Some mysteries

Unfortunately you are assuming the thing would sell direct to the end user (because you have not calculated in distribution and retailer margins). I know this isn't an oversight on your part because you are a bachelor of science in economics.

However, having learned in the university of life, rather than in some scholarly institute, my economics, which cost me bitter experience rather than uni fees, show that without distribution you not only live on the fringes, but in all expectancy would become a one-hit-wonder.

My guide is my experience. My experience does not cover the common era you are party to, but started around 1982. What may work in Eastern Europe simply doesn't work here, nor in the harvestable fields of the outreach. Out of 100% of possible sales, direct sales account for 20% - that is hard won fact gained over a period of 26 years - over a quarter of a century - a quarter of a century of great change, but the fact remains that without the support of the distributive industry and retail sector, you are known to very few.

One could always argue for the web. Just stick it on there and the sales would flood in. But I'm afraid to say that the Dot.Com crash put paid to that one. Furthermore, search engines are now wise to your locale - big-brother is certainly watching you. Don't believe me for one second, do it! Give it a try, see the orders flood in worldwide (not).

My proof in this argument is a book - a book of accounts that spans the years - a book that can be read and understood.

My dear friend Dejan, you were educated in economics by the great wisdom of that great nation. Did you not know that great nation has fallen? Do you not know why? Do you think for one moment that the model of economics it gave you was faultless? Do you not see the mess that great model has resulted in? You also know much about history - my suggestion is you trace it further back - far, far back. The penny should eventually drop and tell you that great wisdom was only temporary.

And indeed, the distributive/retail network may one day also stumble, but the window of opportunity is still open, just. And therefore I justify my argument above, and you know the margins, and with those margins it isn't such a bargain after all, is it?

Therefore, it makes perfect sense to concentrate on offering a "cost-out" product that serves the same exact purpose, and performs to the "nth ultimate" degree, beating-off the competition for the very reason that it brings the much desired musical satisfaction to the purchaser, but at a price where, with distribution and retail trades factored-in, people can afford. And that is for the benefit of the customer, and not for the act of committing commercial suicide for the sake of pride. It is a marketing mix not taught in any university apart from the university of life. It is not the stuff of which dreams are made, neither is it pie in the sky - and hence it doesn't bring riches, but still it bears fruit. It IS what this business is founded on, and so far with the help of the creator it turns over a honest 0.25M/a, and it is hard work there's no denying, but the meal ticket expired with Naim as I mentioned in an earlier thread.

And that is why I have no interest in promoting it.

dvv wrote: ...I wonder how you get along at all.

Well, we get on through very hard work - making "cost-out" devices perform to a spectacular degree - you ought to try it some time...

As for the others? Mainly they're built in China to take advantage of super cheap labour. I would call that deception and criminal, but for the fact that China has many mouths to feed, and I'm not a racist. God loves all his creation after all. But China has become a convenience for "designed elsewhere" products. However, here you have the root of the greed - not the Chinese people I hasten to add, but Hyper Profits are easily made on half decent gear through the Chinese people's willingness to work for little reward. But will the Chinese people do this forever? I doubt it - nobody likes to be a slave...

Dealers can obtain 70 percent margins! I've been offered 70 percent myself, but I'm Graham Slee - I'm either too nice a chap or downright stupid - I'll let others judge...

The difference between margin and mark-up is obviously that margin, is bigger:

a 70% margin on 100 quid is £233, whereas a 70% mark-up is £70.

We can't offer anything like this sort of margin but we have to be at least in line with the industry norm for non-Chinese origin goods. The industry norm is no secret if you're willing to do your research - and the web has made that relatively easy, if not less so recently, because of the search engines returning far more materialistic search results (but Joe Consumer is after all materialistic...).

And because it's no secret any more I may as well tell you that the absolute minimum the distributive and retail trades in hi-fi will put up with (sometimes begrudgingly) is a 30% margin on distribution and a 40% margin at retail, plus any taxes like VAT (in the UK and throughout EU Europe) on top.

So people like us do really have to try extremely hard to give the customer an incredibly good musical performance without having any real money left to do it with. And going on what the vast numbers of our customers say, we've managed to do that year in year out. Add to that the continual interference of the EU and other world powers into our affairs - preventing us doing this, preventing us doing that - and it's a pure God given miracle that we've been able to do it - and are continuing to do so.

