Profit Margins on Luxury Watches
Interesting article about the increase in price from the manufacturer to the wholesaler and from the wholesaler to the retailer. If you don’t want to reach the article, the answer is about 600% from what it costs the manufacturer to make it to what we pay at the AD.
https://threadcurve.com/what-is-the-profit-margin-on-luxury-watches/
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Jake
I have been collecting for a few years and began building them recently. Founder of the DFW Watch Club.
Dallas, TX, USA
Member since
Last active: 1 hr ago
16.51 cm
With high touch items like watches that is not a surprise. The training cost alone for an average employee is many times higher than most industries, and that is sunk cost before even starting on a watch. On average the AD is working on a 30%-40% margin, and that has to cover the entire business cost. That is a pretty common retail margin.
🤮
Not to mention AD’s typically want to be in a prime location. Where the rent alone is a staggering.
600% is about right for the illicit narcotics and watch industries.
That's definitely accurate and thanks for the Cole's Notes 🤣
That's why I only buy from my current AD = AliExpress Dealers 😂
What’s with the pictures in the article, can’t take it seriously!? 😂 Check out the unique Datejust Chronograph!!
I'll take that article with a grain of salt since it says the average Longines is $6296. And there are less than 20 Longines watches at that price in their catalog of 780 watches, so I find this difficult to believe. Not disputing the 600% number just the accuracy of the Longines number which puts the whole article into question.
I won’t argue that the markup is very high. There are many more business expenses than just cost to manufacture though.
Luxury items, it is what it is — it’s not just watches; if one thinks watches are expensive you should look at the cost of Berkin bags 🤷♂️
That whole article smells of Gemini / ChatGPT. No human writer would feel the need to point this out: “Many dealers choose not to manufacture their own watches and instead buy them wholesale to sell to customers at a markup” Pffff…….
“Many watch buyers choose not to assemble their own watch from assorted bits and pieces and instead buy them whole from someone who does actually know how to do that”
The profit margin is all from the middle men. Whoever (whomever?) they are. That's why Vincero and all of them have cut them out. Spaghetti Scametti will even send you a part of the said cut middle men.
600% is about right for the illicit narcotics and watch industries.
The notorious Swiss Timepiece Cartel
I'll take that article with a grain of salt since it says the average Longines is $6296. And there are less than 20 Longines watches at that price in their catalog of 780 watches, so I find this difficult to believe. Not disputing the 600% number just the accuracy of the Longines number which puts the whole article into question.
I mean I work in the industry so I know some of the actual cost prices , and I really dnt think it's %600. it is a substantial amount in some cases but %600 to me at least seems way off.
That’s actually less than I thought it would be when you take in things like VAT too. In the UK half the price of a watch will be the dealers cut and VAT give or take. So the watch manufacturer will be making 200% on their costs, and I don’t see why the manufacturer should make less money than the AD.
Such mark ups aren't the soul territory of luxury brands. There are plenty of microbrands - as we discussed in a thread recently - that are selling watches that could conceivably be sold under $100 and make a profit of some description, and they're being sold from $500 to $1000, or more. And those brands don't have the supply chain, the shops, the employees, etc, to suck up some of that insane profit. The ride that some microbrands take people on - and then have those same people singing their praises - is extraordinary.
I don't have luxurious watches,however i have delt with an authorised dealer when buying a few Seikos. The difference between the manufactured retail price and what the dealer pays ,what i have been told, is........less than 45 percent and more than 35 percent. Actual percent is being withheld just to protect myself,dealer,manufacture,etc. Duane......Black Diamond, WA. 98010
I do not believe Rolex only spent $56 million on advertising. They hold countless events for VIP clients and those gotta be included in the marketing budget. There is no way Rolex only spent $56 million on their marketing and or advertising budget. Just the Formula 1 line item marketing budget is apparently $50 million according to Forbes. The Rolex – Formula 1 sponsorship: making the world’s top watch even bigger
What’s with the pictures in the article, can’t take it seriously!? 😂 Check out the unique Datejust Chronograph!!
The one in the back? Jeez you got good eyes! This photo is blurry as f
I'll take that article with a grain of salt since it says the average Longines is $6296. And there are less than 20 Longines watches at that price in their catalog of 780 watches, so I find this difficult to believe. Not disputing the 600% number just the accuracy of the Longines number which puts the whole article into question.
You can get to an average price with none of the watches being that price.
Vis a vis Jomashop 🤣😂
That’s crazy! Wow
Horage did a long breakdown of their costs and prices for watches in a lengthy blog post. Price to buy was about 1.4x the cost to produce 🤯
The one in the back? Jeez you got good eyes! This photo is blurry as f
Scroll down past the Rolex sign, near the bottom of the article.
I'll take that article with a grain of salt since it says the average Longines is $6296. And there are less than 20 Longines watches at that price in their catalog of 780 watches, so I find this difficult to believe. Not disputing the 600% number just the accuracy of the Longines number which puts the whole article into question.
Morgan Stanley has average Longines as just over $1000.
https://revolutionwatch.com/morgan-stanley-luxeconsult-2024/
That whole article smells of Gemini / ChatGPT. No human writer would feel the need to point this out: “Many dealers choose not to manufacture their own watches and instead buy them wholesale to sell to customers at a markup” Pffff…….
“Many watch buyers choose not to assemble their own watch from assorted bits and pieces and instead buy them whole from someone who does actually know how to do that”
Good catch. Ran the first two paragraphs into ChatGPT. The response. “Yes, that text appears to be AI-generated. It discusses the allure of luxury watches and the potential profitability of selling them, indicating a business-oriented perspective on the luxury watch market.”
AD makes 38% on ever watch