No End In Sight?! Prices For Watches By Rolex, Omega, Longines and Oris Go Up. The Reason?
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- Опубликовано: 28 июн 2024
- Luxury wristwatches are more expensive than ever before. Top brands like Rolex and Omega change their price tags almost every year. And also smaller brands want to enter the high tier market of watchmaking. What are the reasons?
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Great summary Tim, economy of scale puts the costs down as with large purchases the cost of unit goes down. I think the biggest issue is the manufacturers raising prices to try to jump a watch tier. Companys overheads and profits per quarter makes everyone want to raise their prices.
I love my Timex. It cost me forty bucks. You have to admit watch collectors are a little bit crazy.
A little bit, lol?!
Yes, I have a selection of Timex and Carriage watches which I enjoy wearing more than the expensive Citizen Eco drive watches I also own. I only own one watch over $300.There seems to be little correlation between price and real value, especially in the high end market where name brand seems to prevail. I buy based on what I like and wish to wear and the snobbishness of name brand watches doesn't even come into play as I suspect it doesn't for people who value their money properly....
I've found the secondary market prices have dropped a bit in North America. Recession fears maybe?
They have dropped a bit in the UK too. I suspect a recession is coming and people are keen to off load inventory before it hits.
As you say Tim, there’s never been so much choice available if as a watch enthusiast, you’re willing to look beyond the well known brands. I suspect Rolex have a mission to raise themselves to the level of AP, PP and VC in price terms, but they just don’t seem to want to deliver the value in terms of the product they are selling, or I suspect it’s not about wanting to I don’t think they can in the volumes they manufacture. I fear for companies like Oris who won’t be able to attract millionaires to the brand and they’ll price themselves above the average person.
@@IDKline Same here!
Yep. I went for the ProPilot X Cal 115 because I love all the effort and thought that went into building that beautiful movement. But I bought for less than half of retail preowned letting the original owner take the depreciation hit. I am definitely a fan of the brand.
Typically brands will apply an uplift of 600% to 1000% on top of the total manufactoring cost, to calculate the list price
I find theres a difference between watch collectors and people who buy watches as status symbols. People who collect watches have several watches under 1k-2k and love wearing them. You dont need to spend 10k to have a very nice watch. So i think the real discussion with most of this should be centered around are you a watch lover or a statis symbol watch lover.
I've been wondering if Rolex putting their prices up because they can has dragged the entire market up with it? Been half kicking around the idea of an Aqua Terra 41mm for a while, could have bought one this month and they're suddenly £5400. I swear they we low-mid £4000s last I looked.
The real shocker for me has been Tudor - Black Bay 41 on bracelet was £2250 when I bought mine January 22, just before price crept up to £2500. The new one with the in-house instead of the SW200 is now £3070.
Meanwhile, FC Highlife has risen around £200 since I bought mine in Apr 21, from £1500 to £1750. Similarly, sister company Alpina has seen prices drift up over the last two years by around 10% in total... seems inflationary pressures vary from valley to valley in Switzerland.
Companies have to establish desirability before raising prices. This is the most obvious but difficult thing about marketing.
Ah, that brilliant moment when your product is recognized as a Veblen good.
Very much enjoyed that Tim - an extremely interesting dialogue. However, there is the retention of value factor in buying high-end products as well. The phenomenon of loss in value as you walk out the door of Longines with your 2000 euro purchase, for example - you would have a lot of trouble recouping that money if you sold the watch a week later. Some Rolex/Patek/Audemars Piguet actually go up in value as you leave the shop. But hell - a watch is a watch, and sometimes you buy them because they are beautiful, and not because they are investments. And they tell the time, which is always useful. Thanks for the clear explanations. Tom (from France)
Even if so. Rolex had the least price increases compared to Omega Seiko etc.
I've heard from reputable sources that the final cost of the watch at retail is usually 6-10 times the production cost.
I never cared too much for brand in my purchase, I always go for style first then price then I select a brand, a good brand.
In times where many brands are becoming more expensive, I appreciate what Damasko, Guinand is doing.
I own a damasko and they make amazing watches!
I still have the "Watch Time," magazine; early 2000's, where they broke down the prices! Manufacturer, distributor to the AD, the prices get crazy, lol! This is why having a goal and limit in this hobby makes a lot of since! You play their game, and you are not wealthy, you just accumulate regrets!
