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rohada
·deleted
Are Omega getting too expensive
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Cod Holliday
·No, they are Federal, and in some cases Provincial. I know, I pay and collect them.
5% GST across the entire country, and then another 0% to 10% depending on the province or territory you are in.
And some as inept as BC choose to keep them separate to double up on the cost of bookkeeping. 🙁
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montelatici
·No, they are Federal, and in some cases Provincial. I know, I pay and collect them.
5% GST across the entire country, and then another 0% to 10% depending on the province or territory you are in.
I was talking about the delta being provincial/territorial As I said, Quebec is 5% total, so less than our metro area Md, Va. and DC. I also pay and collect them.
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scapa
·I was talking about the delta being provincial/territorial As I said, Quebec is 5% total, so less than our metro area Md, Va. and DC. I also pay and collect them.
But everywhere in Canada also pays a GST of 5% on watches (and nearly everything else). So outside of Alberta we're tacking on an additional 10% to 13% or so, including on used pieces. That starts to add up on a 6500.00 plus watch, especially when that watch can be expected to rise by 6% 2 or 3 times in a year, as global pricing is adjusted.
Yeah, currency, but other Swatch Group pricing seems to rise less frequently than does Omega's -- Longines had one such price hike in 2020 that I'm aware of, against 2 or 3 for Omega. Did Longines' raw materials, manufacturing and advertising, etc. costs rise only fractionally while Omega's skyrocketed by 15 - 18%?
in an era when many salaries are stagnant, imperilled, or seeing rises lower than inflation, the steady creep off regular price hikes start to hit psychologically important thresholds. When did Omega last fail to have an entry in the "5k and Under" watch lists? In some areas, they soon won't have an entry in the "7.5k and Under" lists. I think that's worth paying attention to, though these pricing strategies most certainly sren't limited to Omega.
Anyway, it's clearly a complicated issue. But worth discussing IMO, if only as a sidebar.
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Chef40
·I bought a 2004 seamaster a few months ago and it came with original sales receipt. The guy paid £1000 after £100 off for managers special discount. £1100 for a seamaster in 2004. In the last 16 years they have gone up roughly 300% but minimum wage in the UK has only gone up just over 100%. Every year that goes by the brand new retail price watch becomes more and more unobtainable to the average person. In 20 years time an entry level watch will could be over £10000. Its a wonderful feeling going into the shop and buying a brand new watch but I think I will be looking at the vintage and used market from now on.
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Angry_bird
·I was talking about the delta being provincial/territorial As I said, Quebec is 5% total, so less than our metro area Md, Va. and DC. I also pay and collect them.
So lets say Speedy will cost you 6750 * 1.05 * 1.9975 = 7794 CAD
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SpeedyD
·And in recent years currency fluctuations have also played a part. Most major currencies have weakened against the Swiss Franc.
But yes Omega have gone up quite a bit in the past few years. I noticed that one reference I own (i bought used at about 36% off MSRP at the time). The MSRP has gone up nearly 30% since them. This is <3 year timeframe. Crazy!
This is the exact same watch. Nothing changed except the price. Yea cars etc also go up, but an anomaly with watches and other ‘luxury’ goods is that mass made products usually go down in cost to produce over time. But the ‘price of illusion’ with watches, like many other branded luxury goods negates that. So yes the value proposition has changed.
As someone else said above - takes more time to pause for thought now. As I’ve done twice this year. I’ve bought a lot leas Omega this year for that very reason. And it is not covid and finance - simply that getting less bang for buck makes a purchase decision less whimsical. Probably a good thing to be honest. So i’m not that bothered.
it is not just Omega of course. They’re all at it! Good luck to them. If it works it works. If not balanced with other measures it could well backfire.
But yes Omega have gone up quite a bit in the past few years. I noticed that one reference I own (i bought used at about 36% off MSRP at the time). The MSRP has gone up nearly 30% since them. This is <3 year timeframe. Crazy!
This is the exact same watch. Nothing changed except the price. Yea cars etc also go up, but an anomaly with watches and other ‘luxury’ goods is that mass made products usually go down in cost to produce over time. But the ‘price of illusion’ with watches, like many other branded luxury goods negates that. So yes the value proposition has changed.
As someone else said above - takes more time to pause for thought now. As I’ve done twice this year. I’ve bought a lot leas Omega this year for that very reason. And it is not covid and finance - simply that getting less bang for buck makes a purchase decision less whimsical. Probably a good thing to be honest. So i’m not that bothered.
it is not just Omega of course. They’re all at it! Good luck to them. If it works it works. If not balanced with other measures it could well backfire.
Edited:
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speedytoronto
·What is the dealer cost for most of the Omega watches? Seems like it’s around 50% of MSRP. This definitely leaves room for a grey market intermediary. Personally, I don’t see the value of the AD for an Omega.
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Archer
··Omega Qualified WatchmakerI was talking about the delta being provincial/territorial As I said, Quebec is 5% total, so less than our metro area Md, Va. and DC. I also pay and collect them.
Not correct...Quebec has one of the highest, as noted just under 15%, so not sure where you are getting your information from, but you need a different source.
Try this...
https://en.m.wikipedia.org/wiki/Sales_taxes_in_Canada
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1st speedy
·Lol... Québec taxes suck balls. Trust me.
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Gruesome
·There is probably more than one factor at work that makes Omega raise their prices faster than the growth of the average North American or European middle class or upper middle class disposable income.
A few guesses:
1. Swatch does not need to sell more Omegas to make more money. They don't even need to make the same money from Omega, and could still come out ahead, if a lost Omega sale is replaced by a sale of a Longines or other Swatch. I'm pretty certain they are optimizing over their whole range of brands.
2. Gains in disposable income are distributed very skewed over the income scale. The average worker in the US lost buying power over the last 40 years. The gain in GDP per person that did happen is divided over a smaller fraction of people, and to Omega it's just the same if fewer people are buying more watches. Actually, they probably prefer it, since it means less wear and tear on each single watch...
A skewed distribution also makes more of the income truly disposable.
3. Similarly, the skewing of income distribution and emergence of a new upper class in developing countries. If you can only produce 800,000 of something per year, you are much better off pricing it appropriately and trying to sell it to the 800,000 richest people worldwide. The US/Canadian/European fraction in that number is falling.
A few guesses:
1. Swatch does not need to sell more Omegas to make more money. They don't even need to make the same money from Omega, and could still come out ahead, if a lost Omega sale is replaced by a sale of a Longines or other Swatch. I'm pretty certain they are optimizing over their whole range of brands.
2. Gains in disposable income are distributed very skewed over the income scale. The average worker in the US lost buying power over the last 40 years. The gain in GDP per person that did happen is divided over a smaller fraction of people, and to Omega it's just the same if fewer people are buying more watches. Actually, they probably prefer it, since it means less wear and tear on each single watch...
A skewed distribution also makes more of the income truly disposable.
3. Similarly, the skewing of income distribution and emergence of a new upper class in developing countries. If you can only produce 800,000 of something per year, you are much better off pricing it appropriately and trying to sell it to the 800,000 richest people worldwide. The US/Canadian/European fraction in that number is falling.
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worldwidewes
·How's Rolex offering a better product? I am genuinely curious. What other brands are better value in Rolex price bracket?
I'm thinking specifically about the Daytona. It's MSRP is ~$13k, and I can't think of a new watch I'd rather want at that price, and I'm not even a fan of Rolex. I think Rolex's are sort of boring and ubiquitous, but one thing you can't dispute is that they are the best at making high-quality, robust products that last.
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worldwidewes
·While probably unachievable, Omega is probably trying to regain the status it had post war until the late 1960s. Prior to then Omega was more desirable than Rolex as a brand. It had the status symbol position that Rolex has today and Rolex was a relative newbie in the watch industry. In terms of price, the Omega Constellation of the 1950s was more expensive than the 1950s Rolex's top of the line Day Date.
Dang, I didn't know that. Very interesting.
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worldwidewes
·I bought a 2004 seamaster a few months ago and it came with original sales receipt. The guy paid £1000 after £100 off for managers special discount. £1100 for a seamaster in 2004. In the last 16 years they have gone up roughly 300% but minimum wage in the UK has only gone up just over 100%. Every year that goes by the brand new retail price watch becomes more and more unobtainable to the average person. In 20 years time an entry level watch will could be over £10000. Its a wonderful feeling going into the shop and buying a brand new watch but I think I will be looking at the vintage and used market from now on.
This is something I worry about as a young watch guy. As my watch budget increases, the prices of the watches I want will also increase. The problem is that, as prices of new watches increase, prices for used and vintage watches will also increase.
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Cod Holliday
·I'm thinking specifically about the Daytona. It's MSRP is ~$13k, and I can't think of a new watch I'd rather want at that price, and I'm not even a fan of Rolex. I think Rolex's are sort of boring and ubiquitous, but one thing you can't dispute is that they are the best at making high-quality, robust products that last.
NOW is Daytona the only watch you want to buy at 25K? If that's your thing more power to you. I won't.
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bernhard
·I like the breakdown of the 100 dollar nike shoe above. Some members noted that for Omega the retailer’s margin might be in a similar range of 40 or 50 percent. I want to emphasize the, possibly evident, fact that this is not a margin as in net income. Clearly the retailer has a number of costs, such as rent, salaries, inventory, electricity, cost of running a business in general.
Now for an AD I have absolutely no idea about their net margin, bur for a store selling Nike shoes I would expect the margin to be at a similar value of 5 percent.
Now for an AD I have absolutely no idea about their net margin, bur for a store selling Nike shoes I would expect the margin to be at a similar value of 5 percent.
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Albe100
·I would not suggest to know the inner workings of the Rolex financial department. But, I try and be skeptical (if only for self improvement’s sake) at off-cuff suggestions that certain products are wildly bloated in their pricing.
Above someone mentioned new Nike’s as being another example, like Rolex, of such boated pricing. This might prove a good test case for testing our skepticism, because here is an actual breakdown of Nike’s profitability on sneakers:
The biggest takeaway here is to remember that the retailers are in many cases fully 50% of the take-home on a sticker price. I have seen many others suggest/confirm the same is true of retailers of luxury watches (ie, about a 50% retailer cushion in MSRP).
Again, this is not to say I know the inner financials of Rolex in particular, but instead only that I try and be skeptical of my assumptions in the apparent margins for certain products - particularly those that are (1) global, and (2) increasingly inundated with competition.
Taking a $8,100 Submariner as example, if the retailer has a 50% margin, then cash to Rolex is approx $4K, and seeing a financial anatomy from there - like with the Nike example above - would be INCREDIBLY Internet-breaking.
The one thing with this, is that your freight, customs, etc is usually being charged to the retailer, which eats into the margin you mention and swings the pendulum back the other way. I know this to be the case for clothing, amd would assume it would apply to watches as well.
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Albe100
·I was talking about the delta being provincial/territorial As I said, Quebec is 5% total, so less than our metro area Md, Va. and DC. I also pay and collect them.
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Taddyangle
·...it is not just Omega of course. They’re all at it!
And the vintage/second hand market too. It was 5-6 years ago you could buy various used Limited Edition Speedmaster watches for $3,000 - $4,000 USD. Now they are more than double that price.
I will need to purchaser a Speedmaster for my Speedmaster Decades Collection, but fortunately I have another 9 years to save, because the prices seem out of control.
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