I ran a small surgical practice.
A one person office, payroll, rent, utilities (power, water, heat, phone and internet service), housekeeping, hazmat fees, insurance (business, malpractice, unemployment, health, etc), website maintenance, professional fees, adds up: all that was several hundred thousand dollars a year.
A watch manufacturer might have a marginal cost of making an in-house piece of a few thousand dollars, but there’s all the brick and mortar, many of the things I listed, as well as stocking costs, maintenance of adequate spares for decades, retirement plans, advertising, transportation etc etc.
It’s an unending list of expenses.
A look at Rolex shows a profit margin of 20%. 80% goes to manufacturing plus other costs. We‘ll never know the marginal cost of making one of their watches.