Why are luxury watches so expensive? – EconomyMorning


Who never asked himself this question ? We all have our opinion, our (relative) knowledge on this subject, and the discussions do not add much new on this subject. Some people think that watches are all the same, that it’s pure profit on the part of somewhat snobbish manufacturers (“sorry Môsieur, they are not manufacturers, they are master watchmakers”), and that all in all , a watch is a watch.

Others, on the other hand, easily imagine that a luxury watch is worth the money you put into it. It’s sort of a investment, but above all it is a precision object, like the satellites that we send around our earth.

A rationale that lies in the details and expertise

Reality, of course, lies between these two limits. Let’s find out together what is really behind the graceful and arrogant facade of luxury watches. The luxury watch is indeed an object of precision. You are not a master watchmaker because you want to produce watches. We are a master watchmaker because we produce in the company itself most of the components that will form the timepiece final.

An analogy that is unrelated to the world of clocks? Canon, a major manufacturer of cameras, produces its own bodies, electronics AND the lenses that make up its cameras. Most of its competitors assemble components made by others. Do you see the nuance? Remember the expression: “The devil is in the details”. This is reflected in the field of luxury watchmaking.

Most of the large companies that manufacture luxury watches, most of which are located in Swiss, are therefore manufacturers and not assemblers. The precision required to create watches worth thousands of dollars requires specialist workshops, specialist craftsmen and excellent quality materials. And material means both the product itself and the tools used to create it. All of this results in exorbitant costs for the company.

It is enough to observe the smoothness of a mechanism and the fabulous number of parts necessary to realize that one does not improvise master-watchmaker. Switzerland was able to seize the opportunity (and this from the 16th century) to develop a manufacturing industry of extreme quality. Despite the presence of formidable competitors (China and the United States in particular), this country which produces only a meager 2% of world production, however, manages to take 50% of global sales. Hello profit margin!

A concept of quality made in Switzerland

This is due to this concept of perfection imposed by Switzerland on the whole world that luxury watches (Made in Switzerland) manage to stand out from the crowd of ordinary watches, in order to become true luxury products. We have all of the most famous brands in our memories. They all have their peculiarities: some are known because they were found on the moon, others have reinvented the precision necessary for aviators or are part of the “standard” equipment of the people of the jet-set … But everyone of course knows the rolex watches !

Representative of an elite with good taste (we forget the bling-bling) and the financial means that go with it, this brand offers many time mark that will go to everyone. And the prices, my gosh, are not as unrealistic as some competitor’s watches may have! Without saying that everyone can afford one (we are talking about a luxury watch anyway), it is astonishing to see that a Rolex can be more affordable than one would imagine a priori.

This does not prevent us from considering that a luxury watch is above all an object for (oneself) to please. As an accomplished businessman or director of a large company, each luxury watch is representative of who you are. It’s a way of asserting yourself with taste, while discreetly presenting the fact that you can afford to buy one. Not an ordinary watch. Not a watch that everyone wears. Not a watch that everyone can buy. I wear a luxury watch and it’s my choice!