Why we all feel such disdain for Seiko now... AKA, the @ichibunz SPB143 homage perfectly illustrates why Seiko and other mid-tier manufacturers can no longer compete for enthusiasts’ hearts and minds

[Begin aside]

PSA:  Do yourself a big favor right this very moment, and go to https://theescapementroom.com

There you will find many articles written by fan favorites @DeeperBlue @Porthole and @Aurelian.  My god, I can't remember the last time I've laughed so hard. Their posts are eff'ing brilliant.

[End aside]

Behold, friends, the @Ichibunz "Only Watch" world-exclusive SPB143 homage!!!

[Are we allowed to say "Only Watch" anymore? Or does the massive fraud perpetrated by Luc Pettavino now preclude us from using that moniker?]

Look at that lume!!!

Oh, what’s that you say?  It’s not a homage?  It’s just a clone?  

I LOVE this watch.  Attention @Aurelian, incoming 5-star review!

The only issue I have with the watch is that you can easily tell that it’s not a genuine Seiko, because it doesn’t have a misaligned bezel.  But, I don’t fault @Ichibunz for that.  I understand that Seiko has assiduously guarded that feature as one of their key differentiators, and they protect that IP with fanatical fervor.  

I came by this watch because I’d made a comment in some thread that I was thinking of picking up the SPB143, and @Ichibunz was kind enough to message me directly to say, “Dude, seriously?  Don’t pay all that money!  I can easily build you one.”

The final product costs a fraction that of an official SPB143.  Sure, part of that has to do with the fact that @Ichibunz just likes to build watches for fun, and doesn’t charge any margin whatsoever.  But, part of it has to do with the cost structure of the watch industry as a whole.

The retail channel

See, Seiko lists the SPB143 for $1,200 MSRP.  That’s the price that a Seiko AD will charge you for the watch.  But, Seiko itself sells the watch to the AD for roughly 50% of that.  In reality, the manufacturer is always only getting roughly half of what you pay for the watch itself.  But, why is this the case?  Why doesn’t Seiko just go direct-to-consumer?  Why doesn’t Seiko boldly cut out the middle man to bring you affordable luxury?  Well, some brands do precisely that, like MVMT and Filipo Loretti…  as well as enthusiast favorite, the ever-awesome @benswatchclub’s Spaghetti Scameti...

https://www.youtube.com/watch?v=ezd0nAjhwDA

But, the real reason that the big brands continue to use the AD channel is because ADs provide a truly valuable service for both manufacturers and consumers.  For manufacturers, ADs take on the one job no manufacturer would ever want to do:  ADs deal with the buying public. 

I mean, if you’ve ever had to interact with another human being...

"Oh, that’s utterly out-dated thinking!” one might exclaim.  “The Internet has changed everything, which lets manufacturers own the consumer relationship directly!”

Well…  direct-to-consumer really isn’t working out all that well for many once high-flying brands…

https://www.youtube.com/watch?v=WcNbIm0fRxk

But, let’s focus on the value ADs bring on the consumer side of affairs…

1. Retailers curate the selection, ensuring a level of quality right off the bat for consumers, so you’re typically not going to get an absolute stinker when you buy from them, because retailers have a reputation to uphold and want to stock only quality goods

2. Retailers have a vested interest in maintaining relationships with consumers, and will thereby typically stand behind the products they sell, providing hassle-free returns and exchanges, and other “insurance” services

3. Retailers provide consumers with the opportunity to physically inspect goods and provide some level of product knowledge to unknowledgeable consumers

Now, you may look at that list, and react thusly…

Sure, sure…  but that’s because you are not the target audience for ADs!  By virtue of you being here on WatchCrunch, you are a self-identified watch dork!  You already know EVERYTHING there is to know about every single watch that has ever existed in this and every other universe throughout the multiverse!  

[Begin aside]

Actually, the whole idea of a multiverse and the “Many Worlds Hypothesis” that comes out of the Copenhagen Interpretation of Quantum Physics is pure, unadulterated drivel.  What an absolute load of BS!  But, that’s a conversation for another time!  Nonetheless, I'll just leave this here...

https://www.youtube.com/watch?v=QHa1vbwVaNU

[End aside]

We enthusiasts are “special”

Yes, you are!  You already know what’s high quality and what’s not.  You already can and do take care of any of your own watches’ issues by either fixing the issues yourself or going directly to the manufacturers themselves for warranty service.  And, most importantly, you already know everything!

