Why is this watch so much more than that one?

[@jmmartin7766]

Love how you educate your fans without being condescending-- it is VERY much appreciated, because Ive learned a lot about watches from you. Thanks, Mark, for what you do!

[@DrBarrie3]

I agree totally....Mark has learnt me so much about watches

[@islandwatch]

Thank you and you are welcome.

[@Teromi]

a level if transparency you won’t see from most retailers. thank you

[@islandwatch]

Thanks

[@KakashiHatake-ou7mp]

1. One key pricing factor is brand value. When you wear a Rolex people would notice. Phoibos maybe not so much. That also is monetized since a lot of effort has gone into building the brand 2. Another thing would be R&D. A company like Seiko would be putting a lot of time and money into research which would not yield immediate revenue. That's something they'll have to compensate from elsewhere. Micro brands don't really need to do this for the most part since they simply use the technology readily available

[@bernardwadding]

Great points, great video Mark

[@redcapitalist]

When you wear a Rolex, people who really know about watches think you're a sucker. In the 1970s and 80s in Hong Kong, only low income old men, construction workers, drivers, blue collar workers and the like would wear Rolex. A testament to their marketing prowess to turn that around starting from 2000 but one fact remains - it is a cheap and poorly made watch and at present it's a mass manufactured product @ 1 million watches per annum. Anyone paying the prices they are charging is a sucker, plain and simple

[@puch7283]

Kakashi Hatake you arę right. It takes do many years to develop new inhouse movment. Those microbrads just buy ŚW/eta, they dont spend milions of $ on R&D

[@islandwatch]

Very true, thank you.

[@SA-hk8xj]

Mark, I agree 100% with this👍 I worked for a mom and pop jewelry store for five years and the watch industry slowly were cutting the retailer out by selling their products directly to consumers (on line or open their own watch store). The owner of our store finally would not carry any brand watch that would sell directly to consumers as he felt he was buying into a watch program that he couldn’t profit from while competing with the watch company stores themselves...wtf??? It’s not only watches, it was many things in the jewelry business. It got to the point customers were buying more online, but expected us to size, or repair their internet purchases. The owner had enough of not getting enough of his share of the pie, only crumbs, that he eventually closed his brick and mortar store, and hence, I was one of a few who also lost my job. It’s hard to compete with any product/brand that sells directly to consumers, as they can discount their own product, but the retailer is stuck with the original market price. My old boss always told me “who is going to service these products? The manufacturers sure can’t handle it in a timely manner, and retailers are sick of only servicing these higher ticket items for scraps?” Food for thought ;)

[@islandwatch]

Very true, thank you.

[@mtp1979]

That's a fair and honest explanation ! 👍

[@islandwatch]

Thanks.

[@leonidaslantz5249]

I just 'discovered ' Long Island Watches very recently and your customer service,honesty and integrity are so very refreshing. And your watch line is awesome in both quality and pricing.

[@wayneturner1336]

Being in business myself, and having to compete against my suppliers in the market, I know how challenging that can be. I do make an effort to buy local when it comes to watches and other items, especially this past year when everyone was struggling. I’m sure that will change as markets reopen. I do know that when I purchase products for my company going as direct as possible is ideal, in this case foodstuffs, and certainly easier when your a larger corporate entity. You can definitely see the built in costs as the items transition through suppliers; in one case the producer was being paid 0.16$/lb and by the time it went through all the brokers it had become a 4.50/lb item. Buying direct from the producer saved me an immediate 500k a year. Business is an interesting game to be in.

[@BarnOwl61]

If you think the American taxes are high... Try to get a Seiko from Japan to to EU.

[@jacopochiefjaco123]

Still though? There should be the free trade agreement enforced soon. Right?

[@michielroskam3877]

we dutch people are getting f###kked up the ####sss with these steep taxes...... i actually feel bad for my AD, i go there once a month, always got a new seiko on (bought online) and when he ask me how much i payed i say like 50% of your prices and i can see him tearing up inside.... AD got it rough boys, they stuck with overpriced dead stock

[@michielroskam3877]

@@jacopochiefjaco123 lets hope

[@puch7283]

In Poland thats 3% duty tax + 23% VAT tax. This kills for me every watch outside eu. It realy hurt me when i had to pay all taxes for my seiko alpinist. I want to buy sarx055 but no one in eu sells it, getting it from jp/usa is too much for me 😢

[@islandwatch]

I know!

[@jaymt1982]

I love this video! Iss it possible that you could discuss this topic more in depth talking about the quality of the finishing as well. I find that two divers can both be 200m WR, stainless steel and both have sapphire glass but will be vastly different in feel and finish. Are there tell tale signs that you look for that let you know that one watch is finished better and will last longer than another? With your vast experience handling watches it would be interesting to know what you think.

[@islandwatch]

Thanks for the idea. Will consider it.

