Why are Panerai so expensive?

**TheFlyingBanana** · 6th March 2010, 20:10

A genuine question. I had one years ago, just a basic model IIRC and thought it was okay. I am contemplating buying another, but prices seem astronomical to me for a watch that in my opinion is good, but not that good. And it doesn't even come on a bracelet.

I have noted a few very high-end Panerai appearing on SC recently, and please, to be clear, I am not saying they aren't fairly priced. I am sure they are.

But Panerai were virtually unknown until ten years ago, and are now not even made in Italy IIRC. What makes them so pricey?

And is it justified in your opinion?

**Omegamanic** · 6th March 2010, 20:17

Expensive because they have a large following and therefore resale value - good resale makes for more 1st time buyers.

**Argee1977** · 6th March 2010, 20:20

It's all down to market placement and the way the brand have grown, it's the same with most watches, they tend to try and find a position within the market and sell their goods at that price.

If you look across the board then any watch over £1000 is not worth the money, Rolex at 4k is still the same rolex that cost 2k 5 years ago, Omega and others are the same but what they have done is move prices up and change ranges to try and find the ceiling for pricing, which i fear has come and gone going by sales.

The main thing about a Panerai though, if you buy a 111 or the likes at £3200, then you'll still be able to sell it for £2500 secondhand, so it holds its value well, the same as the likes of rolex again.

So in short, why are they so expensive, the answer is because they sell at that price, if they didn't then they'd be cheaper.

**JCJM** · 6th March 2010, 20:33

It´s called the Veblen aka snob effect.

What´s the point in wearing something which does not separate you from the blue collar class, that is the way the target market sees things.

BTW, WIS are not the target market. New money is. Typical Richemont Group. And, it will only get worse once the economy will get better :roll:

**Argee1977** · 6th March 2010, 20:39

Originally Posted by JCJM

It´s called the Veblen aka snob effect.

What´s the point in wearing something which does not separate you from the blue collar class, that is the way the target market sees things.

BTW, WIS are not the target market. New money is. Typical Richemont Group. And, it will only get worse once the economy will get better :roll:

To be fair, i've not yet spotted a 'snob' wearing a Panerai, the people i see wearing them are actually in the main working class guys in the 'lower' middle to middle class.

As for WIS not being the market, i honestly can't think of a brand that does actually target the WIS and fans, just look at the releases, they listen to what the paneristi want and usually deliver it in their Limited Editions and new releases, i have to say that they are probably the best ones out there for that.

I would add that they are way overpriced as well, all watches are, i really wish prices were the same as even 5 years ago, £2350 for a Rolex Submariner, Panerai at less than £2000, but now it's just gone daft and is beginning to stop a lot of these working guys buying new watches :(

**jonny** · 6th March 2010, 20:55

All watch brands have become reidiclous exspesnive in terms of the pricing of the last few years.Why as k the question by Panerai but what about every other make?

**JCJM** · 6th March 2010, 21:13

So to whom are Timefactors, MKII Watches, Ocean 7 and the like?

**shalako** · 6th March 2010, 21:14

Are you sure your not taking part in the latest watchtalk craze of 'Shadowman Baiting' with this Panerai thread? :bom:

They are expensive because people want them and therefore they can get away with charging that sort of money....You could of course say that about a number of other watch manufactures. Panerai watches are very well made particularly the cases and at least they are manufacturing their own in-house movements now which helps justify the additional cost but I do think having over 300 different models in the last 10/11 years might ultimately affect their resale in the long term.
When you consider whether your getting good value paying thousands for a Panerai it's interesting to consider that the base unitas/ETA movements in some of the earlier Panerai models cost the Richmont group less than the Beautiful Pearwood box they came in! This is one of the reasons why one of my favourite earlier models was the Pam 72/74 Chrono with the El-Primero movement. This stunning, versatile 200m water resistant chrono however was only 40mm so the vast majority of size obsessed Panerai enthusiasts would never consider it.... which is their loss because it's a beautiful watch IMHO.

(I forgot to mention that if anyone out there has a Pam 88 for sale please let me know, I miss the one I've sold. :) )

**Chris_in_the_UK** · 6th March 2010, 21:18

Originally Posted by shalako

Are you sure your not taking part in the latest watchtalk craze of 'Shadowman Baiting' with this Panerai thread? :bom:

**Andyg** · 6th March 2010, 22:58

There are because that what the punters are prepared to pay. If not, no one would buy them and Panerai would go bust - simple economics really - they charge what the market will stand.

