Watch Curmudgeon: How Little Did You Pay For That Watch?

Series | The Watch Curmudgeon | 02.25.2013

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What do you think a gorgeous watch should cost that’s meticulously crafted, and features a fine ETA automatic movement, a thick, domed sapphire crystal, state-of-the-art lume, a superb strap or bracelet, and many more amenities? $5,000? $4,000? $3,000.? $2,000.? Hold that thought.

Now, what do you think when you see a watch on worn&wound that has all the above going for it but only costs about 500 bucks? Impossible? Mistake? Piece of junk? Drunk editor? Typo? Probably made in a leper colony in Outer Mongolia? All the above?

Well, if you’re a regular reader of this blog, you know damn well what $500 will get you: a damn incredible watch! But did you ever wonder how that’s possible? Or if serious watch makers offering those deals are making any money? Let me assure you that it’s extremely possible, and those (smart) companies are doing quite well, thank you very much.

Let’s examine this conundrum by first looking at distribution. Watch companies that offer the most extreme value are self-marketed exclusively on the internet. So, the following costs are not built into their prices: internal distribution personnel, sales representatives, outside distributor markups, retail markups, retail marketing costs, and, in some instances, display case rentals. WOW!

That all adds up. Big time! For example, retail markups, alone, can go from 100% (traditional keystone) to 300%. Retail advertising is dumped into all this, and so is inclusion in any store catalogs, fliers….etc. So, an internet watch that costs $500. could cost up to $2000. or more at your favorite watch dealer. What the internet watch company is making at $500. is the same they would have made if you bought their watch at a fine jeweler or department store. Let that sink in.

It should be pretty obvious by now that companies like Steinhart, Christopher Ward, Stowa, Tourby and many others offer the best values in the industry. And their watches are every bit as good as most of those major brands we all know and love. However, “major brands” have a lot more built into their prices than just distribution costs. Lots and lots more!

Here’s what you’re paying for, my friends: multi-million dollar advertising campaigns, multi-million dollar celebrity endorsements, sports sponsorships, high-profile headquarters and manufacturing locations, big-ticket CEO’s, exotic equipment for future R & D, worldwide public relations campaigns, lawyers to sue other major brands, and much much much more. All of those millions upon millions of bucks are built into the price of each and every watch.

Yup. Doesn’t it give you a warm feeling all over to know that you could help pay for Daniel Craig’s bespoke suits? Or John Travolta’s Scientology dues? Or Cameron Diaz’s hair colorist? Or Arnold Schwarzenegger’s alimony? Or some rapper’s diamond pave teeth?

Or you could be helping pay the rent for a watch company’s boutique store. That seems to be all the rage. A bunch of high profile brands have opened their own shops in major cities, and they’re only in the most elegant, high rent areas. You ain’t gonna find an Omega boutique, for example, on the same street as Sal’s Calzone Zone, You Pretty Nail Spa, or Larry’s Socks ‘n Smokes.

Getting back to reality, when was the last time you saw a double-page spread advertisement in a major magazine for Steinhart? Christopher Ward isn’t networking with Hollywood agents to find a “brand ambassador.” Vollmer isn’t investing gazillions in developing a manufacture minute repetition movement. And Defakto isn’t building an 800,000 sq. ft. headquarters in Geneva.

What they’re all doing is quietly manufacturing and marketing absolutely superb, heirloom quality watches for some of the world’s smartest, most discerning people – people who respect genuine value, yet disrespect fake or borrowed prestige. What’s more, companies like Nomos, Helson, Lüm-Tec, and so many others are providing a level of quality control, customer support, and after-sales service that’s almost unheard of in this industry.

So………whether you’ve got an uncontrollable itch for a $500 Steinhart, an $800 Christopher Ward, or a $1500 Helson, don’t worry about how little it costs, but rather how MUCH it could cost.

  • http://URL Ross

    Excellent post, I’ll hope to see this trend continue to other products, so the discerning can get top end items for mid-range prices!

  • http://www.briangreen.net Brian Green

    For years manufacturers have artificially kept the price of watches containing even the most basic grade of ETA movement as high as possible. If it’s expensive it must be good right? We’ve even seen smear campaigns on some of the popular watch forums against cottage manufacturers that have lowered their price points to be competitive, but still have ETA mvts. – if it’s cheap it must be junk.

    So it’s good to hear that we can finally move past this. Articles such as this that point out the excellent watches that are available under $1,000 go a very long way to educating and informing watch buyers and hopefully resetting the standard “price point” for quality that has been around for far long. Great post.

  • http://URL Will F.

    Aside from the development of an in-house movement, I’m in 100% agreement. I’ll always try to make my dollar go the farthest, and while I love collecting, I doubt I’ll ever be in the position to afford a bunch of luxury watches.

    I think you could (and probably should) have added Frederique Constant in there. They (along with Nomos) are one of the few small manufacturers that actually make a fully in-house movement (and I believe it can be had for under $2500).

