It's bloody hard to recommend with a straight face that someone should spend more on an espresso machine and grinder than most people spend on a refrigerator.
I mention this because this comparison with fridges, along with microwaves and even stoves, is often brought up in discussions of price in my email correspondence and in interviews I've done with the mainstream press. Even worse, price comparisons are made to kettles, auto drip coffee makers, and even toasters!
These days, I'd much rather compare the purchase of an espresso setup for the home to the purchase of a good quality stereo system, or even better, a decent quality home entertainment system, including a LCD or plasma TV, surround sound system, the works. But that's only because of the costs involved.
The fact of the matter lies mainly in a principle called "economies of scale". Maytag may make 150,000 dishwashers of a particular make and model this year, while Rancilio will make maybe 5,000 Silvias in the same time span. Maytag can amortize R&D, development, factory fabbing, and the works over those 150,000 units; Rancilio has to do it over considerably fewer units.
Along with economies of scale, there's another significant factor involved in the pricing of espresso machines coming out of Europe: most are handmade, and most involve extremely complex, specialised parts, both of which add to the overall cost of production. And don't even get me started on importer and vendor markups!
I mention all of this at the start of this section for no other reason than to get it out of the way, because what I think is more important than the initial price (shock) is something called "life of ownership". It's about how you plan to use the products, and how long you expect to own them and expect them to work.
Thinking about Life of Ownership
Believe it or not, I'm not a big fan of cost breakdowns, but I'll delve into that just a bit. I often think of the purchase of an espresso machine as a lifelong investment. I felt this way even back in 1998, when I bought my first serious machine, the Rancilio Silvia. Back then, spending $400 (or about $700 CAD with exchange and duties worked in at that time) was a massive expense for me - I was only a few years out of university, struggling still to find a "career", and that purchase amount was nearly 75 percent of my monthly rent!
I managed to justify the cost (and saving up for the purchase) because I thought about where I wanted to go with this whole coffee and espresso thing. From my point of view, I wasn't making a purchase of a non-descript toaster from which I expected a few years' use - I was buying a machine that I hoped would last for a decade or two with daily use. I didn't have the benefit you all have today of a ton of online resources to help me select one of these otherwise obscure machines, but I did have the usenet newsgroup alt.coffee; and the consensus was that the Rancilio Silvia was the machine to own, the one that met all my expectations and desires.
The fact that I sold the machine two and a half years later when I did a big upgrade to a Pasquini Livia even plays into this - owning a good quality machine meant that when it came time to sell, I was able to get a good price for it. I think I sold it for around $500 CAD or so, making my investment in it less than $200 for the two plus years of use I got out of it.
Factoring in future costs
When deciding on your budget for buying an espresso machine (after, of course, deducting the amount you'll spend on a good grinder), think about how long you want this product to be working. Think about the cost broken down over five, ten, and even fifteen years of ownership.
All of a sudden, that $1,200 machine doesn't look so bad when the cost is amortized over 10 years. The bonus is that most (but not all) of the machines in the $500 plus category are built to last. A machine like the Rancilio Silvia or the Pasquini Livia is built with many commercial parts - some parts designed to withstand the abuse of pulling 50 to 500 shots a day. You're going to be making between 2 and 10 shots a day. The same goes for grinders.
It's very tempting to buy the cheapest machine out there; after all, there's plenty of machines on the market costing $150 to $250 that have the minimum specifications required to brew a great shot. And I stand by my claim that I can make great espresso with a $200 machine. But if that $200 machine ends up breaking down in two years, requiring a $150 boiler replacement, and the plastic outer body cracks, and the pressurized portafilter starts to fall apart, all of a sudden, it makes spending $475 on a more professional calibre machine much more economical and less stressful than mailing a $200 machine cross country for repair and being without your espresso fix for a month or longer.
You also want to think about that upgrade path. Basically, there's three types of people who buy a $500+ espresso machine: the poser who wants something flashy (I don't think there's any of those reading CoffeeGeek!); the user who just wants a good tool for producing a great beverage; and the fanatic who, once they fall in love with something, eventually wants to upgrade to something better.
For the latter two types of user, spending good money right off the bat for a well researched product will pay good dividends. Chances are you'll be using the machine almost every day, and the commercial quality of the interior parts on an expensive machine means little or no worry about breakdowns or problems. The fanatic gets a machine that can withstand heavy use, which will also, when it comes time to upgrade, give them good resale value.
Keeping these things in mind should help you when it comes time to fret about paying more for an espresso appliance than most people spend on a refrigerator. ;)
Caveat: by no means am I saying that more expensive machines are less prone to problems.
There are plenty of stories in our forums about $1,000 to $1,500 machines requiring trips back to the shop; but one benefit from the more expensive machines is that the parts they use are commercial quality and are readily available to most vendors and machine repair centres. And generally, if problems don't crop up right away once you open the box and start using the machine, most likely your investment will give years or even decades of worry-free service.
A very important fact to consider is that most of the espresso machines available today are handmade in Italy and other parts of Europe in very small runs. Handmade sounds great, and generally really is, but it also means that there may be a greater frequency of quality control issues than in a prefab factory that churns out 100,000 machines of a particular make each year.