But just to expand on this thought, and for full disclosure, this is not just theory to me. I make my own line of watches, so one thing I had to consider was my price point. As much as it might sound easy to decide where to price a watch, it isn't, or at least it wasn't for me.
You have to look at the competition in the price range you are thinking of, and decide if your product can offer something others don't. I'm sure these large companies have a lot of resources dedicated to this activity, but I am a very busy one man operation, so I had to be fairly quick and efficient about it. I am not having some company in China make the watches for me, and I'm not funding it with various crowd sourcing as it seems everyone is doing these days. These days you don't need to know much of anything that is technical to have a watch company - you don't even need your own money anymore!
But for me it's different and I ran into a few somewhat difficult decisions pricing out the watches I make. Not only did I have to look at what other new watches of similar design and price range were doing, but I also compete against the used market - maybe even more so than the new watch market. When your price approaches what a brand name watch used is, then people's value proposition changes. All I can say is that I'm glad the price of an SMP on the used market isn't what it once was, because I honestly saw that as pretty direct competition to my watches in terms of price. I felt downward pressure on the watches because of things like the ease of getting a used SMP for close to what I charge.
But on the flip side, some people won't take you seriously if your product is priced too low. If it's not expensive, it must not be any good, right?
So finding a balance can be difficult. For me it's a fairly small portion of my business, so it ended up not being a huge deal either way. With the difficulty of getting movements increasing every year, I might not be in the new watch business for the long term anyway.
Just some thoughts from someone who has had to make the pricing decisions.
Cheers, Al
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