Reply With QuoteCan I be the first to mention Veblen?
I read in a marketing blog that Patek Phillipe and Birkin (Hermes) charge $50K for $500 worth of materials and labour. The other $49.5K is brand value.
Makes me wonder about the value of other brands. I'm assuming that Nomos, for example, represent better value but maybe that's not the case? Seiko and Grand Seiko used to be good value I think, but now they seem to be investing more in building up their brand.
Can I be the first to mention Veblen?
Yep, I thought that might come up!Originally Posted by Sinnlover
I'm aware that this topic has been discussed before but I hadn't seen total costs quantified into materials and labour vs brand value before.
What do you think about Sinn in terms of value?
Last edited by Rocket Man; 16th August 2023 at 09:01.
I was not having a dig, more poking fun at the whole situation and the standard response on the forum, we have all bought in to the ideas of Veblen one way or another and every watch company is following suit. E.g, Wilsdorf was the master of marketing (happy to use untruths or out and out lies) and other watch brands seem to be using his sales patter as inspiration. Brand, influencers marketing, advertising all cost money and that’s where brands see the value now and therefore it’s reasonable to assume that’s where the majority of the public see the value, as they have had it forced down their throat.
With regard Sinn, they no longer offer the value they once did, as a die hard fan I am sceptical of some of the tech they now use and are not sure of its real value over and above a marketing ploy. Other tech they use is a really good idea and worth the cost IMO. I am sure the submarine steel is more expensive than normal stainless steel but I am not sure there is a huge deal of difference in the quantity Sinn purchase, it is much more hard wearing though, especially when hardened.
Diapal seems to offer a real benefit but I am not so sure of the AR gas and copper sulphide capsule. So it’s a bit of a mix. All the research costs though. So the one thing Sinn have in their favour IMO, is the research and progressing the industry in some way. Most of the larger brands don’t do this and churn out variations of same old thing out time and time again using old movements. So any investment is largely placed in the brand.
I have reached the stage in my collecting life that new watches are a side interest now, I can’t remember the last time I bought a new watch from an AD and there is nothing new out there that is making me reach in to my pocket, vintage gives me most joy so I guess I am one step removed from the direct marketing pushed by brands. That said prices rise on the back of association so no one is immune from the brand influence.
Right I had better do some work now I have competed my rambling.
Last edited by Sinnlover; 16th August 2023 at 09:54.
Its how it is unfortunately,choice has different price levels for different levels of wealth.
Plus the feel good factor plays a part,helped by all the glossy advertising by A list celebs (who need paying).But the levels of profit is not justified if your quoted figures are correct.
Last edited by P9CLY; 16th August 2023 at 13:21.
I think it was Christopher Ward who once described their price point as being x3 the costs. I am not so sure that Patek is $500 for materials and Labour sounds very low considering where they are made I can’t imagine Swiss workers come cheap.
Yes, those quoted figures may not be accurate. I wonder if any other brands have made their price points public?!
I don’t believe the figures in the OP but the point is still valid.
The majority of the cost is in the marketing not the manufacture. Same with all luxury goods.
My own view is our host, Timefactors, probably offer the best brand value with Smiths. My PRS-48 is a great watch for the money.
There was something quoted a while back can’t remember if it was here or Rolex forums which did give an accurate price of cost to build vs retail price for Patek and a few other brands. It wasn’t as steep as you quoted but it was still pretty big.
I was thinking as I read the blog that my next watch might come from TimeFactors.
Shame the Smiths Military PRS-29 won't be available again until Spring next year!
Last edited by Rocket Man; 16th August 2023 at 13:22.
Do Zeno not have the same spec watch?
Don’t think there is much doubt that with todays prices timefactors are one of the few who maintain good value for what you get.
I've heard you can buy watches for a few thousand yen (few hundred dollars) that look like certain high calibre brands. Are they higher value?
“ Ford... you're turning into a penguin. Stop it.” HHGTTG
It isn't true that the majority of costs come in the form of marketing spend.
Rolex had revenues of $9.7b in 2022. During this period they spent approx $100m on advertising and $200m on sponsorship. So in total around 3% of total revenue.
Around 40% of the cost is actually gross margin to the retailer (the AD). That would I imagine be the biggest chunk of the cost.
Pre 2020 and the skyrocketing grey-market prices of Rolex, a read that the retail AD's mark-up on wholesale price was up to 50%. Given the automated watch-production Rolex uses to churn-out circa 1M units per year, cost of production per watch has to be well under £1,000 with the rest going on marketing, sponsorships, trade shows, R&D etc. plus Rolex's margin on the factory gate price.
Last edited by J J Carter; 16th August 2023 at 21:41.