[@edteach3r]

Well said, Marc. Keep it simple ... avoid dealing with distributors and shop from Long Island Watch. The customer service and back-up you receive are priceless.

[@islandwatch]

Thanks so much.

[@lx95020]

You are a gem brother..... Giving people an insight as to how this all works is extremely valuable.

[@pedrosaenz2800]

Very clear and good teaching!! Thank you.

[@islandwatch]

Thanks!

[@chrishunter9784]

It may be "the lowest hanging fruit", but the biggest reason for the price differences is micros use catalog cases (and dials, and hands), and sourced movements. Someone else has put in the time and effort to manufacture every single component of their watch for them, so they had no expense of a factory. Seiko, well... just the opposite. When you do things yourself and don't rent it out, of course common sense is going to tell you that overhead is priced into the product.

[@joshuawolfe8865]

Interesting video. I agree that the supply chain adds to the COST of the watch and the fewer players adding their margin along the way results in lower cost. However, the RESALE price of a watch is market driven by how much people are willing to pay. There is also a feedback loop that flows back up the supply chain based on the demand (price customers are willing to pay) too; if a particular watch is so popular it sells out regularly, the OEM raises the price to its supply chain partners. The supply chain, even holding their margins at the same percentage, further increases the final resale price to the end customer. As price increases, the quantity demanded decreases along the demand curve, supply increases along the supply curve, theoretically reaching equilibrium at some price where supply = demand. Of course, that's what text book economics tells us but we live with the Rolex's of the world and their marketing departments that appear to not be increasing supply to meet the demand so, what do I know?!

[@islandwatch]

Great feedback. I guess what I'm saying holds as long as the manufacturer wants a profit. I guess that always isn't the case.

[@ronjenkins4257]

The Internet disrupts traditional channel selling, cutting out traditional resellers and distributors. New distributors arise, or conflate the reseller and distributor into one (Amazon for example). For resellers to survive, they need to change their value add: Long Island Watch does this through education and curating product for end customers. Good work!

[@islandwatch]

You got it!

[@VersedNJ]

He's right, on the import, I ordered a Stowa, they only sell direct, they use Fedex, I pay for the watch and fedex s&H handling, unless I'm home to be able to sign for it, I have to goto the Fedex warehouse which isn't far. I sign they give me my shipment. In a few weeks I get a letter from Fedex for a bill for customs clearance and duties, usually around $20.00 and I pay it, done this twice, for an order of around $1000 and one for about $1300.00 the later was the first one I bought about 9 years ago, which was a slightly more expensive watch, and a weaker dollar at the time since it was Euro based. The second one the dollar was stronger and cost less. Still on both paid around $20 online to Fedex for their duties and handling. What is odd, if I get something from oversea's and it comes through the post office, I don't get hit with any fee's. But the $20 is worth it on an expensive product and how FesEx usually handles it.

[@islandwatch]

Watch those duties.

[@sleeperawake9818]

We as consumers also have to realize that in order to get the business you (retailer Long Island Watches) need to survive you have a budget for advertising and you have to consider in that in your markup. Which is why all my browsing has your advertising on the margins lol. Thanks Marc for your continuous education and honesty. Those facts make me want to buy from you rather than anyone else, even if someone else has better prices , I appreciate those traits in todays dog eat dog world and want to give you my business.

[@islandwatch]

Thank you!

[@Joe-lk6oc]

Don't forget the separate shipping costs between those entities you mentioned. Excellent and honest explanation Mark. Thank you for yet another good video.

[@islandwatch]

Right, good point.

[@KatanaSwordMaster61]

Hi Marc, very clear and concise explanation, love the videos you make!

[@islandwatch]

Thanks.

[@michaelidarecis]

There is also a manufacturer's rep who is not a distributor. With the rep you buy direct and get a better price than a distribution however a bigger commitment is usually necessary

[@murph8411]

The problem is you can often buy from manufacturers direct now and they haven’t dropped their prices in general. Customs and taxes don’t account for price differences in different markets either in a lot of cases. You can often find things much cheaper when buying from the USA compared to the U.K. even when you factor in the taxes, duty, postage and handling fees we are charged for them asking us for tax in the U.K. This even holds true for some U.K. made items that are being shipped abroad and then back again and for items bought from our European neighbours. The U.K. has always been a bit of a captive market whereas a lot of our European neighbours could cross borders or have things delivered across borders in Europe much more easily. Given that many manufacturers don’t have to pay overheads for actual stores and can sell directly over the internet to the customer you’d think this would have driven prices down but they seem to have increased in recent years if anything.

[@GSM007G]

Perfect... Explanations of Sales & Marketing....Marcus!!!

