Reply With QuoteThat's hardly surprising as you're paying for far more than the sum of the raw materials.
This was on my news thread this morning, maybe of interest to some
https://interestingengineering.com/v...-a-rolex-worth
Click on cody's lab link in the article for any science nerds.
Nice mark up by Rolex......
That's hardly surprising as you're paying for far more than the sum of the raw materials.
It’s worth as much as someone’s prepared to pay for it.
Whatever you will pay and no doubt when they look at the market for certain models there may be a discussion about raising the prices by whatever %.
the raw material costs should insignificant. Why pick on Rolex - same applies to any watch or car or tv etc.
Last edited by MartynJC (UK); 20th February 2019 at 10:04.
Yep - that is the universal rule.Originally Posted by WHL1882
Ha I don't think anyones picking on Rolex!! As for the raw material cost being irrelevant not entirely true is it. It could be any watch manufacturer, I guess it just grabs the attention more when Rolex name gets used, and provokes a reaction or over reaction....
Last edited by Itizme; 20th February 2019 at 10:32.
You're paying for the brand and all of the perceptions (i.e. luxury, exclusivity, history etc) that come with it. Simples.
https://www.streetwearofficial.com/c...ie-grey-orange
How much is a hoody worth? There is a 30% off code if you’re quick though!
Cheers
Rory
I'm surprised there's as much as $500 worth of raw materials to be quite honest.
Raw material cost doesn't tell you very much though. Time, skill, R&D, precision engineering, testing... the list goes on.
Isn't this where someone mentions Veblen or something?
Last edited by Dave O'Sullivan; 20th February 2019 at 12:06.
I wonder if any finished product has a price less than 10x its materials cost. I doubt it. Labour costs account for so much more than in the past.
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should of posted this article in the unpopular watch opinion thread. I actually thought it was interesting how he scavenged all the precious metal out of the watch to calculate it. People getting annoyed by it is comedy gold, I thought more people would be bothered by the fact they destroyed a working watch for internet points.
Its obviously a vid crafted to generate discussion, and im sure even the creators know its a bit rediculous, but just to play along, the cost of a rolex includes:
- R&D Costs for past innovation & investment for future innovation.
- Tooling costs, smelting & machining the extra hard steel, ceramic two tone bezel's cant be done with the box of tools in ones garden shed.
- marketing, to make it one of the most desirable brands on the planet.Sure it has a lot of market share built up but that needs investment to stay at the level it is.
- Skilled staff to operate machinery, do research, quality checking etc.
- Logistics for transportation & safekeeping of product
- Rainy day money for when times are lean.
- payout for shareholders (is rolex publicly traded?)
Thats not everything by a long shot. Sure Rolex make a nice chunk of profit from their products, but thats what business do.
As has been stated already on the thread, if someone is willing to may the money, they'd be fools not to take it.
Wait till you hear how cheap the paint in David Hockney's Portrait Of An Artist was.
I'd have thought someone of his calibre would have indulged with Dulux?
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Quite a big canvas, isn't it, hopefully he caught the Easter Bank Holiday 3 for 2 offer at B+Q
Did he mass produce that ?
That's just what I was thinking!
Why's that relevant? The point is, the cost of raw materials is, in both the case of sought after art and sought after watches, pretty irrelevant to the market value of the end product.
Does your moving to a new bad argument indicate you've given up on the first one?
In the UK, 16.67% of the retail price is VAT.
Calm down people.
I'm not arguing anything, I posted a link.
Last edited by Itizme; 20th February 2019 at 13:00.
.... quite simply, “whatever someone is willing to pay” as proven by the current market, which incidentally, is another overly discussed topic that we all know the answers to.
As stated sooo many times you’re not paying for a lump of raw material.
The overheads of such an endeavour don’t disappear nor do the pre production costs... as with medication , jet engines and everything else ever designed and built....
This precisely.Any one ever worked out how much Your house will cost You by the time You clear a mortgage? Considerably more than the materials!!!
Exactly. It's an interesting question, but of limited relevance.
May as well wonder why a Michelin Star restaurant charges so much for many ingredients you could buy cheaper yourself.
