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    a $5000 preamp for $1350

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    tubes4hifi
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    a $5000 preamp for $1350

    Post by tubes4hifi on Thu Sep 07, 2017 6:41 pm

    Yes, my Vacuum Tube Audio SP14 ( www.tubes4hifi.com/SP14.htm ) is a $5000 preamp that I sell for $1350 (fully assembled/tested/warranty).
    Here I'm going to tell you how that's possible and why it's such a great bargain (if you didn't already know).
    I've been meaning to write this for 3-4 years now, but just never got around to it.  But now, here it is.
    My Vacuum Tube Audio business is built around VALUE, not profits.

    VTA doesn't pay a Chief Executive Officer (CEO) $200,000 a year.
    VTA doesn't pay a Chief Financial Officer (CFO) $125,000 a year.
    VTA doesn't pay a VP of Marketing and Sales $125,000 a year.
    VTA doesn't pay a Director of Human Resources $75,000 a year.
    VTA doesn't pay for 4 Electronic Engineeers at $75,000 each a year ($300,000).
    VTA doesn't pay for 20 electronic techs (worker bees) each at $45,000 a year ($900.000).
    VTA doesn't pay $250,000 a year to rent a manufacturing warehouse
    Those figures add up to just over $2 million a year, and those figures are in the ball park for a typical small manufacturing company.
    I worked for five companies very similar to that during my 30+ year career.
    A company like that might make 1000 pieces of a $5000 preamp each year, for $3 million in sales.  
    Yes, that's correct, not an error in math, they sell them to dealers at $3000 each (40% discount from retail),
    so the dealer can make $2000 profit.   So now you see, they make $3 million in sales, and have over $2 million in overhead,
    so they are making just under $1 million in gross profit, which is pretty good, around 30%.  
    Of course, there are some other overhead expenses I didn't mention, let's not forget taxes and social security
    to the government (around 30%) and of course ADVERTISING, medical, dental,  vision, and retirement funding,
    so now they are probably down  to a profit of around $500,000 or around 17% of sales, right in the ballpark for a decent business.

    With VTA, I do ALL of the above myself!  I pay myself a flat $40K a year.    I work out of a 100 sf spare bedroom in my home.  I work 30-60 hours a week.
    VTA pays the IRS and social security taxes of around $10K a year.  My partner Bob Latino who sells amplifiers using VTA designs,
    is an independent contractor who pays himself about a small commission on his sales, no cost to me, a fair payment for his work.

    That $5000 preamp that dealers pay $3000 for has about $750 worth of parts in it.   This I know.  In fact,
    if you look inside a $5000 preamp you can pretty easily figure the cost.   About the same cost as my $1350 preamp.
    My preamp has $800 worth of parts, $400 worth of labor, and $150 profit for me (about 10%).  I can live on that.
    You get the VALUE, not the marked-up price.  I don't have dealers, I don't advertise (just a few free ads on ebay),
    I don't have any employees (or worker bees).  No secretary.  Just internet, email, website, buy direct !!
    I find the best sources for parts, buy in bulk to get some wholesale pricing, and you get the deal - a $5000 preamp for $1350.

    Maybe later I'll take you inside some of those $5000+ preamps and show you where they cut costs on parts quality.
    I've seen alot of those preamps using RCA jacks that cost $1 a PAIR.  Chassis cost under $100.
    My RCA jacks cost me $5 a pair, and my chassis costs almost $300.


    Last edited by tubes4hifi on Fri Sep 08, 2017 1:00 pm; edited 2 times in total
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    corndog71

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    Re: a $5000 preamp for $1350

    Post by corndog71 on Thu Sep 07, 2017 8:20 pm

    You forgot the mic drop.

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    jfine

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    Re: a $5000 preamp for $1350

    Post by jfine on Thu Sep 07, 2017 9:10 pm

    tubes4hifi wrote:
    Maybe later I'll take you inside some of those $5000+ preamps and show you where they cut costs on parts quality.

    I for one would like to see that.


