Why should you pay that much?
In the watch industry, the most common question we hear is of course “why should I buy an expensive model? ” and “cheap brands can show the same “time”. True and that is a valid question. However, it’s not a matter of a nuance or just a shade in colour difference, in fact, there is an endless list that tips the scale. So let me highlight some of the main reasons why there is so much difference in price. Some brands require some justification especially when you can buy one watch for €50 and another for €50,000.
Casio, GMW-B5000D-1ER for €500 and Patek Philippe Nautilus for €100.000
Let’s say you can go to your destination and you can choose any means of transport you want to or watch your favourite film on any size and quality of tv, or stay in any hotel during a holiday. How would you choose? Of course, the first question is, what is your budget? So let’s assume that you are blessed enough and don’t have to worry about the finances, how do you choose and then justify your decision? Well, let’s have a look at what is there to know regarding watches. Hopefully, by the end of this read, you will know more.
In this article, we will not explain in depth the inherent (the total and actual effort, time and money poured into a watch) and perceived value (how well other people receive your timepiece, what will they think of you and the timepiece) , though both are essential, also both are subjective up to a certain point.
First things first, the quality. Metal, wood, leather, pearl, plastic, rubber, and diamond can be made under different conditions. There is a difference between steel and stainless steel and often the more you pay, (not always but often) the more you get. Let’s not forget how many times we (I mean everyone on this planet) shopped for a stainless steel knife set that rusted. No matter what you buy, you want what you are paying for and watches are no exception, especially when you spend so much. Where the material was sourced from, what processes it had to go through, and what regulations and laws applied throughout the process can influence the price to a certain extent. In fact it goes so far that on the market you can find watch links that cost more than €1.500. One single link.
Rolex Pearlmaster, Presidential and oyster braclets, three unique styles.
Then there is the brand. For certain brands, you pay for history, knowledge, technology, marketing, and for the name as well. Behind every watch, there is a design and a question if it’s their own or if it is copied. How much effort they put into the timepiece. Models with a unique look usually cost more; however, that adds to the watch`s perceived value.
The next point on the checklist is the actual value of the market. The watch market is incredibly liquid, (and I promise to do an article on that soon). Most brands and their models are predictable. As soon as you buy them, they will lose value compared with the original price, but some models are influenced by many things. Therefore, you can see watches that cost a certain amount one month and completely different the next month. Here, I must say, people often mistake the retail price (set by the brand, this is what you pay for a new watch) and the market price (the amount you buy and sell the watch once it’s left an Authorised Dealer) and that is a rookie mistake.
Related to the previous point, there is the matter of demand and supply. For example, Rolex has a waiting list of two to three years on some models, sometimes you can’t even sign up for the waiting list. At this moment, Rolex has 1816 ADs around the world and active 150+models that can be ordered in the 2022 catalogue. IF ADs receive shipment once a month (more or less, that is not the same everywhere) just do the maths, that is over three million pieces a year, or it would be since Rolex produces only 800.000 to one Million a year. And since they are popular, the demand is there. Meaning if you buy a piece from an AD, you can sell it for more, if you bought the right model. but even then, you must wait for the timepiece. Therefore, dealers are more expensive, but you skip the waiting and with that, you can buy a watch today and the value will grow in your possession, on your hand if you will. However, as Rolex raised prices twice in 2022, and the demand plunged, the retail price was often more than the market price. It means that if you don’t want to wait for years, you can just simply walk into the local watch club and see what you can get.
Next is the matter of mechanism. An underrated and overlooked factor. It can be in-house (designed and produced by the brand) or a bought pattern and turned into its own, (if they bothered even to change it at all) or sometimes, the brand has wizards who can create magic from scratch. A kind reminder that a decent watchmaker trains, learns, practices and studies day and night for decades, and still there is always something new every day. They are an underappreciated species and the creations they do are overlooked regarding the price. The amount of physics and mathematics required to design a watch is overwhelming.
Lange 1 Tourbillon Perpetual Calendar | 720.025. A masterpiece totalling 624 parts including 76 jewels and 5 screwed gold chatons. To create this watch takes approximately five years
If the timepiece is mainly made of precious metal, it adds a different value, a plan B as you can always sell it for that. For example, you have water damage and the whole watch is a write-off (as changing the full mechanism would cost more than it makes sense.) Of course, the price of gold is changing on a daily basis. So there is that option if you can’t sell the watch as a watch.
Models with bracelets are often more expensive than the ones with NATO, rubber or leather straps, however some brands like to offer them all simultaneously, which is a nice touch and shows some effort from the brand.
Also, there is the fame factor. The watch ambassadors influence a lot. David Beckham for Tudor, Brad Pitt for Breitling, and Rami Malek for Cartier. Just to mention a few. People who are in the watch world are always looking at wrists. God knows how horologists don’t remember faces and names as well as they do watches. The first thing they look at is not the person, but the watch and they remember that. Even though some famous people are not ambassadors, they are collectors and they influence. Eric Clapton, Sylvester Stallone, Jay-z, Kevin Hart, Ed Sheeran, and the list is endless. All this importance coming from celebrities is affecting the demand, therefore the prices as well.
Kevin Hart has an amazon collection with several unique pieces.
Let’s talk about what happens when someone inherits a watch. Well, in case you leave a less valuable watch, you won’t give much earthy value, but a sentimental value that is amazing, even priceless in its own way. However in the case of the right models, just as a fine wine, the watch value ages well. Some vintage models go for a price of a house now.
I want to mention that this condition is also important. If you buy a watch brand new, of course, the condition should be nothing less than perfect. When you buy an Omega from an AD, the watch must have no scratches, no dirt under the glass, no smudge on the dial, So when you choose to buy a timepiece from a watch club or dealer, you must assess the watch, See that you get what you pay for. Please, don’t buy watches from random people on the street. (Especially just to save a few hundred euros) That never ends well. The paper of origin and the original box are always a good thing to have and please always keep it if you can. Watch clubs and dealers are the safest choices regarding second-hand watches.
As you can see, there is a lot more than meets the eye. Next time you look at a watch, consider these points and you surely will realise that a million Euro might be a ridiculous price for a watch, but tens of thousands are often well justified. Horology is a rabbit hole and the depth and width of the hole are often affected by tiny things you can’t even see with your own eyes yet they demand appreciation.
Richie E.