So, tell us....
@@gelmibson883 Cover Story: Time is Money
Sept. 18, 2000...By Joshua Levine
(Pg. 183 last 2 paragraphs...shortened)
A steel case with a crystal $40-$250...movements, $10 to as high as $2k!
Manufacturers may double it's manufacturing cost in arriving at a wholesale price to the distributor! The distributor in turn doulbles it's price in selling to the retailer (AD), who doubles the price once again to the consumer. Before you know it, a watch that cost $500 to manufacture ends up with a price tag between $4k & $5k... end quote!
Complain, if you want, about the giant mark-up, but that is beside the point for a buyer who perceives that he is acquiring a work of art. You may as well complain that Matisse marked-up his oil paintings...end quote.
Great explanation , Tim. And I can see where your description applies to a lot of similar products. Keep up the great channel.
because people are still buying them... everything going up and people are still shopping.
JLC just raised the price of the Polaris Chrono to $14,000 now.... i think it was $10,000 when it first came out in 2018.
You have to shop carefully. I’ve bought 4 new watches in the last 3 months and got everyone with a discount except my Santos de Cartier large which I paid list from an AD(I could have saved 3% gray but it wasn’t worth it). They also took my Breitling as a trade in for what I paid for it. The others were Longines Zulu Time at 18%off list(sourced from a middle man, came with full warranty and box and papers), Bucherer rose gold Manero date at 50% off gray market with box no papers and a U-Boat DarkMoon at 25% off from the boutique. Just stay away from the watches that are over priced. I’m about to buy an Omega SMP300 for about 20% off list.
You can buy a used Breguet Type XXI for as low as $6000.00.
I find this argument to be circular but thank you for presenting it!
well says and sound explanation. I mostly agree.
I prefer a brand with strong history such as Swatch, which saved the swiss watch industry in 1970. Therefore I recently buy a artist swatch and only cost me 150. Although it is quartz watch, it is indeed an artwork and had artistic looking.
You are very well groomed etc Tim but more watch pictures please!
Excellent analysis and insight, as ever 👍
People are more and more becoming ‘watch investors’ instead of watch collectors.
Excellent summary! I think Tim is a very effective communicator. For me, this makes his content even more interesting.
Thank you! It took a while to prepare that video, but I'm glad that people find it now helpful.
Great breakdown of the cost and in addition the name attached to the product, in this case the watch. I think as a result of the rising costs, micro brands are really flourishing at the moment and although they may not have the name recognition, they do capture the value vs cost that more expensive brands don't have to think about. It also allows smaller brands to enter those price points that other brands have left behind and maybe offer more exciting designs and/ or specs.
I don't know what German inflation was like, but 2000 DM in 1986 was 820 USD, and 820 USD in 1986 adjusts to 2300 USD in 2023.
Also, man, do I miss travelling to Germany during the DM days. I wish they would use a Seiko movement and German case, or maybe just charge me $100 more and use a German case, so my money does not support an economy that enslaves Uyghurs.
I must say, I very much enjoy your sociological explanations. To that end, I would be curious to hear if you have thoughts on why German brands often defy this trend and pick a price point they are happy with and stay there.
I don't know about that. The prices of the German manufacturers I follow, like Stowa and Archimede, have increased significantly in the last few years. Perhaps 50%.
Although it's true that unlike Seiko, they haven't tripled.
@@scottparis6355 Yes, but currency, at least US currency, has lost over 20% of its value over the last 2 years, so they've basically kept with inflation.
I did the calculation once, and accounting for inflation, Rolex watches from the 60's were being sold for only about $1450 in today's dollars. However, the watches then were lower quality: mineral crystal, hollow links and end-links, pressed-clasps, lower-quality bezel materials, etc., but also, it was a lot more labour intensive to create a watch back then, whereas most of the manual effort has now been replaced by robots and other machines, so if anything, you would think that the prices should be even lower now. Part of the Rolex story is that a Rolex isn't an expense, it's an investment, and that's why they need to keep increasing their prices, to perpetuate this belief. But unfortunately, this causes other companies to increase their prices as well. Grand Seiko's used to be much more reasonably priced, but I bet they say to themselves: "we're making watches better than Rolex, and they're charging much more, so we should be charging more also".
