From collectors and enthusiasts to newcomers looking to purchase a first timepiece, finding a reasonable price point for a new (watch) investment is usually important. But is it always about spending the price on manufacturing costs for goods, or is it also a certain psychological prestige that comes with owning a new Rolex?
We can’t place value on sex appeal, but how can we at least confirm monetary value down the road? Here are a few reasons why we think investing in “luxury” watches is worth it, from a consumer perspective:
1. Lifetime Value Factor. Like we’ve mentioned in other articles, unlike other investments that may produce unstable returns over time, finely-made watches tend to retain value over time and stay at a relatively fixed price. If kept in good condition, you can generally retain your initial investment if and when you have to sell. Your next watch just may act as a suitable investment vehicle.
2. The “Status” Factor. Although we may not consciously admit this to ourselves, there is something notoriously alluring and “sexy” about buying a brand new watch to add to our collection. Just having the weight of the piece on your wrist can add a lot of psychological power to your day, be it professionally or socially. Unlike a lot of other status items we can invest in, the watch is one we can both integrate into our daily lives in a functional way and one we can admire for aesthetic beauty.
3. High Costs. There is some mystery about the manufacturing costs of goods within the high-end watch industry in general, but even the most zealous collectors spend quite a deal of time trying to figure out the game. We do know that a single Rolex takes a year to produce, and that every product is a testament to both its historical roots and paying respect to the integrity of detailing. While the manufacturing process may remain somewhat elusive to all of us, it’s also fair to say that it is quite labor-intensive and consuming to produce luxury timepieces.
4. Practicality/Use. A functional watch that acts as both a statement and investment can really stand the test of time, with good maintenance and repairs if and when needed. It’s definitely a longer-term investment that has years worth of practical and professional use attached to it.
5. Supply and Demand Factors. A lot of very high end watch manufacturers (i.e. Richard Mille) only produces about 4000-5000 watches per year, and there is often a shortage of watches for collectors who want (demand) them. As demand goes up and supply goes down, prices go up as well