Why are LED lights so Expensive?

[Piranhapat]

Why are these company’s putting out a light fixture that cost $840 a piece. Plus they can only cover about 24”x24”. So most likely your need 2-3 even 6. Costing $1700- $5,100. So what are the life expectancy 5years or more? Really surprise that the cost only comes down when a new generation comes out. Seems to me why a company can put a more reasonable price especially the actual area they cover. It’s probably the second important equipment you need in a reef tank. What’s your opinion?

 

[Zeal]

Agreed. Everything in this hobby is extremely expensive and almost feels like a cash grab.

EDit: I love it when these companies give a whole 10% discount on an item that costs $500. what the heck is 10% gonna do? It's not going to entice me to buy the item

 

[PeaBrain]

My gut tells me partially to cover R&D costs. Also, LEDs are more versatile and convenient. All in all, the price fits market demands. My two cents.

 

[andrewey]

It's interesting- I've thought a lot about this and I don't have a great answer. Ultimately, most of the manufacturers are selling luxury lighting options. As to why most of the lighting that is coming out is targeted to the luxury market rather than a middle ground, I'm not so sure (it's not like skimmer manufactuers all decided to target the luxury market). I'm not entirely sure why it happened, but I've noticed in the past 5-8 years or so, there has been a decrease in affordable reef equipment. It seems that the trend has been to move towards high end or low end with the middle ground disapearing. Clearly, from a business perspective, this has been a boom- many new reefers don't know that there are affordable options for skimmers, wavemakers, lighting, pumps, etc if the only products they see advertised or reviews for are extremely expensive/luxury items.

 

[NS Mike D]

Put the word Reef or Saltwater in front of a product and mark it up. Go to Petco and see how much more super glue costs compared to the identical stuff at Harbor Freight.

Although I think a lot more R&D and marketing costs go into reef LEDs that needs to be recouped with limited sales volume.

 

[Silver14SS]

Why are these company’s putting out a light fixture that cost $840 a piece. Plus they can only cover about 24”x24”. So most likely your need 2-3 even 6. Costing $1700- $5,100. So what are the life expectancy 5years or more? Really surprise that the cost only comes down when a new generation comes out. Seems to me why a company can put a more reasonable price especially the actual area they cover. It’s probably the second important equipment you need in a reef tank. What’s your opinion?

Do you have a specific light example in mind? If so, please let us know how much you'd charge to manufacture and sell the same light. Please try to account for material, labor, packaging, distribution, support, R&D, etc.

 

[AllSignsPointToFish]

Why are these company’s putting out a light fixture that cost $840 a piece. Plus they can only cover about 24”x24”. So most likely your need 2-3 even 6. Costing $1700- $5,100. So what are the life expectancy 5years or more? Really surprise that the cost only comes down when a new generation comes out. Seems to me why a company can put a more reasonable price especially the actual area they cover. It’s probably the second important equipment you need in a reef tank. What’s your opinion?

Well, they don't all cost that. You can certainly find cheap LED lights that will grow coral like nobody's business...and in some cases maybe even better than the expensive lights!

 

[mike550]

@Silver14SS raises a good point. Retail pricing includes a lot of people to pay along the way.

As an example, a fully loaded iPhone Pro costs around $1450. But total cost is estimated to be about $490.50 per TechInsights. That’s a lot less than the retail price but keep in mind, that’s just materials. You need to add the costs for manufacturing, assembly, shipping, product development, etc. The markup for Apple is probably lower overall because they have a much more established distribution channel. When you include a wholesaler and a retailer in the mix -- all of whom need to make a profit -- the costs just go up.

 

[45ZoaGarden]

Well, they don't all cost that. You can certainly find cheap LED lights that will grow coral like nobody's business...and in some cases maybe even better than the expensive lights!

Yup. There are only 2 units in that price range. Radion xr30’s g5 pros and Atlantiks. Some reef breeders are up there but cover much more. The lights are expensive because they offer top of the line performance. They just work better. Yes they are marked up but people will still buy them because they work. If I did it again, I would have 2 xr15’s instead of my hydra 26hd. I don’t personally mind the extra $$$ if it grows better. If you want something similar, get hydras. They’re made by the same company with the same components and cost half as much. If I were personally making radions, I would probably have around $300 into the light. 20% for packaging, 10% for the lfs and gross the rest. Most companies want to Atleast double their money.

 

[45ZoaGarden]

@Silver14SS raises a good point. Retail pricing includes a lot of people to pay along the way.

As an example, a fully loaded iPhone Pro costs around $1450. But total cost is estimated to be about $490.50 per TechInsights. That’s a lot less than the retail price but keep in mind, that’s just materials. You need to add the costs for manufacturing, assembly, shipping, product development, etc. The markup for Apple is probably lower overall because they have a much more established distribution channel. When you include a wholesaler and a retailer in the mix -- all of whom need to make a profit -- the costs just go up.

