Rip off hi fi true or false ?

Blacksabbath25

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Most hi-fi systems on sale worldwide are so heavily marked up that the majority of customers are being scandalously ripped off. That's what AVI hi-fi chief Ashley James said in an interview conducted with Tech.co.uk last Friday at the Bristol Sound & Vision Show .

He also said that companies are selling inferior products for extortionate prices, and that the magazine industry is supplying unhelpful and inaccurate reviews which allow the hi-fi manufacturers to get away with it.

"I'm not going to mention the name of a company which sells an AV processor for several thousand quid. You boys with computers will know perfectly well that if you want Dolby 5.1 you can get a PC card for £7.50 with the same chipset in it," he said.

"We had a customer who came to see us last week, [who paid] £4,000 for a power supply from this company, but it hummed like buggery and it drove him up the wall so he took the lid off of it. And what was in it? One transformer, two capacitors and a regulator! Forty quid's worth of bits in a box that cost £4,000."
Rampant rip-offs
James said that this practice is rife in the industry, and that the rip-off hardware includes many types of loudspeaker as well as CD players, amplifiers, tuners and power supplies.

He said: "If you go to [major player in the hi-fi industry; name removed] to buy a 50 watts per channel amplifier - bearing in mind that you would need 500 watt peaks for most modern recordings at normal listening levels - you would be asked to pay around £750. A CD player could be £850. If you want a radio then that's more money, and if you wanted a pair of speakers that could be an additional £850."

"So for £3,000 you've got a pretty mediocre system and I think it would be difficult to argue that they were in anyway superior to a [much cheaper] system you might buy from Richer Sounds - Cambridge Audio or something like that.

"That's the truth, and I think the fact is that there are lots of companies who do the same sort of thing - and behind the scenes most people realise that. And I think that most of the public at large feel the same way."

James said that the failure of the major hi-fi magazines to point out these massive price discrepancies is leading to buyers being severely ripped off.
Poor journalism
"The magazines have not been very discerning. And as a result they haven't been able to tell people if things are very good value for money."

"The fact of the matter is that loudspeakers can be sold in sufficiently large quantities to certain shops, for the discounts to be up to 80 per cent. Now I've never seen a review in a magazine which says [that the retail price] isn't very good value for money. And yet I bet the manufacturers are still making a profit out of the £1,000 pair of speakers they sold discounted for £200.

"So we've got a load of crap loudspeakers out there, the reviews of which help nobody. We've got no attempt being made as to whether something is value for money or not. We've got an £850 50 watt per channel amplifier, and another one from Cambridge Audio for £200 which was better specified."

James said later in the interview that some of the top-end hi-fi equipment that is sold for many thousands of pounds is worth nowhere near that amount, and isn't great quality in the first place.

"It's no good and it's ridiculously priced. They're very nice people in a room down the hall [at the Bristol hi-fi show] but their amplifier for £4,500 [he shakes his head in disdain]... I don't know how much the rest of it is, but it's utterly ridiculous."

According to James, hi-fi magazines in the UK and US, with one or two exceptions, have had every opportunity to change the tide; intelligent readers have written in and pointed out the "obscene" quality-to-price ratios.
Never-ending
But instead of taking heed, the magazines have apparently only responded by inviting replies from the "lunatic fringe" manufacturers in order to stir up controversy. And that's as far as it goes, which means the hi-fi companies can continue charging whatever they like, unchecked.

"I just think that [listening to music and buying hi-fi gear] is an intelligent pursuit. And I think at the moment large numbers of people are being denied hi-fi by shops that are reluctant to accept that [these intelligent people] exist, and by magazines that haven't even considered that they might exist," James said.

"You've got some hi-fi systems with £80 worth of components inside being sold for £2,750. And the magazine reviewers are just not good enough to tell the difference."

Ashley James got his first job in the audio industry in the 1950s. He later became an instrument engineer, a watch and clock maker and a restorer of automobile engines. He eventually receiving formal training and becoming a manager before settling at AVI.
 

jjbomber

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Blacksabbath25 said:
Thought it world be of some interest as a topic and just like to know if we do get ripped off?

There is a much higher mark up on mobile phones than there is on hi-fi. I know a car company in the UK that gives a 53% discount on fleet car sales. So no, we are not ripped off at all. I know one hi-fi accessory where the dealer gets 9%. Not even worth stocking the product.
 

Vladimir

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...car and wine analogies.

Helmet on.
helmet.png
 

chebby

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Mark Rose-Smith said:
Guess I'll never find out . I'll never part with 4k for an amp or any other single component at that kind of money.

And if I had 500 watts (even just on the peaks) going through my 90dB speakers at 8 feet distance I am not sure if they or my eardrums would burst first.
 

chebby

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Vladimir said:
...car and wine analogies.

Helmet on.