However when you compare them (and the movement) with a £200 homage from China, you cannot see them being good value for money. It cracks me up when they charge £5K, for a Unitas Handwound movement when the same Seagull movement is about $50 - at least when I got my PAM2/B I only paid £1600 and it actually was one for 1200 - never to be repeated.

Andy

**sevvy** · 6th March 2010, 23:25

Surely the whole point of luxury brands is to create a desire and one of the easiest ways to create a desire is to set a price point thats out of reach of many people! I mean, a Louis Vuitton bag can cost more than a Panerai but are they really worth that much money.

I don't think that Panerai are that much more expensive than other luxury branded watches. Sure, they don't have the history of Rolex, Patek etc but they have very quickly manufactured and marketed an extremely desirable product....... and I for one want one.......... badly!!!!

**Mike Wood** · 6th March 2010, 23:48

Watch Heroin...

They put some out there cheap, so you'll give the product a try.

Everyone likes the buzz, passes on the warm and fuzzy feeling. The words spreads, and more people want to give it atry.

Bit by bit, the price slowly creeps up. More suppliers enter the market to satisfy the growing demand.

For some, it's just too late. They're in deep, and they just need more, at any cost.

Those who've just had their first experience can remain nonchalent, and resist the urge for more.

The suppliers try to re-generate demand by stirring memories of the good old days, whilst gradually cashing in.

Mark my words, this is how they do it! Don't fall for it, or you'll end up, errr.... like me!!

:drunken: :bom: :blackeye: :bom: :drunken:

**Tinker** · 7th March 2010, 00:42

Originally Posted by TheFlyingBanana

But Panerai were virtually unknown until ten years ago, and are now not even made in Italy IIRC.

Where are they made?

**JCJM** · 7th March 2010, 00:48

Of course in Switzerland.

But we all know what is mandatory for a watch being properly "Swiss Made". So, "Swiss" it is. I suspect it is not entirely Swiss though.

**Karl** · 7th March 2010, 00:50

:lol: ^

**Qatar-wol** · 7th March 2010, 05:51

Originally Posted by jonny

All watch brands have become reidiclous exspesnive in terms of the pricing of the last few years.Why as k the question by Panerai but what about every other make?

That's some mighty fine spelling there, Lou.

Panerai is the most obvious and conspicuous example of this. There are others (Kobold, I'm looking at you), but Panerai's success and cult (and cult-like) following makes it a more obvious target.

7th March 2010, 08:56

Originally Posted by JCJM

Of course in Switzerland.

But we all know what is mandatory for a watch being properly "Swiss Made". So, "Swiss" it is. I suspect it is not entirely Swiss though.

This means many/most of the components are sourced in the Far East ?
And then 'finished' in Switzerland ?

Being Swiss 'made' is probably a good thing, most Italian things look nice for a short period but soon stop working properly and even when they are
working they are unreliable/tempermental.

From coffee machines to women.

**andrew** · 7th March 2010, 10:16

Originally Posted by nesima

Originally Posted by JCJM

Of course in Switzerland.

But we all know what is mandatory for a watch being properly "Swiss Made". So, "Swiss" it is. I suspect it is not entirely Swiss though.

This means many/most of the components are sourced in the Far East ?
And then 'finished' in Switzerland ?

Yes. Let's not bother with facts, but invent our own scenario. And here it is: all Panerai is made in the same factory as the MM knock-offs and fitted with a movement from a Asian factory marked ETA rather than a movement from a factory across the street marked SEA-GULL. Then they charge you £3450923476 and cackle all the way to the bank. Does that make everyone feel better? :roll:

Why is a basic Omega AT chrono now £4,000? Why is a Submariner Date £4,000? Why is an entry-level Oris £800?

**Toshi** · 7th March 2010, 10:24

Originally Posted by JCJM

It´s called the Veblen aka snob effect.

What´s the point in wearing something which does not separate you from the blue collar class, that is the way the target market sees things.

BTW, WIS are not the target market. New money is. Typical Richemont Group. And, it will only get worse once the economy will get better :roll:

You really do dislike Richemont, don't you? :lol:

7th March 2010, 10:28

Originally Posted by andrew

Yes. Let's not bother with facts, but invent our own scenario. And here it is: all Panerai is made in the same factory as the MM knock-offs and fitted with a movement from a Asian factory marked ETA rather than a movement from a factory across the street marked SEA-GULL. Then they charge you £3450923476 and cackle all the way to the bank. Does that make everyone feel better? :roll:

Why is a basic Omega AT chrono now £4,000? Why is a Submariner Date £4,000? Why is an entry-level Oris £800?

