* Margin. A relatively low prestige Swiss brand (Tag) has stated they charge 3x bill of materials for their watches. The more exclusive the brand, the higher this number goes.
* Volume might be higher than you think. Popular Swiss models sell in the tens of thousands of units a year. Not bad if you’re charging four or five figures per unit.
* Consolidation. There’s a handful of actual parent companies for watch making that are responsible for most sells. Swatch, Citizen, Rolex. They share resources between each other.
* Common suppliers. Some movements are used in multiple brands, even across multiple parent companies. Sometimes a company will buy a movement, modify the movement, and completely rebrand it. This allows better economics of volume for the most complicated aspects of watches.
* Marketing works. There’s no practical reason to buy a $10k (or $40k) Rolex compared to a $25 Casio. There’s a reason James Bond wears expensive watches and that reason is product placement. Some watch conglomerates are publicly traded, so you can look at how much they spend on marketing.
* The fact that you haven’t heard of the brand is part of the point. If you’re wearing >$100k on your wrist you probably don’t want everyone to know. Even at this price point, it’s a highly liquid asset in some cities.
> There’s a reason James Bond wears expensive watches and that reason is product placement.
Only since Goldeneye when Omega started paying for product placement. Bond had worn Rolex since the original novels, which were written before their big pivot to luxury, so him wearing expensive Rolexes in later films was more of a historical accident. Rolex never actually paid a cent to appear on screen.
The novels always had a lot of wealth signaling from Bond. E.g. in 1953, he ate an avocado, which to British consumers at the time was virtually unknown.
Originally Bond wore a Submariner, which wasn't a wealth signal at a time- it wasn't a _cheap_ watch, but also not the choice of a wealthy person. The Submariner was originally a tool watch, used by naval infantry. The modern equivalent would be wearing a G-Shock DW5600 with a tuxedo. It hints that Bond is a military vet.
* Margin. A relatively low prestige Swiss brand (Tag) has stated they charge 3x bill of materials for their watches. The more exclusive the brand, the higher this number goes.
* Volume might be higher than you think. Popular Swiss models sell in the tens of thousands of units a year. Not bad if you’re charging four or five figures per unit.
* Consolidation. There’s a handful of actual parent companies for watch making that are responsible for most sells. Swatch, Citizen, Rolex. They share resources between each other.
* Common suppliers. Some movements are used in multiple brands, even across multiple parent companies. Sometimes a company will buy a movement, modify the movement, and completely rebrand it. This allows better economics of volume for the most complicated aspects of watches.
* Marketing works. There’s no practical reason to buy a $10k (or $40k) Rolex compared to a $25 Casio. There’s a reason James Bond wears expensive watches and that reason is product placement. Some watch conglomerates are publicly traded, so you can look at how much they spend on marketing.
* The fact that you haven’t heard of the brand is part of the point. If you’re wearing >$100k on your wrist you probably don’t want everyone to know. Even at this price point, it’s a highly liquid asset in some cities.