Why are factory watches more expensive?

Author: Jessica

Dec. 06, 2023

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Tags: Timepieces, Jewelry, Eyewear

 

If you’ve ever been watch shopping, you’ve seen a wide range of sizes, cases, straps, colors – all different and more unique than the last. But probably the most distinct difference you notice between them: those price tags.

You see most casual watches around the $50 - $200 range, but as you keep scrolling you see some that climb up all the way into five figures. So, what’s the deal with these outrageously high-priced pieces and how much does it cost to make a watch? Are expensive watches that much better than more affordable options? Not exactly…

How Much Does It Actually Cost to Make a Watch?

As with any product in virtually all industries, the total cost of producing a timepiece varies from brand to brand and it largely depends on factors such as whether or not they produce their own movements, how much of their material is outsourced, and the type of movement they use in their watches.

Typically, wristwatches will cost anywhere between 5% and 15% to produce with some brands operating on even lower production costs. This means that that Rolex priced at $8,000 only costs around $500 to produce. At around $25,000 retail, a Patek Phillipe only costs around a couple thousand dollars to produce.

So, are watch companies scamming you? Surely, taking something that costs so little to produce and jacking up the price 15x is criminal, highway robbery, right? Once again, not exactly…

Why Do Watches Cost So Much?

As with any business, the cost isn’t simply a giant profit grab for the company. It’s also there to cover advertising costs, logistics, R&D, labor, and everything in between producing it and getting it on your wrist.

But the main reason watches like Rolex or Patek Phillipe cost so much is not just the quality of labor or materials. Yes, the manufacturing is some of the best out there, but it is not 15x better than your most basic watch. The material is also nicer quality, but it is nowhere near 15x as expensive as a $50 watch.

For the most part, the cost stems from the labor, advertising, and celebrity endorsements which can chomp anywhere between 20% - 40% of additional spend out of their profits. The high price can also be attributed to the prestige that the brand brings.

As with any high-end brand, you’re paying for the status that the piece brings by wearing it. Rich people like to wear pricey things to let other people know they’re rich. It’s just how it is and these brands are fully aware of this. This simple reason is why luxury brands exist at all – has little to do with how much better the quality is and more to do with the brand name.

So yes, there are some costs associated with improving the quality, movement, and overall finish of the piece, but the overwhelming cost of wristwatches comes from other areas leaving most companies with anywhere from 10% - 40% profit when it’s all said and done.

Which Watch Movement is the Most Expensive?

The answer to this broad question about which of the 3 main watch movements (Mechanical, Quartz, Automatic) is unfortunately another ‘it depends’. Generally speaking, more expensive watches will have mechanical or automatic movements. Although you might think that this would mean one of these two movements is superior to quartz, it’s actually the opposite!

In terms of performing the primary function of a timepiece (telling the time), quartz movement watches are the most accurate watches ever invented. To read more on why you should consider a quartz watch for your collection, check out our recent blog post here!

Now you’re probably wondering why the most accurate movement out there is mainly featured in lower priced watches instead of an exotic luxury watch. The reason most affordable watch brands place quartz movements in their pieces is because they are much easier to mass produce whereas automatic and mechanical watches are typically made in smaller batches.

To Wrap Things Up…

As with any product on the market in most all industries, the cost you end up paying is not just the material in the watch or the labor that goes into producing it. It includes those hefty advertising costs, R&D to work on improving future watches, employee pay, fancy packaging, etc.

As brands grow bigger, their advertising dollars may increase, their workforce may grow larger, but the upgrades to their products may be minimal (a few dollars increase in production here and there). The main price you’re paying when purchasing a timepiece is the status and prestige of the brand you’re wearing.

About Black Tie Watch Co.

Black Tie Watch Co. is an American minimalist watch brand providing modern styles at affordable prices. We began operations in August 2019 out of Houston, TX and have been growing rapidly ever since. As of today, we have shipped our pieces to 27 countries across the world and look to continue to expand our global presence! Our watches proudly run on quartz movement to ensure they are as accurate as possible. Each watch also comes with a full year warranty so you can shop with confidence every single time!

If you’d like to check out our selection of modern, minimalist quartz watches, please click here!

We are also looking for talented freelance writers to contribute to our blog! Articles will cover minimalist watches, watch styles, current watch events, as well holiday events happening with Black Tie Watch Co.If you have any experience or would like to gain experience contributing to our articles, please shoot us an email.

Also, don’t forget to follow and connect with us on Facebook and Instagram!

Facebook: Black Tie Watch Co.

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To best explain the difference between aftermarket and factory set diamond watches, we can use an age-old expression: not all that glitters is gold. Not too long ago, watches were seen as tools – everyday items with clear and defined purposes. Some were more dressy, some more rugged, but all born out of necessity at the end of the day. Now, instead, they’re seen more as a vessel to display one’s status…. especially if it’s filled with diamonds!

Here at IWS, we don’t like to get bogged down in that sort of pessimism: we believe that the watch is instead a vessel to express oneself, one’s tastes and personality. The majority of Instagram however would disagree: it’s not uncommon to come across aspiring trappers waving their diamonded timepiece in front of the camera.

Whether it’s objectively right or wrong is not up to us to decide (but I won’t hold back on my opinions). What we can do, is help you out in understanding the various facets of diamonded timepieces; identify whose are worthy of praise; and whose would like to be.