Don’t forget taxes and tariffs from bringing materials from overseas.

 

[X-37B]

When you walk into a lfs and they have 20+ radions running you think thats what you need.
When the lfs will only talk about them, same thing.
The price is never going to go down as it does cost alot to design, manufacture, market, and do r&d on the next model.
I wanted them too but am happy running a used T5 instead of 3 high end leds for 2-3k.

 

[andrewey]

@Silver14SS raises a good point. Retail pricing includes a lot of people to pay along the way.

As an example, a fully loaded iPhone Pro costs around $1450. But total cost is estimated to be about $490.50 per TechInsights. That’s a lot less than the retail price but keep in mind, that’s just materials. You need to add the costs for manufacturing, assembly, shipping, product development, etc. The markup for Apple is probably lower overall because they have a much more established distribution channel. When you include a wholesaler and a retailer in the mix -- all of whom need to make a profit -- the costs just go up.

Do you have a specific light example in mind? If so, please let us know how much you'd charge to manufacture and sell the same light. Please try to account for material, labor, packaging, distribution, support, R&D, etc.

I think you and the OP might be interpreting the question differently. I didn't see it as to why equipment would cost more than the individual diodes, drivers, acrylic- I think the OP understands the cost of sales, R&D, delivery, importation tarifs, general overhead, etc. Instead, I saw it as a question as to why many of the bigger LED manufacturers are choosing to sell the equivalent of macbook pros and fewer big name led manufacturers are selling the equivalent of dells/lenovos? I think it's a fair point- for every NYOS or Royal Exlclusive Skimmer out there, there is a Reef Octopus so there's a pretty nice gradient of price points. While there are a few mid level LED lights, I mostly see lights targeted to the luxury market on one end and black boxes on the other end. You don't see a ton of manufacturers making the equivalent of black boxes (no frills) with reputable drivers/leds.

This might just be a question of perception, but if I wanted to buy a return pump, I could buy anything from a jebao to a tunze with various big name companies in between. I could choose to spend a bit extra and get a DC or wifi enabled pump, choose my pump based on wattage, size, or noise. Most pumps would deliver equivalent performance, it's what I found to be important to my particular need and I would pay accordingly for the perks or lackthereof. I don't see that same diversity with LED lights.

 

[dopey]

Yup. There are only 2 units in that price range. Radion xr30’s g5 pros and Atlantiks. Some reef breeders are up there but cover much more. The lights are expensive because they offer top of the line performance. They just work better. Yes they are marked up but people will still buy them because they work. If I did it again, I would have 2 xr15’s instead of my hydra 26hd. I don’t personally mind the extra $$$ if it grows better. If you want something similar, get hydras. They’re made by the same company with the same components and cost half as much. If I were personally making radions, I would probably have around $300 into the light. 20% for packaging, 10% for the lfs and gross the rest. Most companies want to Atleast double their money.

I'm all for everyone going with the vendor/selection of their choice. Which resonates with them, whether it's the marketing, features, or even someone''s tank you admire which uses them...........but is there really any evidence they are 'better'.... and what does better even mean

If we are talking about growing corals successfully.. feel generally speaking there is a very very wide range of lights, some by the most talked about vendors, some by less talked about vendors which can successfully grow corals.

I think the only hard comparisons you can draw about different lights is 'features', and/or your own visual taste appeal. Have a hard time believing one brand vs another is proven to grow coral better.

I'd imagine you can find a 'awesome tank' lit by most lights anyone would name (from MH, to Reefbreeders, to Radeon Gen 5s)... and you can find plenty of nightmare/failed tanks by those too..


...think 90+% of success is based on the person, not the gear in general.

 

[45ZoaGarden]

I'm all for everyone going with the vendor/selection of their choice. Which resonates with them, whether it's the marketing, features, or even someone''s tank you admire which uses them...........but is there really any evidence they are 'better'.... and what does better even mean

If we are talking about growing corals successfully.. feel generally speaking there is a very very wide range of lights, some by the most talked about vendors, some by less talked about vendors which can successfully grow corals.

I think the only hard comparisons you can draw about different lights is 'features', and/or your own visual taste appeal. Have a hard time believing one brand vs another is proven to grow coral better.

I'd imagine you can find a 'awesome tank' lit by most lights anyone would name (from MH, to Reefbreeders, to Radeon Gen 5s)... and you can find plenty of nightmare/failed tanks by those too..


...think 90+% of success is based on the person, not the gear in general.

+1 this is mostly a pay to play hobby. But money can’t buy knowledge and devotion. My lfs has new frag tanks lit by radion G5’s right next to their old frag tanks lit by black boxes. It’s hard to deny that black boxes grow corals just as well as the new radions. The spectrum the radions put out also looks much sharper to the dull, drab black boxes.

