It is not uncommon for luxury goods to be sold at very high prices. But how can a luxury watch cost the same amount of money as a sports car?
If you too have been dealing with this question for some time, we have made your job easier. We decided to find the reasons for the astronomical prices of wrist jewelry. So what makes watches so expensive and are they really overpriced?
Research and development
While the production of most things is automated, luxury watches are made by hand. The final product goes through several stages of production and is the result of numerous tests. When you buy a watch, you also contribute money to the hard work of the manufacturers.
Surcharge
Apple revealed that it spent $81.20 to produce a single Apple Watch, while it costs $349 in regular sales in the US. A surcharge is added to the production price, the amount of which depends mainly on the prestige of the brand.
Limited quantity
Top watch manufacturers release their products in limited quantities, as they ensure that supply does not exceed demand. In this way, consumers are forced to believe that watches are classified as luxury goods, access to which is denied to many.
Luxury
Clocks were once meant to tell the time. Today, due to the development of modern technology, they are used as a piece of jewelry. We can conclude that they play the role of a status symbol. Some brands conjure up luxury with their very name.
Gravity
Many high-quality watches have the “tourbillon” technology developed in 1795 by Abraham-Louis Brequet. This is supposed to help reduce the influence of gravity on the watch, and today manufacturers use it in the manufacture of watches for tradition.
Quartz
Quartz watches have an electronic motor that is driven by an electric current flowing through the quartz crystal. The production of this type of watch is much simpler than the production of mechanical watches. With the launch of quartz watches, Swatch became the largest company in the watch industry in the world.
Additional power sources
While a quartz watch relies on a battery, a mechanical watch is powered by a mainspring that needs to be wound every few days. Many mechanical watches therefore also use reserve energy sources, which contribute to a higher price.
Veblen's goods
Economist Thorstein Veblen, in his book The Theory of the Leisure Class, which was published way back in 1899, defined a special type of goods that we know today as "Veblen goods". The characteristic of these is that the demand for them increases with the increase in price. This also includes watches.