Taking Christopher Ward at their word (3x cost), Swiss made with a bracelet with a patented clasp is about €333 material cost.
I think some manufacturers are using the general inflation as an excuse to make hugh increases in price.
I can buy a Stowa or Archimede for around $1000. These are beautifully made German watches with ETA or Sellita movements.
Meanwhile, the Swatch companies like Longines are asking 2 or 3 thousand dollars for very similar 3 hand watches. I don't see the added value of the brand name. My guess is that the extra 2000 dollars is pure profit without added value.
The only defense we have as consumers is to refuse to buy the overpriced iems.
50.- for a case made in china seems reasonable. And sometimes it’s true that cases are outsourced to china. But very often case manufacturing is in house or outsourced within Switzerland or Europe.
Especially the big manufacturers such as the swatch group or Rolex can manufacture mist things in house for a competitive price due to a high degree of automation and high number of pieces.
Great video btw. It gives us a good insight.
Grüsse aus Zürich
Saving up for for a Rolex Oyster Perpetual. Rolex "lets make it a little harder for you." Price went up with 200 euro last year. This year ???
Oris prices are a farce
Honestly I really wonder who is still buying these watches. I've been collecting/enjoying mechanical watches for a long time, but the prices now create a real "opportunity cost" dilemma. There are quite a few watches that interest me and that I'd have purchased in the old days at the old prices, but now it's an easy decision to pass. I also think that reselling a mid tier watch at anywhere near retail must be difficult.
Interesting treatment of the subject. I have enough watches to last the rest of my life, I have been tempted many times to buy another watch I dont really need. If I lost them all I could make a case for buying another but a £20 Casio would do the job. I long ago decided not to buy another Rolex as there is no need for them to be priced at the level they were, now its much worse. Nobody needs the kind of watches you are discussing so I could see a lot of them disappearing.
I am a small collector but the watches I choose are because I like them individually. However, I am totally blown away by how so many people will pay outrageous prices or watches based on name or some other nebulous reason. Only thing I can think is "fools and their money are soon parted". I watch these videos with a feeling of amazement of what is going on....
Very good video 👍
Great analysis Tim and really smart conclusion ("If you like Longines, buy Longines, but in a conscious way"). Several youtubers are bringing your correct starting point to the radical conclusion: "you have to buy only microbrands, if you buy consolidated and historical brands you are an idiot". It's always a pleasure watching your video. Ciao
Very nice and insightful analysis. Good bits of realism in there. I didn't like to be confronted with the 'safe haven of the super rich'. Although I can stomach a small group of super rich, when you see how much is apparently reserved for them or only exists because of this group, my stomach turns... It's a damn shame the world is like that. That said, outside of those excesses of luxury and crafting, I largely agree that the far majority is available at virtually all price points and that's great for creativity and individual choice. In you price analysis it did seem to me that the price for a basic Sellita was a bit high. I think Pitzmann did a video suggesting that can be considerably cheaper, although the exact pricing escapes me now. Perhaps I'm wrong. They made the video to show the considerable additional value one gets with a decorated, modified, regulated sw300 in their Pitzmann II.
I observe that for every watch Marque and Model made in Switzerland, there is a close equivalent Seiko or Grand Seiko model. This includes Rolex, but probably not the Patek and other very top Marques.
If you compare the Grand Seiko equivalent to a given Rolex for example, there is a ratio above which your watch will not sell well. Maybe 5x or 7x will be okay but above that no sale. Seiko then raised the entire market over the last few years if you look back on it. Thats my theory.
It’s difficult to see a brand jump tiers, like Rolex. Once the everyday man’s watch, not so much anymore. Kind of a generational thing, where previous gen can’t just want in and buy a Rolex for $999. Anyway, all great points, and prices are here to stay and will only go up over time. Secondary May drop however, and that’ll be the tell.
Great episode. Interesting. Informative 👌
I blame Rolex. They seem to be on a mission to continually raise their MSRPs - other brands like Omega will follow suit and that in turn will "trickle down" to lower tier manufacturers. Take the Submariner, which was at ~ $8,000 for the date-version around three or four years ago. About a year ago it was at $9,000 and now it's at over $10,000. I didn't keep notes on this BTW - just happened to have watched a couple of YT-videos last week, showing MSRPs on the Rolex website with one video dating from 2019 or 2020 and the other from a year ago.