[@roberts.4582]

Glad to see this video. Not sure why people would expect a Seiko to be priced like a Phoibos -- much less gripe about it. The economics of large brands and micro-brands are entirely different. Only watch-geeks buy micro-brand watches, because doing so requires a special combination of knowledge and, frankly, obsessiveness. I sincerely doubt that the folks at Seiko lose a drop of sleep over cottage-industry watch companies.

[@islandwatch]

Right on, thanks for commenting.

[@gilliebrand]

Loving the picture in the background.

[@markcoveryourassets]

I’m totally with you on that. A big improvement over the Seiko? poster. You can tell how observant I am.

[@islandwatch]

I've got a few!

[@MikeAustin2012]

Mr Plankman is right. I also thought taxes in the US were high. I knew taxes in Switzerland are 50% I just found out that they are 49% in Aussie land. However. I guess this video is / was necessary but, I am more interested in why a good watch, say a $1000 to $2000 watch compared to Not so much hand made Patek Philippe but Rolex and others that now use automation and produce what 100k to millions.of pieces at $10k to $20k average price per unit. Not to put YOU on the spot, just saying

[@islandwatch]

Thanks for the topic idea :)

[@rmoraespinto]

I totally agree that there is a lot of effort put in brand-building; and that Rolex, for example, whants to recover the costs associated to BB and works hard to keep the prices of their watches up, as this is also a sign of high value (and they strive to have this situation continue forever). As a consumer, and as I do not need a watch to work for me as a symbol of status, I would always prefer to buy a reasonably priced watch, that works fine, and dresses well (to my taste, of course). As usual, I believe that your videos are enlightening and work to your clients benefit. You deserve your margin, Mark. Thank you!

[@islandwatch]

Thanks for the great feedback

[@paulbrady701]

Hi Mark I just want you to know that I appreciate you taking the time and effort to educate us .Wishing you much success.👍🏻

[@islandwatch]

Thank you.

[@mkmpotterytools410]

Mark, thank you for your insight into pricing. Very helpful. But customers should not forget the myriad of other reasons for price differences. For instance, these are fashion items with the oftentimes strange and wildly fluctuating prices of that market. Also, new technologies, innovation, and features can command a higher price. And then there is the issue of quality materials, quality components, quality finishing, and quality control. Each of these incremental price differences multiplied along the keystone pricing structure you mentioned adds up to quite a difference. And, of course, much of the price of a watch can be hidden inside a pretty (or less pretty) exterior. Very low quality components can be hidden by a sweet look, and similarly, exquisite components, materials, and manufacturing can be hidden by a sometimes plain exterior. Love your many clear explanations of things. And I have enjoyed your online store many times! Keep it up!

[@islandwatch]

True, thank you for sharing.

[@bubbab7792]

Nice video Marc, great educational/tutorial lesson for us. Thank you. 👍

[@islandwatch]

Thank you

[@TheMNbassHunter]

I don't have any issue with each person in the chain making a profit from the sale of the watch, but that's only if they are also adding some value in the process. What value are the distributors and retailers providing over just buying from the supplier direct? This was easier to explain prior to the internet. Retailers had the inventory and physical stores a person could visit. Now, with the ability to buy online from anywhere in the world it is harder to see the value not buying direct.

[@robero11]

Always informative. What I really like is that your clock on the wall actually runs!!

[@islandwatch]

Haha, thank you

[@Itschunks]

Mind if I asked where did you get that wall clock in the background?

[@thenexthobby]

I agree Marc, distribution is its own animal, and one not often understood by consumers. Manufacturers are traditionally "best" at making and then parking product on a dock. Distribution is an entirely different skillset, often specialized to the extent they are good at dealing with makers and resellers ... but not consumers. Hence the 3 tier model ... not always needed, surely not always loved (just ask anyone in the craft beer industry) but insanely helpful where and when beneficial. The corollary to this is that a company like Phoibos _cannot_ ever become a Seiko without a miracle. And that's probably OK.

[@WINDINGCROWNS]

Great insight on behind the scenes. Btw that blue oem seiko rubber strap I bought from you looks great on my srpa 21!!!! Thanks Marc.

[@islandwatch]

Awesome, thank you!

[@weekendoverlanding9946]

As someone who works in another luxury industry (retail side) I completely understand and wish more people (clients) also did. I just had a client think he was going to negotiate a 40%+ discount on a $60k purchase. People can be unrealistic.

[@islandwatch]

LOL, I've seen similar!

[@barrettwbenton]

Well-done, Marc: I knew a few of the points you made here, but certainly not all of them. Clears up a lot of things, so thanks (again)!

[@maverickbonato8164]

Thank you so much, I thought it would be something like that but it's now clear as water. Great job really.

