifier for only US$1000, where are these things sold? I want to buy at least one.
What I really think is happening here, though, is something else, entirely. Regardless of what anybody might tell you, I think a US$95,000 amplifier is simply overpriced. IMNVHO, there is flat no way that an amplifier priced that high can reasonably be worth what they’re asking for it.
The key word there, of course, is “reasonably”. At present prices (about US$4,500 per Troy ounce), making the amp’s chassis out of 24K gold could get it up to where it would have to cost that much or more at retail, but other than being pretty, what good would it do?
How could having a solid gold chassis improve the sound? Gold, while 5 to 7 times more conductive (lower in resistance) than mild steel (the metal most electronics chassis are made of) is still only about half as conductive as copper, which would be (count ‘em) ONE THOUSAND TIMES CHEAPER THAN GOLD, and still not make much difference at all – especially in a balanced (differential) circuit, where there’s no chassis ground.
The fact of it is that, on very expensive products, a goodly chunk of the price goes not into the performance at all, but into making the product look good enough to make a potential buyer think it’s worth the price he’ll have to pay for it.
And there’s nothing wrong with that; it’s simply the way things are.
In an article I wrote some years ago about a very fine amplifier I still own and am still very pleased with, I told readers that it had a very beautiful 5/8” thick machined‑aluminum faceplate with equally beautiful heavy‑duty lifting handles mounted to it. The amp’s looks were so great that I commented on them to the Designer/Builder, who told me that he was glad to hear it, but that they ought to be, because they had cost him $200 per unit to have made. (That was for an amp that had a list price of US$5,500 – very expensive for the time).
When I did some quick figuring and worked out that just that one feature must have added nearly $1,000 to the amplifier’s MSRP, I asked him if he wouldn’t have been better off – sold more units for greater total revenue – if he had just used a cheap faceplate and dropped the price by $1,000. His response was that if he had done that – made the amp cheaper and cheaper looking – he might not have sold any units at all. $4,500 was still a lot of money for an amplifier in those days, and without the good looks to bolster its perceived value, people might, even despite its outstanding performance, have ignored it completely.
So, looks are worth a lot. And a respected and/or prestigious brand name is also worth a lot. But, in tube amplifiers, for example, and in a lot of our other electronics, too, copying – call it emulation – is so common as almost to be the norm.
Think of all the amplifiers available, even today, using or “emulating” the Williamson circuit or various kinds of sub‑circuits with recognizable names. And realize that components – capacitors, resistors, transistors, diodes, etc., are all available in their myriad brands, sizes, and values to anyone who wants to buy them. Transformers are a little different, and tubes, even with the same number (6L6, 12AX7, etc.) can vary all over the place in performance and cost, depending on brand, age, and even batch, but, just considering part names or numbers or their makers, making a “clone” of something really isn’t all that hard to do.
What is hard to do is to figure out what is actually meant when someone talks about one product being a clone of another. And, if two products are made of the same or identical parts and if they sound the same and if one is vastly more expensive than the other, guess which one I’m going to buy?
I don’t really care about the brand name. I DO care about the performance. And if I can get a better deal, I’m always going to take it
