Markets in Everything: $300 Hearing Aids

Tech Crunch -- "Of the 27 million Americans who qualify for a hearing aid, 75 percent choose not to purchase one — only one in seven Americans over 50 years old who need a hearing aid actually wear one. The problem is a sizable one, so former Stanford University classmates Sam Tanzer and Ross Porter decided to do something about it. In early 2011, they founded a startup called Embrace Hearing to apply some entrepreneurial pressure to the situation. 

The co-founders tell us the top reason that 75 percent of Americans don’t purchase hearing aids is due to a familiar culprit: High cost. If you take it from CareCredit, hearing aids range in price from $1,000 to $6,000, with the average price being $3,000. And for those who do choose to wear them, the top pain point is the high cost of replacement.

Embrace offers three lines of hearing aids, starting at $300, next at $500, and top of the line at $700. Obviously, the whole line prices way below the industry average of $3,000. Because manufacturers tend to have exclusive agreements with audiologists, Tanzer says, they collectively tend to set prices high, but the startup’s German manufacturer only recently decided to enter the market, and as a result, isn’t tied to any exclusive partnerships."

MP: The invisible hand at work.....