Take WEEE as one example of EU interference. To help their stakeholders make lots of money (the rag and bone men who are the EU Governments friends) they introduced another form of stealth tax, which like Thatcher's Poll Tax doesn't differentiate between rich and poor. We are forced by European law (that's Europe, not just the UK) to pay £2,200 GBP per year for the collection of the £10 GBP per year of alleged pollution we cause - yes just £10! And that £10 is based on the assumption that people throw away our products! Which simply doesn't happen - our products are built to stand the ravages of time - so we are being charged £10 for nothing! Plus the other £2,200 a year just to administrate that nothing. And who administrates it? The Right Honourable John Gummer MP (Chairman of Valpak: an EU [European Union] Government approved Compliance Scheme! So don't go accusing Great Britain, making Europe look squeaky clean, Dejan!

Then before that came RoHS, where the EUROPEAN UNION alleged that the electronics industry pollutes the water we drink by the mega tonnes of Lead, Cadmium, PBDEs, etc it dumps into landfill when the customer tosses his broken toy in the bin. But, isn't that what WEEE is for? No, yet again the twisted EU bans the 1% and allows the 99% to do what the bloody hell it wants. For example: I am not allowed to use microscopic amounts of Lead that are beneficial to a prolonged lifetime of my products, but I can make the things run off Lead Acid or Nickel Cadmium batteries that weigh several orders of magnitude heavier. Think about it Dejan, your lovely Europe did this!

And now, "Two legs are good - four legs are bad", yes Animal Farm! Or for those who don't understand: European Eco-Design! We just happen to make products that operate on a single voltage - you know? just like valves (tubes) do! But Europe has decided in its "wisdom" that single voltage external power supplies must be of better efficiency than all others, or else war! Therefore we have to use switched mode power supplies for our more affordable products, at which you will wince because you know that switched mode is simply rectified noise, with most of it being at RF. But, by good British Engineering we are able to make products that sound spectacularly brilliant using switched mode, while the competition in Europe (and other places too) is allowed to have its easy time using its self proclaimed superior multi voltage supplies, except that our customers will tell you, we urinate all over many of them, and some of our customers ARE European - and ARE realising what's best for them.

And we do this all for a mere pittance? Yes we do - and we're British! And you wonder how we get along?

And in finishing off this British end of the argument for the time being, I must tell you about a European manufacturer who I was in conversation with. When I asked how they tested their products, I was told "we have friend at local technical college who test the prototype for us - distortion, noise, that sort of thing. And before we send out we check the voltages...". I ask you?

What we do as responsible British manufacturers, is to test every single one for distortion, for noise, for bandwidth, and anything else that could possibly let a product down (and yet we still get the occasional customer with their crappy over priced, over hyped crap, blaming our products when their rubbish breaks down shortly after purchase - arrogance eh?)

And you wonder how we get along at all?

Well wonder on.

dvv wrote: Back on the track - why are there no facilities for balancing the phones, and audio in general?

Unless you are unfortunate to be deaf in one ear, I would think, given properly balanced program, there will be no need for a stereo balance control on phones. And after all, we measure channel balance on all our headphone amps at production level, and if a pot (volume control) is found to be outside specification (our spec I hasten to add - and our tolerance is within 1dB - and I will stand by a double blind test to see if anyone can split hairs on that 1dB or even notice it's there), it gets taken out and slung in the scrap bin. But we buy quality components in the first place - that is to say, components of good engineering quality, not BS, like the hi-fi industry cavorts with - and how do I recognise good quality components? 34 years actually diligently working in the industry brings experience! No, I'm not a lie telling newbie that the majority trust!

As for how the others get on? Don't ask me.

@ dvv: People only whine and moan when they don't know what they are afflicted with. It's quite plain to see, if you know where to look (but I'm not telling you where because to use one of it's words, you are ever so slightly froward), that all those with the mark will meet their maker, and as such, the EU will collapse and all those who are connected with it, but what's left of its ruins will still think of itself as being great and will try to do great harm (as it does now), but it will also become dust. Take this simple analogy: Does night follow day? Or does day follow night? Everybody I know says night follows day! Need I say more?

Actually I think I should say more but as most people are so cock sure of themselves through being fed BS parrot fashion from cradle to grave, and believing it, they also see themselves as having a greater command of understanding than their peers. So as not to fall into that trap I will say no more on that subject here - let the blind continue to lead the blind over the edge, at least it'll be less crowded for me one day...

Oh yes, pot gain, I know it well. And in saying that I'm a liar!

Please educate the "masses" here by presenting your argument for "pot gain" in an understandable mathematical argument, remembering that I have been educated in mathematics at university level, so I don't understand if put any other way...

Dave Millier wrote: Me, I'd do something else for a living before I ended up in a nut house...

Already been there, just trying to help a few mates escape too, but that's proving a difficult task...