Despite the pandemic, some luxury items continue to do quite well. Which we illustrated in yesterday’s discussion of a $69 million crypto art sale. Now, we turn to the more well-entrenched case of designing and pricing luxury watches.
If the topic of pricing interests you, then check this article out. Choosing and Employing the Right Pricing Techniques. And here are some others with good pricing material:
- A Pricing Primer from Pragmatic Institute
- Value Creation and Pricing
- Is the New iPhone 12 Worth the Hype?
- Marketing High-End Sneakers
- Designing a Better Pricing Strategy
- Psychology and Pricing
A Unique Case Study: Designing and Pricing Luxury Watches
As with upper-end autos, luxury watch prices relate to three different factors. (1) Functionality and physicality — based on such features as accuracy, functions provided, and materials used. (2) Prestige — the level of status conferred. (3) Collectability — which conveys a higher value over time. These factors each take into account the design/style.
Check out these stories about luxury watches. Then, view the view video clips.
Price Lining and Watches
Price lining is a very useful strategy. With it, a price floor and a price ceiling are set for each product category you sell, and then selected price points are set within the range.
For example, an inexpensive watch would sell for less than $50. In that price range, Trend Spotter rates the Timex Men’s Weekender watch very highly: “The Timex Weekender collection was designed with one thing in mind: the freedom to choose. The end result is a versatile and timeless piece that effortlessly takes you from your 9-5 to the weekend.”
Primer Magazine cites “the best watch brand for your budget.” Ranging from $30 to $30,0000. And some expensive watches sell for even more. According to Benjamin Clymer, founder and CEO of the luxury watch publication Hodinkee, these represent excellent examples of watches at different price points:
- Less than $500 — any Seiko
- Around $1,000 — Vintage Universal Geneve Polerouter or any vintage Tissot
- $2,000 — $3,000 — Any Tudor, any Nomos, or a vintage Omega
- Around $5,000 — Rolex Oyster Perpetual or Omega Speedmaster Professional
- $7,000-$8,000 — IWC Portugieser
- $12,000 — Daytona or ceramic-bezel Omega Speedmaster
- $15,000 — Jaeger-LeCoultre, or A. Lange & Sohne, or a secondhand Patek Philippe
- $20,000 — Jaeger-LeCoultre Master Ultra Thin Perpetual
- $50,000 — Vacheron Constantin Cornes De Vache or any A. Lange & Sohne Chronograph
- >$100,000 — Patek Phillippe tourbillon or vintage
What Makes a Luxury Watch
Due to their upscale design features, luxury watches are more valuable. Luxury Watches Guide describes 10 features that a “luxury” watch typically includes. Such as these three design elements:
- Some of the best watch brands make their own movements ‘in-house’ which is seen as a badge of honor and offer and an extra level of exclusivity.
- The transparent front window of a watch is known as the ‘crystal’. And you’ll find the best and most expensive watches with a crystal made from ‘synthetic sapphire’. Which is a very scratch resistant material. A cheaper option is ‘mineral glass’ but go for synthetic sapphire crystal if you can afford it as it is more likely to survive a massive whack.
- The more expensive luxury watches will be made from precious metals like gold or platinum (generally pricier than gold). Of course, you do also get high-end luxury watches with leather straps. These tend to be lighter, which is some people’s preference.
To learn more, view this video.
Buying and Selling Luxury Watches
Luxury watch shoppers have various options. They may buy new watches or “vintage” watches (which dominate the collectible watch marketplace). They may shop with reputable retailers (online or offline), buy direct from the manufacturer, and also attend auctions — as with art. Likewise, luxury watch sellers have options. They may place a watch privately, sell it to a retailer, and sell it at an auction.
For both buyers and sellers, Chrono 24 provides a helpful Web site whereby you may check the worth of different watch models. [Pretty cool.] Sotheby’s, the well-known auction house, also offers services for both buyers and sellers.
Below, the video gives a nice synopsis regarding the design and pricing of luxury watches.