Luxury Watches and Pricing

If you’ve spent any time shopping for luxury watches or other designer timepieces, you might be a bit baffled by both their pricing and their availability.  Most consumer products are sold by pretty much anyone who is willing to sell them; after all, the manufacturer is in the business of selling merchandise, and the more people who are offering the product for sale, the greater the likelihood that the manufacturer will make sales, and thus, profits.  As a rule, when it comes to retailing, more is better, which is why so many manufacturers are interested in having large retailers such as Wal-Mart or Amazon carrying their product for sale.  Greater visibility equals greater sales.

Chanel watches - Tourbillon VolanteThere’s a flipside to that, however, and that’s the fact that greater visibility also means greater competition, which means lower prices.  The retail business can be a brutal one, especially around the holidays.  Everyone is trying to make a sale, and generally, if I’m making a sale of Item A, then it means you’re not making a sale of that same item.  Many manufacturers don’t like seeing price wars when it comes to their products, and that’s particularly true of makers of luxury watches.  These are high quality products and the public needs to understand that.  Companies don’t like to see their products on sale or heavily discounted, as it can give the public that the products are cheap.

Because of this, many makers of luxury goods, and particularly those who make luxury watches, try to control not only who sells their products, but they also try to control the prices for which those products are sold.   Many luxury watchmakers such as Rolex or Chanel have agreements with a limited number of retailers who agree to work in the capacity of an “authorized retailer.”  For that, they’re allowed to advertise that they carry the brand, but they also have to sell the products under the terms dictated by the manufacturer.  This usually means selling for the manufacturer’s suggested retail price (MSRP) or the minimum advertised price (MAP).

This can be frustrating for buyers, especially in the modern era, when people are accustomed to being able to shop online and buy just about anything, anywhere, at any time.  It’s equally frustrating if you’re accustomed to being able to shop around to get the best price.  If you’re trying to buy certain brands online, you’re going to find that they’re largely unavailable, and that’s because of a number of factors:

seiko watches - men's le grand sportPrestige – Some brands offer products that they feel are truly special, and they want their customers to feel that they, too, are special for buying and owning those products.  If you’re going to spend $50,000 on a luxury watch, they reason, you shouldn’t be purchasing it from some mass-retailer that’s simply going to throw it in a box and mail it to you.  The company feels that for your investment, you should buy the watch, in person, from a salesperson who is going to take the time to ensure that you’re buying the item that’s right for you, and that it has the features you want and that it fits you correctly, and that it doesn’t have any defects, and that you’re happy with it before you walk out the door.  They’re also likely to follow up after the sale and make sure you’re happy with the purchase a few weeks later and they’re going to be available for you if you have any sorts of problems with it and they’ll be there to help you when the watch needs to be serviced.  Luxury watchmakers feel that this entire process if part of being an owner of their brand.

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Brand protection – If you’re selling expensive luxury watches, you rightly want the public to regard your product as something special, and not as some common commodity that they could buy just anywhere.  There are many inexpensive designer watches, and they have their place in the market.  But if you’re buying a watch from U-Boat or Hublot, you’re buying an upscale piece of luxury, and the manufacturers are emphatic that their products are limited, exclusive, and not simply common commodities.  They are scarce, or even, in the case of Patek Philippe watches, rare, and the company likes it that way.  They don’t want their products to be the sorts of things you see every day at the mall, because they don’t want you to think, in any way, that their products are common.  They are extraordinary, and for that, you’re going to have to go to a dealer.

Pricing – With the above, the pricing must remain inflexible.  Cartier and Rolex are above price wars; they regard each of their products as having a specific and unchanging price in the marketplace.  A watch from one of these companies is something you choose to buy; it’s not something on which you negotiate the price.  You can either afford one or you cannot, but the price is the price.  When you buy one and you’re showing it off to family and friends, they’ll be discussing what you bought, rather than how much you paid for it.  It’s not about the price; it’s about the brand.

Patek Philippe watches - men's white gold complicationsAll of the above is fine for most buyers.  But the fact remains that some people are frugal, even when they’re buying luxury goods that they can well afford.  It also turns out that it is possible to buy luxury watches at a discount, though not “officially.”  Many retailers are “unofficial” dealers of some of these exclusive brands, and while they cannot advertise that they are official dealers of these brands, nor can they offer the manufacturer’s warranty, they can and do sell these luxury watches at a discount.  Where do they get them?  They get them from a variety of means, including buying them from authorized dealers, picking them up from companies that are going out of business and through other such means.  They’re legitimate retailers, and the products they sell are genuine, but they often can sell these luxury brands, including Rolex and Patek Philippe and Hublot and others at a discount off of the prices you’d pay at an authorized dealer.  For savvy shoppers, buying luxury watches online at a discount can be quite appealing.  If that’s the case, you might want to look around a bit.

Click here to shop for luxury watches at Amazon.