How Much Does It Cost to Make a Watch?

Are you wondering how much it costs to make a watch? If YES, here are 6 factors that dictate how much it costs to make a watch.

Truth be told, this is a very difficult question to answer since it is more like asking various car makers how much a car costs to make. The answer will vary and depend on numerous factors, especially since the price range for a watch is much bigger due to the variety of parts used.

Each variant can make a big difference to the pricing. However, for watchmakers or those looking to create their own watch brand, it is the market orientation that has the final say.

For instance, if a watchmaker intends to target the middle-end market, they will have to use medium-quality watch parts and also provide a price within that range. But if it is high-end, they will have to opt for high-quality parts and of course, the price will be higher.

Notably, if you are looking to make your own watch brand, you can just let your manufacturer know your estimated target price, and they will come up with a solution for the parts to be used. A good number of new business owners make the mistake of always requesting a lower price.

Note that the risk of doing so is that your manufacturer can always find alternative materials to meet your target price without you knowing it.

Nonetheless, it is estimated that a nice watch will cost around $150-300 to make with a basic movement. The 10x mark-up from luxury brands can primarily be attributed to really good marketing. Rolex, for instance, will push a 200 percent or 300 percent mark-up to wholesalers.

And a wholesaler makes about 100 percent on mark-up as well. Therefore, a $7,500 watch costs under $4,000 to buy from Rolex direct, so Rolex may have $1,000-$1,250 in total manufacturing costs.

Factors that Influence the Cost of Making a Watch

Just like with most luxury products, there is a massive price difference in watches. A good number of well-made and intricate watches are quite expensive, and some are not. However, here are some of the factors that influence the price or cost of making a watch.

1. Design and Movement

Note that a watch movement, or caliber, is more or less the engine of a watch — the powerhouse that makes it and all of its functions work.

Indeed, watch movements are internal and control everything from the hands to every other complication like calendars and chronographs. Have it in mind that watch movements are not all created equal, in fact, quartz and chronograph are very different.

A chronograph watch is known to show the time of day as well as the intervals, just like a stopwatch. Meanwhile, a quartz watch leverages the vibration frequency of a quartz crystal subjected to electronic tension as its norm. Note that the complicated details involved in watchmaking are one of the reasons the price of a watch can vary from one product to another.

2. Materials

Also, note that the type of materials used can affect the final price. Different materials can be easier or more challenging for a watchmaker to handle. For instance, the 904L steel family used by Rolex is particularly resistant to corrosion and acquires an exceptional sheen when polished.

However, this steel is very challenging to use and it tends to slow down the production process and require a more skilled hand to work with it – all of which costs money.

The usage of the material, and how much goes to waste can also make a big difference. Some watches are made of solid gold. Some are made of plastic. Some have diamond-adorned bezels. Some watches are made with platinum, stainless steel, colored diamonds, or other gemstones.

Watches are made with fiber, rubber, ceramic, bronze, wood, real leather, faux leather, and everything in between. The price will vary greatly depending on the features of your watch.

3. Supply and Demand

Without a doubt, supply and demand are more or less something that every manufacturer will take into consideration when it comes to costing goods or products. Ideally, the fundamental principle of the more people wants a product, the more it will cost to acquire it, does not only apply to the materials you need but also to the cost of having the watch made.

For instance, if a factory is in high demand they may charge you more for the cost of production. Meanwhile, during their slow periods, there is more room to negotiate.

Have it in mind that a good number of watch-making factories have peaks and troughs in production due to the flow of work from existing customers and orders following a seasonal pattern. Nevertheless, by researching when the factories’ downtimes are, and by planning in advance to leverage this time rather than requesting products in peak time, you could negotiate significant savings.

4. Generations of Experience

Notably, the watch brands you have heard about must have really been around for that long — and notably for much longer. Some of the many historic brands like Seiko were established in 1882, Patek Philippe was established in 1839, and Breguet was established in 1775.

A good number of high-end brands have generations of experience and knowledge and employ highly trained watchmakers, ensuring each and every timepiece is perfectly crafted.

Have it in mind that it can take up to a whole year to make one watch. From putting together the detailed complications and every other step like hand-polished finishing, watchmakers do all these and more. A good number of watchmakers are highly trained and certified and typically have years of training and education under their belts.

Have it in mind that the unique work and time watchmakers infuse into every single step of the process influences the cost of the watch.

5. Location of Factory

Owing to certain factors like labor rates, energy costs, and infrastructure, the location of the factory can make a massive difference to the prices. For instance, if you want to manufacture in the UK, the ex-factory cost is going to be higher than lower-wage countries such as those in the Far East.

However, in most situations, the benefits of making locally outweigh the cost of importing a product. Even within the United States, certain places will be cheaper to manufacture in than others. For instance, wages in cities such as New York are higher, and your production price will reflect that.

6. Manufacturing Time

Have it in mind that the longer it takes to make something, the more it costs. Therefore, until you or a watchmaker have made the first sample, and worked out exactly how long it is going to take to make, you won’t be able to note the final price.

Most times, labor is the most expensive part of the cost of a product, particularly when it is made in cities or regions where wages are higher.

If you know how long something takes to make, and what the minimum wage is in the country you are making it in, it offers you an insight to work out if you are being realistic with your target price. Always remember, the manufacturer needs to add their profit and overheads to this price too.

Conclusion

Even with the prevalence of smartphones that easily display the time, watches continue to be popular. Notably, there remains a steady demand for high-end, luxury watches. However, there are numerous factors that go into watchmaking! And don’t forget, your budget is important when it comes to choosing a timepiece.