    In any case, I agree with the sentiment. I personally own three Steinharts, and they’re all fantastic. My mother owns a Rolex from the late 80s, and she can’t believe the build quality that I got for under $500 (my Steinharts are more accurate than her Rolex).

  • http://URL John

    I agree with everyone of these points. Having owned both Steinhart and Christopher Ward watches (C60 Trident and best Steiny ever the OVM), I can attest to their amazing build and value for money. However, there is one slight problem. The more you get into watches the more you appreciate what you are getting. Case in point, I recently acquired a vintage Speedmaster pro and there is no Chr Ward or Steiny that can match that watch. The closest you will come is the C900. They other problem is that it’s because they are so accessible they lose their “desirability”. What I mean is if everyone can buy one them they lose that special something. I don’t mean that in a “watch snob sort of way.
    In my own opinion I feel like these watches are the “Honda Civics” of the watch world, great value for money, great reliability, you’ll probably get back most of what you paid for if you ever wish to sell them again, and they have a good reputation for not being cheap or junk. Whenever my friends ask what “proper watch” they should buy I always say, if you want brand new new then get a Steimhart OVM, or a C60 Trident, splurge….trident GMT. If you have to have a designer label the go vintage and get an omega deville from the mid to late 60′s. Then enjoy the watch for a year or two, learn your tastes and see what makes the watches what they are and then start to save your money.
    Once you know what you like and you know what your budget is goto a sales corner on a watch form and buy a gently used second hand quality watch that can be had for almost half what some else paid for at the mall. Many times these come with original boxes and papers and warranties still intact. Let them take the hit on depreciation and all the marketing nonsense mentioned above and you walk away with a quality piece that can be passed down to your son. It may very well appreciate in value in yrs to come. I also think its probably better to have just one or two quality watches than dozens of “value watches”. But by all means get a gently used OVM for a bargin and keep it for weekend fun :)

  • http://URL Alex

    Great artible to breakdown the differences between a great watch and an expensive great watch. Never really thought about all the costs that go into marketing an omega, iwc, rollie ect.

  • http://URL Richard

    Having handled and closely studied a Steinhart chrono and Christopher Wards, I disagree that their build quality is ‘absolutely superb’. They are cheap watches that are built to a (low) price, and it shows. You can see where shortcuts have been taken to keep the price down, and they just don’t have a feeling of meticulous quality compared to other watch brands that I own (my watches cost between $2000 and $5000). In addition to this, both Steinhard and Ward are very guilty of directly plagiarising the designs of numerous other brands. This lazy approach is what makes these brands undesirable.

  • http://URL Michael C

    Agree with Richard. Being a WIS, I have a Steinhart and ChrWard, as well as an Omega and a Rolex. The difference in build quality is just miles apart.

  • http://www.brightfactor.com William Bright

    …this is one of the reasons, as a WIS, that I almost never, ever buy new. Even watches that have just come out, if you pick up used, you’ll save THOUSANDS of dollars. And I’m talking about some of the bigger brand names out there.

  • http://URL New Reader

    I am not knowledgeable about watches but am trying to educate myself before I buy one. A question I’ve faced is: Why is one watch $500, another $5,000? So I very much enjoyed this post. But I have a question. Can anyone offer input about the relative value of the brands mentioned above (Steinhart, Ward) with that of “value brands” owned by larger companies — e.g. Archimede, Tissot, or Hamilton? Does the quality of a Hamilton compare to that of a similarly priced Steinhart or Ward?
    I don’t like acquiring large collections of material things, and so I’d prefer to purchase one or two watches that I can enjoy wearing in most situations (I’m willing to pay what I need to).
    I sincerely appreciate any input that you have.

  • http://URL Cameron

    If you are comparing the fit and finish of a Rolex (that is manufactured in house) to a company that buys cheap movements and puts them in cases, you either a) don’t know much about watches, or b) aren’t a watch collector, but a watch buyer. There is a big difference.

  • http://URL sid

    Excellently argued article!

  • http://URL phillip chouzenoux

    I attempt avoidance of Homage watches unless it is worn in sporting events where it may become damaged or lost-skiing, sailing. A Rolex is costly although superior in workmanship. Regarding Indie diver watches i find a helium escape valve questionable as 120 click dial. Notice on a Sub etc. how the ratchet markers line-up perfectly with minute markers, quality. The most expensive Honda still is not the least expensive Mercedes although I still am attracted to a handful of Indie-Divers and the more new entries in watches/fabulous.

    • http://URL Wes

      As a car aficionado, I find your analogy laughable.

  • http://URL simon

    Spot on …… =D

  • http://URL Pete

    Do your thing guys. Nothing but support from me, a fellow New Yorker. Excellent point.

  • http://URL bnabod

    may be you should send the article to the watchsnob

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  • http://URL roman lemechkov

    a great point, thank you.