Unlike regular watches, luxury watches pose a great level of refinement. There are a couple of different factors that contribute to the high price tag of these watches. Brands like Rolex, Audemars Piguet, and Patek Philipe are the leaders in the luxury watches segment, producing some of the most expensive watches in the world. In this article, we delve into all the aspects that make luxury watches so expensive and extraordinary.
Top 7 factors that make luxury watches so expensive
Luxury watches have a higher retail value as well as a high pre-owned market value. When you buy a regular watch, the value diminishes. It’s the other way around for premium watches. Prices of luxury watches have constantly been rising, especially for limited-run pieces.
Let’s take a closer look at the top 7 factors that make luxury watches so expensive:
- Research and development
- High-quality materials
- Level of fit and finish
- Production time
- Retailer mark-up cost
- Limited in number
Research and development
Watchmaking is definitely a high-stakes process. The time and effort that is spent behind researching and developing watches in the luxury segment is rewarded with high prices.
Luxury watch makers like Rolex for instance, have started producing watches over a century ago. The methods of producing, the design and materials they use in their products define their brand. To bring in a sudden innovation in these aspects is highly challenging. Therefore, when a luxury watchmaker releases a new watch, it takes years of research and development to produce them. Hence, their prices are set exceptionally high.
One of the prominent and notable factors that makes luxury watches so expensive is the use of high-quality materials. Titanium, steel, ceramic, sapphire glass are some of the many materials used. All of these materials are expensive to source and store, hence, adding to the cost of the watch.
Level of fit and finish
You will never find a hastily built or clumsy-designed luxury watch. Every single timepiece built by some of the renowned watchmakers will showcase the highest level of the quality fit and finish.
The fact these watches function accurately for several decades is the work of perfect fit and finish. From all the internal components to the case of a watch, expert watchmakers will ensure an exceptional work of craftsmanship.
To achieve the highest quality and finish, watchmakers take an extensive amount of time. Not to mention that most of the high-end watches are all hand-built. Each component of the watch is carefully assembled by seasoned professionals.
Some of the popular Swiss watchmakers are also known for producing all their watch components in-house. Each of these internal components like the movement are known to take up to a year to produce. Therefore, it goes without saying that an extensive period of man hours are spent in producing these high-end timepieces.
Luxury brands market themselves by associating themselves with other luxury products and lifestyles. Luxury watchmaker Rolex is associated with some of the highest sporting events like Formula 1 and Tennis.
They also work along with some of the renowned sports personalities, and celebs to endorse their brand. Therefore, watchmakers assign large budgets for such high-end marketing strategies, which is all added to the price of their watches.
Retailer mark-up cost
In every form of business, the products sold are inclusive of a retailer mark-up. Luxury watch stores are usually massive in size, and are located in some of the prime locations. Retail stores for brands like Rolex and Patek Philippe pay an astronomical premium for their stores in Dubai.
Therefore, a certain percentage of the total price is the retailer mark-up. Hence, making luxury watches so expensive.
Limited in number
What’s hard to find is naturally considered high in value. The same principle applies for luxury watches as well. One of the strategies most watchmakers use is to produce a certain series of watches, and limit its production. Therefore, increasing the demand and value for it.
When more people are drawn towards the idea of buying a particular premium watch that is limited in number. The value of each piece produced keeps rising. Some of the watches produced by Richard Mille fetch prices upwards of AED 3,000,000, which goes to show the exclusivity of these watches.
Other aspects that makes luxury watches expensive
Apart from the ones we have discussed above, here are some other components that impact the pricing of luxury watches.
- Cost of production
- Movement type
- Precious metals
Cost of production
Everything from the high operating expenses to labor costs, are included in the price you pay for a luxury watch. The professionals who work at the factory are all experienced craftsmen, therefore, their salaries are all part of the costs incurred. To break even these high costs are all added into the price of a luxury watch.
A luxury watch features a highly complex movement. These movements are built using micro components. The complexity of work involved demands a higher price. Hence, making luxury watches so expensive.
Needless to say, the use of precious metals in a watch will exponentially increase its value. Many watchmakers are known to integrate diamonds, and other precious rubies in their watches. All of these precious stones make an expensive watch.
Best luxury watches to look out for
- Rolex Oyster Perpetual Day-Date
- Audemars Piguet Diamond Punk
- Blancpain Le Brassus
- Vacheron Constantin Ref no. 57260
- Patek Philippe Nautilus
- Jaeger-LeCoultre Duometre Chronograph
- Omega Speedmaster Pro
- IWC Schaffhausen Portuguese
- Tag Heuer 02T
- Jaquet Droz Petite Heure Minute DRAGON
Luxury watches – the pinnacle of fashion accessory
We all know that luxury watches are expensive and now you know why. These timepieces that elevate your overall style are developed through an intricate process that has been refined over the years. Everything from expensive metals to other factors like labor costs are all part of the reason why luxury watches are expensive.
Having said that, the price you pay for these watches are still worth every penny. They not only stand the test of time, but are among the lucrative assets people have invested in.