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

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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.

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