I asked 2 questions:

'This means many/most of the components are sourced in the Far East ?
And then 'finished' in Switzerland ?'

I have not stated any facts or invented a scenario.
If you can contribute to the thread and offer the benefit of your knowledge, please do so.

**aldfort** · 7th March 2010, 11:31

Oh goody another Panny bashing thread. :D

Well colours nailed to the mast I'll admit I don't much like Richmont Group either.

As far as I can tell this is how Richmont Panerai achieved their postion.

Sly Stallone buys original Panerai Firenze watch and also some for his mates. Wears watch in movie. People ask about watch. Richmont buys Panerai and starts making in Switzerland what are effectively hommages (bit strong but you get the idea) of the brand they just bought. Richmont Panerais become very desirable and are the must have thing. Prices go up. More "internal hommage" models are made - they are always "limited edition / first edition" (said in Watch Commander voice). Prices go even higher.
People become (as mentioned) addicted to the brand. Prices go even higher.

Let's be honest - they're nice watches - they work well enough, they look good, they are beautifully presented. They are very carefully and beautifully made. They're skillfully marketed.

If I was to buy one I'd look for one that was made in Italy pre- Richmont. but that's just me.
To me they lack the heritage and continuity (I'm probably kidding myself) of a brand like Rolex and I've always assumed that part of the price differential in a Rolex was down to the brand history, continuity and heritage. So where I can except a modern Rolex is +50% over an Omega I can't accept that with a Richmont Panerai.

**spogehead** · 7th March 2010, 11:44

I just wish they wasn't so friggin' expensive :cry:

I'd have ten of them instead of one as I love the way the look (except Rads) couldn't care less about movements as long as the watch works, I'm happy :wink:

**shadowman** · 7th March 2010, 11:48

Originally Posted by shalako

Are you sure your not taking part in the latest watchtalk craze of 'Shadowman Baiting' with this Panerai thread? :bom:

They are expensive because people want them and therefore they can get away with charging that sort of money....You could of course say that about a number of other watch manufactures. Panerai watches are very well made particularly the cases and at least they are manufacturing their own in-house movements now which helps justify the additional cost but I do think having over 300 different models in the last 10/11 years might ultimately affect their resale in the long term.
When you consider whether your getting good value paying thousands for a Panerai it's interesting to consider that the base unitas/ETA movements in some of the earlier Panerai models cost the Richmont group less than the Beautiful Pearwood box they came in! This is one of the reasons why one of my favourite earlier models was the Pam 72/74 Chrono with the El-Primero movement. This stunning, versatile 200m water resistant chrono however was only 40mm so the vast majority of size obsessed Panerai enthusiasts would never consider it.... which is their loss because it's a beautiful watch IMHO.

(I forgot to mention that if anyone out there has a Pam 88 for sale please let me know, I miss the one I've sold. :) )

8) I'm just off to watch some paint dry 8)

**jwg663** · 7th March 2010, 11:56

Marketing & customer base, I would reckon.
.
.
They are well marketed as a rufty tufty watch that is a bit more than
just that. There's history & celebrity in the mix. They've done the tricky
bit where one customer probably buys multiple watches, not necessarily
at the same time.
.
.
BTW...If we went out today & bought, say, an Eberhard Scafodat,
Dubey & Schaldebrand or a Cuervo & Sobrinos for about the same
money, would we be able to wear it for a year & then flip for about
90% (minimum) of the purchase price? I'm not so sure we could.
.
.

**shalako** · 7th March 2010, 11:57

Shadowman Wrote: I'm just off to watch some paint dry

:lol: Wondered what had happend to you Baz, you didn't bite, probably a wise move. 8)

**Huertecilla** · 7th March 2010, 11:58

Originally Posted by nesima

'This means many/most of the components are sourced in the Far East ?
And then 'finished' in Switzerland ?'

The legal Swiss definition of 'Swiss made' is that a minimum of 25% of total cost is Swiss.
If a Swiss quality inspector spends an hoour on a watch that equates a LOT of outsourced cost.

It is no secret that Chinese movement factories provide ETA movements also. All that is needed to make it 'Swiss made' is to fit a balance mechanism and spring in Switserland (wherever thatose parts come from). Per example .

