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Pricing / Production Cost of Watches

  1. MtV Jun 10, 2020

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    Hello everybody,

    I stumbled upon something that I'd love your view on, simply out of curiosity:

    I've been looking for a watch by the German watchmaker Stowa, the Antea 390, for quite a while. I don't want to buy one new but I thought if I could pick up a decent used exemplar I might go for it - have a Verus from them already and I really enjoy it.

    Now, the Antea 390 comes with an ETA 2824-2 automatic movement. It's a solid, well-known movement and the only movement the watch is offered with. The regular price would be 1030€.

    A couple of weeks ago I found one on eBay that didn't have the see-through case back but an engraving for 10 years of service in a company. Other than that, the watch was brand new, unworn, and came with the guarantee card and original box. I contacted the seller and she was very helpful, but on one of the pictures she send me personally, I noticed it said "Quarz" on the back... That killed the deal for me but I roughly explained to the seller, who has no interests in watches whatsoever, about the difference between an automatic and a quartz movement and why the value will be completely different. We stayed in touch, she contacted Stowa to get more information for selling it eventually and found out that, apparently, it was 400€ new.

    The price gap of 630€ - a cut of >60%! - did surprise me. ETA 2824-2s can be bought new for ~200€, according to a quick search on eBay, and I'm sure that's not the price an established company like Stowa pays for them. So where does the price difference come from? Even if I add 400€ for the quartz Antea plus a generous 200€ for the movement, that leaves another 430€ for a regular case back instead of one with a glass - that can't be the reason, surely. So I wondered what else would have to be done in production that explains the price gap, regulating of the movement maybe?

    I probably overlook something, so maybe one you might want to hazard an educated guess. Just being curious here.
     
  2. izydor Jun 10, 2020

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    A watch will never cost as little as sum of its parts...

    Add design, production, assembly, inspection, QC, marketing, sales... and there you have retail price.
     
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  3. JimInOz Melbourne Australia Jun 10, 2020

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    You probably overlooked the cost of things that get the watch to a finished state.

    Like the factory establishment and ongoing upkeep cost.

    The cost of:
    Maintaining an inventory and a control system.
    Machinery and machinery maintenance.
    Watchmakers furniture/tools/accessories.
    Electricity/gas/water.
    Building atmosphere control.
    Consumables (cleaning fluids, lubricants, wipes etc).
    Employees (Wages/superannuation/medical).
    Packaging (watch boxes/cushions/instruction manuals/hang tags).
    Packaging for transport from the factory.
    Shipping costs.
    Council or city land rates/taxes.
    National taxes.
    Advertising.

    Just a few things off the top of my head.
     
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  4. Dan S Jun 10, 2020

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    The market for an automatic watch is different than a quartz watch. Different people buying it, different competitors, etc. It has little to do with the the cost of manufacturing and more to do with the demand and the market. Adding up the cost to produce the watch is pretty much irrelevant.
     
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  5. MtV Jun 10, 2020

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    Thanks for your replies. I‘m aware of those points but didn’t mention them since most them (shipping, building maintenance, design etc) are true for both the ETA and the quartz movement in the watch. The finished product looks identical, except for the case back.

    Wages for example might be different thing. When you receive the automatic movement in one, is the assembly of the watch that much more complicated than the fitting of a quartz movement?
     
  6. MtV Jun 10, 2020

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    (sorry for the double post, didn’t see Dans reply in time)
    I wonder in what numbers the quartz ones are actually produced. They are not available officially and in about a year or regularly checking the common market places for watches it’s the first one I could find.
     
  7. gostang9 Jun 11, 2020

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  8. MtV Jun 11, 2020

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    gostang9 likes this.
  9. Donn Chambers Jun 11, 2020

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    Or the closely related Snob effect:

    https://en.wikipedia.org/wiki/Snob_effect

    We pay more for the word “Automatic” on the dial because we perceive it is “better” than a quartz movement, and more exclusive. It has nothing to do with the actual cost difference. In fact, one could argue that some watches with high-quality quartz movements in them are substantially better than the same watches with a pedestrian automatic movements (e.g., they are more accurate, which is really the most important aspect of a watch).
     
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  10. studeb Jun 11, 2020

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    If the automatic movement has a display back, there could be extra cost in finishing the movement for display. I presume the movement would be finished without gear train, so each one would have to come apart, be finished and go back together. Or does your 200 Euro 2824-2 come finished?