I'm sorry but I've never bought into the 3x cost model. Does the cost change once the development costs are paid off? What about parts that are developed for one range and end up as part of another, are they included? Marketing ? All marketing, or just for that model? For 1 year or just the launch ? Given that taxes on profits are paid in arrears, is it a best guess at sales or are they not included? Cost is a very vague thing indeed. But we can probably agree as far as Rolex goes, and getting back on track, that Crown on the dial costs a heck of a lot to put on there.

I’ve bought multiple Rolexes (Rolices? ) and they are quite nice as watches. I think the reason I’ve become so attached to CW is the greater VFM I perceive the Trident and others to be. I’ve never owned a Submariner. At this point I don’t intend to get one. But I would still consider a Cellini or a 1908, perhaps even another DJ. Dive watches are not really my interest even as I have a few. I don’t seek out higher end lux watches, generally, mostly because I enjoy variety and while I could get that Sedna gold Speedmaster or a Daytona, I instead could have thirty watches that offer a breadth of styles and uses over a single nice watch.

I have not gotten a Rolex in well over a decade. Of the Rolexes I acquired, I’ve only kept one and that’s for mostly sentimental reasons. The others were gifted in the family some time ago. I’d consider Rolex again but I absolutely despise the waitlist game which feels extortionate to me.

Personally I’m not particularly keen on most Rolex products, although there are plenty of other “premium brands” whose watches I would very much like to own.
As per one of the opening comments, “value” is extremely personal and subjective. In terms purely of the function(s) for a given cost, any watch in the Rolex price brand is dreadful value for money. Then again, so is any CW watch, if you compare it to (for example) the time-keeping functions that come bundled in “as free” on your smartphone.
However, if you bring in to the value equation how a particular watch (or any other “luxury product”) makes you feel, it can be very easy to justify the much higher price. For sure there is a feeling of high quality about most Rolex products (and those of other brands) but, for me, the law of diminishing returns in terms of value has kicked in way before those price points. It still doesn’t stop me lusting after some pretty expensive watches though!

general-discussion/my-new-c60-sapphire- ... 17-30.html
I actually posted this in a very similar thread just a short while ago. As the topic is essentially the same I thought I'd add it here too.
Thanks
Pat

5oclockhero wrote: ↑Mon Aug 26, 2024 4:34 pm I'm sorry but I've never bought into the 3x cost model. Does the cost change once the development costs are paid off? What about parts that are developed for one range and end up as part of another, are they included? Marketing ? All marketing, or just for that model? For 1 year or just the launch ? Given that taxes on profits are paid in arrears, is it a best guess at sales or are they not included? Cost is a very vague thing indeed. But we can probably agree as far as Rolex goes, and getting back on track, that Crown on the dial costs a heck of a lot to put on there.

From my understanding, a C60 Trident is £750 ( including VAT / sales tax at 20%). Ex sales tax £625. This would be the cost that needs to be divided by 3 = £208. The £208 would include all direct costs - case, movement, dial. The balance £417 would cover all other costs - marketing, R&D, delivery etc.

The way UK tax works it is charged after all the costs have been applied. Cash and accounting are very different.

This system is usually called an overhead absorption method. It does get more complex with high street brands because of AD mark up. But i have found the maths works.

WileyECoyote wrote: ↑Mon Aug 26, 2024 1:45 pm Rolex doesn’t use the same transparent 3x cost pricing model as CW uses. The same question could be asked about any of their watches, not just the Submariner, which happens to be a dive watch. The same goes for many of the luxury watch brands & how they price their product. But, that really isn’t the point. Rolex has built up a reputation over the years for making dependable, high quality watches. They don’t price their watches at a point at which no one will pay it. Quite the opposite! A simple example of how supply x demand economics works. Rolex has been very good at maintaining a situation in which demand exceeds supply. There’s a reason why there are long waiting lists for their most popular models. A lot of people think that they are worth it. We are most likely not a good or representational group for your poll. I literally have done what you are asking by currently owning 12 Christopher Ward watches. No, they are not all dive models. But, with the money spent, I could have bought a Rolex Submariner! For me anyway, the cumulative enjoyment of my CW collection has exceeded the ownership of one Rolex.

Delmar

Maybe it's more like you have 12 CWs and maybe one Rolex. I think there are a number of Rolex owners on this forum, and also owners of other premium brands, but not exclusively premium by any means.

