Okay, my two cents. I used to sell this stuff once upon a time and there were HUGE markups on cartridges and also cables, but especially low end cartridges, like at least 200%. In general as the retail got higher, the margins got smaller. Margins on cables were generally at least a hundred percent. I don't know the current industry and I imagine we won't be hearing concrete examples throughout a line from the mfrs or the dealers. Generally audio resale was about 50-100% markup from wholesale.. with variables based on whether a dealer paid cod, bought qty, etc. Actual TVs had terrible margins, 25% markup was awesome.
An interesting story though, we used to sell at the low end, yamaha, sony and denon. Yamaha and Sony were about a 100% markup, Denon was about 60%. Amazingly enough, at the same retail price points, the Denons always sounded better... hmmmm.
If one looks at this somewhat objectively, many, many hardware dealers have had financial problems, even venerated names like Mark Levinson recently, Wadia, McCormack, etc. But when did you hear a cable dealer going out of business? I am sure there is one, I just can't think of one, same thing with cartridges. So if I add what I know of their profit margins to the fact that they don't seem to have near the percentage of failures of the other dealer types, I'm guessing the margins are still pretty healthy.
Now then, having said all of that, I recently had what seemed like a reasonably honest dealer/manufacturer at my nome. He will soon or has come out with cables. For two years, they have been researching the cables, and he feels that the only way they can conceivably break even or make a profit on these cables is to retail them at 6k a pair for the 2 meter speaker cables. He had to buy the test equipment, figure out the manunfacturing, figure out what the key elements to sound were ( he personally thinks it is the leading and trailing edge of an input square wave) market it, advertise it, etc. He is absolutely convinced that if he cannot get this money in the market, than it will not be worth the developemental costs.
Now to my personal experience. I own a calibration laboratory and a test equipment rental/sale business. I look at the materials, the retail cost of the plugs used, the cost of the wire and shielding, as we often make our own cables and connectors, and I can definitely say that the cost is not in the componenents, absolutely not. Now then, look at the cost of accutron drivers direct from the mfr, and a good scanspeak tweeter from Audio Express. Even at full retail, and purchasing the parts for a crossover, and then having a cabinet maker make a one-off cabinet, I could duplicate a pair of 40 grand speakers for well under six grand. So I wonder how much at wholesale, and in quantity, making your own multiple cabinets, the speaker maker has as materials cost, maybe 1/2? However, I don;t have time nor inclination to make audiophile cables, experiment with different connectors and cables, inductors in parallel, etc, etc. so I experiment with various cables and yes, in a high resolution system, there are huge differences in sound, especially in my experience, in speaker cables. So I pays the money whens I hears da difference, and when I don't, I don't.
On the last part of your post, I bet prices wouldn't go down for existing cables, many cable manufacturers just would come out, as they did during the tech downturn, with "amazing new technology able come within 98% of our very best cable due to incredible advances in metallurgy techniques and connector manufacturer".
Having sold hi-end retail, I can tell you I never pushed the top cables when I sold a system, that could have been death to the whole system. I would try to get them to buy a cable I felt was a relatively good value for the particular system, but even if I thought an expensive cable was the best for a system, I would never ever push it because in the eyes of most of the initial buy consumers, I would then lose any credibility I had. If they came back, after they were familiar with their systems at home, at that point I would recommend loaners, and they got to make their own decisions as to whether different cables were worth it. Any dealer I have dealt with, and when I sold hi-end, the challenge was always to try to find the cheapest cable that would make the speaker or system sound the best, and I personally probably did 65% of down time listening trying different cables in different systems to find the best synergy at the lowest price. I have, however seen some very unscrupulous things go on when my friends do their hometheatres. They get charged as much as 20 bucks a foot for hometheatre cable for stuff that doesn't cost the dealer even 2 bucks a foot, because the consumer looks at the total cost, or they look at what they think is the big part... ie projector, and by the time they are getting to the wire, they are so worn out, that they really don't notice the perfoot price, because it is either totalled, without noting the actual linear footage, or it is a relatively inexpensive line item compared to the projector for instance.
Wow, that was some good therapy :)
An interesting story though, we used to sell at the low end, yamaha, sony and denon. Yamaha and Sony were about a 100% markup, Denon was about 60%. Amazingly enough, at the same retail price points, the Denons always sounded better... hmmmm.
If one looks at this somewhat objectively, many, many hardware dealers have had financial problems, even venerated names like Mark Levinson recently, Wadia, McCormack, etc. But when did you hear a cable dealer going out of business? I am sure there is one, I just can't think of one, same thing with cartridges. So if I add what I know of their profit margins to the fact that they don't seem to have near the percentage of failures of the other dealer types, I'm guessing the margins are still pretty healthy.
Now then, having said all of that, I recently had what seemed like a reasonably honest dealer/manufacturer at my nome. He will soon or has come out with cables. For two years, they have been researching the cables, and he feels that the only way they can conceivably break even or make a profit on these cables is to retail them at 6k a pair for the 2 meter speaker cables. He had to buy the test equipment, figure out the manunfacturing, figure out what the key elements to sound were ( he personally thinks it is the leading and trailing edge of an input square wave) market it, advertise it, etc. He is absolutely convinced that if he cannot get this money in the market, than it will not be worth the developemental costs.
Now to my personal experience. I own a calibration laboratory and a test equipment rental/sale business. I look at the materials, the retail cost of the plugs used, the cost of the wire and shielding, as we often make our own cables and connectors, and I can definitely say that the cost is not in the componenents, absolutely not. Now then, look at the cost of accutron drivers direct from the mfr, and a good scanspeak tweeter from Audio Express. Even at full retail, and purchasing the parts for a crossover, and then having a cabinet maker make a one-off cabinet, I could duplicate a pair of 40 grand speakers for well under six grand. So I wonder how much at wholesale, and in quantity, making your own multiple cabinets, the speaker maker has as materials cost, maybe 1/2? However, I don;t have time nor inclination to make audiophile cables, experiment with different connectors and cables, inductors in parallel, etc, etc. so I experiment with various cables and yes, in a high resolution system, there are huge differences in sound, especially in my experience, in speaker cables. So I pays the money whens I hears da difference, and when I don't, I don't.
On the last part of your post, I bet prices wouldn't go down for existing cables, many cable manufacturers just would come out, as they did during the tech downturn, with "amazing new technology able come within 98% of our very best cable due to incredible advances in metallurgy techniques and connector manufacturer".
Having sold hi-end retail, I can tell you I never pushed the top cables when I sold a system, that could have been death to the whole system. I would try to get them to buy a cable I felt was a relatively good value for the particular system, but even if I thought an expensive cable was the best for a system, I would never ever push it because in the eyes of most of the initial buy consumers, I would then lose any credibility I had. If they came back, after they were familiar with their systems at home, at that point I would recommend loaners, and they got to make their own decisions as to whether different cables were worth it. Any dealer I have dealt with, and when I sold hi-end, the challenge was always to try to find the cheapest cable that would make the speaker or system sound the best, and I personally probably did 65% of down time listening trying different cables in different systems to find the best synergy at the lowest price. I have, however seen some very unscrupulous things go on when my friends do their hometheatres. They get charged as much as 20 bucks a foot for hometheatre cable for stuff that doesn't cost the dealer even 2 bucks a foot, because the consumer looks at the total cost, or they look at what they think is the big part... ie projector, and by the time they are getting to the wire, they are so worn out, that they really don't notice the perfoot price, because it is either totalled, without noting the actual linear footage, or it is a relatively inexpensive line item compared to the projector for instance.
Wow, that was some good therapy :)