[@markcoveryourassets]

Wrist check! Wrist check! Thank you for the transparency. I look at the increases at each level as the cost of distribution. The local retailer is there to support after the purchase, help with purchase decision making, knows what to order for their clientele. There is a lot of value in NOT having to do that as a manufacturer or wholesaler. Distributor/wholesaler/mfr’s rep knows how to get the goods into the country and beats the pavement to find and maintain good retailers who will sell their offering and add value to the brand. That’s something a Swiss or Japanese or other foreign to USA company doesn’t have the expertise in or time to spend building that internally for the USA. I was looking into EPOS and Cyma watches today and realized that their focus is the Asian markets. Can’t find them in the US except resale. I wonder how much distribution costs played into that decision. And one of the terrifying things about being a retailer: I had a client who owned a small camera store whose distinction was spending a lot of time with their customers to help them get and then learn to use their cameras. They had to, because Nikons on Amazon were offered for less at retail than my retailer friend could buy them at wholesale. They are closed now, and we have just one brick and mortar “real” camera store that I know of in a city of 4 million. I do think that many people still want to deal with real people who care and with whom they can feel some kind of belonging. This is where Marc gets to shine because of his business ethics, retailer genes, joy in his product, and willingness to communicate all this without always selling in his telling. Thank you, Marc.

[@islandwatch]

Thanks for your awesome feedback.

[@ClarenceKansas]

That all being said. I'd rather pay a bit extra to help out small businesses like yourself rather than Amazon. Even though long island is a long ways from Kansas.

[@islandwatch]

Thank you.

[@DrBarrie3]

Thank you Mark for a very interesting explanation of this whole pricing system

[@islandwatch]

You are welcome.

[@doofy28]

Mark thank you for your opinion. I would of suggested Seiko raise there prices at a more reasonable rate. Doubling prices in such a short time is upsetting their customer base. I am also an online retailer. If I raise prices that quickly some customers complain.

[@islandwatch]

They have something in mind. We shall see.

[@romani5881]

I love honest, straight talk. Thank you sir

[@islandwatch]

You are welcome

[@randynovick7972]

I mean, yeah, those are all the fundamental elements of watch pricing, but there's also the intangibles. When you pay for a Rolex, sure, you're paying for the marketing and the advertising, but you are also paying for the intangible perception of exclusivity in owning a Rolex. You're not just buying the watch that will keep time to 2 seconds a day, but you're buying what a Rolex says about you, the buyer. Luxury goods are strange things, in a way, because all the drivers of making a profit tend to align with cost-cutting, but significant price elevation places a brand in a certain category of exclusivity. Rolex isn't a great example of this, admittedly, because they also develop and manufacture in-house and they actually have tangible exclusivity they can price for. We see this in present day fashion watches that are no different from any $20 Cadisen (sometimes literally) in terms of materials, design, technology, or quality of manufacture, but they sell for twenty times that because a Kardashian snapped a wrist-selfie while wearing one. It's not the same price point as a Rolex, but the markup on the intangibles is the same.

[@islandwatch]

Marketing is a whole different game.

[@jefferyneu3915]

Thank you Marc, people need to be a little more understanding. Then they would understand what good values you bring us! Keep on keepin’ on!😍

[@islandwatch]

Thank you.

[@zinvas78]

There might be noble exceptions, but I don't think watch manufacturers are as diligent in their pricing as you were in your example. My bet would be forget about applying margin/markup to production cost, instead just position the product within the desired market brackets and then adjust the price so that it's just below ridiculous (if they're any decent, that is; if they're not, outright or beyond ridiculous will do fine). :D

[@TheChadWork2001]

Good information Mark. Thanks.

[@jmand63]

Most traditional and independent brick & mortar retailers are under growing and increasing pressure nowadays. Customers are better informed than ever about the watch models they want to purchase, therefore they often already know the product before entering the shop and if yes or no they can negotiate a discount from the tag price. Big & famous brands always demand more investment participation (from retailers) in expensive marketing & promotion, costly sales events and sales & service seminars. Retailers are asked (e.g. with Rolex, Cartier etc...) to buy all their collections' range including slow moving elder articles to get the possibility of getting a few hot selling items highly advertised during Watch Shows (Baselworld, SIHH etc..) which are often on waiting lists. Independent traditional brick & mortar retailers face a new kind of disturbing competition from all sides (e-business, fast emerging second hand market well controlled by serious & certified brands' partners, brands' own gorgeous boutiques being delivered in priority with exclusive models and limited editions usually located in the same luxury shopping streets as where "classic" retailers are. In addition to that, let's not forget the grey market (inventories sold through unofficial retailers and channels with large discount because of cutting short sales channels without marketing investment), fakes/copies and half fakes (copy watches with an excellent finish made totally or partially with original spare parts). Expensive fakes are often made of precious materials and quality components without original movements, for instance. An expensive Rolex or other expensive brands might be equipped with a perfectly working Swiss ETA or Seiko or Miyota movement for years without trouble. With automation and "democratization" of tooling (e.g. in China), it allows to copy quicker and better. It needs some time to detect the cheat even by the genuine brands' watchmakers. A customer should always buy from trusted and official distributors and certified retailers. Not hoping "to get the deal of the century" by buying their watch much cheaper than its real [market] price. "Good fakes" are made by illegal & well structured organizations (Mafia Groups) which make a lot of money with a minor investment. Another important point which happened recently; famous brands are willing to avoid massive grey market supply (because soon or later distributors and retailers need to "clear their stock") by buying back large inventories to simply destroy them, write them off, pull them out of the market. Last year, the Richemont Group (Cartier, IWC, Vacheron Constantin, Piaget etc....) bought back more than USD 500 mio worldwide to "clean up" their sales channels. It was reported in the media because Richemont is a shareholding company which had to amortize heavily and to communicate publicly the financial consequences on results (bottom line). However, it is reasonable to think that many other brands have done just the same. However, they did not need to report it because they are family owned (single shareholder) companies or structures which benefit from another corporate & legal status. In the past, brick & mortar traditional retailers had a quiet and much profitable "road in front of them" (keystone principle). Nowadays, worldwide, their situation has become an uncertain mountainous rocky path..... Like any other commodities, goods or services.

