The No.1 Website for Pro Audio
 All  This Thread  Reviews  Gear Database  Gear for sale     Latest  Trending
Why do modules cost an arm and a leg?
Old 24th May 2018
  #1
Here for the gear
 

Why do modules cost an arm and a leg?

Looking at the prices of modules I frequently do wonder if they are really worth and arm and a leg. Eg take the price of a Verbos Harmonic Oscillator--what makes this piece of kit worth so much? It comes on top that recently a merchant told me that the margins are so low that he almost cannot survive!!!???
Old 24th May 2018
  #2
Small number of sales compared to other synths.
Each module has a research and development period. Something like the `Verbos Harmonic Oscillator' is more complex to develop than an ordinary analog oscillator that's been done many times before.
I do think some modules are premium priced because they know they will sell a bunch almost at any price.
But I think most of the time it's because you're talking one and two man companies, making products that have a limited number of sales.
Old 25th May 2018
  #3
Lives for gear
 
spiderman's Avatar
Chris is right... but there's also the "physical" aspect. Omnisphere (or any software instrument) has no production costs beyond RnD. Maybe some support expenses. Add to Chris' concept... Having built a few modules, you'll find that about 50% (more or less) of the retail price is just break-even for components. Then figure labor, shipping, retail cut, etc.

There is a reason most people with huge modular kits are older... most young people don't have enough money to go deep on building a rig... unless they are trust-fund types, rock stars, or in deep credit card debt (major mistake).
Old 25th May 2018
  #4
Lives for gear
 
Coorec's Avatar
The simple answer is: because people are willing to pay that much.

If they wouldnt be able to sell for the price they would make it cheaper.

Thats the reason why they are so afraid of Behringer. Because their market entry will change peoples perception about what gear is worth and the other companies have to adapt.

Like Moog just did with the GM. 3 years ago they would have charged 2-3k for it. Now they are suddenly able to offer a more competitive price, which according to many discussions on this very board (note: Moog never said that) was impossible due to small-ness, US-ness, etc.

The development argument is often recited. Nevertheless from a business point of view its a non-issue. If there is interest i can write you an essay "why not", but for now i'll restrain myself.
Old 25th May 2018
  #5
Quote:
Originally Posted by Coorec View Post
Thats the reason why they are so afraid of Behringer. Because their market entry will change peoples perception about what gear is worth and the other companies have to adapt.
Have you seen any fear of Behringer from other module companies?
I haven't.
It's mostly been commentary from other users (like me).
Please don't make this another pro/con Behringer thread like many others in the modular forum of late. This used to be a happy, respectful place.
Old 25th May 2018
  #6
Lives for gear
 
Coorec's Avatar
Quote:
Originally Posted by chrisso View Post
Have you seen any fear of Behringer from other module companies?
I haven't.
It's mostly been commentary from other users (like me).
Please don't make this another pro/con Behringer thread like many others in the modular forum of late. This used to be a happy, respectful place.
Not my intention to make that a Behr vs everything else thread. Far from it.

The point i wanted to make with the example was: Perception shapes value for customers. Perception is subject to change.
Old 25th May 2018
  #7
Quote:
Originally Posted by with_joerg View Post
Looking at the prices of modules I frequently do wonder if they are really worth and arm and a leg. Eg take the price of a Verbos Harmonic Oscillator--what makes this piece of kit worth so much? It comes on top that recently a merchant told me that the margins are so low that he almost cannot survive!!!???
You have to understand that you are paying for the company or business to survive. Not just for the actual product itself.
Old 25th May 2018
  #8
Quote:
Originally Posted by Coorec View Post
Perception is subject to change.
There are a whole slew of factors.
Do you want more of something, therefore need to pay less. Do you want to support the one man style innovators, therefore you will pay more.....
Doepfer have been offering very affordable modules since the mid-90's.
Other companies have successfully created an aura of cool, often through innovation, and they are able to sell their modules at a premium price point.
Old 25th May 2018
  #9
Gear Addict
 
base615's Avatar
You'd have thought that Derp's buying habits would have brought the price down by now :(
Old 25th May 2018
  #10
Lives for gear
 
spiderman's Avatar
Berhinger is irrelevant to me (although they are currently trending with certain young hipster types). I still remember them as the company who makes cheap lawsuit products that break... and don't sound that great. They must have improved in recent years... Boog D looks solid. But they aren't going to change the habits of people with money.