 

[Silver14SS]

I think you and the OP might be interpreting the question differently. I didn't see it as to why equipment would cost more than the individual diodes, drivers, acrylic- I think the OP understands the cost of sales, R&D, delivery, importation tarifs, general overhead, etc. Instead, I saw it as a question as to why many of the bigger LED manufacturers are choosing to sell the equivalent of macbook pros and fewer big name led manufacturers are selling the equivalent of dells/lenovos?

Not every company wants to have products at every price point. If a company is attempting to position themselves as a premium or luxury product, having an entry level model may cannibalize sales from their more profitable models or reduce the perception of them being a premium brand. I assume the companies in question have done analysis to determine how to price their products and position themselves in the market.

Short answer is they are in the business of making money and they are going to do what makes them the most money.

 

[Futuretotm]

This is a hobby, a want rather than a need. Not sure how big this hobby is but it’s rather limited # of buyers.

I keep seeing R&D being thrown out, do you guys seriously think there are men in white coats out there in a sterile lab testing led combinations? There are members on this very forum who diy there fixtures....

Remember lighting is just a slice of the pie, there are other things that are needed to grow a coral as well. You guys should see what costs are added when you add the word “medical” grade to anything, medical grade reception chairs are like ten times the price of a regular chair

 

[andrewey]

Not every company wants to have products at every price point. If a company is attempting to position themselves as a premium or luxury product, having an entry level model may cannibalize sales from their more profitable models or reduce the perception of them being a premium brand. I assume the companies in question have done analysis to determine how to price their products and position themselves in the market.

Short answer is they are in the business of making money and they are going to do what makes them the most money.

After your last post, I think I understand your point and I'd agree. They are maximizing profits by selling a luxury product and the market is clearly accepting of this. I just find it interesting that all of our equipment hasn't moved to this market- whether that reflects "market research" that the average reefer wouldn't swallow the price tag associated with a "luxury return pump" or "luxury RODI" or whether we just haven't seen that shift yet. I'm guessing the truth probably lies somewhere in the middle- it's probably much easier to convince someone that their corals will color up better or grow faster under a premium light compared to a cheap light than it is to convince someone of the value of a "premium return pump". I'm guessing that eventually some company will figure out a selling point and we'll be having this discussion in ten years about the lack of affordable dosing pumps.

 

[atoll]

Simple question and IMO it's a simple answer. Because people will pay it, that's the bottom line.

some marketing guy with a calculator came to the conclusion if you sold them for half the price and still make a good profit it wouldn't turn into twice the number of sales. In fact they would probably have to sell 3 or 4 times the number.
R&D is very little and the consumer is the main R&D with feedback etc given. Take the issues with the new Radions G5s as an example. Ecotechs philosophy seems to be one of we know there are issues to be resolved but that will do, get selling them and we will deal with the problems as we go along.

Companies build into the price the warranty claims they know will come in. Then people praise the company for sending out new parts for them to fit. They will do updates for the software along the way as and when while the customer is pulling his/her hair out. You couldn't make it up.
Never buy the latest and greatest for about 6 months after launch and untill all the problems are resolved.

 

[mike550]

I think you and the OP might be interpreting the question differently. I didn't see it as to why equipment would cost more than the individual diodes, drivers, acrylic- I think the OP understands the cost of sales, R&D, delivery, importation tarifs, general overhead, etc. Instead, I saw it as a question as to why many of the bigger LED manufacturers are choosing to sell the equivalent of macbook pros and fewer big name led manufacturers are selling the equivalent of dells/lenovos? I think it's a fair point- for every NYOS or Royal Exlclusive Skimmer out there, there is a Reef Octopus so there's a pretty nice gradient of price points. While there are a few mid level LED lights, I mostly see lights targeted to the luxury market on one end and black boxes on the other end. You don't see a ton of manufacturers making the equivalent of black boxes (no frills) with reputable drivers/leds.

This might just be a question of perception, but if I wanted to buy a return pump, I could buy anything from a jebao to a tunze with various big name companies in between. I could choose to spend a bit extra and get a DC or wifi enabled pump, choose my pump based on wattage, size, or noise. Most pumps would deliver equivalent performance, it's what I found to be important to my particular need and I would pay accordingly for the perks or lackthereof. I don't see that same diversity with LED lights.

@andrewey that's a fair point. But just a couple of thoughts. First, there are LED fixtures available across a broad range of price points from Radion's upwards of $800 to $130-ish Kessils. But as @Silver14SS points out certain companies want to be known at certain price points -- to your MacBook pro vs. Lenovo point.

But there's the buyer's dilemma of what do I need vs what do I want.

 

[fcmatt]

In the time I have owned my ati t5 fixture some people have gone through 3 versions of led lights. But they did not have to buy bulbs every 6 to 9 months and saved a ton! Lol

The halide people can probably double up on that!

Led only saves you money if you run your original purchase without replacement for 6 to 8 years basically.

With that said good lighting costs $$$.