The Absurdity of Hi-Fi Prices

One of the many benefits of my foray into DIY audio is that I’ve learned the prices of the components that go into many hi-fi components, including the high-quality capacitors, resistors, transistors, and transformers that form the heart of most amps and preamps. The truth is that even the highest quality components from the likes of Elna, Nichicon, and WIMA are relatively cheap – even when bought individually and without the volume discounts available to manufacturers. This makes the sky-high prices many manufacturers are now charging even more indefensible.

Without naming names, below is a picture of a $10,000 Class A amplifier that was featured in Stereophile and received a favorable review. It looks very similar to some of the Class A amplifiers I’ve built using parts sourced from Mouser, DigiKey, and AliExpress (for aluminum cases). By my rough calculation, even including the aluminum case and the cost of having the PCBs printed in Taiwan, this amplifier includes at most $700 in parts. And that is a conservative calculation based on the prices that I, as an individual consumer, would pay. Assuming this manufacturer is building even a few dozen of these, the price of the components would drop significantly as a result of volume discounts.

This begs the question, what could possibly justify charging $10,000 for this amplifier? Well, in my view, nothing.

Labor is obviously an important factor in the cost of any product, but putting an amplifier like this together is not particularly time consuming. Soldering the components to the boards is quick for an experienced technician. The manufacturer almost certainly orders their cases with pre-drilled holes for the PCBs and transformers, and, as you can see from the photo, there is minimal wiring. A single experienced worker could probably assemble several of these a day. And even putting all that aside, even if you spent $1,000 on labor assembling a single amplifier (which is a wildly high number), you would still be looking at a 588% markup when you sell the product for $10,000.

The next question is whether the unique design of this amplifier (or any other amplifier for that matter) justifies this huge markup. Without having listened to this specific amplifier, the answer is almost certainly no. Any well designed modern Class A amplifier will have distortion characteristics far below what the human ear can discern. That is not to say that measurements are everything and amplifiers can’t have their own unique sound. Many do. But whether a given amplifier sounds “better” than another amplifier measuring equally well is a purely subjective determination. So yes, it is possible that there is someone out there who will hear this amplifier and believe that it sounds marginally better than a similar Class A amp selling for one-third the price, but I can’t see how that could possibly justify charging $10,000 for a $700 collection of parts in a cheap aluminum chassis.

The truth, unfortunately, is that Hi-Fi prices are no longer moored to actual costs. For whatever reason, most manufacturers (with the exception of Schiit, Emotiva, and a few others) have turned their focus to serving a small group of deep-pocketed customers who can afford a $10,000 amplifier, or for that matter a $50,000 or $100,000 amplifier. Those customers either do not realize or do not care that they are being vastly overcharged for products that in most cases sound the same (or worse) than products costing a quarter as much. So long as it looks nice on their audio rack and they can brag to their friends, I guess they are happy.