Just like the quote in the OP, it's all been digested (and composted) years ago. Eight years ago in this instance...

clicky

It was all just marketing bluster. Another way to skin a cat and cheaper than paid advertising.
 

iQ Speakers

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I think I may just answer this one in the morning, I have just finished building a pair of X overs and rewarded myself with a few beers. I do have an opinion on both sides of the potential controversy. My only experience of Ashley was.... stop. I've had enough controversy for one week.
 

drummerman

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Blacksabbath25 said:
What got me was a man buys a power supply for his hi fi For £4000 just to find out it only had £40 wouth of electronics in side is that for real ?

According to DEFRA, Farmers get paid an average 23.66 pence per litre of milk ...
 

jonathanRD

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We could do this for days - I remember the basic manufacturing and component costs for car & lorry batteries (lead acid accumulators) were mainly under £10 and even the large lorry/bus batteries were under £15.

When I worked in that business, I used to get them at 'cost' and sell them to my friends who thought they were getting them really cheap, yet I was still making a small fortune myself.
 

Vladimir

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Names that would come up first in the UK as pioneers of 'designer' electronics are Ivor Tiefenbrun and Julian Vereker. However, the king of them all worldwide is definitely Mark Levinson. The man sold cheap OEM Chinese amplifiers for huge markups under his brand Red Rose Music, and he isn't even an engineer, just a failed trumpet musician. Someone else always builds the amplifier and speakers he sells. The Mark Levinson amps you can buy today have nothing to do with the actual person considering he sold his name as a brand to Harman Int. decades ago. After claiming to have retired, he again launched a company under the name Daniel Hertz in Switzerland. Hertz after his ancestor Heinrich Hertz and Daniel after a favorite uncle or something. The man is a genious coming up with this stuff. Who buys it? Dmitry Medvedev owns Daniel Hertz speakers and LG paid big money to have "Audio by Mark Levinson" signature on their gadgets.

Oh, btw. He is the only true jet set in the hi-fi world, being a former husband of Kim Cattrall (Sex and the City). If there ever was an exact opposite of Ashley James, it would be ML.
 

chebby

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Blacksabbath25 said:
What got me was a man buys a power supply for his hi fi For £4000 just to find out it only had £40 wouth of electronics in side is that for real ?

Yes, probably (at the 2007 figures he was quoting).

I recently looked into buying a speaker kit that retails for £310. If you want the company to build and finish and varnish the speakers then they cost £1024 (with postage). That seems unfair until you imagine how much a cabinet maker costs to employ to make a pair of speaker cabinets up to 'furniture' grade standards of finish and how much it costs to buy and store all the different veneers and then the assembly and fitting and testing of the drivers and crossovers etc.

Make the power suppply yourself with £40 worth of electronics is the only answer.

Otherwise let others source all the components and employ people to build them in a business premises with light, heat and power and a safe working environment (plus paid vacation and pensions in a few cases). They will have to pay taxes and NI and keep a bunch of spares for everything they make to support their 5 year guarantee. They will be legally obliged to keep their accounts in good shape and they might like to pay to advertise their wares (reasonable enough). They may even research future product lines.

Also they will not get the £3960 'mark-up' being objected to. The dealer will take a sizeable chunk of that and the taxman takes 20 percent VAT at every turn (on dealer and manufacturer and customer and courier).

Council taxes on the premises and - often - lease or rent payments.
 

drummerman

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Hifi is not one of life's existential requirements. It's a luxury.

As such things are worth as much as people are willing to pay for it.

Its pointless arguing about it.
 
Vladimir said:
Names that would come up first in the UK as pioneers of 'designer' electronics are Ivor Tiefenbrun and Julian Vereker. However, the king of them all worldwide is definitely Mark Levinson. The man sold cheap OEM Chinese amplifiers for huge markups under his brand Red Rose Music, and he isn't even an engineer, just a failed trumpet musician. Someone else always builds the amplifier and speakers he sells. The Mark Levinson amps you can buy today have nothing to do with the actual person considering he sold his name as a brand to Harman Int. decades ago. After claiming to have retired, he again launched a company under the name Daniel Hertz in Switzerland. Hertz after his ancestor Heinrich Hertz and Daniel after a favorite uncle or something. The man is a genious coming up with this stuff. Who buys it? Dmitry Medvedev owns Daniel Hertz speakers and LG paid big money to have "Audio by Mark Levinson" signature on their gadgets.

Oh, btw. He is the only true jet set in the hi-fi world, being a former husband of Kim Cattrall (Sex and the City). If there ever was an exact opposite of Ashley James, it would be ML.

Eh what??

Just goes to show what those wonderful Marketing chappies can do once a name becomes 'established'.
 

spiny norman

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It's all a scandal: I mean, there are some companies selling direct, so cutting out the distributor and retailer profit margins, yet still selling for the same price as their (few) retailers charge, plus adding on delivery. How can they get away with it?

Mind you, given the vintage of the original interview, how do we all think that nice Mr Brown is doing as Prime Minister?
 

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