Credits: aBlogtoWatch

Factory Set

Diamonded watches in general aren’t everyone’s cup of tea, but I say: why the heck not?
This is the exact thought process by some brands to satisfy their most extravagant clients. The result? Exquisite timepieces whose dials, bracelets and bezels are set with precious stones.
Factory set means that the stones have been applied directly by the technicians of the watch manufacturer, without any third-party involvement.

The client base for these types of watches is very small, normally reserved for an elite tier of the respective watchmaker’s demographic. This is the exact type of “persona” we should be looking at to spot these timepieces. Given the exclusivity of the customer base, production numbers of factory set diamonded watches are near-microscopic. Thankfully, though, this means that the aforementioned flawless quality is “easier” to pull off (even though it really isn’t).

Therefore, if you should find yourself in the presence of a factory set diamonded piece, you should definitely be comfortable in the knowledge that it’s been done tastefully (and not gaudily!), and that an incredible amount of attention to detail and quality of the stones has been employed (with colours and purity of utmost perfection).

A few examples of factory set diamonds and stones

Aftermarket

When the diamonds or the precious stones are applied onto the timepiece outside of the factory, it is said to be “aftermarket”. Synonyms include “custom”, “iced-out”, “blinged-out”, “bust down”, etc. Many names, all with the same sort of definition: I want a diamonded timepiece but I can’t get it directly from the source.

That being said, buying a diamonded bezel that you can mount on your regular timepiece as you please isn’t a cardinal sin. It’s certainly not a wise choice, but still, it’s not a punishable offence. Modifications to your watch which don’t compromise the original conditions of the watch are… alright… not really tasteful in my opinion, but again, not blasphemous. (That’s as tolerant as I’m going to get)

If, however, your aftermarket diamond “upgrade” (photos below) involves modifications to the actual watch’s features and structure – an often irreversible change – well, that’s a different story. Flooding a bracelet with diamonds, indeed involves completely changing the shapes and sizes of the original form, usually by shaving off portions, which damages the timepiece. If smaller sized stones are to be placed on it, the results are even worse.

One quick way to spot an aftermarket diamonded timepiece is by looking at the small details on the bracelet and dial of the watch, and then comparing it to the overall form factor. If you look closely, these “iced-out” watches have proportions which just don’t sit right. Why? Because they’re trying to be something they’re not: they were never designed nor manufactured in a way to have precious stones on them.

The Stones

As we mentioned earlier on, on factory set pieces, the precious stones will always be of a better quality. This often comes by means of higher grade/karat and/or dimensions. If we then look at specific pieces like the Rainbow Rolex Daytona, or a signficant portion of the Jacob & Co. portofolio, we find that those which require multi-coloured stones, are meticulously selected to give a flawless chromatic blend: something which is nigh on impossible to find in aftermarket sets (simply because of supply costs).

Moreover, in aftermarket sets, it’s very rare to find “large sized” baguette diamonds. In the off-chance you do come across larger ones, they’re most likely to be embedded or applied poorly. It’s not to say that this is objectively wrong, it’s just the way it is: because of supply chain costs, the more expensive baguette diamonds are swapped for the princess cut ones. The latter are therefore used in the majority of the “iced-out” pieces you see on the wrists of trappers. It must be noted that this is at the expense of overall quality of the final product.

Head to Head

Although they are one of the most respected brands of all time, and are taken very seriously in the horological world, Audemars Piguet is unfortunately the primary victim of aftermarket customisation. AP, is in fact, the Holy Grail of rappers, musicians and athletes, who quite literally flood their timepieces with diamonds, with awful results. But, fear not, because the Swiss watchmaker is actually fighting back with their own frosted gold: an in-house solution to aftermarket “bust downs”.

This surface finishing is best compared to sand blasting the case and bracelet with micro precious material, which yields a brilliant twinkle, without resorting to smaller-cut diamonds or strange aftermarket gimmicks. If we then look at the Double Balance Wheel version, well, it speaks for itself.

Where words fail, pictures enter stage. If you’re not convinced, have a look at the photos below and compare the in-house method with the “blinged-out” aftermarket one. Spoiler alert – the differences will shock you. I’ve said it once and I’ll say it again:

Factory is ALWAYS best!

Market Value

As we mentioned before, factory set pieces are hyper limited, precious and hard to obtain. As such, it comes as no surprise that the pricetag takes all of these into consideration. The Rolex Daytona “Rainbow” is trading on the aftermarket for way over what it was at retail, and the pavé Nautilus scarily even more so.

On the other hand, aftermarket pieces, which are in some respect a mutilation of the watch, often clock in at a lower value than their original counterpart, indeed because of this very modification. This gap is made even more apparent by the “steel mania” that the watch world is seeing, especially for Rolex and Audemars Piguet models.

Take it from us: it’s better to get it straight from the source: it may take a little longer, but it’ll be done more tastefully, and with better craftsmanship. Now that you’ve read this far, you might look at the below photos in a different light.

Hopefully, this (now) trained eye will carry over to Instagram, too!

There’s a separate discussion to be had for timepieces which have “aftermarket” customised pieces which don’t compromise the condition of the original watch. In these cases, we essentially have two different watches with two different markets and therefore prices, one more desireable than the other.

Personally, I don’t have anything against the addition of custom diamonded components to one’s watch, so long as it’s not at the expense of the original condition of the timepiece. If flexing is your aim though, please, for the sake of those who truly appreciate horology and the watch for what it is, don’t just stay away from the diamonds, stay away from the watch altogether.

If you want diamonds, be like Maluma: go factory set, or go home!

-Translated by Patrick R.

Why are factory watches more expensive?

Aftermarket Vs. Factory Set Diamonds

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