Watch mark-ups
Does anyone know the typical mark-up from the big name manufacturers to the retailer? I’m wondering about direct-to-customer microbrands as it relates to value, quality and the cost of a big swiss name. What would the cost of a big name Swiss brand be for a $500 direct-to-customer American microbrand of equal quality of materials and workmanship?
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Bob
I live in the State of Georgia in the USA. I'm been interested in watches my whole life but just started collecting in 2021.
Georgia, in the Southern USA
Member since
Last active: 25 min ago
7.00” / 17.78 cm
You are assuming a cost-plus pricing model, which is largely not the case. Watch manufacturers price to what the market will bear, regardless of whether it is justified by production cost, including a share of organizational overhead, such as marketing, distribution, etc.
Microbrands are saving money by not doing a lot of marketing, and have very limited operations. But they also don't have the economies of scale that a large brand has. For example, I would assume that the cost to produce an SRPD-style case at Seiko is marginal.
A manufacturer like Tissot probably has a lower per unit cost than an American microbrand, but that is only part of the story.
You are assuming a cost-plus pricing model, which is largely not the case. Watch manufacturers price to what the market will bear, regardless of whether it is justified by production cost, including a share of organizational overhead, such as marketing, distribution, etc.
Microbrands are saving money by not doing a lot of marketing, and have very limited operations. But they also don't have the economies of scale that a large brand has. For example, I would assume that the cost to produce an SRPD-style case at Seiko is marginal.
A manufacturer like Tissot probably has a lower per unit cost than an American microbrand, but that is only part of the story.
Thanks, so maybe the economies of scale offset some of the intermediaries.
Thanks, so maybe the economies of scale offset some of the intermediaries.
Right, but there is also the aspect that for higher-priced watches many buyers are very much inclined to see the watch in person first. Sure, I have no worries ordering a $300 watch online. But once you get to the $1000 mark, at least for me, I really want to see that watch in person first. With a direct distribution model, especially for a brand that is not that established, you may lock yourself into a certain price category.
Right, but there is also the aspect that for higher-priced watches many buyers are very much inclined to see the watch in person first. Sure, I have no worries ordering a $300 watch online. But once you get to the $1000 mark, at least for me, I really want to see that watch in person first. With a direct distribution model, especially for a brand that is not that established, you may lock yourself into a certain price category.
My budget is what locked me into a certain price category. I guess I'm just trying to tell myself that the micro brand I just ordered is comparable to a big name Swiss costing a lot more. Silly I guess. 🙄
My budget is what locked me into a certain price category. I guess I'm just trying to tell myself that the micro brand I just ordered is comparable to a big name Swiss costing a lot more. Silly I guess. 🙄
You’d be better off just saving for what you want.