CLX, Summit, Spire, Vantage Parts Cost - Anyone Want To Guesstimate?

[User211]

I just thought it would be interesting to make an informed guess at what the parts cost of any of the titled MLs would be in terms of PARTS only.

We must realise that isn't ONLY what we are paying for, and appreciate the significant R&D costs, transportation costs, dealer margins, packaging, employees salaries, company profits, sales tax etc that all get factored into the final price.

I just thought it would be interesting to have a stab at it... anyone dare to have a go? Anyone informed enough to make a good guess?

Replacement panel costs might provide a good insight to making a start. But surely even these are subject to manufacturing & transportation cost, sales tax and possibly a dealer margin?

I guess we are talking the cost of parts to Martin Logan via any sub-contractors etc.

Paradoxically, it might be easier to subtract percentages for sales tax, profit margin, dealer margin etc etc to deduce what the material cost is!

Difficult one. If there are no takers I won't be surprised...

Just so there is no mis-understanding - we are talking the complete parts cost for a particular model ONLY. Why should we care is NOT a sufficient answer...

 

[Jungle Jack]

Hello,
I would guess that the ICE power modules would be the single most expensive part in the speakers. With that being said, I would guess the price spread between the three speakers would not be that much.
Cheers,
ML

 

[Feltran]

For most high end audio companies, like ML, I would imagine that a fairly significant chunk of money is spent on R&D, and also that there is a lot of money spent on assuring high quality construction, and quality assurance (which sometimes doesn't pan out, but most of the time it does). In light of those things, I would think the cost of the parts would be less than a third of the retail price for most products. It would, however, be more if they use expensive components from other companies (like speaker cones), which I think ML does sometimes, iirc.

For high profile consumer electronics, like iPods, it will sometimes be the case that when the product launches the profit margin is quite small, but it grows over time as the components get cheaper and are ordered in larger numbers. However, since I don't think ML ships in high enough volume, or uses many (if any) parts that are particularly cutting edge, I doubt their profit margin changes much over time.

 

[User211]

Here's another thought...

Is it possible that a CLX, whilst consuming a lot of R&D money in developing the new dual force drivers, actually costs about the same as a Summit to produce in terms of parts cost?

Why? Because ML have the tooling equipment to make ESL drivers in-house and don't have to pay a premium for 4x out-of-house woofers (assuming they aren't made in-house... anyone know what they use and how much they cost?). Granted the CLX is physically bigger and consumes more wood etc etc...

 

[amey01]

Parts only - geez, I wouldn't think it would be much at all, especially in the quantities in which ML purchase.

As for a stab, I wouldn't even try - by nature, I think in AUD and I'm sure the USD figure would be substantially differnet.

 

[FISH_MAN]

made in the USA + low quantities + customer service = expense

I will start of by saying that I own and operate my own retail store.I think profit margins for manufacturing range about 20-30% retailers make about 40-50% on cheeper lines as this percentage decreses as the product line goes up in price but not allways sometimes such as products that have no competetor such as the clx they go the other direction in price I also belive that barrets,tweeter best buy "magnolia" make more money on audio than video.any product I sell made in the USA or europe cost way more than others, add some good customer service to this which is really non existant in todays market and you have a recipe for a high price tag. I know my answer is not what you guys are looking for wich is "parts only". maybe my % guidlines will help you guys. martin logan and and their accountants are the only ones that really know and I think it should stay that way! I know you are trying to figure out why the clx cost so much more but hey should the best get the best?

****FORGIVE US MARTIN LOGAN FOR GOING WHERE NO CONSUMER SHOULD GO****

ps sorry i have such bad grammer

 

[User211]

****FORGIVE US MARTIN LOGAN FOR GOING WHERE NO CONSUMER SHOULD GO****

Yeah, I know, it's pretty direct, isn't it?

I think it is cool, though. We are ONLY guessing... and there is no harm in that, ultimately.

I think any made statement along these lines is good... just to know other people's thoughts on the matter... and the chance of learning something.

