There are 4 elements to any speaker. 

  1. Cabinet

  2. Drivers

  3. Crossover parts

  4. Crossover design  

Both commercial folks and DIY (Do It Yourself) folks seek perfection among these things, but at what price?

The commercial loudspeaker industry is similar to other commercial industries.  There are property taxes, social security taxes, accounting fees, research costs, medical insurance, unemployment insurance, retirement plans, marketing, and lastly, the dreaded brick and mortar (storefront) markup.  When purchasing a set of commercial speakers the consumer pays for all of this.  Some might think these costs are outrageous.  I don’t.  I believe they are justified.   They represent the common cost of doing business.   

The retail cost of a commercial hifi speaker is 5 x $ the cost of producing that speaker.  This includes the cost of parts, materials and labor.  The rest of the $ is spent on overhead, marketing and 100% (typical) is spent at the storefront.  The 100% storefront markup is common practice in other retail industries too.  I have heard this from several retailers.  This might seem outrageous, but my wife (a CPA) and I have discussed the cost of doing business and agree this practice is warranted.  The retail industries are important for consumers that need to see, touch, and smell a product before purchasing.  The 5 x $ markup is common, but some commercial manufacturers have better (more expensive) marketing efforts.  

These companies will often rely on expensive gimmicks to sell their products.  They appear in catchy phrases that mean essentially nothing.  I will refrain from directly addressing those marketing gimmicks.  I will admit that they must work.  Most folks are willing to pay for marketing convenience and advertising.  Others can trust their ears.  The comments below illustrate what knowledgeable DIY’ers think about the composition of a typical commercial loudspeaker after some education.  This is because they don’t understand the commercial need for markup.  

The 5 x $ markup is necessary.  Also, some manufacturers have better (more expensive) marketing efforts.  Their markup is commensurately higher.  Selling $3 to $5 Chinese drivers in a $1000 speaker isn’t easy.

I will offer a couple of examples here.  These are from the Madisound discussion page.  I took the liberty of editing the remarks for punctuation and spelling.

Madisound Audio Discussion

Posted By: jason <jterpstra7@home.com>
Date: 12/23/2001 23:09

You know when I paid 165$ for my cc-150 paradigm center channel I thought I was getting a pretty good deal.  This is paradigm you know..!! I’VE got 1 thing to say to that – CRAP CRAP CRAP!!

I was reading Dan Wensor’s look inside of an 800$ speaker earlier and decided to pull my center apart.

What a joke!  First, the cabinet is 1/2″ particle board, not MDF.  Second, the drivers are poly with foam surround and very chintzy looking.  Lambs wool… what’s up with that.  It looks like I’ve had a pack rat living in my speaker for a year – GROSS!! Last but definitely not least the wires are cheap as all get out 6DB crossover throughout with a 50v cap and a coil that looks like a transformer that came out of an old boom-box or something and that cheeeeesssyy push in round terminal cup with no glue – no nothing.  I’ve been wondering what’s been rattling.

Oh well looks like ill be doing some upgrades to this thing after Christmas..!!

See you guys MERRY CHRISTMAS !!!

While Jason’s comment’s are strong, they address the issue of getting what you pay for.  This speaker was likely built on a budget of about $40-50.  This necessitates $.05 electrolytic capacitors are $1 – 20ga inductors.  With more expensive commercial speakers the quality goes up commensurately.  Nonetheless, components like 20ga inductors, and electrolytic capacitors will often exist in more expensive stuff.  I have seen electrolytic capacitors and 20ga inductors in a $600 commercial 2-way.  Others have reported electrolytic capacitors in $1600 commercial speakers.  Yet others report $1 – 20-22ga inductors in $3k+ speakers.

Madisound Audio Discussion

Posted By: Al Woodworth <azwoodworth@home.com>
Date: 12/24/2001 11:20

In Response To: Re: paradigm?? (jason)

I have a pair of Paradigm 5’s that at the time (pre DIY) seemed like a comparatively good deal- certainly better than the $525 retail competition. I then had the caps upgraded by Speakersetc.net, and the difference was astounding. Now they’re pretty decent, but the DIY was cast!(sorry, couldn’t resist) It’s all home built from here on. Al

This next comment is typical of what happens when folks upgrade to a reasonable grade of capacitors.  Al’s paradigm speakers likely had electrolytic’s before being replaced with a generic metallized propylene capacitor.

There is also cabinet.  Jason eluded to this.  I contend that a strong cabinet is critical to bass clarity.  I have heard very nice warm/sloppy bass from some very thin cabinets in $3k speakers.  This is due to saving $ on the production line and shipping weight the post office.  The critical hifi enthusiast will notice that all high-end speakers are also very heavy.  This is because good clean bass requires a thick/heavy cabinet.  The laws of physics demand this

Next are the drivers.  Moderately expensive drivers are found in seemingly expensive speakers.  For further reference concerning what drivers are used in what speakers consult the LDSG.  I initially found it amazing that $500 worth of drivers would appear in $3k to $6k speakers.  Later I learned that this is common, necessary and accepted practice.

The crossover design is the last, and most important part of any speaker.  I have auditioned excellent drivers with a bad crossover design that sounded commensurately bad.  I have also heard relatively cheap drivers with an excellent crossover design that sounded quite good.  The crossover is the heart of any loudspeaker.  Measuring the results of crossover modification is critical.  These method of obtaining these measurements have changed in favor of the home enthusiast during recent years.

Once upon time.. accurately measuring the response from a loudspeaker required a large anti-echoic chamber.  This is because the room reflections would interfere with the measurement.  While anti-echoic chambers are nice to have, they are are expensive.  They are also no longer needed for accurate measurements.  They are rapidly being replaced.

Computer measurement hardware/software such as LAUD, LspCad, LspLab have made accurate measurement available without the use of large anti-echoic chambers.  There are many methods of measurement using these computer programs, but the one that is most easily conceptualized is the Gated Time Response.  

The Gated Time Response uses a timed gate for the microphone via a computer, soundcard and amplification.  Perfect measurements are quite simple.  The computer turns on the microphone and sends a frequency pulse (A) through the speaker.  The microphone remains open/on and receives the frequency pulse.  After receiving the pulse the computer closes/shuts-off the microphone.  This happens before the arrival of the reflected waveform (B).  The gated time response nullifies the effects of room reflections and provides a perfect representation of the speakers response. 

The advent of this technology has made the home crossover designer a viable competitor in loudspeaker design.  There is obviously much more to a good crossover, but this is the tool that brought the very best designs down to the level of the skilled home designer.

So, there are 4 elements necessary to beat the commercial market by their 5 x $ (cost of production) margin.  The degree depends on a persons investment in the above information.

  1. Build a cabinet of something much better than 1/2″ particle board.

  2. Spend a fair amount on crossover components.

  3. Spend a fair amount on drivers.

  4. Ensure an excellent/tested/measured crossover design.

If these 4 elements are met, and there is about $500 in electronics the DIY speaker will beat commercial products  costing $3k+.  This is simply because a different business model is applied.  The consumer has successfully avoided property taxes, social security taxes, accounting fees, research costs, medical insurance, unemployment insurance, retirement plans, marketing (huge!), and lastly, the dreaded brick and mortar (storefront) markup (also huge!).