Originally Posted by
froze
ALL watches are marked up considerably, get with the program. I had a Tissot Seastar I got back in 1967, if failed in 2020 in such a fashion that Tissot said it was unrepairable, so they offered me a loyalty exchange program, I got a $600 or so Tissot PR100 Powermate 80 for only $230, do you think for one moment they took a beating on that watch? NO, at the very least they broke even, but I have a feeling they still came out ahead.
I actually saw just last year the cost to make a standard $7,000 Rolex Submariner to be only $690!!! and speaking to a watchmaker he agreed that specing out the parts and labor would be around $700 for him to make. And it gets even more lopsided on the profit scale for the gold Submariners! While the cost of the manufacturing is only $690 you then have to add in marketing, merchandising, and sales commission, once that is all calculated Rolex makes $2,100 on every standard $7,000 watch sold. ALL Rolex watches are NOT handmade, they have an assembly plant that robotic machines put the parts together, the only time a human hand touches it is to place the the hands and the hour markers onto the face and then install the movement into the case, they put the bands on the watch, and they hand polish the watches after the machine has polished them; of course one could argue that the machines are human operated, but the reality is they are not handmade watches. The gold by the way used on some of their watches are made at a foundry on the Rolex factory site, so they don't import the gold they actually make it right there.
So since Tissot is a less expensive brand than Rolex and cheaper to build cost, I have a pretty good idea that Tissot made around $150 on my exchange, I haven't see the cost factors but judging by the Rolex paper I saw I think I'm pretty close. But the other thing that helped Tissot in my deal is that they got my old Seastar and can cannibalize most of the parts out of it except for the rotor bearings that failed and be able to fix other watches of my vintage and charge them an arm and leg to repair it. So they probably gained another $500 in potential profit from repairing other watches with my watch.
But that is why Rolex is a very profitable company, between Rolex and Tudor they're valued at $8.8 billion dollars the last time I checked, it may be more now. If you ever price a replacement stainless steel band for the Rolex they're around $375...what stainless band on this earth is worth $375? It probably cost them $10 to make since those are not handmade.
Rolex puts out over a million watches a year, but because of the process involved it takes a year to build one watch and have it ready for sale. So there is a bit of some of the reasons why Rolex has such a high profit margin, because most of the watch is assembled by machine.
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