[@rayray..3349]

A Big Thank u Marc..!🙏😎

[@Br0ns0n]

This a "Watch & Learn" episode that everyone should watch.

[@operasinger2126]

Thanks for spilling the beans, Marc. Now I would like to buy direct from manufacturer. But don't want to buy major volume.

[@islandwatch]

There's the issue.

[@operasinger2126]

@@islandwatch lol.

[@sarahconner9433]

In general it's a 1/3 to 1/3 or 1/4 to 1/4.... Manufacturer makes for $33 sells to dealer $66 dealer to customer $100...

[@VictoriaStobbie]

Should by from MVMT or Vincero they cut out the middle man, which means lower prices. Just fucking with you of course.

[@lion5352-z1s]

Seiko prices have been becoming very expensive lately

[@islandwatch]

They have.

[@clk25120]

Research, design and lower volume per model could be a factor in increasing costs. Car, phones, watches etc. nowadays have shorter life span, so costs per model will increase too.

[@FT4Freedom]

They have also experienced a huge jump in brand recognition over the past 20 years. The only problem is they didn't amortize that amount into annual price increases. They lobbed it on heavy in 2018 and that really burned their following. Plus they retain a low QC. Which is salt in the wound.

[@jeanlefranc3817]

Good video. Bottom line, the one entity always taking a fat slice from the customers pocket is the Tax Office !

[@islandwatch]

Haha, that is true!

[@watertightwatchco4810]

Mark we absolutely love your detailed breakdowns brother, pleeeeeease keep them coming. Cheers! ❤️⌚🍻

[@josephkatusich2551]

Well said Marc as always 👍🏼thank you.

[@b.p.stimemachines2327]

dude I have ordered so many Orient watches from you and others that's amazing I didn't realize it until after I have to fall asleep watching a video about you the Orient sporty red beautiful watch beautiful as classy as anything there is they're definitely a hidden Jewel amongst watch enthusiasts in-house movements what could go wrong. Oh Orient is a subsidiary of Seiko now but still maintain their factory and their proprietary movements

[@josevasquez1781]

The three tier system has been around for years it's the American way that's why everything is so expensive and of course greed. I learned this way back in junior high. I recommend everyone to build a relationship with local dealers so one can benefit from a 10-30% discount and in the event that you want to upgrade or have an issue the dealer will always put you first and treat you like family. I learned the hard way now I have dealers who are my buddies fur real. I'm Into more expensive watches and it really matters where you get your watch from.

[@mikcsa]

Not to mention penetration pricing: new market entrants (ie microbrands) wanting to build up a following might decide to offer their goods at a lower price, foregoing short term profits for a sizeable customer base who will be willing to buy their products at a potentially higher price later on.

[@islandwatch]

Correct. Nice one.

[@donp2166]

In that 3 tirr system, most wholesalers who also sold direct to public at least did so at suggested retail price....so as not to undercut and have a very unhappy retail network.

[@islandwatch]

Right, but not anymore it seems.

[@donp2166]

@@islandwatch I agree. Sales distribution is all over the board today. Lots of direct-to-consumer sales.

[@bobalouie2413]

Educational and transparent..... Another great video!!

[@islandwatch]

Many thanks!

[@kennethgibson3296]

That is a good explanation without affending anybody but it is so true greed does play a big part in the watch industry and also the big name brands with high quality and a lot of jewels you pay more to like Rolex Patek FP Jorge but there’s no way your average American be able to afford those just sayin good video very well put sir..

[@danr1920]

Lets use Orient. If Orient sells them direct to you, they will have the same basic set up as the distribitor, they will need to mark it up like the independent distributor. The cost of selling direct to me from Japan would be also expensive to do.

