It’s no secret that consumers aren’t always aware of exactly what they’re purchasing. Many find themselves paying a rate for merchandise that is marked up astronomically from the original cost of the raw materials; whether or not they are aware they are being duped by big brand named companies. Putting their faith in a product — that the up-charge won’t be too much — they blindly shop every day. Beats Headphones by Dre are the latest product involved in a controversy over whether the amount they are charging purchasers is justified, or if they are price gouging consumers.
Breaking Down the Beats Headphones
From the beginning Beats Headphones have been relatively expensive, each pair costing around 200 dollars. Until now the structural integrity, and the quality of sound were means used to justify the high price tag on the expensive audio devices. In a recent dissection of the headphones it was revealed that a large portion of the construction of the headphones was metal added to create.
Avery Louie the man responsible for reporting on the stripped down headphones describes the pieces added that serve no real purpose, “A little bit of weight makes the product feel solid, durable, and valuable. One way to do this cheaply is to make some components out of metal in order to add weight. In these headphones, 30% of the weight comes from four tiny metal parts that are there for the sole purpose of adding weight.”
Real Costs of Beats
At this point consumers are wondering if most of the appeal of Beats Headphones is a false sense of quality based on extra parts that don’t contribute to the final product, how much do the headphones actually cost to make? Shopping online the headphones can cost anywhere upwards of $200, but according to the breakdown by Louie the headphones actually only cost about 18 dollars to make, “I estimate that the COGS (cost of goods sold) without labor or shipping is $16.89 yet Beats is able to successfully retail these headphones for $199+. This is the power of brand; Dr. Dre and Jimmy Lovine have leveraged their personal backgrounds and a sleek design to launch a remarkable brand that’s become fundamental to music pop culture.”
With engineers such as Louie breaking down the production of popular electronic devices, there is hope in the future that consumers will become more aware of what it is that they are actually purchasing. For now at least shoppers know that every time they see that iconic ‘B’ logo on the side of a pair of headphones, that person paid 200 dollars for a pair of headphones full of unnecessary parts that only cost about 17 dollars to make.
