Sept 1 6% Price Hike real?

w@tcher

Hello,
Is this a rumour or formal information from the ADs?

Dedlock

I spoke to my AD sales rep today, he mentioned that they were under strict orders by the higher ups not to provide any discounts until the price hikes were implemented which he thought would come in affect towards the beginning or end of October.

He said the price hikes were due to

1) Increased cost of production
2) disruption in global material supply chains
3)Devaluation of currencies across the globe
4) Supply watch shortage due to factory operating at a lesser capacity.

he was informed that factory production and supply chain was disrupted earlier and this has reduced Omegas supply in certain lines of their watches

I cannot confirm of what he's saying is the truth but thought I'd share it here.

schoolboy

What country are you in?

Dedlock

I come from a small country in the middle east, and I'll leave it at that cause I dont want to get anybody in trouble.

schoolboy

Oh okay, I was just wondering if you’re in America.

Thanks!

scapa

It's real in Canada. Another bump of 200.00 on the FOIS to 6450.00, from 5850.00 as of April 30th this year.

SMP Diver 300 from 6200 on April 30th to CAD 7050.00 now. That's getting pretty pricy, IMO.

Moonwatch Pro goes to 6750.00, up 550.00 from April 30th (6200).

scapa

Perhaps, although given the worldwide casualties and misery caused by the pandemic, to single out one country for "compassionate" pricing while adding (for example) CAD 850.00 to the price of an SMP 300 Diver on steel seems a bit much. Seems more likely that these latest hikes are a response to currency fluctuations and market-specific pricing strategies.

I do think that Omega is taking a risk here, though -- the SMP that seemed a relatively good buy at 6k is expensive at 7k a few months later. I sure as heck would be looking elsewhere if I were a first-time buyer looking to get into Omega or simply a luxury diver at this point.

Archer

Well it actually is in the equation. In Canada much of the increase has been driven by exchange rates, which were impacted by the pandemic. The Canadian dollar weakened significantly in comparison toe the Swiss Franc.

Archer

I didn't say they did, but it's clearly a factor.

If you think these are bad, the price jumps in prices for Omega parts would make you faint...

Archer

Just for some context, Omega parts used to have a small yearly increase of a few percentage points. These always happened in the spring, and were I assume a reflection of general inflation and exchange rates. They were never terribly dramatic in my view, and often cheap parts were unaffected for years, so for example something like a spring bar stayed the same price through a number of years, because I assume it was too much trouble to tack on a small increase to something that only costs $1. But over time the increases built up and they jumped to $2. All this was pretty reasonable and understandable in my view.

In the last 2-3 years, these regular increases have mostly gone away, although one happened here not long ago They were replaced with specific parts jumping dramatically in price overnight, while others remained the same. When I say dramatically, I mean prices of parts doubled or more overnight, and in some extreme cases, I've seen the price of a part jump 4 times the previous price.

This changes things in a few ways. One is that parts like acrylic crystals, which were sort of a no brainer minor expense to change if they had even slight damage, can now comprise close to 20% of the total cost of a service if you change it. These increases have affected vintage watches more than modern, and for some vintage movements that aren't used in particularly collectible or valuable watches, it makes the cost of servicing them prohibitive unless it's a watch that has sentimental value. For me, not knowing when these price jumps will come and what parts it will affect, makes giving someone an estimated price for a service pretty difficult. If a part jumps from $69 to $265 overnight, as one chronograph wheel did, then how do I know what to tell people it will cost?

I do believe there is a specific strategy at play with regards to spare parts pricing, personally.

So do parts ever come down in price? Yes, but with the way pricing has changed, affecting specific parts more than broad overall pricing changes, it's harder to grasp. After one price increase where some parts jumped up dramatically, a few months later there seemed to be almost a correction of sorts, and some of them went down slightly, but then they went back up again later.

These are mostly watchmaker problems, but eventually will be watch collector problems. It's frustrating to say the least, and I've made my displeasure with this approach known, but of course the reply I get is that pricing is set by Switzerland, so the locals have nothing to do with it.

Cheers, Al

weimi1

If I understand my dealer correctly, Omega is now more or less dictating the prices. According to him, they are no longer allowed to give high discounts. On the other hand, he'll probably get his margin cut too. So big discounts are hard to come by. Omega wants to keep prices stable and fight the gray market.

C Craigtw

I went to an AD on Saturday. They wouldn’t give me anymore than 8% off a sapphire sandwich speedmaster. This is after the 6% increase.