Considering that Rolex not only is the most generally desirable brand but also, by far, the one with the largest share in the Swiss luxury-ish watch-market (~20% IIRC), I don't think you can over-estimate their role in all of this. Because, as you've stated, if Rolex keep pushing up their prices, other brands like Omega are almost obliged to do the same - otherwise they might be viewed as less desirable than Rolex. Which is kinda what they are anyway already, but hey.. :)
No mention of the rise of the Chinese economy in the past decade or so that has increased the demand for luxury watches exponentially in the past decade?
I believe watch blogger/Retailers have had a deleterious effect on watch consumers! when You see 30 " blogs" about the same watch, It's obvious There's something wrong!
Inflation does make all consumer goods more expensive in time. The people who work for watch making companies have all felt the same shocks as the rest of us. I'm sure they want higher salaries too, which get passed along. I'm betting today's watch prices will look "cheap" in five years time, especially if inflation rates don't drop to the very low levels we became used to before recent crises.
The price increases of many watch brands are far higher than inflation
@@Hans-Georg_Buddne Accepted, but I'm betting we'll see even greater rises going forward given that prices have risen considerably during a long period of low inflation.
@@BAF605 Probably. The reason is greed. At some point, this will need to stop
They have to actually sell the watches to normal people with jobs.
At some point makers like Oris and Longines will find that while they had a market at $1000, they no longer have one at $3000.
@@scottparis6355 Veblen goods have entered the chat.
What it means for me, is that I re-direct my finite resources towards watchmaking - tinkering - and enjoying horology in a different way. I won't be spending 3k on a Longines, I'll be spending 300 on a timegrapher.
That was my decision also Neil!
Are you a certified Watchmaker though?
@@davidcrandall4958 Of course not! I have a seiko 5 in bits on my desk which I've already broken in two different ways, but it's good fun, and it doesn't cost me 3k to have fun like that.
And also you have great Micros! 😅
The growing divide between rich and poor means that the rich can buy more of the high-end watches and they don't buy just one "grail watch". So why wouldn't the watch companies raise their prices? Then there is this absurd quest for the best (driven by YT channels?) where everyone is rating everything. I read that some people have spreadsheets for their sexual partners.
Absolutely brilliant video. You should consider becoming an economics instructor as a side job.
Thank you!
Hello Tim,
I say:
BE IT AP, VC PP, OMEGA OR LONGINES. SINCE NO WATCH IS 100% ACCURATE THEREFORE, NO WATCH IS WORTH MORE THAN USD500.00 .
DANKE
😎
It's inflation. Prices on everything has risen.
Unfortunately for most people the inflationary increase in income doesn't keep up with the price rises of Rolex and its competitors.
@philspencelayh5464 That is true unfortunately.
There are companies that sell watches for very reasonable prices. I recently bought a quartz watch from Mr. Jones in London for $250, and they sell watches with Sellita movements for $550. So by Tim's calculation, they're not making much margin per watch. And these are beautiful, playful watches too. And a tourbillon is an amazing feature that should be in any watch lover's collection. But it's not worth $50,000 to me; nor is it worth $5000. But $500, yes - and I bought a Chinese tourbillon for $550 (bought in 2020 at the height of COVID however) and it runs great - around +/- 10 sec on my timegrapher.
Simple. Greed.
Demand will always outstrip supply because high end brands will simply produce less to uphold scarcity. Entry will be mid, mid will be high and high will be unattainable for most. That’s just the way this is going. Eventually only the wealthy can afford any mechanical watches. BUT we’re merely going back in time when watches were once only for the wealthy.
Red nose
Finally somebody noticed it 😉
Greed
Everything is so expensive now, due to a lot of people being so Greedy, every one must live within there means, and say, do i really need it 🤔
Thanks to YT and IG I can live such a rich life vicariously, because frankly that's all I can afford.😊
Swiss meh!
1:37 You think it is Fine to do business with companies exploiting their workers or Even using forced labour?
No watch unless it is made of exotic materials should cost more than $1500. That is what my watch repairer told me. I.E. a sucker is born every minute!