Wether or what is outsourced in a specific watch is something to be determained.

It has to be observed that 'Made in China' does NOT mean it is not well made nor disqualifies the quality.
There is no reason why a Shanghai factory should not be able to produce a movent or case to the same specs in all respects as anyone else anywhere.
Nothing wrong with it.
It becomes dodgy if marketing obscures the origins, is flexible with the truth.

Bottom line on topic however is that most customers appearantly do not give a hoot. The above is pretty much public knowlegde just as just about every buyer knows that there is nothing much italian about a Panerai and that connections to its roots have been..... stretched.
The whole point of it is that customers are not buying the wátch. They are buying what it represents and that is enteirely subjective.
As was aptly noted, 'those' watches have their price because the buyers value 'it' at that level.

Watch Markting has done the perfect job by disconnecting the material value of the product from the perceived value.

7th March 2010, 12:15

Huertecilla, thanks for providing the information.

**Toshi** · 7th March 2010, 12:19

Originally Posted by Huertecilla

The legal Swiss definition of 'Swiss made' is that a minimum of 25% of total cost is Swiss.

where did you get this info?

AFAIK it has absolutely nothing to do with the costs involved. This is what the Swiss Watch Industry's own website says about it (http://www.fhs.ch/en/swissm.php):

"a law "regulating the use of the name 'Swiss' for watches" sets out the minimum conditions that have to be fulfilled before a watch merits the "Swiss made" label.

This law is based on a concept according to which Swiss quality depends on the amount of work actually carried out on a watch in Switzerland, even if some foreign components are used in it. It therefore requires that the assembly work on the movement (the motor of the watch) and on the watch itself (fitting the movement with the dial, hands and the various parts of the case) should be carried out in Switzerland, along with the final testing of the movement. It also requires that at least 50% of the components of the movement should be manufactured in Switzerland. "

**spogehead** · 7th March 2010, 12:41

Mentioned in some of the posts in this thread is reference to Panerai marketing. Where do they market/advertise?

I have never seen an advert or promotion about them, and only a handful of dealers stock them, the only reason I know of the brand is because of watch forums.

Could someone please enlighten me

**NJH** · 7th March 2010, 12:53

Which basically says the case, dial, hands and bracelet can all be made in China. Finished and assembled in Switzerland with a Swiss movement in it. The thing that grates in all this is we know roughly what a swiss watch should cost now. If it was 100% European and made with probably more hand assembly/finishing then is done currently, across all the famous brands they should cost about 1/2 or less what they do. We know this from all the historical prices form the 60's and 70's. The fact we now live in a world where costs can be cut through outsourcing to the East and much more mechanisation can be applied in manufacture only tells us we are being ripped off to the tune of what say, 300% or 400%? We know this is done because its all about luxury goods not instruments/devices for the professional (which sounds manly but is nonsense).

Panerai is just an extreme example, and like Rolex it works for the WIS owner as you can buy and sell without it actually costing that much. It always amazes me how ppl completely forget TCO in these discussions.

**RTH** · 7th March 2010, 13:11

Originally Posted by NJH

you can buy and sell without it actually costing that much. It always amazes me how ppl completely forget TCO in these discussions.

This doesn't work if you don't flip watches...

**100thmonkey** · 7th March 2010, 13:11

Why Are Panerai So Expensive?

They are only expensive if you cant afford them!

If I can nominate this for the Dullest Thread of 2010 please that would be great

Now 3-2-1 youre back in the room!!!

**JCJM** · 7th March 2010, 13:14

Originally Posted by spogehead

Mentioned in some of the posts in this thread is reference to Panerai marketing. Where do they market/advertise?

If you want to become a Giant you must ask yourself how? The answer is easy: follow the path of a Giant and sooner or later you´ll become one...

The first follow-up Q to arise thus is: "who is a Giant?" - the answer of course being Rolex. Second follow-up Q thus is: where do Rolex advertise?

Many a places, yes, but if I would bet the one and the most important of all places Rolex has ever advertised, the answer is National Geographic :!:

I don´t about your guys but IMO Richemont Panerai is milking its crowd by attaching the very emotional content of old Rolex ads to it´s clientele within the very media that most Rolex aficionados attached to the brand or would you not say there is a certain connection in between the National Geographic Magazine and Rolex? Just look at old Rolex ads and compare them to the Richemont Panerais ads on todays NG. A coincidence?