 

[amey01]

The more I think about this, the less relevant I think it is. It's like saying "What is ML's staffing cost" or "what do you think their quarterly electricity bill is?"

Cost of materials is such a miniscule amount in the overall cost of running an outfit like ML, and the raw materials are such a small factor in determining overall sound as well - I think things like design expertise, execution, R+D, quality of build, precision of manufacture, manufacturing tolerances, testing, etc. all combine to produce the sound we know and love.

Just my view.......

 

[User211]

amey01 - Doens't that fall into the "Why should we care is NOT a sufficient answer..." bracket?

No matter. And your points are taken. I just find the "what is the true material cost" of the speakers sitting in front of me an interesting question. To be honest, all the other costs would interest me as well. Maybe I should have been an accountant! (NOT!)

 

[tonepub]

It's actually very simple.

Most high end manufacturers that have dealers and distribution operate on a "multiplier" of between 3 and 5.

Because the CLX is a bit more complex than other ML designs, I'll give them the benefit of the doubt and guess they are making a bit less money on these than say a pair of Summits.

If the pair of CLX's cost 25k at retail, that means the dealer probably pays somewhere 12.5 and possibly as high as 16k. That will usually leave the dealer a margin of about 40%. Most high end lines from other mfrs leave the dealer 30-50% gross profit as well. That's what they pay their sales people, the rent, phone, etc, etc.

Out of that 12-16k, ML probably makes between 30 and 50%, so the actual parts and labor cost is 4-8k.

Again, many of the high end companies I've encountered will take somewhat of a lower profit margin on a flagship or an entry level product to get more market share and/or exposure.

Considering the amount of R&D that has gone into the CLX, I wouldn't be surprised if they are on the lower end of the scale with this product, at least for the first few hundred pairs of CLX's. Then if the product enjoys a long life span, they will probably be more profitable on pairs 300-1000.

Hope that helps!

 

[MPS]

To be on the safe side I'd expect the cost of components to be around 1/10 of retail price for any consumer electoronics piece. Single most expensive component generally being enclosure, in case of speaker the box. Drive units would probably be number two if counted for prise per piece. Units which have power supply the transformer(s) being second, which partly explains popularity of chopper supplies. Very high quality passive components like foil coils and teflon or PIO capasitors can cost up to XXX$ even in large quantities (I don't think ML is using these in any model). Power electronic components and large elecrolytic capasitors can cost tens of $ and so on...

 

[FISH_MAN]

My 2 Cents

I personally find this thread distasteful. I think the creator should remove it.
I know I am new here and my opinion probably has little wheight. I just think out of respect to the greatest loudspeaker manufacture in the world this should be removed.

 

[tonepub]

Again, keep in mind that there is a 50-50 chance ML is making next to nothing on these speakers and is using them as a marketing tool to showcase their technology and build brand awareness for their other products....

The parts cost could be one thing, but there may be a ton of hand assembly time and possibly a high rejection rate on those new bass panels, crossovers, etc.

Acura did that with the NSX. They lost money on every one they sold, but they got so much goodwill and brand awareness in the end it was still a good move for them.

SO, I wouldn't jump to rash conclusions on just how much money they are making on this one.

Also, considering how much ML supports their legacy models, that costs a lot of money that has to be factored into overhead. Look at all the CLS owners that can still buy panels! I have a friend that has someone elses speakers that are only six years old with a dead tweeter.

He was informed by the mfr. that "they no longer stock parts for that speaker, the warranty was only five years..."

It's a tough business to maintain. Parts aren't everything.

The Mona Lisa was made with $25 worth of art supplies, but I can't make one.

 

[amey01]

Also, considering how much ML supports their legacy models, that costs a lot of money that has to be factored into overhead. Look at all the CLS owners that can still buy panels!

I consider ML support to be second to none, but I don't consider this particular aspect to be the pinnacle of their support - it should go without saying.

REASON: The panels are more of a "consumable" than a "spare part" - in my opinion.

Very soon there would be no CLS in existance if they didn't make panels for them.

