Why Are Luxury Watches So Expensive

 

Most people ask a very common question why luxury watches are so expensive. The Replica Rolex watches are attractive not only for their best imitative designs but the very affordable prices. Expensive simply means anything that costs a lot but behind the scene there are various decent reasons for such price. For instance a product has marketing costs, material costs, manufacturing costs, development costs, distribution costs and also a fair profit too. One can easily find expensive and overpriced watches in the market but overpriced watches are available in abundance. The most amazing aspect of overpriced watches is that people still buy these watches. In this short informative article we will share the reasons which make them so expensive.

1.    Development and Making makes the watch Expensive

 

Watch movements mostly take years to be manufactured perfectly. Watch technicians spend their precious time and efforts on a problem that has been already solved but the fact is they want to do it in a unique and different way. In simple words we can say that they must design the new movement to track the time but in a different way to call it their own. Professionally trained micro mechanical engineers work out on new watch modules and movements on computers before they are produced. The process can take few years to complete. The case is special and lengthy if one is aiming to produce something new, unique or complicated that are difficult to manufacture.

Watch movements are expensive to dream up but even more expensive to get movements to be durable and work properly. The process also needs serious testing process. A new caliber can take millions to be developed and remember this is just one movement. Design a watch bracelet and case are simple as they are not made on machine but it is still tough because you are working to produce a watch that can withstand serious atmospheric conditions. The bottom line is that good material is used in nice wristwatches. A decent material needs serious amount of labor and hand attention whereas machines are used to make tiny timepiece parts for high end watches which are then modified and delicately finished by watch artisans.
A nice wristwatch can usually take between to several months to manufacture. Even in many cases watch brands are unable to produce according to the demand of the market. The problem leads to the increase market value and a production bottleneck. In-fact every watch brand want to produce maximum timepieces but the reality is it is not easy or cost effective. It is the manufacturing time and complexity which mainly leads to the high demand problem of luxury wristwatches. This is one of the prime reasons that expensive watches are produce in low quantity.

2.    Movements make it expensive

There are very few brands that produce their own movements. There are chiefly two types of movements that are the high end mechanical ones and the less expensive quartz movements. If you are going to make your own movement then it will be relatively cheap but still the mechanical movements are expensive enough. Various watch brands decorate or modify watch movements after buying them. But you can compare the cost of high end mechanical movement to the cheap quartz movement that costs few bucks. Mechanical movements are available in dozens and dozens of styles, level complications and grades. A basic Swiss automatic mechanical chronograph movement costs roundabout 250$. A Japanese quartz chronograph movement can cost only $10-$20. Now imagine how much money can an exotic mechanical movement cost? A decent movement maker is hard to find. ETA has a high demand which needs to approve any project before selling them out. ETA manufactures number of mechanical and quartz movements and is in great demand in Switzerland due to volume perspective. Talking about high quality exotic mechanical movements, their price can be in tens of thousands of dollars.

3.    High Cost is directly proportional to Low Quantity

For instance Casio doesn’t make timepieces in 100, 1000 or 10000 but in many of the watches are produced in millions. This can be one of the reason for which the initial cost of tooling and development can be partially disturbed in every timepiece. Even if the cost of a new timepiece is million dollars, only pennies of that expense will appear in the cost of each watch. But what about a wristwatch that has been produced only in 1000 pieces or less? Here applies the simple basic principles of industrialization. Beside purchasing watch movements, various brands still needs to invest different parts. They use series of suppliers for this very same purpose. There are technicians that make different parts for them and charge tooling cost too. The cost of these making hands can be seriously high. IF you are talking about the relatively inexpensive Asian watch making, the low amount of the timepiece, the higher the cost for each watch most be due to the design, manufacturing and buying the parts which combine to make a watch. A simple summary can be an interesting watch needs tough workmanship to utilize different parts which results in high cost.