3%. I don’t think that can be the correct figure. More likely to be 30-40% of revenue for a luxury goods brand.
That % would include the selling costs of their own boutiques.
https://advertisers.mediaradar.com/r...June%2C%202022.
Surely posters, literature, business cards, all associated with boutiques, are indeed marketing?
Correct but that is only a small percentage of the costs of running a boutique. The rest would be direct overheads
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Are you comparing like for like?
10 years ago Rolex were spending 55m in US advertising alone. It’s likely much higher today, and possibly the guessed 100m.
The other figures are guesstimates of total revenue.
It's just a matter of time...
Value is simply what something is worth to someone. Nothing more, nothing less. We'll all have an opinion on what that is for a given object and statistically, there will be others that agree with us. Audemars Piguet has more or less the same monetary value as Kylie Jenner but I think most forum members would consider one more valuable than the other.
No the article in the link states they spent $100m on advertising. On top of this there was approx $200m in sponsorship of which $75m was to Formula 1.
So $300m total out of just under $10bn revenue.
A true GMT with DLC in a slim case...the brand "T" does cost 10X the price for this.
in the meantime, I rather enjoy this
https://www.youtube.com/watch?v=8T-VfSMYaSc
Last edited by seikomatic; 17th August 2023 at 03:34.
[QUOTE=seikomatic;6260721]A true GMT with DLC in a slim case...the brand "T" does cost 10X the price for this.
in the meantime, I rather enjoy this
[url]https://www.youtube.com/watch?v=8T-VfSMYaSc[/
Sent from my iPhone using TZ-UK mobile app
There must be some allocation of revenue for R&D annually to bring us the latest bling etc.
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Feels way too low for a luxury brand, that link isn’t Rolex own figures.
Here is another brand as a benchmark.
Total marketing and selling costs jumped 26% to €28.2m (£24.7m), amounting to 35.6% of revenue.
https://www.marketingweek.com/lvmh-r...ost-marketing/
Edit. Looks like the journalist has their billions and millions mixed up mind …
Last edited by Montello; 17th August 2023 at 08:35.
Law of diminishing returns.
A £25 Casio tells the time at least as well as a Patek Phillippe.
You are, of course, paying for exclusivity as well.
What's a Banksy worth of there are 10,000 exact duplicates.
Rolex play the game best, ordinary stainless steel watches, limited supply, massive marketing machinery (don't forget what that must cost) and people will buy ugly, unpopular models just to get a chance to buy the one they really want!
Of course, if they do get one, they'll be able to sell it other like minded people for a huge profit .
People are prepared to spend £1000+ on a Seiko, with a misaligned chapter ring and bezel, so clearly brand value is very important to some.
M
Sent from my Pixel 6a using Tapatalk
Last edited by snowman; 17th August 2023 at 09:53.
Breitling Cosmonaute 809 - What's not to like?
& I would suggest that the $100m “advertising” might just cover ads in the US, based on previously obtained figures of $55m of around 10 years ago. World-wide advertising would therefore be significantly more.
Id also suggest the Rolex spend significantly more than most other watch brands in relation to research and development.
It's just a matter of time...
I think that’s marketing budget if their US operations.
I’m not so sure, how much R&D went into the upside down GMT? Tag Heuer have done miles more with materials, movements, Connected range and so on. It’s taken Rolex nearly 50 years to figure out how to put a sapphire case back on a Daytona.
Omega with their ceramic watches, 321 movements, animated snoopy case backs, and so on will have spent more on R&D in just the Speedmaster range than Rolex have on their entire catalog.
Anyone remember the former IWC CEO youtube video "chasing dreams" which caused much anger and anguish amongst the WIS? He openly said they paid a bunch of celebs to just walk about having a good time while a photographer followed them about taking pictures to give an image of what every IWC owner would aspire to be.
I think there’s a huge difference between what comes to market, and what’s being worked on behind closed doors.
It's just a matter of time...
This is the one, it's worth a watch if you've not seen it before.
I feel such a fool 🤣
that's why I think he is a very very very rice man and doesn't need my money for Victoria's dinner
now I might want an IWC..will double my melatonin tonight and hope for that dream
I have few dozen of Seiko mostly because they're cheap but not against my Rolex/GP/Omega..too bad this is not the story of Seiko today
Last edited by seikomatic; 18th August 2023 at 05:22.
Vostok brand value....they pay you don't they
But Novak Djokovic needs his dinner paying for?that's why I think he is a very very very rice man and doesn't need my money for Victoria's dinner
I couldn’t agree more, this is exactly where I am too, I haven’t seen a new watch I really really want in many years.
Cheers..
Jase
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