December 17, 2014

Why are Wrist Watches so Expensive?

BY James Osborn comments 0

One of the reasons watches are losing their popularity among the populace of the typical everyday world is that they are so expensive.  A Rolex or Tag Heuer on a man’s wrist shows that they are a man of supreme success and a force to behold.  That is because so many people do not wear a watch any longer, particularly because everyone has a smart phone which doubles as a time piece.

Some economists might wonder why they don’t lower the price of the high end watches so that they could move more units and increase the bottom line.  Many other types of products use that business approach and see great increases in the company’s value.  So why wouldn’t the high end watch makers do that?  Why do they insist on keeping the cost of watches so incredibly high?

There are many reasons why.  First of all, very high end watches are actually incredibly expensive to make.  It’s a misconception that a fake Rolex bought on the streets of China or New York City is effectively the same product as a real Rolex but at a tiny fraction of the cost.  A fake Rolex uses everyday parts that can be built and bought for cheap and constructed easily.  The inner workings of an analog watch can be built extremely cheaply.  But with that comes the many downsides: inaccurately keeping time, breaking quite easily, and being worth nothing on resale.  Would you rather buy a $20 watch that can never be resold, or a $5,000 watch that can be sold for $10,000 in a few years?

A real Rolex has a history that is unmatched by other type of products.  The factory in which Rolexes are constructed is guarded like the federal reserves.  At every step of the way there is an elaborate and intricate security measure and quality control system in place that would shock you.  The pieces within the watch are so finely and hand-crafted that even the cost of a single watch’s hand would put it out of many normal people’s price range.  Rolex is always researching better machinations and systems to make the watches more fine and better.  None of that comes cheap.

A fine watch will have a unique serial number so that the watch’s history can be tracked with perfect accuracy.  From the serial number alone you can ascertain where it was manufactured, and when, and even by whom.  This level of product verification and perfection comes with a price tag, but also a value that does not diminish with time.

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Even the outside of the watch is unique and crafted with perfection.  The metals used are made specific to the watch and may not even be used among other watches of the same make.  Knowing fine watches takes a lifetime, but if you delve into the world, you will unwrap layers upon layers of qualities that make each watch more valuable than the one next door.

So why are watches so expensive?  You get what you pay for.  A real, fine watch has years of science and scrutiny built into every tick, every winding of the gears.  You can buy a watch for $10, but that’s what you’ll get: a $10 watch.  With a fine watch, you’ll get a masterpiece that will last for generations.

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