HP still make cartridges for their old printers, Canon still make cartridges for thier old printers, and so should ML still make panels for their older speakers.

Just my $0.02.

 

[C.A.P]

I personally find this thread distasteful. I think the creator should remove it.
I know I am new here and my opinion probably has little wheight. I just think out of respect to the greatest loudspeaker manufacture in the world this should be removed.

I too agree this is a Distasteful thread. Martin Logan has spent many years developing their proprietary systems and designs. To down play that with a thred like this is shameful. Has any one ever tried building a car from the parts department. Its almost double the cost. The word PROFIT is not a bad word.

 

[Craig]

There are way too many variables and too many intangibles involved to even make a reasonable guess. What's the point?

A good analogy is trying to guess the cost of materials involved in creating computer software. I would guess the DVD disc cost about penny or so. The cardboard and printing ink for the packaging is probably 2 cents. Add another 2 cents for the manual if one is included...no wait...thats available online...So why does software cost $$$.$$?

 

[tonepub]

I consider ML support to be second to none, but I don't consider this particular aspect to be the pinnacle of their support - it should go without saying.

REASON: The panels are more of a "consumable" than a "spare part" - in my opinion.

Very soon there would be no CLS in existance if they didn't make panels for them.

HP still make cartridges for their old printers, Canon still make cartridges for thier old printers, and so should ML still make panels for their older speakers.

Just my $0.02.

However, there are a lot of companies that do not make parts for their older products anymore. The high end is littered with companies that are either out of business or just don't have parts.

So, I still find it highly commendable that ML takes care of their older customers and makes the parts available...

 

[amey01]

However, there are a lot of companies that do not make parts for their older products anymore. The high end is littered with companies that are either out of business or just don't have parts.

So, I still find it highly commendable that ML takes care of their older customers and makes the parts available...

Absolutely - I agree!! I was specifically referring to panels though. I think it would be very different if ML stopped making say binding posts for Monoliths or spikes for CLS - those things are not consumable and can also be fixed / modified by third parties. Panels are a different story altogether.

 

[MPS]

Some have critisized this thread but I don't see any harm discussing these issues, after all they are just 'facts of life'. No matter how much we like ML it isn't a charity organisation. 1/10 of retail price for parts only is quite reasonable estimation IMHO. Add same amout for labor and once more for other expences and profit. Now we have 3/10 retail price for factory out price. Count some cost for stocking and transport. Take away about 20% tax (GST) form retail price and retailers margin is probably 20-30%. I think this ain't too far off...
As far as producing replacement panels, I think it's the only way ML can stay in business. Would you invest thousands of dollars on a product which could be totally wasted only after a few years (worst case scenario)? That would also devastate any second hand interest on product. On the other hand that would create opportunity for thirth party units which on long run could end up creating capable competitor on the market. Of course there are patens and so on but it hasn't prevented things happening before... I think ML is playing this thing smart and hope they continue to do so.

Edit; some typos (my output isn't quite the same league as ML's)

 

[User211]

I too agree this is a Distasteful thread. Martin Logan has spent many years developing their proprietary systems and designs. To down play that with a thred like this is shameful. Has any one ever tried building a car from the parts department. Its almost double the cost. The word PROFIT is not a bad word.

How on earth is it downplaying ML??? It TOTALLY is not. I have already indicated in the beginning of the thread that we should bear in mind the other costs we have to bear just to pay for a consumer product. These costs are the same for many other material goods.

My wife's company makes expensive designer handbags... the mark-up of them is insane. The material costs are just the leather/buckles and stitching...

So what? And any buyer of a £7,000 handbag KNOWS there isn't £7,000 worth of materials in it... unless they are retarded of course. But then you might argue that anyone prepared to pay that for a handbag is anyway, just like many regard us as fools for spending so much on hi-fi.

Are you insinuating that MLs are a rip-ff, C.A.P? And as such we mustn't let "the people" know the true material costs? Of course you are not. So where, precisely, is the harm in it? Additionally, we have failed to definately identify what the costs are, anyway... but we know full well that a large percentage of the final price goes elsewhere...