[@rbmwiv]

Back in the day there was a seiko wholesale store and I picked up some nice watches for a lot less than retail. Still in my collection. All but 1 I just sold for a profit.

[@ouzaloid]

So bottom line is: buy the cheapest because the difference of price goes only to logistics and marketing and CEOs astronomic salaries, not to quality. Thanks for the advice

[@lenpowell6647]

Hiya, very good vid and all common sense that applies to anything we buy.The rich guys will always be the wholesalers or distributors as you call them.They don't care what they wholesale as such but buy and sell in as higher quantity as possible.Typically a holding company of sorts. They shift watches to washing machines to carpets. Old school making of rich men. Cheers,GG.

[@islandwatch]

Thanks Len!

[@rickewilde]

I hear you,and completly understand where the micro brands and entry level watches are concerned,but it's not relative to the manufacture costs where the big brands are concerned.that is pure extortion throughout the chain I am sure.big brands just know that they can command ridiculously high prices because people pay it.

[@Mythicregard]

Please look up the definition of extortion.

[@rickewilde]

@@Mythicregard fair enough,I will rephrase "the prices are extortionate"

[@Mythicregard]

@@rickewilde A bit hyperbolic, but I'll accept.

[@TARS..]

Incredibly educational as always!

[@islandwatch]

Thanks.

[@michaelskinner896]

Thanks Marc! Insightful and informative video.

[@michaelskinner896]

@Mr. Shlock Assuming you have extensive knowledge of the watch industry and have run your own watch retail business, please explain or otherwise detail your rationale.

[@dipsyfriday]

Great video! Could you please explain the pricing on the new quartz Timex "American Documents" that they're trying to sell for $495 on their website!!! Painted dial, no lume and a $25 Swiss quartz movement. They'll be lucky to sell 200 of those.

[@deyudeyu505]

That's what they're selling Made in america And Box made out of wood

[@switzknight]

dipsyfriday Timex had some success with the Marlin reissue both automatic and manual. The Marlin being the first mechanical timex in almost 40 years. Looks to me they got greedy. The new line of American documents ... 500$ for a cheap Swiss quartz movement, 30m water resist, plastic crystal and so on. Greed. They go against the market. I had an original timex mechanical from the 80’s, and I bought a Marlin from Mark and I am happy with it.. 199 was a fair price even if it was nearly 10x the price I paid back in the time. They are missing the target now. Too bad, they could do great things at affordable prices if they just set that for a goal. We will see what happens next.

[@MrDoggerDog]

@@deyudeyu505 What this guy said. Variable costs on US direct labor are significantly higher than overseas, and getting worse in today's "trickle up economics" with artificially high wage hikes. Moreover, sourcing parts to the US adds up quickly, so ultimately it's a high price on covering both labor and materials...

[@islandwatch]

US labor kills it.

[@nevahenuf]

I can’t speak with authority but I’ve been considering a Vaer watch that is USA assembled. Certainly a more tasteful and affordable alternative to Shinola and Timex’s American Documents.

[@evkoum]

Thanks for being franc !

[@wannabetechnician7451]

this just COULD be a Watch and Learn

[@islandwatch]

Could be.

[@eliransabak1447]

Can you feature the new Orient star standard re-au0004b00b? It's a new sarb033 competitor that many people would buy

[@bernardwadding]

b00b? Tee hee

[@eliransabak1447]

@@bernardwadding I just noticed that and i can't unsee it

[@bernardwadding]

Just messing around, just looked it up, it's a lovely watch. I think I prefer the white / cream dial version. I also really like this ORIENT STAR RE-AW0004S. I'm very close to pulling the trigger on a sarx033. I'm calling myself a "watch collector" but I think it's some kind of illness

[@MrDoggerDog]

@@bernardwadding I think Orient is up to something... I almost bought the FAG03001D0...

[@korbendallas9722]

Hey Marc any idea on the next batch of Phoibos divers?

[@islandwatch]

Week or two.

[@JettyLife23]

Ugh I want that py007c so bad... Cash has been burning a hole in my pocket for months!

[@bogrot69]

@@JettyLife23 I have the Wave Master and Reef Master both incredible watches at that price. Great brand

[@michaelskinner896]

Yes, same here. Waiting for it to come in!

[@JettyLife23]

@@michaelskinner896 ordered mine today with my 5% off first purchase code! Pretty excited for it to come.

[@fluffyfreak505]

What's the deal with Seiko, the price on their website, and some retailers is say 600, but you or eBay has it for 400, where does that come from?

[@islandwatch]

MSRP

[@daa3417]

Some products at some times always sell below msrp while others always sell above msrp. As an alternative example firearms for quite a long time now have had ‘street prices’ below the msrp.

[@beachedbum8682]

So if its all the distributor and retailers fault then Seiko should be selling direct to consumers from their website at 75% below MSRP.....which they don't.🤔

[@islandwatch]

No, they are taking more profit for themselves.