    You guys have really brought high quality, and simplicity, at a much lower cost. And the fact is, these units can be easily modified, i.e., try to upgrade a modern Mcintosh preamp output cap to something worthwhile, not going to be easy if not impossible and also the value likely goes down messing about like that, and never mind the hassle of fixing/troubleshooting if something goes wrong  Evil or Very Mad
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    tubes4hifi
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    Re: a $5000 preamp for $1350

    Post by tubes4hifi on Fri Sep 08, 2017 1:18 am

    OK, here's a fast and dirty comparison done in about half-hour, nobody paid me $5000 for the ad layout . . .
    the top photo is a pretty decent quality $5950 preamp (with my personal comments added),
    the bottom photo is a VTA SP14 with just two upgrades . . .
    Next week maybe I'll add a couple more $5-6K preamp comparisons . . .




    monkuboy

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    Re: a $5000 preamp for $1350

    Post by monkuboy on Fri Sep 08, 2017 10:28 am

    tubes4hifi wrote:Yes, my Vacuum Tube Audio SP14 (www.tubes4hifi.com/SP14.htm) is a $5000 preamp that I sell for $1350 (fully assembled/tested/warranty).

    Quick note, your link in the very first sentence in this thread is incorrect. The closing parentheses is included in the link and should be removed.
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    Denizen

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    Re: a $5000 preamp for $1350

    Post by Denizen on Fri Sep 08, 2017 10:49 am

    I just want to chime in to say THANKS for everything you two do.
    For those of us like myself that have champagne ears and a beer budget, you're a blessing.


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    tubes4hifi
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    Re: a $5000 preamp for $1350

    Post by tubes4hifi on Fri Sep 08, 2017 1:01 pm

    thanks Monkuboy, fixed it
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    jfine

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    Re: a $5000 preamp for $1350

    Post by jfine on Fri Sep 08, 2017 2:44 pm

    tubes4hifi wrote:OK, here's a fast and dirty comparison done in about half-hour, nobody paid me $5000 for the ad layout . . .
    the top photo is a pretty decent quality $5950 preamp (with my personal comments added),
    the bottom photo is a VTA SP14 with just two upgrades . . .
    Next week maybe I'll add a couple more $5-6K preamp comparisons . . .

    This is great! I would put just the SP14 photo on your site, helps explain a lot of things.

    I wondered about the Power Supply Shielding, Manley Chinook phono stage uses similar, shouldn't be too hard to add to the PH16? Although maybe it turns out doesn't make much difference?
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    tubes4hifi
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    Re: a $5000 preamp for $1350

    Post by tubes4hifi on Fri Sep 08, 2017 2:50 pm

    well, a properly made SP14 and PH16 are already dead quiet, so haven't found a need for further shielding
    Looking at some $9-10K preamps has inspired me, maybe I'll make an $8k preamp for $2500 later this year . . .
    I used to be a budget guy, but it seems that there are some people out there with alot of money to throw at hi-end stuff . . .
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    tubes4hifi
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    Re: a $5000 preamp for $1350

    Post by tubes4hifi on Wed Sep 13, 2017 7:27 pm

    oh wow, now don't get me started!!  But seeing this photo blows my mind!!
    For $1400, you get 4 op-amps, and a bunch of cheap WIMA capacitors.
    And a nice review in Stereophile (have they ever NOT done a nice review?)
    Guaranteed, under $300 in parts!!  
    $500 profit for the dealer, $500 profit for the manufacturer after paying for advertising.
    The RCA jacks are the cheap plastic ones that solder to the PCB.
    Would you rather have this . . . .


    or this super nice super quiet incredible sounding fully tube phono preamp, for $895 ($740 kit)??
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    deepee99

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    Re: a $5000 preamp for $1350

    Post by deepee99 on Fri Sep 15, 2017 2:49 am

    Think I'm gonna get me an SP-14 and PH-16. Oh, wait, I already have.

    Corona

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    Re: a $5000 preamp for $1350

    Post by Corona on Sat Sep 16, 2017 5:14 pm

    Heck yeah!
    >Proud owner of SP14, m125's and st70.


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