As a result, middle-tier offerings are almost always “overpriced” and "a bad value," in the eyes of us watch enthusiasts.  I mean, think of every single post here on WC stating, “I can no longer in good conscience buy Seiko watches!”  Always said calmly and even-handedly, like this…

The reason that we have so many of these posts is because it is very hard for mid-tier manufacturers to provide a compelling value proposition for enthusiasts.  "But Seiko used to be a great value!" one might exclaim.  Unfortunately, memory can be an unreliable thing, as the genius who is @KristianG recently pointed out in a mind-blowing comment...

Most people reminiscing about Seiko's better prices are thinking back to grey market prices, not RRP.  They completely forget that the SKX and SNK lines were dirt cheap because Seiko ADs couldn't sell them at RRP, so they got dumped on the grey market in huge numbers.

At the pricier end of the spectrum, the “luxury” manufacturers provide value by offering highly salient and compelling branding.  If you have a Rolex on your wrist, EVERYONE who sees the watch will know what it is and will immediately know that you are wearing a luxury watch!  And they will immediately ask…

If you have a Glashuette Original on your wrist, watch nerds continents away will immediately perk up...

And, invariably, that watch geek will reach out to you telepathically to say…

That is the power of brand equity!  And so even though all of the major luxury brands use AD networks to sell their watches, we enthusiasts don’t hate them the way we hate Seiko, because they provide us with lots of value in the form of brand affinity (heritage, history, a sense of connection, self-confidence, a spring in your step that comes on after a short evening thunder shower the first time a boy or a girl calls to tell you they love you, etc., etc.).

Seiko, meanwhile, is in the unfortunate position of being stuck in the middle, where they have to compete with the likes of Nodus and Formex and Farer and Baltic and Christopher Ward, etc., etc., etc.  These are all micro brands that sell directly to consumers!  And they sell only to, effectively, enthusiasts!

The $1,000 MSRP Seiko can’t compete with the $1,000 MSRP Formex, for our enthusiast hearts and minds, because what you’re really getting from Seiko is a watch that Seiko will only make $500 in revenue from when the AD buys that watch from them.  Meanwhile, you order the Formex directly from Formex’s site, and they recognize the entire $1,000 in revenue from the sale!  How can a $500 watch be competitive against a $1,000 watch?  The fit and finish will almost always be better on the $1,000 watch, no?

So, why don’t more brands move to a direct model, like the micro brands?

Well, see the discussion above about the value that the middleman actually brings to the table.  But, beyond that, even if Seiko wanted to deal with people directly (yuck!), the vast majority of consumers don’t want to buy direct - it’s only enthusiasts who do!  The only people in the world who have ever heard of Monta, Formex, Nodus, and all those other wonderful micro brands is us enthusiasts!  And, well, we’re a tiny fraction of the watch market.

As @AndrewMorgan has pointed out many a time in his videos, we enthusiasts make up only something like 10% of the revenue of the watch market!   And when you’re a big corporation, selling to the middle of the market, like Seiko, getting rid of your AD relationships would be nothing short of suicide!  You can’t emulate the success of the Spaghetti Scameti when you’re Seiko...

https://www.watchcrunch.com/benswatchclub/posts/introducing-the-greatest-watch-brand-on-earth-spaghetti-scameti-icon-is-here-43779

… that revolution is a once-in-a-lifetime phenomenon.  

What to do?

So, where does that leave us?  Well, the large manufacturers selling mid-tier offerings will inevitably continue to shrink and flounder.  The innovators, like @Wes_nodus of Nodus will continue to produce offerings that surprise and delight us enthusiasts, and hopefully they grow into ever larger and more important players in the industry.  Modders like @Ichibunz will build watches that are equivalent in quality, if not superior, for far less than Seiko charges!  And manufacturers that have built powerful luxury brands will continue to leverage those brands to get us to shell out crazy amounts of money for these ridiculous trinkets.  

Unfortunately, Seiko, and others like it, will continue to provide less and less value to us enthusiasts.

But, you know, there’s really no need for us to react this way every time we talk about Seiko…

… it’s just how it is.  Getting upset at Seiko would be like raging at the sun for always rising in the east and setting in the west!

So, are you done with Seiko?  Only micro brands for you from now on?  Or are you still a Belieber?

Oh, and if you want the world’s most awesome mod watch, hit up @Ichibunz!