Why Are Watches Expensive?

What makes watches so expensive?

Luxury watches can be had at a variety of price points, from entry level to ultra high-end. However, even the modestly priced ones can still cost a sizeable amount of the Average Joe’s salary.

One is bound to ask: what makes these delicate objects worth so much? Generally speaking, luxury watches, especially Swiss watches, have a price tag that is justified for a number of reasons – and these go well beyond brand prestige.

 

We’ll name the key factors that determine the cost of a luxury watch:

 

Patek Philippe World Time Complications
Patek Philippe World Time Complications White Gold Watch

1. They take time to develop and manufacture.

Creating a watch, especially a new model, may take years. The process of making a watch may begin with research, particularly on aspects that aim to innovate the watchmaking process – such as creating more accurate movements, a thinner case or a more advanced complication.

After this come design, prototyping and testing – and only when these are done that the actual production can begin. Brands invest significant amounts of time and resources to test the watches before they can be launched to the market.

A. Lange & Söhne takes about three to five years to produce a new movement. Patek Philippe, meanwhile takes an average of nine months to produce a watch; while it can take as long as two years to make the more complicated styles. More about why collectors love Patek Philippe here.

 


 

Yachtmaster Gold
Rolex Yacht-Master 40 in Steel Yellow Gold and Steel Everose Gold 

2. They are made from the finest materials.

Watch brands use top quality materials to ensure the robustness and longevity of the timepieces.

While the standard is to use steel and precious metals such as gold and platinum, brands have also taken to using avant-garde and leading-edge materials. These include their own composition of materials – take for example Omega’s Sedna gold or Rolex’s Cerachrom ceramic bezel.

To date, Rolex is the only watch brand to produce and patent its own metals. They are the exclusive manufacturers of the gold used for their watches and bracelets; and they have even patented their own mix of rose gold – the Everose. This is part of their move to own all aspects of the manufacturing process, thus keeping control of their product’s quality. Doing so also keeps prices high.

 


 

A Lange Sohne
A. Lange & Söhne movement

3. They are made by highly trained people.

These days, when automation has given much emphasis to speed and efficiency, luxury watches remain largely hand assembled.

Brands still rely on the steady hand of artisans to put together timepieces, as the parts used for watches have very low tolerances to errors or variance. Watch components, which are very tiny and of complex geometry, are manufactured to the precision of a few microns (a millionth of a meter).

Watchmakers train for decades before they can start producing watches; and there are varying skill levels needed for every part of the watchmaking process. Of course, labor and overhead costs can impact the price of timepieces.

 


 

Rolex Yacht-Master 40 Steel Platinum Watch and Yacht-Master II Regatta White Gold Platinum Watch

4. They are produced in limited quantities.

Luxury products are by definition rare; and it’s their exclusivity that gives them so much allure. However, watches are not produced in limited quantities for this reason alone.

As we explained, luxury watches are still largely assembled and finished by hand, so scaling their production is not a possibility. Luxury watches are designed to last a lifetime, and even passed on through generations, so they are made, finished, decorated, and tested extensively before they leave the factory.

All these create a market with slow production time and high demand, thus keeping the prices of watches high. As an example, Patek Philippe is estimated to have produced less than a million watches since their inception in 1839.

 


 

Sport Watches
Rolex Sport Watches. From left: Rolex Submariner Steel Yellow Gold Watch, Rolex Cosmograph Daytona Yellow Gold, Rolex GMT-Master II Steel Yellow Gold Watch

5. Luxury watches keep their value well.

Although their prices may seem high to some, watches don’t depreciate quickly like other luxury goods. They are a real asset, and many watches increase in price. Many collectors see their watch collection as another asset that they own, and expect it to hold its value.

We have seen many sports models of Rolex go up in price by over 50% over the past few years, and many customers are able to get more than they paid for them when trading the watch in or selling it back.

Moreover, they can last for generations when properly maintained. With some technologies, such as phones and automobiles, updates and new features can make their predecessors entirely obsolete, whereas watches have a timeless function.

 


 

Black Diamond Dial
Patek Philippe Twenty~4 and Rolex Datejust with black diamond dials

6. Price perception matters.

Watches were used primarily as tools, particularly in the early part of the 20th century. Chronographs and race watches were made so drivers can time their laps, dive watches were created so that divers can measure their time underwater, while keeping the watch waterproof.Today, there are other means to do these tasks, and most people do not even wear watches to tell time. Mechanical watches, therefore, are no longer necessities, but wants.

If luxury watches were priced more affordably, and are more widely available, they will not be as desirable or in demand as they are today. There is something to be said for keeping these items aspirational – after all, part of the fun of owning a watch, is in the search and wait.

 

____

SEE MORE OF THE WATCHES IN OUR VIDEO:

____

Toll-free US and Canada Only:
1-800-797-0634
Outside US:
1-404-814-1814


Customer service:
info@swisswatchexpo.com


Swiss Watch Expo
315 East Paces Ferry Rd NE
Atlanta, GA 30305


M - F 10 AM to 6 PM EST
Saturdays 10 AM to 5 PM EST