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Watch Material Cost

In Response To: I think you need to roll some of all of the above ()

I have may doubts about this information. What would you have to retool with a CNC machine? Most of the fabrication steps in making a watch case are machining. There is no expensive tool steel die as in drawing or forging. The statement that you can't recycle gold is completely wrong. If anyone disagrees, please send me your worthless, oil soaked gold shavings and I'll take them off your hands. If you heated the mixture, the oil would evaporate and the gold would melt. Where's the problem?

Here's my read on this. Its all about elasticity of demand for luxury products and has nothing to do with costs. The reason that the prices seem outrageous is because they are, at least in terms of cost. If you think of a spectrum with commodities at one end and highly differentiated products at the other, watches fall somewhere in between. As products go, its hardly as unique as say a patented drug. Movements are somewhat standard (lots of watches have the 7750 for example). Ok so they do some finishing. As differentiation goes, I'd say that amounts to "somewhat differentiated." As to whether small differences are worth thousands of dollars, that only has individual answers.

Here's my take: - Omega is a name you know -
: costs more (read Anna's dough, etc...)

: - Omega stands behind their product (warranty
: costs - they have to be a higher share of
: the price with precious metal - if you need
: a new case under warranty, etc...)

: - number produced - economy of scale - If I
: make 1 million in steel and have to re-tool
: to make 1,000 in gold - you have to pony up
: for the costs

: - scrap - gold scrap is big money - and no it
: cant be recycled - not by the case maker -
: has contamination in it - oil, etc...

: - exclusiveness (is that a word) - this goes to
: Derek's comments as well

: JM2C