I buy what I like/want within reason. I don't pay premium for vintage (but many people do). I'll buy exotics if there is enough windfall from good gigs. There are lots of people who will spend $100 or hundreds on diner or bar tabs... it's very common... and the idea of spending $500 on a module with a decent resale value doesn't seem crazy to me. But... I imagine if you're working an entry level retail job, it would seem expensive. There are lots of people like me, and bc of that I can't imagine Behringer's economy modules will reduce the price of boutique productions. It's like saying the value of a Ford Focus would reduce the price of BMW or a Corvette.

Last edited by spiderman; 25th May 2018 at 04:41 PM..
Old 25th May 2018
  #11
Lives for gear
 
j3rk's Avatar
 

They don't cost an arm and a leg. They cost right about what they should give or take a tiny bit. Even some of the more expensive ones are typically right about what I'd expect. There really isn't much in the way of gouging.

It costs a lot more than people think to put a module out there. Usually at the maker's own expense in development time, build time, tooling and manufacturing, components, panels, boards, hardware, and sometimes software development on top of that. It may look small, but the physicality is deceptive.

Anyone that thinks they can build a comparable product for a cheaper price with anything less than a Behringer sized operation...


...still waiting...


Old 25th May 2018
  #12
Lives for gear
 
spiderman's Avatar
Quote:
Originally Posted by j3rk View Post
Anyone that thinks they can build a comparable product for a cheaper price with anything less than a Behringer sized operation...


...still waiting...


Even then... Behringer isn't developing anything. They take old ideas and make them available for cheap. Neutron is the most original thing they've done... and it's still mostly derivative.
Old 26th May 2018
  #13
DSC
Gear Maniac
 
DSC's Avatar
Compared to what they cost back in the 70's, we are in the golden age of modular, if there ever was one!!!!!!
Something for everyone, literally. DIY if you want to really learn and save money. Top end money splurges, like the Intellijel Rainmaker,
which is great for showing off to your friends... ...of which I don't have either the former or the latter!
Old 26th May 2018
  #14
Lives for gear
 
cane creek's Avatar
 

Quote:
Originally Posted by Coorec View Post
The simple answer is: because people are willing to pay that much.

If they wouldnt be able to sell for the price they would make it cheaper.
100% agree, Mark Verbos knows fine well his Harmonic Oscillator is well over priced but he charges what the customer is prepared to pay.

and thats basically the simple answer to all the Eurorack crazy prices.
Old 26th May 2018
  #15
Lives for gear
 
cane creek's Avatar
 

Quote:
Originally Posted by spiderman View Post
you'll find that about 50% (more or less) of the retail price is just break-even for components. Then figure labor, shipping, retail cut, etc.
I agree in the world of DIY your correct, but in Mark Verbos world of big component orders and SMD pick n place machines the profit figures would be vastly different as your 50% would mean Verbos pays £260 per module for components, no-way more like £40 per module in components.


Look at Oliver at Mutables, after a few runs of a new modules he's then happy to give aways all the firmware/schematics etc as that module has earned its worth so to speak, I guess that should hint that theres a good profit to be made.