4.    Many Watch Brands like to be Luxury Brands

A dream of every watch brand is to be on the wrist of popular celebrities and envied by passers-by. Only few reach their goals legitimately while others find dark ways to do so. But people love to choose the brand with rich history and known for the high end lifestyle, quality and luxury. Quality and exclusivity are two main factors that determine the future of any watch brand or jewelry. For instance, Patek Philippe is one of the most sought out luxury watch brand with a long rich history for producing high quality luxury timepieces. They also take help from marketing sector to get the attraction of celebrities and rich people. It is the best quality material used in the watch which not only makes it luxury but also boosts its price. A luxury watch brand always use best stuff in every aspect of the timepiece which is not easy and needs a generation of experience, resources, money and serious time in R&D. Image and marketing are two prime keys. All you need is to create a lifestyle persona and show people you are exclusive and luxurious. Take a look at the best watch brands with slogan such as Luxury Swiss Timepieces. They are very clever in marketing their product as they tell you what you are thinking of a perfect timepiece. They create artificial high prices and invest heavily in marketing to create an image of their product and also to attract people from every aspect of life.

5.    Long time is spend by highly trained artisans to make a good quality watch

A complex watch usually take almost one year to complete. They don’t work continuously on it but a time is needed for a mechanical watch manufacturing, finishing, decoration and testing process. Then they need a specific time frame to polish hundreds of parts by hand though microscope. There are countless people doing this but the best in the business are professionally trained and certified from renowned schools. These people are paid highly especially in Europe as hours and hours of their time are valuable. Most of the watches are assembled rapidly but it doesn’t exist and impacts the cost of luxury watches in great deal. Just imagine one year working of a professionally trained team then you will understand the cost of making a high end watch.

6.    People circle and their profit ratio raise the price

Very often we hear a statement from shopkeepers “do you know how much the product cost to make? This is the most common way to trap a customer because most people don’t know. The hidden reality is a watch cost more than just the sum of their internal parts. Wristwatches are seriously expensive to manufacture, design, distribute and also market. All these minor things come together to burdensome the watch industry. If we see from beginning the line from making to the consumer can be seriously lengthy. Let’s take a look at a simple example. When a watch comes out of a factory, it costs $1000 including all parts and labor. A manufacturer adds $500 to gain some profit and supply it to the distributor. A distributor has to deliver watch to local shopkeepers and also outside the country. Here comes the involvement of import, export and other duties. The taxes may include the value of the timepiece and also adds the custom paying. Distributor also has to hire sales people to find retailers. In simple words these entire sums up to increase the price up to $2500 of the timepiece. Retailers also need to hire sales people on base pay revenue and percentage commission. There are three parts that are brand, distributor and retailer in which marketing costs are often distributed. Now retailer has to add some profit to cover all charges and place a watch under $5000. Just look back from where a watch came out with $1000 and suddenly reaches to $5000. This is one of the prime reasons that all brands find it attractive to sell the watch online. In-fact every brand is earning healthy profit by selling the timepiece with market price. Additionally majority of customers want to order online because it is the most convenient way of shopping.

7.    You don’t know any better

Hardly few people are expert in the pricing and valuation of wristwatches. This applies to most industries. The charm of performance, luxury and presumed quality attracts people. In simple words, various luxury watches are not that expensive at the time of production. An experienced eye will always keenly observe the quality and material of a watch. While a common customer rely on brand name for their positive reputation. 

8.    The customers worth

A Champagne maker Dom Perignon decided to reduce the price of its product so that they would sell more. But the tactic badly failed and rather than increasing the sales dropped down seriously, so they raised their price again. In simple words, the price is a mental indication of the product’s worth. The story is not different from the watch industry.

9.    Is it worth?

After looking all the factors of a watch, the question is “is it worthy to invest in a timepiece? First, does the quality of the watch match its cost? Secondly, does the market price justify it and how is the resale of the watch in the market? There are countless brands with quality timepieces placed under high prices which really worth it. On the dark side there are brands that are deceiving people with less knowledge by selling fake watches. Whether you take Rolex, Hublot, Patek Philippe or any other Swiss brand, they are highly manufactured timepieces that worth such money.