What Makes A Watch Expensive?

When you start looking at luxury watches you will very quickly notice they can get pretty pricey.

I’m sure you can understand why they are more expensive than some of the super cheap watches, but maybe you can’t understand why they are at least a 1000 times more expensive, sometimes even more.

It’s easy to look at the price tags and think it is ridiculous, so let’s look at why the price can be so high. 

What Makes A Watch Expensive?

There is a lot of different things that go into matching a watch, A lot of which may be behind the scenes and actually not part of the watch, but they can all add up to the final cost of the watch.

Research And Development Of The Watch

Making a watch is going to start with the design, which may sound like it is the easy bit, but it’s really not. When a new model is made there are many questions to ask about how it will be different from previous watches. These little changes might not seem much to us as buyers, but for a business it will take quite a lot of time and effort to come up with these changes.

More importantly they need to make sure that these changes can be implemented in the manufacturing stage.

The same goes for the internal workings. When a company makes a new movement, or even tries to add an additional feature, it will take a lot of planning and development to make this happen.

Complexity Of The Watch

The more expensive watches are usually mechanical. If you have ever seen a mechanical watch being taken apart you will very quickly realise they are very complex little machines. The number of parts in a simple watch is incredible, when you start adding other features it can get really complicated.

It’s no surprise that these features are called “complications” by watch makers. When you start adding more and more features to a watch, it becomes a real engineering puzzle to get them to all work together, while also having to house them inside a small space. It really is unbelievable how some of these watches work.

Having this level of engineering is just simply going to cost more. It is going to take a lot of skill to come up with these movements and they are going to be equally as difficult to manufacture.

Materials and Components Used In The Watch

When you start to look at the materials used in the more expensive watches you will start to understand where the extra costs comes from. When precious metals like gold are being used, rather than cheap plastic resin it is understandable why it costs more.

However, even the individual parts and components that may be made of more generic materials are going to be made to a better standard. This can be seen as clear as day when you compare the movements of a genuine luxury watch with a fake counterfeit copy.

The quality and finish is just so much better. Each individual piece is pretty much perfectly made.

Labour Hours To Make The Watch

Luxury watches are more likely to be put together by hand, which of course means that they are going to have to pay for this labour, which is going to make the cost of production higher. It will cost a lot of money to train these technicians as the watches they are assembling are unique to the company they are working for.

A lot of cheaper watches are assembled by machines and finished by a human and you can tell by the quality difference. Of course a lot of the components used in a luxury watch will be machine produced, but they are then usually assembled by hand. You also need to consider that most of these components have been specifically designed for the watch, they are not some mass produced part that can be used in any watch. This is going to increase the cost of manufacturing, let alone the fact they are using the best quality materials available.

You also need to factor in the cost of all the staff that are involved with the design side of things. When you look at homage’s or cheap knock offs, they don’t need to pay for this. They just copy the designs that the luxury brands have had to employ teams of people to produce.   

Testing The Watch

When a luxury watch says it’s waterproof to 100m, you can trust that. Its design will have been tested, tweaked and retested until it is perfect. 

A lot of companies also ask for their watches to be externally tested and certified by organisations.

Having a watch tested to this level of course means the watch will be better quality, but these tests all have a cost. A lot of people feel this is money well spent as it helps guarantee that watch they have is robust and likely to last.

Overall Quality Of The Watch

When you hold a luxury watch in your hand you can just feel the quality compared to a cheap watch. Just the weight of the watch, the finish of the edges, the crispness of the dial and hand, the feeling of the bracelet… it is just better quality.

All the hours of development, testing, high quality materials and hand assembly really show in an expensive watch.

Of course there are some watches that are not to this quality and are just expensive, these are not good and should be avoided, but when you feel the quality of a luxury watch you will understand why it commands more money.   

Longevity Of The Watch

All the ingredients that make the watch a quality item also make it a very long lasting one too.

Cheap watches may last a couple of years before they break or run into issues. A luxury watch is built to last. All those quality components will last for years to come, often outlasting the owner. This is why you will always find watches being handing down to children and grandchildren. These are not disposable items, they are built to last and you are paying for this quality.

Supply and Demand Of The Watch

Luxury watchmakers produce fewer watches than the cheaper watchmakers. When you add the fact that luxury watches are often something people aspire for, you end up with a supply and demand issue.

Basically there are not enough watches for all the people who want them. This means the price can be higher.

You will see this play out massively on the grey and second hand markets. The demand is so high compared to the amount of watches available that the prices can sky rocket.

Brand Name

Although no one wants to admit it, we are often paying a little extra for the brand name. Of course that brand name is synonymous with high quality and a great reputation built over years, but you are still in a way paying for that brand name.

This is massively the case with fashion watches; however, there you are paying mainly for the brand name.

I feel luxury watches are not this bad, but I do think some of the price is certainly down to the brand name. This is one of the reasons why a mircobrand will charge far less for a watch that is of similar spec to a major luxury brand.

(You can read more bout – What Makes Swiss Watches So Expensive?)

Profit

I think we would be foolish to not consider this. These luxury brands are businesses and they have worked very hard, often for decades to build their brand and reputation. They are not making watches for the love of watch making; they are doing it to make money. They are always going to have the profit in mind.

While we will probably never know the exact cost of production compared to the sale price, we can of course be certain there is a profit made on this, even if it is only a small percentage, it is there

Conclusion

Luxury watches are expensive, maybe too expensive, but as you can now see there is a lot that goes into them, both physically and before they are even created.

A luxury watch will be of the highest quality and will last a life time, when you start to weigh up everything involved in its production, along with the high demand and low availability, it is easy to see why they can be much more expensive that other watches.

However, is worth it? …well only you can answer that but there are certainly a lot of people who think they are.

(You can read more about – Are Expensive Watches Always Better and Are They Worth It?)