(he'll probably chime in now, he always does when i mention his name and he'll tell me how wrong i am )
Old 26th May 2018
  #16
My first question would be - how many examples of a single module does Mark Verbos sell? My guess would be small amounts.
Old 26th May 2018
  #17
Quote:
Originally Posted by cane creek View Post
100% agree, Mark Verbos knows fine well his Harmonic Oscillator is well over priced but he charges what the customer is prepared to pay.
Has he told you that? Otherwise you're more or less guessing.
Old 26th May 2018
  #18
Lives for gear
 
cane creek's Avatar
 

Quote:
Originally Posted by chrisso View Post
Has he told you that? Otherwise you're more or less guessing.
Ive seen the layout of his Harmonic oscillator and the type of components he uses, the fact I've been DIYing regular over the last 7 years and order components on a regular basis i know the prices and know he'll pay less for bulk.

Look for your self, a handful of op-amps, transistors and other ordinary stuff.

Old 26th May 2018
  #19
Gear Guru
 
Muser's Avatar
because fingers and toes are always ten a penny
Old 26th May 2018
  #20
Quote:
Originally Posted by cane creek View Post
Ive seen the layout of his Harmonic oscillator and the type of components he uses, the fact I've been DIYing regular over the last 7 years and order components on a regular basis i know the prices and know he'll pay less for bulk.
You said he 'knew' it was overpriced. But apart from components you have accounted for his employee wages, distribution costs, rent of workshops and offices, customer support.
Obviously, a one man operation more or less hand building modules for a limited customer base is going to have lower distribution, customer care and employee costs, although perhaps higher component costs.
What Verbos saves on bulk buying components he probably loses on higher factory, employee and customer service costs.
Old 26th May 2018
  #21
Lives for gear
 
cane creek's Avatar
 

Quote:
Originally Posted by chrisso View Post
What Verbos saves on bulk buying components he probably loses on higher factory, employee and customer service costs.
Yes he’s probably got a high maintenance girlfriend and a mammoth drug addiction that I didn’t include in my audit either.
Old 26th May 2018
  #22
Quote:
Originally Posted by chrisso View Post
Has he told you that? Otherwise you're more or less guessing.
Quote:
Originally Posted by cane creek View Post
Ive seen the layout of his Harmonic oscillator and the type of components he uses, the fact I've been DIYing regular over the last 7 years and order components on a regular basis i know the prices and know he'll pay less for bulk.

Look for your self, a handful of op-amps, transistors and other ordinary stuff.
So, no. He hasn’t told you that. You’re more or less assuming.
Old 26th May 2018
  #23
Gear Head
Shorter runs and small business overheads will account for a lot of it, for sure, but there always seems to be a musician's tax on most things. People are just willing to pay a lot for gear, and even more so when it's something nerdy and customisable like modular. That a lot of individual modules aren't out of reach cost-wise probably helps too. £100-300 for a new piece of gear doesn't seem so bad, but when it's only one small part it adds up.
Old 26th May 2018
  #24
Quote:
Originally Posted by deondamage View Post
You have to understand that you are paying for the company or business to survive. Not just for the actual product itself.
R&D, parts, facilities, rent & labor; translated in overhead cost. this drops per module when larger quantities are produced like Chrisso already said.
Then why not produce more? Well... let's say you're really proud of some module you designed, and you're having 2000 made.
If you sell only 500 you're basically bankrupt.
I know a story of a powersupply manufacturer who made awesome power modules. Really high quality. The guy is an engineer who used to work for one of the big corporations. But he priced his modules too low and didn't make the necessary marketing. So, potential customers thought it was lower quality, and not enough people found out about it. So he sold not enough to break even. There's a happy ending: those power supply modules are now sold through another manufacturer, they do have a better market presence.
Also, the market is very fickle.. a part of the customers now, they want the "popular" modules. But popularity changes every month.
So it's not so easy, even if you have a great product ready to sell.

