Why Are Watches So Expensive?

There are watches that are worth the price beyond the emotional attachment or social value. Some diver’s watches, for instance, can withstand insane depths beyond what a human could withstand. Some, like the Rolex Milgauss, are designed to stay accurate in environments with very high radiated frequencies and high magnetic fields; like the CERN Super Collider. I’m not saying this is an example of value-for-the-money, but some of the high-end specimens are created with very, very exacting movements

1. The materials that comprise the piece are of the highest quality and are expensive in itself. Companies use gold and platinum among others in their designs. Rolex and their two-tone is one example. However, material prices fluctuate (like copper) and as such, prices of a watch may be priced differently.

2. The movements are in-house and made by hand. I have seen movements that are comprised of 396 pieces. Putting all of that together is time consuming. However, these watches are among the priciest and well-made in the world.

3. Switzerland’s labor force is among the priciest in the world. The people putting these timepiece’s together are expert watchmaker’s and as such, demand high pay. Using simple economics, companies have to charge more to pay labor costs and make a profit.

4. The rarity among these brands is enough to charge out the roof. Some brands make very little amounts because their movements and other details are time consuming. Brands like Vacheron and Breguet make something 40,000 watches a year. Rolex is actually pretty common and charge pretty reasonable prices for such a brand. They make around 600,000 a year, so their prices aren’t so extraordinary. Vacheron and those companies charge based on economics. Low supply + high demand = high prices.

5. Marketing campaigns make money but cost a lot of money. I imagine Citizen, forked a fortune out to get Eli Manning to be their spokesman. Companies have to charge to make a return on their marketing.

6. Brand heritage and perception of quality is not that big of a driving force for their prices, unless you are Baume et Mercier and possibly even Tag and Breitling. Nice watches but are pretty ordinary, at least through most of their models.

7. You have to keep in mind that Something is worth what someone is prepared to pay for it. They charge because they know you will pay for it. They know people will buy these watches as a source of pride, status, or whatever other reason you buy watches for. So are their prices worth it? That’s up to you.