[@beachedbum8682]

@@islandwatch BINGO!

[@wlnmn7217]

I appreciate your video series. However, I think this one is little too simplistic for today's market. This explanation follows venerated, bricks and mortar retailing. But the product's path to consumer is vastly more variable in today's e-commerce world. What bothers me is when a manufacturer tries to upscale a product into a much higher price range on cosmetic changes. Seiko did this recently with a new Turtle variant. $800 for a sapphire crystal, ceramic bezel, and modified dial and bezel textures. I paid less than $250 for my Pepsi Turtle in late 2016. My baby tuna was also less than $250 way back when... both from overseas sellers, granted. The new Baby Tuna variants (4R36 automatics) are very beautiful watches, but they're selling in the $600-$700 range now, based on purely cosmetic changes. The new Sumo is over $800 for essentially the same watch. I'm not suggesting there aren't still good values in the Seiko line. But recent price hikes on popular models seem like blatant profiteering. Maybe Seiko feels that shifting income levels require a more profit over volume strategy? I still love Seiko. But price hikes of nearly double or triple based on cosmetic changes are in the theater of the absurd. Seiko has strong competition...

[@rotorwind177]

Same thing is happening with bikes. Direct to consumer. Straight from the manufacturer. Unfortunately killing a lot of small bike shops.

[@islandwatch]

For sure. It's a shame for the smaller guys.

[@grijsje]

Research & Development play an extra role. The higher the investment in applied technology, the more it adds to the cost price per unit. Thus for example a watch with new technology in it tends to have a higher retail price. Sometimes the applied technology can be so unique to a manufacturer that even if the technology is old, it still demands a mark-up.

[@MrDoggerDog]

This assumes a direct allocation of G&A overhead, which nearly nobody does. Also don't forget that a lot of companies have "loss leaders," with the sole purpose of funding a competitive edge against other players in the market. They'll gladly take a nominal loss on product A if it means huge profits on accessory B or product C. It's all about the mix.

[@islandwatch]

Sure, R and D is a large expense. I'd say marketing is even higher.

[@jmdudley3859]

Thank you Mark ! Most interesting information ! Cheers.

[@islandwatch]

You are welcome

[@JohnClarkW]

I love my Phoibos, mostly because it was so reasonably priced, but I have read that they really won't do a return for misaligned bezels and chapter rings. So with Seiko and Orient, some of what you are paying for is those returns. Just like part of what you pay for with the big boys like Omega or Tudor is the QC that Seiko doesn't always get right. I don't know that all watches are worth their price tags, but most have legitimate reasons behind them.

[@islandwatch]

You have to always take a product back if a customer is unhappy.

[@JohnClarkW]

@@islandwatch I agree, but you take care of your customers. Apparently, their own direct sales aren't quite up to your standards.

[@GenWivern2]

As interesting and enlightening as ever, thank you Marc. There's a related discussion to be had about how - ahem - certain companies have managed to stretch the price to objective value ratio, but I see that's well under way below.

[@islandwatch]

True, thank you.

[@MrTimstaaa]

Hi Marc. Great info for the general population.

[@islandwatch]

Thank you.

[@TWG911]

Awesome video, Marc! Hope all is well, buddy.

[@islandwatch]

:-)

[@Sergeant_Fury]

What about supply and demand? Is Rolex restricting supply to drive up prices, or is there a bottleneck in their supply chain? Could you talk about the drop-ship phenomenon?

[@rowdyron4111]

So the conclusion is to buy a Phoibos? :)

[@islandwatch]

Lol

[@anonimushbosh]

Marc, this leads me to a delicate question I keep meaning to email you about. Correct me if I'm wrong but if I ordered a watch from you to be shipped to the UK I would need to pay your retail price, which includes US sales tax, plus an additional 20% vat at my end (plus a tiny fee for duty - if anyone's curious look up trade tariffs on www.gov.uk). But because you would be exporting the watch could I buy it from you without paying local taxes, so that I only pay tax once? For comparison, a UK watch retailer could sell a watch without including sales tax (20% vat) provided the watch was not destined for the EU.

[@islandwatch]

We do not have VAT in the USA. But for export, there is no tax either. So you are only paying your VAT. Same as anything you would purchase outside EU.

[@anonimushbosh]

@@islandwatch Thank you. I was still confused so did a little digging. I'd forgotten that US sales tax is payable by 'everyone'. A UK retailer could charge you £1000 for a £1200 watch because you'd be exempt from our 20% sales tax. The downside is more paperwork for the retailer - swings & roundabouts!

[@thestig007]

Basic business! I guess some people need this explained to them. But I grew up in a household where my father owned his own business.

[@islandwatch]

That's a great upbringing.

