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Unfortunately, All low volume boutique electronic musical instruments have “insanely high margins”. The less boutique normal stuff made by Yamaha and Roland is

Unfortunately, All low volume boutique electronic musical instruments have “insanely high margins”. The less boutique normal stuff made by Yamaha and Roland is likely priced at 4x the BOM - and they are able to get better deals from distributors than TE can. You can’t sustain a business any other way. Consumer electronics are cheap because they can sell millions worldwide. Stuff like the OP1 sells in the 10s of thousands so they’re not getting any special deals from their vendors either.

smoldesu 4y ago
It's worth drawing a line between handmade instruments and mass-produced machines though. Yes, Roland and Yamaha also have high margins, but they also face steep competition from low-margin companies like Behringer who are effectively wrecking their business model. Companies like Moog were safe because their demand will always be the same, but boutique vendors everywhere are closing up shop. I'll agree that it's a zero-sum game either way, but it ends with the high-margin vendors getting undercut. Something we could have avoided if they worked to make their product cheaper instead of working to make it more expensive.
- strawpeople 4y ago
  > Behringer who are effectively wrecking their business model By making knock offs without needing to do the R&D and product-market fit work for themselves. Why isn’t there a knock-off of the op-1?
ilyt 4y ago
If you compare them with other competitors in the space the likes of Elektron or Polyend give you more hardware for less. They make Elektron look outright cheap in comparison in fact. > Stuff like the OP1 sells in the 10s of thousands so they’re not getting any special deals from their vendors either. 10s of thousands is enough to get the economies of scale to start working. Even for stuff like custom LCDs for pocket operators. Yes niche costs few times to make than truly mass market as you still need to pay yourself a salary and not just "earn good profit on unit", but on the other side the only reason OP-1 is niche it is because say OP-1 is just that expensive that most people look at it and go "okay, I could get this and this and that and still have some money left over". They know hipsters will buy it and have no real reason to try to sell more units for less money, as that devalues the eliteness of it.
deleted 4y ago
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smoldesu 4y ago

It's worth drawing a line between handmade instruments and mass-produced machines though. Yes, Roland and Yamaha also have high margins, but they also face steep competition from low-margin companies like Behringer who are effectively wrecking their business model. Companies like Moog were safe because their demand will always be the same, but boutique vendors everywhere are closing up shop. I'll agree that it's a zero-sum game either way, but it ends with the high-margin vendors getting undercut. Something we could have avoided if they worked to make their product cheaper instead of working to make it more expensive.

strawpeople 4y ago
> Behringer who are effectively wrecking their business model By making knock offs without needing to do the R&D and product-market fit work for themselves. Why isn’t there a knock-off of the op-1?

ilyt 4y ago

If you compare them with other competitors in the space the likes of Elektron or Polyend give you more hardware for less. They make Elektron look outright cheap in comparison in fact. > Stuff like the OP1 sells in the 10s of thousands so they’re not getting any special deals from their vendors either. 10s of thousands is enough to get the economies of scale to start working. Even for stuff like custom LCDs for pocket operators. Yes niche costs few times to make than truly mass market as you still need to pay yourself a salary and not just "earn good profit on unit", but on the other side the only reason OP-1 is niche it is because say OP-1 is just that expensive that most people look at it and go "okay, I could get this and this and that and still have some money left over". They know hipsters will buy it and have no real reason to try to sell more units for less money, as that devalues the eliteness of it.

deleted 4y ago

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