I dont think so. Yes, savvy and skillful is the Richemont money making machine and the propagandist at work for them. Does not change the fact that they are thief's. Maybe not from a legal standpoint but morally yes - and of course this is just an opinion from me and we all know what they say about opinions.

Originally Posted by 100thmonkey

Why Are Panerai So Expensive?

They are only expensive if you cant afford them!

If I can nominate this for the Dullest Thread of 2010 please that would be great

I agree and am out of this thread.

**thenikjones** · 7th March 2010, 13:15

Originally Posted by nesima

Originally Posted by andrew

Yes. Let's not bother with facts, but invent our own scenario. And here it is: all Panerai is made in the same factory as the MM knock-offs and fitted with a movement from a Asian factory marked ETA rather than a movement from a factory across the street marked SEA-GULL. Then they charge you £3450923476 and cackle all the way to the bank. Does that make everyone feel better? :roll:

Why is a basic Omega AT chrono now £4,000? Why is a Submariner Date £4,000? Why is an entry-level Oris £800?

I asked 2 questions:

'This means many/most of the components are sourced in the Far East ?
And then 'finished' in Switzerland ?'

I have not stated any facts or invented a scenario.
If you can contribute to the thread and offer the benefit of your knowledge, please do so.

I'm pretty sure Andrew's missive wasn't aimed at you but another poster.

At the end of the day, such watches as luxury goods and you don't get cheap luxury. They could slap another £2000 on the price of a Panerai and they would still sell. I have been priced out of the market but so long as they are selling, Panerai/Richemont won't care.

**TheFlyingBanana** · 7th March 2010, 14:25

Dull?

That really hurts!

I had no idea a simple question would stir up such a

:)

**phil h** · 7th March 2010, 14:35

Originally Posted by TheFlyingBanana

Dull?

That really hurts!

I had no idea a simple question would stir up such a

:)

Oh, I think you may have known that the excrement would hit the air conditioning unit with this post :wink: :lol: People are very protective of their favourite brands, especially it seems Panerai which seem to polarize opinion. Not sure I think the thread is a dull one, sure its been done before, but it becomes relevant again everytime a manufacturer decides to hike their prices again. My opinion, its worth what someone will pay. Companies exist to make money, the more the better as far as they are concerned. Panerai, Rolex, Omega et al have done it with great success so far, so why wouldn't they continue?

**JasonM** · 7th March 2010, 15:09

I cant believe these topics still get posted so regularly :lol:

Its a luxury commodity that has no trouble selling for its asking price..

Just like every other 'luxury' item, from Thorntons chocolates to £100 Nike trainers, sales price has pretty much zero to do with manufacturing costs... Its what the market will stand.... The same as anything...Its just sales...

**Argee1977** · 7th March 2010, 15:13

I know a lot of folk think that Panerai are made in China then assembled in Switzerland, but they've just opened up a huge state of the art workshop that produces the movements, cases, dials, etc. Have a look round this site and others for the info, they've pretty much got the most up to date facility in the watch world.

**aldfort** · 7th March 2010, 15:31

Of course Richmot Panerai are going to do everything they can to protect their brand and if that means opening up a modern, well equipt facility in Switzerland then that's what they'll do. Would have been so much nicer if they'd done it in Northern Italy though but I guess the've convinced a lot of people that they are an old established swiss firm now. :lol:

This is a crazy thread. But then again perhaps it's up to us here who know a little (a lot in many cases) to applaude good VFM watches more and be more objective in how we look at mechanical timepieces. There was a thread the other day that made mention of much the same thing.

**dejjl** · 7th March 2010, 15:32

Originally Posted by JasonM

Just like every other 'luxury' item, from Thorntons chocolates to £100 Nike trainers, sales price has pretty much zero to do with manufacturing costs... Its what the market will stand.... The same as anything...Its just sales...

+1

Nike, Levi's etc. etc. etc......what fraction of the selling price is covering costs? A neglible proportion, so what's the difference with watches? And, let's not forget the vast sums of money invested in R&D and state of the art facilities & machinery, which all need paying for.

I don't own a PAM anymore, but will have a Radiomir at some point. :)

**thenikjones** · 7th March 2010, 16:00

Originally Posted by Argee1977

I know a lot of folk think that Panerai are made in China then assembled in Switzerland, but they've just opened up a huge state of the art workshop that produces the movements, cases, dials, etc. Have a look round this site and others for the info, they've pretty much got the most up to date facility in the watch world.

But why would people want to let facts get in the way of a good polemic / diatribe :?: :wink: