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Are today’s watch prices are control?

gostang9
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saulgoodman saulgoodman
Are today’s watch prices out of control, and if so, why do you keep buying them? This is a serious question and I hope to see some well-thought-out answers...
Are prices very high? Yes

Why? “A rising tide lifts all boats”. The world is awash with easy money due to lingering ultra-low interest rates from the 2009 financial crisis. When governments, businesses and individuals can borrow effortlessly, it provides a lot more perceived liquidity that causes consumer spending to increase, and companies to raise prices. Demand for luxury goods fluctuates far beyond the ability or desire of the big watch produces to increase capacity. As demand grows beyond supply, they can greatly increase prices (even if artificially via the secondary market).

Is it “out of control”? No, I don’t think so.

Am I buying new watches at these prices? Nope. I’m very happy with the ones I have, additional watches won’t increase my personal “utility”, so I’m hanging tight.

Where will it go from here? I am in the camp that believes we have almost nowhere to go but down as far as the global economy (after maybe a short additional “blow-off top”...)
 
mzinski
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saulgoodman saulgoodman
So what you are saying is that if a Rolex Sub climbs to $25,000 and someone with limitless resources pays that price he/she would not think twice about whether the item they had just purchased is worth the price? That is nonsense. I know plenty of people with limitless resources and they are very conscientious about where they put their money. That is how they got there in the first place.

What I am wondering is what the consensus is about the breaking point? When is enough enough?

I wonder the same thing - at least if I’m understanding your thread correctly.
Regardless of being rich or not, it could be assumed we all have some level of rationale. We can all look at a good and determine whether the inherent craft, exclusivity, and precious materials is worth the price. Like most luxury goods, the materials and craft are not anywhere close to the price. We pay for exclusivity (read: brand or marketing). So the real question is how much are we willing to pay for exclusivity?
Unfortunately, I think the answer is a non-answer. Each person will calibrate their allowable price based on their value system. Some wealthy individuals see no value in a watch - $500 is too much. Others see tremendous value in wearing exclusive name brands - $100,000 isn’t enough to set them apart.
I think it’s unfortunate there is such a price jump between tiers of watches. Why can’t affordable pieces have better design (from my subjective opinion)? And why can’t affordable watches have better movements? I ask this from the perspective of experience pricing out watch manufacturing and parts. In the end, the parts are not incredibly expensive (even for COSC rating and full decoration).
 
Evitzee
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saulgoodman saulgoodman
What I am wondering is what the consensus is about the breaking point? When is enough enough?
No one can answer when 'enough is enough'. I've been collecting for many years. In the mid-80's I was talking with a sales manager at one of the large Swiss chains and we were talking prices. The collective wisdom of 'experts' in the industry at that time was when Patek Philippe crossed the CHF 2,000 (<$1,000 at the time) point for a gold Calatrava it was the point of no return, the market just wouldn't accept that kind of price. In hindsight it was a foolish position to take but at the time seemed rational for many people. More recently, when the Apple watch was introduced many thought it would be the end of the high grade Swiss watch industry. That again might have seemed rational at the time but proved to be wildly inaccurate. So no one, no one, knows when 'enough is enough'. We'll know it when it happens, it may happen this year, or it may never happen.
 
S.H.
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Evitzee Evitzee
That again might have seemed rational at the time but proved to be wildly inaccurate.

Luxury market is not rational, and even a 500$ watch is a luxury... Trends will be hard to predict.
 
JwRosenthal
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I think you’re trying to ask a logical question about an illogical topic. It would be akin asking someone who paid $100k for their Porsche if they think it’s worth it (verus a Camry which serves the same basic function), or someone who is willing to pay $50m for a Rembrandt self-portrait if they think it’s worth it....I don’t find Rembrandt that much of a looker so I don’t think I would want to look at him every day, even if it were only $49m.

My answer- I can’t afford these new watches and even if I could, I don’t think the products warrant the price tag as a functional object, nor do I think the prices are a reflection of the corporate investment in the products including labor and R&D spread out over the run of the product (also accounting for a modest profit)- unlike small houses like PP or Lange that are making their watches by hand (and those are nowhere near my ballpark so I can’t comment on if those are worth it).
I think the used market is awash with watches “like” the ones your mention (or their previous interations), and I personally don’t care about the new watch smell, so am fine buying with a little desk rash....some people want flawless and LE, so more power to them is that’s their priorities- they aren’t concerned with logic at that point- nor should they be. Now if they are buying in terms of “investment” and justifying the cost, then we get back into that whole debate.
 
Socks
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S.H. S.H.
Personally I tune out north of 3k, my own limit. Anything priced more than that, enters the realm of dreams and theories...

Likewise. It’s a question of proportionality. That sort of limit gives me scope for a 5 watch collection up to £8k. I couldn’t justify anything more with other commitments and to be honest I don’t think I would want to.
 
Walrus
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Even with me buying watches no where near those price levels the few high dollar (to me) watches I have do make me think. I look at them and think I could have updated my bathroom for that price, or rebuilt my walkway with nicely cut stone. Oh well to each his own
 
Cozmopak
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For me it’s simple regarding modern watches, I will never EVER pay above MSRP. This excludes all of Rolex and also some watches that I would otherwise be very interested in purchasing, like the chronometre bleu by Journe. It would just make me feel dirty knowing that I paid above retail.

Vintage is very different as prices are a lot more subjective and determined on the merits of individual pieces.
 
Evitzee
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Cozmopak Cozmopak
For me it’s simple regarding modern watches, I will never EVER pay above MSRP. This excludes all of Rolex and also some watches that I would otherwise be very interested in purchasing, like the chronometre bleu by Journe. It would just make me feel dirty knowing that I paid above retail.

Vintage is very different as prices are a lot more subjective and determined on the merits of individual pieces.
New or vintage, prices are set by the market based on the perceived merits of any piece. Don't get hung up on MSRP's, they are suggested prices by the manufacturer, usually the market prices them lower, but sometimes they are higher. You can feel dirty if you wish, but no real reason to do so. Would you feel better if Rolex doubled their retail pricing to bring them in line with the market?
 
Cozmopak
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Evitzee Evitzee
New or vintage, prices are set by the market based on the perceived merits of any piece. Don't get hung up on MSRP's, they are suggested prices by the manufacturer, usually the market prices them lower, but sometimes they are higher. You can feel dirty if you wish, but no real reason to do so. Would you feel better if Rolex doubled their retail pricing to bring them in line with the market?

As has been suggested before, all of this regarding the perception of fair prices boils down to the individual consumer.

When I can get a Lange Sohne, most Journe pieces, a Laurent Ferrier, etc, for a lot less than retail on the secondary market, it prevents me from paying a premium above MSRP on most modern pieces. Maybe if I was a diehard Rolex fanatic, or absolutely needed that chronometre bleu over the chronometre souverain, for instance, I would think differently. But this is my idiosyncratic consumer psychology.
 
OMEGuy
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saulgoodman saulgoodman
This is a serious question and I hope to see some well-thought-out answers that will convince me that plunking down $10,000 for a Submariber, or much more for a Daytona is in anyway sane.

saulgoodman saulgoodman
What I am looking for is what other people think about the prices. This is not about me. I am not thinking about buying any of these watches.

saulgoodman saulgoodman
What I am wondering is what the consensus is about the breaking point? When is enough enough?

While I'm not sure, if I got you right, I wonder what's your own opinion on the original question as per title of the thread?

Would you say prices are out of control or not? And why do you care, if, as you say, you're not intending to buy?
 
