How much does a $10k watch cost to produce?

Probably less than $200 rather than $2000.

$400

Having worked as an engineer for years and had insight into production in multiple industries. I can assure you there is no correct answer for this question. Anyone who claims otherwise has no idea about manufacturing techniques, materials or business management in general.

There is a tremendous amount of factors to consider that determines the cost of a watch.

It can range from 2K to even 8K. All of your mentioned answers are correct for a certain watch company out there.

It depends how analytical you want to be. Just the materials and labor? Probably under $2,000 supposing manufacturing takes place in a modern country and the employees are paid a livable wage. It’s when you add in research and development, machines, tooling it’s going to drive the cost up.

It depends on the country where it’s made, the tech it is using etc. I suppose if a watch is made in China ot costs less than $100 but if it’s made in Switzerland, Germany, England it will be multiple X more due to labor, QC, R&D, regulations…

This is going to vary dramatically by company as some have significant branding and market dominance which means they can charge more for less despite still being a solid/fine watch. Other companies might punch above their weight bc they feel they might have to in order to compete or differentiate themselves in terms of actual handmade elements, hand finishing and engraving, artisan dials, extra testing etc. Something like a Glashutte Original likely has a smaller gap btw production and labor cost and actual product than say Omega or Rolex where you’re thinking more about massive numbers vs one on one time with individual watches.

Also, most 10k watches now should be 5 to 8k if we’re thinking of value and fairness and many models were just that not long ago. Shit has gotten out of hand at so many companies.

Depends on the watch. Suggesting a +98% markup variance is ridiculous. I chalk it up to wishful thinking that I suppose makes people feel better. I'd expect labor to be the driver of the actual variance of retail price to production cost.

Christopher Ward are very open that they charge 3x production cost for their watches. This is deemed a low ratio for the industry (CW has no shops, AD network, or major advertising costs). Rolex will easily be 4x production cost.

Just materials, labor and energy? Probably around $200-300. Add in advertising costs, shipping costs, overhead and that would bump to maybe $1,000 for a luxury brand.

Ah, but add on top of that the "intangibles" of brand history & status, artificial scarcity/exclusivity, along with a strong dose of good old-fashioned elitism...well there's where the prices skyrocket. 💸

I read somewhere it's around £500. But that's just cost of materials labour ect. That wouldn't include marketing design and tooling. I'll try and find the article.

In most countries with societal & worker protection laws, labor is going to be the biggest cost to a company. Which is why we see companies move to different countries & install robots & A.I. They are always chasing that near zero labor cost.

They chase near zero in as many areas as possible. I'd still expect labor for most $10k+ watches to be a cost driver. Materials, R&D, QC I'd think would be much more spread out (economies of scale). Plus, it's a bit more complex, even if robots are making them, than making a t-shirt or a toaster.

First, and very much most important, is that the cost of manufacturing is not the hard costs of that watch. There will also be research&development, shipping, advertising, overhead costs at the store front, and taxes.

The answer is going to be different in different countries, for different watches in a brand's portfolio, as well as different for each brand. Some watches will be a loss, but that's okay as another will have low total costs. It will change year after year as a specific watch gains popularity

The answer isn't a set answer. Costs vary, profits change

If I was making it, probably £50,000....🤣

Yes but any company that produces a watch for 8k will never sell it for 10k.

There for sure is some hand finishing on Rolex no doubt. I should have said mostly machine made. Though is polishing part of the watch being “made”? I suppose so.

Let’s be clear, I’m a certified Horologist with no horse in the race. I’m an American and I know what the end game is for the Chinese they want to control the World economy and that gallon of milk you bought today for $3 will be $19 when China controls it. Watches, that’s why we are here. And I’ve been sent hundreds of replicas from the factories in China. Why? Because they know I won’t sell them and know watches and am honest. Do I want them to succeed? Hell no. Do I advocate buying from them? Never! But there is an elephant in the room, we appreciate the craftsmanship and heritage of fine watch making but we are in the minority. And some things never change.

