What is the average markup of hearing aids?

Greetings,

After searching, I’ve noticed many threads bemoaning the cost of hearing aids, criticizing the business model, defending the pricing as well as attacking the pricing. People talk about cost of production, where the overhead is, etc.

But, beyond all that discussion, what is, typically, the audiologist’s markup of hearing aids by brand, without going into the heated discussion of what is justified or not? After all, Swiss watches are sold at retailers for double what they buy them for. Same with shoes. Other items have even much steeper markups. As to the high price, as a recovering audiophile, some will spend enormous amounts of money are a pair of interconnect cables that certainly did not involve the kind of research that went into a hearing aid.

Anyhow, without getting into the right or wrong of this, can some people tell me what these markups are approximately? This is just curiosity, and interesting information. Thanks for reading.

Markup is difficult: you have to allow for fitting time, hourly pay rate of dispenser, number of dispenser hours covered by price, rent, taxes, insurance etc.

Raw trade price is something else - and probably meaningless in most cases.

If I told you that, say, eye glass lenses cost $7 what use would that information be to you?

(And, no, trade prices for aids are NOT $7 !!! $100s or $1000s more like!)

Well, of course I’ve heard this in most threads, and the point is well taken. This issue is true for a lot of luxary items as well as medical items. A vaccine for a dog costs a couple of dollars, but it will run you $50 at the vet. This is understandable.

Generally, I’m asking what’s the difference in price between the wholesale HA paid by the audiologist and the retail price. Every industry has overheads and hidden costs, but it doesn’t mean there isn’t a wholesale price, whether it be for cars, jewelry, medication, etc.

you pay what you get, on one hand- you can buy of the internet with minimal to no profesional service to someone who does not only the basic test but also real ear mes. , hint, and counceling to something in between.
that said, you pay what you get. For some pleople buying of the net is good enought for others, the services are worth the extra cost

I am an Electrical Engineer and I have worked in the Medical Devices industry now for over 15 years. My experience tells me that the retail cost of medical devices is anywhere between four to eight (sometimes ten) times higher than the Cost of Goods Sold (COGS). COGS is what it costs to manufacture the goods (parts+labour). The wholesale price is approximately two to perhaps five or six times the COGS.

A very rough rule of thumb for everyday consumer electronics is the “double-double” rule. Wholesale prices is double the COGS and RRP is double the Wholesale price.

Note that none of this includes the NRE nor the R&D costs, the latter typically being about 7% of a company’s annual revenue.

regards
Peter

Yes, this fits well with my experience.

My SWAG for the COGS of digital hearing aid is about $100, so I compute a fair and reasonable price of about $400 (exclusive of the extensive personal care currently “required” by those with profound hearing loss). This entirely sums up my horror and outrage at seeing hearing aids priced upwards of ten times higher.

I see a lot of whining on this forum about the low sales volume of hearing aids being the reason for the high prices. However, it is clear that actually, the reverse is true: it is the high prices that are causing low volume.

For any one with mild to moderate hearing loss, several thousand dollars is a deal killer - a non-starter. :eek:

Those of us with mild to moderate hearing loss simply do not need a high level of personal attention. Open fit units have little or no customization (ear molds, etc.). Mooreover, I resent a market that requires me to make an appointment with a “specialist” to adjust my hearing aid.

The solution is pretty simple: Recognize that there is a huge market of aging baby boomers with moderate hearing loss that could be tapped with a hearing assistive device priced at several hundred dollars. Make less on each unit but sell many, many times more units. Unbundle support costs from the price of the unit. Provide simple software so the user can adjust his own. We are computer savvy and quite used to pumping our own gas…:cool:

You keep making the same argument over and over again, but it still doesn’t make it true.

In England you can get a hearing aid for FREE, through the NHS. No deductible, no costs of any kind. You just go see your doctor, get a referral to an audiologist, and walk out with a free hearing aid.

Even with this model in place the average wait from onset of loss to actually deciding to do something about it was seven years, much like it is here in the States. Even with this model in place there is a thriving private sector often charging more than American prices.

Also, I can tell you right now, there’s not a single decent hearing aid I can buy at cost for $400 or less. Which is unsurprising given that Starkey spent upwards of $50m in R&D last year alone.

But as usual, I’m sure you’ll dismiss my information as propaganda and remain convinced that a fair price for a hearing aid is the same as an iPod.

During my career, I’ve met a number of patients like you. Retired engineers and similar. They all claim that with a few weeks work in their garage they could cobble together a $100 hearing aid. Oddly, not one of them have ever achieved this, and pricing is little changed since I started in 1994. In fact if anything prices have risen in line with inflation.

Your reply is irrelevant to my post and off the OP’s topic, who asked what the audiologist’s markup is for a hearing aid.

My reply addressed several of your points, although I agree that your post was largely irrelevant to the original post, since you are neither an audiologist, nor do you know for a fact what hearing aids cost or how they are marked up. You have made numerous erroneous statements on this board regarding what you think things should and do cost.

I addressed:

  • What you claimed the markup was.