People buy it, because they want THAT specific module, and can afford it.
This is the real meaning of "boutique". I think it's a very unique situation in synth development because we can pick a huge variety of modules to build our instruments.
I don't really see it as a problem, there's good quality lower pricerange modules, Doepfer, Pittsburgh, Ladik and soon Behringer. So you don't have to buy the expensive stuff. And you can invest your OWN time and money in DIY of course. Building kits, or just from a raw pcb or schematic, or even design your own.
Is there a sort of "sweetspot" in this wide range of offerings? I think so, there's unique, small quantity modules for little money. often funded through startup support such as Kickstarter. You have to do some research yourself to find these, and to find out if it's a legit project. Since these are obviously not offered in the shops, through distributors.
like this one: https://www.kickstarter.com/projects...mpleslicer-mk2
Old 26th May 2018
  #25
Lives for gear
 
cane creek's Avatar
 

Quote:
Originally Posted by smutek View Post
So, no. He hasn’t told you that. You’re more or less assuming.
I’m sorry I didn’t realise assuming was a taboo act.

You’ll find at least 50% of my posts are based on assumption, I didn’t realise theres only me who does it.
Old 26th May 2018
  #26
Lives for gear
 
gruvsyco's Avatar
aside from components, the additional hardware on modules can add up quickly. A single module can easily have as many or more jacks as a standalone synth. The price of knobs, pots, switches, and jacks is much higher than your run-of-the-mill components. I assume on modular most companies err on the side of much higher quality jacks due to the amount of use they get. Something with 5000 mating cycles typically costs less than something with 50000 mating cycles.

While I do feel module prices seem kind of high, I don't think it's this obscene amount of profit per module.
Old 26th May 2018
  #27
Quote:
Originally Posted by cane creek View Post
I’m sorry I didn’t realise assuming was a taboo act.

You’ll find at least 50% of my posts are based on assumption, I didn’t realise theres only me who does it.
No, it’s fine. The point was that your statement was an assumption, which you’ve confirmed yourself.

No one implied assumptions are taboo or exclusively your domain. There you go assuming again!

Old 26th May 2018
  #28
Gear Head
 
Modular_8's Avatar
 

margins are small compared to other gear. they aren't made in big batches... which further tightens the margins. some modules are only made 100 at a time. sometimes even less. not every module is made in batches of 500 (which is still a small run compared to other gear).

also, most modules require assembly by hand. PCBs get run and most of the components get put on that way but there's still jacks, pots and possible rework to get done and then assembly by hand to put the panels and knobs on.. so actual human beings get paid to do this work.
Old 27th May 2018
  #29
DSC
Gear Maniac
 
DSC's Avatar
Quote:
Originally Posted by Modular_8 View Post
margins are small compared to other gear. they aren't made in big batches... which further tightens the margins. some modules are only made 100 at a time.
Some smaller than that! When I produce a small run, it usually is 12-16 pieces.
Just try and cover materials and time, no real profit, just love
Old 27th May 2018
  #30
Lives for gear
 
spiderman's Avatar
There are also modules that are built by hand. The "factory built" Shakmat Time Wizard for instance... I built one and bought a factory. Both are Through Hole. Exact same... so someone from Shakmat had to build it. Even if your super fast, it's probably an hour build per unit.

Time Wizard isn't an expensive module compared to Morphagene... but just an example. It's poor logic to assume that modules are cheap to build and makers are snorting coke with all their massive profits.
Topic:
Post Reply

Welcome to the Gearslutz Pro Audio Community!

Registration benefits include:
  • The ability to reply to and create new discussions
  • Access to members-only giveaways & competitions
  • Interact with VIP industry experts in our guest Q&As
  • Access to members-only sub forum discussions
  • Access to members-only Chat Room
  • Get INSTANT ACCESS to the world's best private pro audio Classifieds for only USD $20/year
  • Promote your eBay auctions and Reverb.com listings for free
  • Remove this message!
You need an account to post a reply. Create a username and password below and an account will be created and your post entered.


 
 
Slide to join now Processing…
Thread Tools
Search this Thread
Search this Thread:

Advanced Search
Forum Jump
Forum Jump