Subjective emotional value aside, cost of production and manufacturing processes are not the same as what a thing is worth monetarily, far more goes into that determination depending on the item (for example, property and location); ultimately though, the market determines its value at any point in time, so if the market says a £50-produced watch is worth £10K, then its value is £10K. If the market says a £10K watch is worth £50, then it’s value is £50. That aside, that Rose Engine and outsourced movements are a tiny fraction of the investment other mass-production brands like Grand Seiko, Zenith, or Rolex make toward their watches, all three for example being vertically integrated and maintaining the strictest standards across the board, for example, Rolex owning and operating its own dedicated foundries that produce their own metals, alloys, platinum, gold, etc, and all the costs that entails. To some people the beautiful guilloché patterns executed by that rose engine will matter more than all of the other intangibles and rock-solid near-perfection inherent to a well-executed mass-produced watch, and that’s fine — that’s where subjectivity creeps in. But keeping it a buck, when all is said and done, trying to apply logic to the largely subjective luxury market is counterintuitive in my opinion. Love our little debates by the way 🍻

Can't say I didn't ask for it🤣

I do understand your point. The difference between actual value and perceived value is completely illogical when veblen good are assessed.

Let's be honest with ourselves. The Rolex argument doesn't add up. They are old and the most massive company in watches. Those mines and factories are part of their growth. I wouldn't say it's the reason why they cost so much.

I'm not doubting the quality of them by any means. It's just a fact that they do overinflate the value. Just like Jeezy shoes, just because everyone buys them doesn't mean they are the best around.

I’d argue that the monthly running cost of your average metal foundry far outstrips the cost of that Rose engine when you factor in labor, energy/utilities, maintenance and insurance — and we’re so far only discussing one part of the production and R&D process. Besides you’re conflating the value argument I was making with cost again; your argument is still a linear one — that’s not how value works. And we all concede that all luxury items (including that Benzinger) are inflated, but this is the luxury business: that’s the difference between a Seiko and a Grand Seiko; no luxury brand is selling product at cost/near cost, and to expect otherwise is silly in my opinion; if a brand can elevate itself to the point people are happy to pay above and beyond for, good for them…that’s the goal of every profitable business believe it or not. What’s it worth to you personally? Do you like the package on offer at the cost they’re asking, including heritage? Yes, great! No? Get a Seiko, that’s just fine too. It really is that simple — the luxury space is not a logical one, it’s an emotional and subjective one. I wasn’t arguing specifically for Rolex, but regarding your final comment, ‘best’ needs qualifying. Are they the best example of artisanal watchmaking? No, not even close. Are they the best example of adventurous design? No. Are they the best example of accuracy in pure mechanical watchmaking? Yes they are. Are they among the best examples of reliability and robustness in mechanical watchmaking? Yes they are. Are they one of the best examples of cohesive and timeless design language? Yes they are. Are they among the best examples of brand strength? Yes they are. Are they the best at value-retention? Yes they are. And while your mileage may vary, for many people all of those things they excel at are exactly what makes them the best overall package for consideration.

And I wouldn’t equate Rolex to Jeezy, that’s a poor comparison; most seasoned collectors respect Rolex and likely own at least one. I’m into shoes as well — I wouldn’t touch a Jeezy with a ten-foot pole. A better comparison would be Apple, maybe.

I like you 🥂

It's a beautiful thing when two adults can "argue" in in a civilized manner. Hope to catch you in more comments and post my new friend 👊🏾

😂 Likewise. No point losing your head over trinkets in my opinion, and I love objective debate; people take this hobby too seriously sometimes. 🍻

Rolex movement finishing is so basic, more so than Tudor. Granted many components are CNC cut, mainly in the interest of precision….

Whatever.

I misspoke for sure. I should have said machine polished. My point was a lot more hand assembly and finishing goes into something like a zenith (and other watches in this price point) vs the extent that Rolex is a machine finished product vs similarly priced watches like zenith.

My point is Rolex compared to similarly priced watches gets more profit margin. I’m not shitting on Rolex, I admire the brand and many models. But it’s a marketing company that happens to sell watches……

Hum, more profit margin? And what do you base this upon?

Rolex does not release figures such as profit, gross income, how many watches it makes annually, what production costs are, what are promotional costs, etc.

The point is neither you or I know the true figures therefore it is all speculation, and remember industry figures by publications are estimates based upon their best guess.

BTW, Rolex is a privately held company by the Hans Wilsdorf Foundation. They do not nor are required to release annual reports as such.

Base it on friends I have in the industry. I’ve never heard anythigg by different from them in this regard to what I have said.

And yes Rolex is prvatly own which means this Info isn’t open to the public. That doesn’t mean the info doesn’t exist….. cheers

The value of any object is only what people are willing to pay for it. If you really want that Rolex you will pay $15k for it, if you don’t you wouldn’t pay $100 for it. Is Rolex, Omega, Breitling et al worth the asking price? Only you can answer that.

Well, they certainly aren’t worth after market pricing! 🤣