If you’ve ever been watch shopping, you’ve seen a wide range of sizes, cases, straps, colors – all different and more unique than the last. But probably the most distinct difference you notice between them: those price tags.
You see most casual watches around the $50 - $200 range, but as you keep scrolling you see some that climb up all the way into five figures. So, what’s the deal with these outrageously high-priced pieces and how much does it cost to make a watch? Are expensive watches that much better than more affordable options? Not exactly…
How Much Does It Actually Cost to Make a Watch?
As with any product in virtually all industries, the total cost of producing a timepiece varies from brand to brand and it largely depends on factors such as whether or not they produce their own movements, how much of their material is outsourced, and the type of movement they use in their watches.
Typically, wristwatches will cost anywhere between 5% and 15% to produce with some brands operating on even lower production costs. This means that that Rolex priced at $8,000 only costs around $500 to produce. At around $25,000 retail, a Patek Phillipe only costs around a couple thousand dollars to produce.
So, are watch companies scamming you? Surely, taking something that costs so little to produce and jacking up the price 15x is criminal, highway robbery, right? Once again, not exactly…
Why Do Watches Cost So Much?
As with any business, the cost isn’t simply a giant profit grab for the company. It’s also there to cover advertising costs, logistics, R&D, labor, and everything in between producing it and getting it on your wrist.
But the main reason watches like Rolex or Patek Phillipe cost so much is not just the quality of labor or materials. Yes, the manufacturing is some of the best out there, but it is not 15x better than your most basic watch. The material is also nicer quality, but it is nowhere near 15x as expensive as a $50 watch.
For the most part, the cost stems from the labor, advertising, and celebrity endorsements which can chomp anywhere between 20% - 40% of additional spend out of their profits. The high price can also be attributed to the prestige that the brand brings.
As with any high-end brand, you’re paying for the status that the piece brings by wearing it. Rich people like to wear pricey things to let other people know they’re rich. It’s just how it is and these brands are fully aware of this. This simple reason is why luxury brands exist at all – has little to do with how much better the quality is and more to do with the brand name.
So yes, there are some costs associated with improving the quality, movement, and overall finish of the piece, but the overwhelming cost of wristwatches comes from other areas leaving most companies with anywhere from 10% - 40% profit when it’s all said and done.
Which Watch Movement is the Most Expensive?
The answer to this broad question about which of the 3 main watch movements (Mechanical, Quartz, Automatic) is unfortunately another ‘it depends’. Generally speaking, more expensive watches will have mechanical or automatic movements. Although you might think that this would mean one of these two movements is superior to quartz, it’s actually the opposite!
In terms of performing the primary function of a timepiece (telling the time), quartz movement watches are the most accurate watches ever invented. To read more on why you should consider a quartz watch for your collection, check out our recent blog post here!
Now you’re probably wondering why the most accurate movement out there is mainly featured in lower priced watches instead of an exotic luxury watch. The reason most affordable watch brands place quartz movements in their pieces is because they are much easier to mass produce whereas automatic and mechanical watches are typically made in smaller batches.
To Wrap Things Up…
As with any product on the market in most all industries, the cost you end up paying is not just the material in the watch or the labor that goes into producing it. It includes those hefty advertising costs, R&D to work on improving future watches, employee pay, fancy packaging, etc.
As brands grow bigger, their advertising dollars may increase, their workforce may grow larger, but the upgrades to their products may be minimal (a few dollars increase in production here and there). The main price you’re paying when purchasing a timepiece is the status and prestige of the brand you’re wearing.
About Black Tie Watch Co.
Black Tie Watch Co. is an American minimalist watch brand providing modern styles at affordable prices. We began operations in August 2019 out of Houston, TX and have been growing rapidly ever since. As of today, we have shipped our pieces to 27 countries across the world and look to continue to expand our global presence! Our watches proudly run on quartz movement to ensure they are as accurate as possible. Each watch also comes with a full year warranty so you can shop with confidence every single time!
If you’d like to check out our selection of modern, minimalist quartz watches, please click here!
We are also looking for talented freelance writers to contribute to our blog! Articles will cover minimalist watches, watch styles, current watch events, as well holiday events happening with Black Tie Watch Co.If you have any experience or would like to gain experience contributing to our articles, please shoot us an email.
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