Cozmopak
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vicsdca vicsdca
I'd rather pay $1,000 over MSRP for a Rolex GMT-Master 2 or a Daytona rather than $1,000 below MSRP for a Datejust. I bet you would too if given the opportunity 😉

Wrong examples for me, personally, since modern Rolex really doesn’t appeal to me at all.
 
wsfarrell
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saulgoodman saulgoodman
Daytona $13,150, Submariner $7,900, Explorer 2 $8,350, Speedmaster 321 $13,367. These are the MSRP‘s. As we know you would be lucky to pay that these days. The Rolex models in stainless steel command much more. According to some pundits, so will the Speedy 321. Are today’s watch prices out of control, and if so, why do you keep buying them?
1. MSRP's on watches have been going up, as have MSRP's on most consumer goods. Do you have evidence that MSRP's for watches have been going up faster than those for cars, cell phones, TV's?
2. There's a market bubble in stainless Rolex models. As with all market bubbles, this one will burst eventually.
3. Meanwhile, there are people paying $26,000 for new Daytonas. These guys (a) have a lot of disposable income, and (b) don't want to wait for an unknown period of time for the bubble to burst.
 
JwRosenthal
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Being someone who remembered the tech bubble collapse of the early 00’s and the loss of a huge chunk of the aerospace industry in Los Angeles in the early 90’s- just be patient...I recall lots of shiny new Porches in used car lots and Rolex’s were spilling out of the pre-owned cases at jewelry stores.
Economies are elastic, we are inflated at the moment and if you are one of those who think it’s only going up- then you haven’t been around that long.
 
mzinski
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JwRosenthal JwRosenthal
Being someone who remembered the tech bubble collapse of the early 00’s and the loss of a huge chunk of the aerospace industry in Los Angeles in the early 90’s- just be patient...I recall lots of shiny new Porches in used car lots and Rolex’s were spilling out of the pre-owned cases at jewelry stores.
Economies are elastic, we are inflated at the moment and if you are one of those who think it’s only going up- then you haven’t been around that long.
But this one is different, we’re not making the same mistakes, this time we figured it out and it’s nothing but up, up, up from here!!!
 
lindo
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It is a legitimate question but obviously perceived by some as a thought bubble - and that's because there is no right answer, as so many members have already noted in one way or another.

I personally have difficulty with some of the obscene international auction prices paid for 'major' artworks, which make watch prices look eminently reasonable, but it is pointless trying to find a rational thread for collectors of anything to hang on to. Surely it comes down to the simple premise that people with lots of money will spend whatever they think is necessary to get something they want.

For the rest of us, it will always be a toss up between spending our cash on useful but boring things (like having the house painted) or things that give us joy in ownership.

As for what started this thread, I don't think Rolex prices are 'out of control'. They just reflect what the market will bear, so if you want one, keep saving (or sell something).
 
Dan S
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mzinski mzinski
But this one is different, we’re not making the same mistakes, this time we figured it out and it’s nothing but up, up, up from here!!!

Don't forget to add the winking emoji or someone is going to make a response you weren't expecting. 😀
 
JwRosenthal
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Dan S Dan S
Don't forget to add the winking emoji or someone is going to make a response you weren't expecting. 😀
I agree but Dan, but some people actually friggin’ believe this and are in full support of rolling back legislation- that a bi-partisan populous demanded BTW after the 2008 disaster- because it’s “bad for business”...seriously!!!?!? People have the memory of a fυcking gnat!
 
Dan S
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JwRosenthal JwRosenthal
I agree but Dan, but some people actually friggin’ believe this and are in full support of rolling back legislation- that a bi-partisan populous demanded BTW after the 2008 disaster- because it’s “bad for business”...seriously!!!?!? People have the memory of a fυcking gnat!

I'm quite sure that @mzinski was being ironic. And frankly, I'm sure most of us are well aware that almost all crashes and other disasters were preceded by a period of loosening regulations. During periods of growth, it's popular to criticize the government for holding business back with regulations, but then after an "incident", the same people blame the government for failing to protect them. Same with everything ... health/drug safety, environmental safety/pollution, nuclear energy, real estate/debt bubbles, risky financial products, anti-trust/monopolies, etc.

I'm not so sure it's really short memory ... it's more likely simple greed and a lack of personal responsibility.
 
STANDY
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The price of everything in the western world is out of control..

$5 for a cup of milk with a shot of coffee in it, yet people pay it. Fu*king crazy if you asked me 30 years ago you would be paying so much for a cup of warm milk , and don't get me started on the price of fermented vegetable drinks (beer for the record)
 
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