Why are Swiss watches so incredibly expensive?

Why are Swiss watches so incredibly expensive?

by Michael Weare

Why do some Swiss watches cost tens, even hundreds of thousands of dollars? Isn’t it true that a $100 Casio can tell the time just as well as, if not better than a Swiss watch worth $200,000? Well, as a matter of fact that is true. A good quality quartz watch will lose or gain considerably less time each month than even the most sophisticated mechanical watch, but if you are buying a watch purely to tell the time, then stick to the Casio watch, or better still, just take the time from your smart phone.

The genius of the luxury Swiss watch is that it has managed to become highly prized not for telling the time, but for being so incredibly intricate, so lovingly and painstakingly assembled, and made to last a lifetime – maybe even two or three lifetimes.

To create this level of exacting quality, where highly trained watchmakers and technicians of various levels are spending up to a year on and off to make one watch with hundreds of individual components, many of them hand polished and bevelled under the scrutiny of a loupe or a microscope, there is inevitably going to be a high price tag. But that isn’t even the beginning of the costly process.

Before anyone lays a carefully aimed pair of forceps on a single blued screw, the highly paid movement engineers have spent months, possibly years, carefully and ingeniously making new embellishments and reconfigurations to the movement, most of them incomprehensible and unappreciable to all but watch aficionados. Why? Because there always has to be something new; something no one has thought of before, it’s all part of the Swiss watchmaking tradition, to take an idea and improve upon it, make it better, do it differently, break the mould. In Switzerland of all places, time does not stand still. Every year collectors, retailers, aficionados want to see daring new approaches to the age old problem of telling the time.

Once the watch finally runs off the production line and the watch is neatly packed in its expensive box, there comes the extremely costly process of marketing the product. Shipping the product to retailers around the world is costly, but then making the customer aware of a new product is more costly still. Some top brands do this by paying huge sums of money to brand ambassadors, highly paid celebrities and sports stars who provide a borrowed interest to the brand, making it all he more desirable and aspirational; but someone has to pay for these celebrities to endorse the watches, and needless to say, it will be reflected on the bottom line.

Next there is the issue of pricing a watch sometimes deliberately out of reach to all but the elite few. The huge cost of producing a high-end limited edition watch can only be justified if the price is wallet achingly exorbitant, so exorbitant that maybe only a dozen people can afford it. After all, the last thing any company wants is very high price ticket inventory sitting on the shelves. If the belief in the brand is there, the quality of materials and workmanship self -evident, then the sky can be the limit.

However much a watch might cost to buy when new, if the buyer makes the right investment, he could well have a high profit asset on his hands in the future. It is literally the case that a high-end watch can cost more than a high performance sports car, and some can cost more than a Hollywood mansion.

Is a Swiss watch really worth more than a Hollywood mansion? It is if you believe and you can afford. But never forget, none of this would be possible without the likes of us lesser mortals. It’s your entry level Tissot’s, and make do Mido’s that give the likes of the Swatch Group the investment funds to produce the gasp inducing grail Breguet’s of the watch world. And as long as there is a market for high roller watches, you can bet they will continue to be rolled out.

    Author Bio

    Articles by Michael Weare


    Michael Weare hails from an international advertising agency background where he handled several well known and highly desirable watch brands; handled, but sadly never got to keep. However it's this exposure that gave him a lasting fascination for watches. Michael was Editor of Click Tempus for over 2.5 years and is now in the same role at Watchuseek, the web's largest watch forum.