Have you ever wondered how luxury watches get their hefty price tags? There are many variables when it comes to the price of a watch, from material costs, labor costs, and market demand factors. In this post, we’ll go over everything you need to know about luxury watch prices, starting with the history behind the prices of these precious timepieces.
Understanding the History of Watch Prices
Mechanical clocks have been around since the beginning of the 14th century, but pocket and wrist watches weren’t invented until the 16th century. The earliest watches were all made with complex spring movements, movements that required great skill for accurate assembly. The high level of skill needed to make a wristwatch meant that they also came with high price tags, which remained true for hundreds of years.
In the 1960s, however, the invention of the quartz watch changed everything. This new kind of watch was powered by electricity, which vibrated quartz inside the watch, keeping the time. Quartz watches shook up the watch industry in a major way, as they were much easier to create, allowing watch manufacturers to sell them at a much lower cost. In the watch world, this time period is known as the “quartz crisis,” as the low prices of quartz watches put the future of mechanical watches in jeopardy.
Through the quartz crisis, however, luxury mechanical watches survived. While many people no longer saw the need for expensive mechanical watches, others did. Watch aficionados saw the value in beautifully made mechanical watches and the passion for these high quality pieces has kept the luxury watch business alive to this day.
What Affects the Price of a Luxury Watch?
So, what affects the price of today’s luxury watches? There are many factors to consider.
- Material Costs: The cost of a watch’s materials can greatly affect its price tag. Certain movements, like Swiss movements that experts assemble by hand, are more time-consuming to make, which makes them more expensive. Additionally, many of today’s watches are made with luxury materials, like precious metals and gemstones, which adds to a watch’s cost.
- Workmanship Costs: Today, there aren’t many people who are experts at making luxury watches. Because there are so few experts who can make exceptional watches by hand, they are in higher demand, which allows them to charge more for their work.
- Rarity: Rarity is something that can make the price of a watch skyrocket. Among collectors and casual watch lovers alike, the rarer a watch is, the more valuable it’s considered. Watch brands know this and have capitalized on it by often choosing to make fewer models per year, allowing them to charge a higher price. Rarity also greatly affects the price of vintage models, which can be worth many times what they were originally, simply because they are considered collectible and are in limited supply.
- Modern Business Expenses: Creating a luxury watch costs the manufacturer money in many ways. Of course, there’s the cost of a watch’s materials and production to take into consideration, but there’s also the expense of marketing a watch, transporting it for sale, and developing new watch technologies. All of these things affect the overhead of making a watch, causing the final price tag to rise.
- Changing Trends: Changes in style trends can cause a watch’s price to rise or fall, particularly among vintage models. One year, a certain vintage model could be considered the pinnacle of timepieces, making it highly desired and highly priced. The next year, the exact same model could have gone out of fashion, making the price plummet.
- Awareness: Sometimes, increased public awareness of a certain watch or watch brand can cause prices to jump. For example, a popular song could mention the name of a watch brand or a successful movie may have its leading man in a particular luxury watch. If the public perception of a particular piece is that its highly desirable, more people will be interested in the watch, allowing sellers to increase their prices.
- People Want To Pay Higher Prices: This last point may sound strange, but research and market trends have shown that people are actually less interested in luxury watches if they are cheaper. Luxury watches are considered a status symbol by many and price drops can make something look undesirable, causing sales to drop off.
All of these factors can affect the price of a watch, and each of these things can change from year to year. If you’re wondering what your luxury watch is worth, reach out to Sell Me Watch for an appraisal. Our experts can help you understand the value of your watch and can make you an excellent offer if you’re interested in selling.