Or, the tale of someone calling-out a plumber to save their bacon in an emergency, only for them to then complain about the size of the call-out charge when the plumber quickly & easily fixed the problem solely by turning a single screw, for the plumber to retort: "Well, you don't pay me for turning a single screw, you pay me for all the years of training I did in order to learn which screw to turn".
Reminds me of this joke:-
The Graybeard engineer retired and a few weeks later the Big Machine broke down, which was essential to the company’s revenue. The Manager couldn’t get the machine to work again so the company called in Graybeard as an independent consultant.
Graybeard agrees. He walks into the factory, takes a look at the Big Machine, grabs a sledge hammer, and whacks the machine once whereupon the machine starts right up. Graybeard leaves and the company is making money again.
The next day Manager receives a bill from Graybeard for $5,000. Manager is furious at the price and refuses to pay. Graybeard assures him that it’s a fair price. Manager retorts that if it’s a fair price Graybeard won’t mind itemizing the bill. Graybeard agrees that this is a fair request and complies.
The new, itemized bill reads….
Hammer: $5
Knowing where to hit the machine with hammer: $4995
A bit of googling suggests that the current value of the elements in a human body is around $4.50. However, the value of selling off the components (bone marrow, DNA, lungs, kidneys, heart etc) could be more like $45 million - and that's without even factoring in how many Instagram followers the human in question has.
Isn't it 20%?
To the OP's question. 42% x RRP, a bit less for the PM models.
100 × (6/5) = 120
100 × (5/6) = .....?
I don't think anybody is particularly annoyed or not calm.Calm down people.
I'm not arguing anything, I posted a link.
They're just pointing out that you've missed the point by a wide mark...
It's an external link to someone destroying a watch. I've made no point. Where do I state anywhere I agree with what they're saying, if I did I'd never buy anything other than a quartz watch worth £20.00
Last edited by Itizme; 20th February 2019 at 16:47.
Unfortunately the smug emoticons and the popcorn emoji are a dead giveaway about the trolling nature of the post.
Last edited by RAJEN; 20th February 2019 at 17:01.
More than I paid 😉
The popcorn maybe, as I thought it funny that people are making out Im arguing a point which I'm not.
Remember reading back in the 80s a Sinclair Spectrum computer cost five quid to make
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Gold prices are much higher than Platinum. Even taking manufacturing costs into consideration, a Platinum Rolex commands a huge premium. I suppose that is the price you pay for exclusivity.
Platinum being more dense, there is more Platinum in a Platinum watch than gold in a gold watch. Added to this is the difficulty of working with Platinum as you rightly implied. But it still doesn't account for the premium.
FTFY for clarity.
I’ve yet to be convinced that platinum is any more difficult to work with than any other metal.
Every metal has its own idiosyncrasies when it comes to working with it but non can honestly be considered more difficult to work with than any other.
If silver is loved by silversmiths for being so easy to work (and I have that from the horse's mouth) why shouldn't the remaining metals have varying degrees of non-easiness?
Personally I am reassured that the raw material cost is such a small proportion of most watches, not just Rolex.
I’ve thought about this before. It means that most of the value of what I am wearing on my wrist, is in the human endeavour, creativity and ingenuity that has created this remarkable machine, plus any personal emotional attachment or enjoyment that I associate with the watch.
That is surely worth a lot more than, say, the intrinsic value of a rare coloured diamond (not that I am criticising those who collect precious stones).
And the bulk of the cost, advertising.
Not bulk of the cost but substantial. As per one estimate Rolex spent over $56 million on advertising in a year in US against the sales of over a billion. (2014 figures) and this is not just magazine ads. I read somewhere 10% of their cost is marketing.
But... but... They're a charity...
Lol. Being a charitable organization doesn't mean you give away products for free or do not try to maximize the revenues
for the organization, so that more money is available for charitable purposes. Ofcourse the skeptics will say it is not truly a charitable organization even if the Swiss law recognizes it as such. We will never know.
Dear Jane, I do not have any money so am sending you this drawing I did of a spider instead.
That's excellent
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