[@williamparker2922]

This kinda was gone over in the movie American Gangster... Buy directly from the manufacturer.

[@harperblackson4688]

MVMT watch doesn't have any middle man they said! No distributor no retailer mark up price. So they raise up the price by themselves.

[@Twin_solo_az]

I'm looking at a watch on eBay for $445 that I can't find for less than $750 anywhere else.

[@MrDoggerDog]

Well Marc, it sounds like business as usual at Kramerica Industries...

[@islandwatch]

Lololol.

[@liveroy]

It's really the bottom of the pit when a distributor is selling to the end customers. You just can't compete with their prices, since most of the time they sell it to the customer at a price very similar they sell to the retail. This happens in all spheres of business though, but it's a rather idiotic and hurts the distribution chain A LOT. Good video anyway, it's hard to be honest, but Marc does it and deserves respect for it.

[@islandwatch]

Thanks. Fully agreed.

[@nicktrnka1480]

So on the Phoibos example, are we buying a watch with only 1 mark up from the distributor, i.e. a watch that costs $200 to manufacture with a mark up to $240 or, is Phoibos selling the same $80 watch to manufacture with the 300% mark for $240? Thus getting all of the mark up for themselves? Comparing the Phoibos wavemaster to the Seiko SKX, it seems like the Phoibos is a quality choice based on features compared to the SKX, e.g you get more watch from Phoibos for about the same price.

[@islandwatch]

They are taking all the markup themselves.

[@nicktrnka1480]

@@islandwatch Thank you for the candor. I do like the Phoibos' watches. I was hoping they had a better product as in the first example. But it does beg the question, if Phoibos can use sapphire and an NH35, Seiko should be able to as well. It is not as though Seiko does any advertising for the SKX. It seems that the watch community on KZbin takes care of that for Seiko. BTW- I am enjoying my SKX011; I just need the perfect strap.

[@Kikilang60]

My first watch was a Casio, and I got it when I was fourteen. It was cheap, but I loved it. When I was eighteen, my parents bought me expensive watch. I left home, and left my Casio at home. I smashed the crystal on my expensive watch, I went to have it fixed. The damage was more extensive, so couldn't afford to get it fixed. I bought another Casio, so I could tell time. I went home eventually, and I had three watches, two that worked, and a expensive one which didn't. When I was twenty five, I bought another watch which moderately priced. Son now I had four watches, three that worked, and one expensive one that didn't. When I was thirty, I bought another watch for work. Now I had five watches, four that worked, and one expensive one that didn't. The moderately priced watch stopped working. I was that fond of it, so I didn't look in to getting it fixed. I bought three more watches, one was very expensive. I lost the very expensive one, so now I had seven watches. Five that worked, and two that didn't. The expensive watch that I lost just drove me nuts. Why did I buy an expensive watch, all I needed to do was tell time. A few years went by, and my Casios watches just need batteries. It really bothered me that I lost a watch that cost more than my first car. I put all my watches in a box except the Casios. Seiko is nice boring company, so I bought a number five, and let it at work to wear, and I have a hand full Casio watches which I really like.

[@wrenside]

Marc, any plans to add to your current line of watches? Great video. Thanks as always for the video.

[@islandwatch]

For sure.

[@drorwis1]

Sometimes cutting the middle man doesn't decrease the price, as the seller pockets the same money (or even more) as if there are a few more hands (like 300 more hands...). MVMT anyone?

[@islandwatch]

Right, more money is more money.

[@WuBloodKin09]

Love the video, thanks!

[@markmcdonnell]

I think this is a good introduction to the cost of watches. But I guess the 'expensive' and 'luxury' watch market is something I find hard to reason about. And I class watches over let's say £500 as expensive, while over a 1000 I think of a luxury. Considering you can get a great Seiko for like £200. I appreciate that brands like Sinn go the extra mile on the level of detail as far as materials, but other brands look to be expensive for no justifiable reason. Why is an Omega (for example) worth 4-5k ? What are they doing that's so different to Sinn, let's say, which means they can mark up that much.

[@islandwatch]

Marketing is #1 for them.

[@Mythicregard]

In-house, anti-magnetic, well finished, silicon hairspring, coaxial escapement movements come to mind.

[@markmcdonnell]

@@Mythicregard and that is totally where my ignorance come into play as I just don't know how to relate those things with the associated costs. It may be that those luxury watches are totally worth the money. But once I start seeing 10k for a Patek Philippe (for example) I'm then thinking "well compared to Omega what are _they_ doing that justifies that price tag?"

[@Andi0012345]

Marc, I do not understand why some watches like Orient Bambino has sale restriction to within USA and Canada only, Doesn't Seiko wants to make more money by making the watches available to other parts of the world? Incidentally, Orient Bambino is very much liked and affordable watch. Why Seiko imposes this sale restriction?

[@islandwatch]

They protect dealers in their other countries, that's it.