  • Why you are wrong about the volume of hearing aid sales.

  • Your errors regarding what you think the cost of a hearing aid is to the professional.

I failed to address a few other issues you raised:

You suggested that charging several thousand dollars for a hearing aid for a mild to moderate loss is a non-starter. Well that’s simply not true on many levels. In fact it is sometimes harder to fit a patient like this, especially with good low frequency results, because of the occlusion issue, and the difficulty of reproducing excellent high frequency response without feedback.

This is another reason why patients with this kind of loss may require MORE adjustments than someone with a severe to profound loss.

Also a person with a mild to moderate loss is often getting aids for the first time, and is therefore going to require more help to get used to them. These baby boomers you keep talking about often have more active lifestyles than our older patients, and so are far more demanding about getting results in a wider variety of situations.

Additionally, when you are talking about baby boomers, you claim they are all computer savvy and can adjust their own hearing aids. That’s simply not true. Not all baby boomers are tech savvy. I’d seriously doubt that 20% of them would do a good job at adjusting their own aids. Heck there are plenty of hearing professionals out there that don’t do a good job of making adjustments, and they have been trained an licensed to do so.

I don’t have an issue with people having an opinion. But I resent posts that are so scathing of hearing professionals, and simply make up ‘facts’ to portray the industry as some kind of evil that needs to be stamped out.

The hearing aids enjoyed by millions of hard of hearing individuals around the world wouldn’t even exist if hearing aid companies hadn’t invented them. So how about we cut them just a little slack?

I’ve met with a bunch of hearing aid industry people from various major companies over the years. They always seem to have genuine enthusiasm for helping people to hear.

I have been involved in other industries that appear to be profit focused, but all the people I’ve met from the major hearing aid companies seem to be very genuine people.

I will concede however, that there are some hearing professionals who are less than professional, and will push over priced product onto patients to make money. But then I’ve met dentists like that too. There are useless professionals in all professions.

Getting back on topic, what is the audiologist’s markup?

Thanks.

I appreciate all this information, but the discussion is going right in the direction of every other thread on the topic. All I was wondering (in a non-judgmental way) was what is the typical audi’s markup regardless of overhead and research, and regardless of market models or ethics, etc…

I am starting to wonder that the problem with getting this answer is two-fold. On the one hand there are many people who are ready to jump on the audis as though they were swindlers living at the expense of one’s disability (nonsense), and as a result audis are not being very forthright, which in turns feeds this suspicion. Oh well…

As noted earlier, I think you should be asking about the typical trade prices for hearing aids.

‘Markup’ is too vague.

Now, as Zenon notes, on discovering the trade price many here will jump to accuse the dispensers etc of being gangsters.

“You paid $X for that aid but you charged me $X+$1000 for 2 hours work!”

Well, you could use that argument with almost any product in the retail market place.

I don’t fancy spending hours explaining my business models and accounts to non-business-savvy customers so they can see where their money goes. They need to get their education from a Business School, not from me!

I appreciate having clients with retail management or ownership experience as customers. They respect me, my time and my expertise. They know how the retail price will break down, and simply accept it as being how the world works.

As for those who argue “I could build a hearing aid for $20.” … well please go and do it!

This is exactly what I was curious about. :slight_smile:

In many respects you are quite right.

For some reason there are a small number of people who frequent this board who seem ready to attack hearing professionals at every turn. Some refuse to accept any industry facts or figures, others seem to imply that helping people to hear is only acceptable if we are willing to do it for free. Yet more assert that they could make a hearing aid themselves for a few bucks in their garden shed, and that they should sell for no more than $200 or so.

So certainly for this reason alone, I for one am not going to publish the confidential figures of my business only to be attacked.

I’ll say this though. when I worked for a hearing aid company they had two offices in Tennessee that I ran. Their profit per office was an average of $2,500 per month.

Anyone who thinks this is unreasonable is just not living in the real world.

As I’ve said before. When it comes to the issues surrounding hearing aid price, I think the important question to ask is who is getting rich. Well it certainly isn’t the local dispensing offices, nor the hearing professionals. And having seen the cost prices, I don’t think those are that unreasonable either.

Were you not happy with my reply ? I’ll summarise it again for you.

The minimum mark-up would be about double. The maximum mark-up would be about five times (i.e. assuming RRP:COGS=10 and Wholesale:COGS=2)

You will be hard pressed getting more refined figures than that as each case is different.

regards
Peter

?? I agreed with your post. My question was directed to ZCT, who still has not answered the OP’s question.

OK, sorry my mistake. I also doubt that this original question will get answered in much more detail on this forum:

what is, typically, the audiologist’s markup of hearing aids by brand,

To give a brand by brand answer is probably too commercial in confidence.

Peter

Widex Inteo, wholesale prices when on discount in January, were $825.

Their current discount special - the Real - is $375.

Oticon Epoq:

V - in canal - $995
mini - $1095
mini power - $1195

Price for two is double those listed.

Unitron Next 16 - BTE - $999 for one