How is it legal for amp manufacturers to lie?

[bigblank69 10+ year member]

Absolutely nobody is making anything close to this. The barrier for entry is virtually nothing to call up China and order 1000 cheap off-the-shelf amps. In fact, I'd wager that re-badging and selling any Chinese electronics is a very thin profit margin. The companies that do make high margin are the snobophile companies (think Critical Mass).

I would argue that your likely incorrect from a gross profit standpoint... Net profit maybe. Take the CAB 1600.1, Cost per amp before shipping is roughly $74 before shipping (per 300MOQ). If you figure it costs between $25-$30 per amp to ship via Sea Container (more you order less lost per unit which can be spread though out the container), someone like CAB could be into an amp for roughly $100-$105, figure $15 to ship to a customer via a business flat rate account, and you into the amp at roughly $115-120... Set aside maybe another 10% of your cost internally for warranty costs and your at $132... Sell it for $200 and your margin is 66%... Why do you think all the companies that sell catalog items are still around (Boss, Maxxsonics, Epsilon, Sound Around (Pyramid, Lanzar, Pyle) etc... While Original Equipment Designers have been forced to branch into other spaces to keep profitable...

Not saying someone like CAB is "Rolling in Cash", their net profit margin is probably not enormous at all, and could be as low as 10% as they have to pay warehouse costs, employee costs, marketing costs, transaction fees etc...

 

[hispls 5,000+ posts]

I would argue that your likely incorrect from a gross profit standpoint... Net profit maybe. Take the CAB 1600.1, Cost per amp before shipping is roughly $74 before shipping (per 300MOQ). If you figure it costs between $25-$30 per amp to ship via Sea Container (more you order less lost per unit which can be spread though out the container), someone like CAB could be into an amp for roughly $100-$105, figure $15 to ship to a customer via a business flat rate account, and you into the amp at roughly $115-120... Set aside maybe another 10% of your cost internally for warranty costs and your at $132... Sell it for $200 and your margin is 66%... Why do you think all the companies that sell catalog items are still around (Boss, Maxxsonics, Epsilon, Sound Around (Pyramid, Lanzar, Pyle) etc... While Original Equipment Designers have been forced to branch into other spaces to keep profitable...
Not saying someone like CAB is "Rolling in Cash", their net profit margin is probably not enormous at all, and could be as low as 10% as they have to pay warehouse costs, employee costs, marketing costs, transaction fees etc...

Lanzar/Boss/Pyle make money because of economy of scale. Bear in mind those companies sell to a distributor who makes a cut who sells to a retailer who makes a cut. There simply isn't any big margins on this because literally anybody can get the same stuff from China, slap a brand name on it, and call themselves an audio company.

Absolutley they are not making that much i was just making the point they are getting dirt cheap containers of amps from china and making decent profit on them and selling tons. at a low price point they are still doing pretty well I'd think

Give it a whirl if you think it's easy money. I don't know what you do for a living now or how much you earn, but I bet if you had to run CAB for a year for what the owner actually sees in his pocket you'd be ready to take your current job back.

 

[LosIsATool 5,000+ posts]

Consumer electronics posted profit margins a few years ago. All the BS brands where at the top. They also have crazy sell numbers

 

[bigblank69 10+ year member]

Lanzar/Boss/Pyle make money because of economy of scale. Bear in mind those companies sell to a distributor who makes a cut who sells to a retailer who makes a cut. There simply isn't any big margins on this because literally anybody can get the same stuff from China, slap a brand name on it, and call themselves an audio company.


Give it a whirl if you think it's easy money. I don't know what you do for a living now or how much you earn, but I bet if you had to run CAB for a year for what the owner actually sees in his pocket you'd be ready to take your current job back.

I think your missing the point of difference of net profit vs gross profit per unit. Before you add in non product related expenses the margin can be that high... It's once you start deducting all the other costs your net profit per unit gets thin, they you make it up in volume.

So you can have a high gross margin, but actually make very little money

 

[Lbetts818]

Lanzar/Boss/Pyle make money because of economy of scale. Bear in mind those companies sell to a distributor who makes a cut who sells to a retailer who makes a cut. There simply isn't any big margins on this because literally anybody can get the same stuff from China, slap a brand name on it, and call themselves an audio company.


Give it a whirl if you think it's easy money. I don't know what you do for a living now or how much you earn, but I bet if you had to run CAB for a year for what the owner actually sees in his pocket you'd be ready to take your current job back.

No way shape or form was i saying it's a easy market that is a get rich quick thing. I guess my main point was the budget amps that say 5000 watts pry on the mass market of people that do not know any better and sell a ton of amps for small profits to 100s of thousands of people so that's why they mark them up. I completely understand that more car Audio company's fail than succeed. I used to run a small business with my parents and i fully get out of a 20$ bill if you take home 5$ your lucky. Like rob said, overhead, rent, energy bills, packing material, hours answering emails, shipping etc.... I was just saying that as a metahpor more or less as to why they are able to sell amps that do not do rated. They buy cheap, sell cheap and go for quantity over quality. I have no clue how a Audio business makes profits but with any retail you can have your "Gucci" and sell less volume at higher profits or you could have your hanes t shirts and only make a small profit per item but when selling a massive volume that small profit adds up. Example. I grew up in the carnival business. Yup a carnie. But anyways for the games me and my wife owned let's say one made 1000$ 25% goes to the employee, 25% to the show for rent, 10-20% on stock, then fuel to move every week, misc. expenses I was lucky to see 1-200$ out of that 1000$ so I completely understand. I sold all of my equipment and got ahourly job for a reason //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif

And my broke a$$ just broke 39k for 2017 so not starting any business. If anything I prefer to diversify my investments in stocks and there's these new p2p loan apps that provide a decent return as well. But any money I invest now to me is more a 401k than a get rich thing. Trying to have it so when my daughter goes to college in 10 years I can fully pay for it so she can focus on a degree vs working 3 jobs to pay for it.