Decoding why luxury watches cost as much as they do

One of the most common questions that readers of this column, or any other content on this clock every day to ask is: "Why do luxury watches cost so much?"

Why something that gives the time with a technology that was two centuries ago a car is more expensive than the state-of-the-art? Or even a house?
This may seem a exact question wrong questions about a luxury product. But in reality, it is a legitimate line of inquiry. And whoever does not arise often enough in the watch industry. When brands announce the price of a new watch, the debate, if any, is always relative prices: Why this piece at a time when ABC XYZ brand or product cost so much? Why do customers buy this model when you can buy two Big Bangs / Seamasters / IIS Explorer for the same price? Etc.
In other words, prices of luxury replica watches are almost always discussed and debated in relative terms. And almost never absolute. The increase was a press conference or during a product presentation is a sure shot way to piss off any employee of the surveillance society in the room. And most journalists.
Why is this so? And, back to the original question, why luxury watches so expensive?

Let me answer the second question.
The key to understanding the prices of luxury watches is NEVER the price associated with actual or components. As I mentioned before in this column, the cheapest Casio probably tell better time than the more expensive, more accurate Swiss mechanical watch. Price is not the same precision.

In addition, although companies charge huge premiums for watches sunglasses gold, platinum or diamond ornaments, the materials used rarely in mind the price difference. In other words, it is very common for the gold version of a clock cost five or six times as much as the steel version. Calculate the price of gold used ... and math rarely adds. Price, therefore, is equal to any expensive components.

So, what do you pay?
The truth is a bit disappointing. Like other luxury goods and services, in many cases, simply be paid by the brand or logo. For example, many Swiss luxury brands, while not the best, often sell expensive watches, securities, off-the-shelf movements inside. Others add no value to the process of assembling components with the exception of watches that are all from suppliers. Even the logo on the dial.

This makes sense when you consider that for many consumers watches are a statement of lifestyle or social signal. They are a whirlwind or a repeater limited edition of only a few minutes to tell everyone that they belong to an elite rich.

Perhaps this is why so many consumers are a bit snobbish to buy brands like Rolex or Breitling (both brands are exceptional clocks relatively cheap and great after-sales service).

"Everyone uses them!" Say, rolling his eyes.
Instead, go ahead and buy a watch that costs twice a submariner or Chronomat, but has a massive production of ETA movement inside a shell of luxury. The fact that the mark is "exclusive".

Therefore, much of the price increase is old demon branding and marketing.
But there is another factor. A recent post on Reddit.com out very well. In a post titled "Is this an average citizen afford a Speedmaster? (Data from 1959 to 2011)", a user has compared the price of a new Omega Speedmaster replica watches against median household income of an American family for about the last 50 years.
His calculations suggest / she an interesting trend. In 1968, a new Omega Speedmaster cost 2.77% of the median income of the family. In 2011, the price of a new piece rose to 8.96%.

Despite the intervention of five decades of progress in manufacturing technology, watches have reached less, not more affordable.

The main driver of this escalation is undoubtedly the quartz revolution of the 1970s and early 1980s the Swiss brands almost bankrupt. Unable to compete with the cheaper quartz watches, Switzerland has decided to leave the housing segment together. Instead, they focused on the premium segment and the premium.
And they have not only watches, but also by offering no clocks, but according to tradition, as luxurious handmade accessories. These swiss replica watches are available in limited quantities and prices for a demanding clientele. The rabble could use quartz. The Swiss real connoisseurs.

The strategy worked and recovered Swiss industry. But finished watches price beyond most budgets.

The next time you walk past a window and feel your jaw hit the floor, relax. Half that price is probably marketing. And the other half belongs to history.