The perception of value is a very personal and individual matter and is largely dependent on, but not limited to, one's financial ability to be able to afford said luxury.
I voted no, because I could never attribute value for money to any Rolex at Rolex prices. That doesn't mean to say that I would not want one or could not afford one, as most people I know drive cars with values well in excess of entry level Rolexes and so by definition, these things are not beyond the reach of many, however, justification is an entirely different matter. With a mortgage to maintain and a family to support, it would be entirely selfish of me to buy a watch for the price of your average used family saloon car, or a years' worth of groceries. Looking at it like that, starts to make the purchase look obscene.
Now, if one has enough truly disposable income to buy the Sub as a treat, I could understand the expenditure and would see the justification in value retention alone (for now at least). I still wouldn't say it was worth 10x the value of the CW though, if I bought one or not.

Stuart1 wrote: ↑Mon Aug 26, 2024 6:11 pm

5oclockhero wrote: ↑Mon Aug 26, 2024 4:34 pm I'm sorry but I've never bought into the 3x cost model. Does the cost change once the development costs are paid off? What about parts that are developed for one range and end up as part of another, are they included? Marketing ? All marketing, or just for that model? For 1 year or just the launch ? Given that taxes on profits are paid in arrears, is it a best guess at sales or are they not included? Cost is a very vague thing indeed. But we can probably agree as far as Rolex goes, and getting back on track, that Crown on the dial costs a heck of a lot to put on there.

From my understanding, a C60 Trident is £750 ( including VAT / sales tax at 20%). Ex sales tax £625. This would be the cost that needs to be divided by 3 = £208. The £208 would include all direct costs - case, movement, dial. The balance £417 would cover all other costs - marketing, R&D, delivery etc.

The way UK tax works it is charged after all the costs have been applied. Cash and accounting are very different.

This system is usually called an overhead absorption method. It does get more complex with high street brands because of AD mark up. But i have found the maths works.

I've lost a reply to this twice now.

I think this is really tough. For £208 (£250 with VAT) CW have to produce a watch with a decent swiss movement, case, dial, handset, indices, lume, and strap. And it has to meet the Swiss equivalent of rheinheitsgebot principles.

The remaining £417 has to contribute profit as well, say £17 profit. On 20,000 watches £17 would mean £340k profit. That might be better than CW have managed in recent history, but I think the BC, 12, and Pro 300, have improved the situation of late.

Mike, of This Watch That Watch says CWs particular expertise is in the area of procurement, which seems a good shout, to me.

As an aside, if CW do well making a watch for £208, what about San Martin, Baltany, Invicta and many others who make a decent watch for a fraction of CWs cost.

.

JAFO wrote: ↑Mon Aug 26, 2024 7:58 pm

Stuart1 wrote: ↑Mon Aug 26, 2024 6:11 pm

5oclockhero wrote: ↑Mon Aug 26, 2024 4:34 pm I'm sorry but I've never bought into the 3x cost model. Does the cost change once the development costs are paid off? What about parts that are developed for one range and end up as part of another, are they included? Marketing ? All marketing, or just for that model? For 1 year or just the launch ? Given that taxes on profits are paid in arrears, is it a best guess at sales or are they not included? Cost is a very vague thing indeed. But we can probably agree as far as Rolex goes, and getting back on track, that Crown on the dial costs a heck of a lot to put on there.

From my understanding, a C60 Trident is £750 ( including VAT / sales tax at 20%). Ex sales tax £625. This would be the cost that needs to be divided by 3 = £208. The £208 would include all direct costs - case, movement, dial. The balance £417 would cover all other costs - marketing, R&D, delivery etc.

The way UK tax works it is charged after all the costs have been applied. Cash and accounting are very different.

This system is usually called an overhead absorption method. It does get more complex with high street brands because of AD mark up. But i have found the maths works.

I've lost a reply to this twice now.

I think this is really tough. For £208 (£250 with VAT) CW have to produce a watch with a decent swiss movement, case, dial, handset, indices, lume, and strap. And it has to meet the Swiss equivalent of rheinheitsgebot principles.

The remaining £417 has to contribute profit as well, say £17 profit. On 20,000 watches £17 would mean £340k profit. That might be better than CW have managed in recent history, but I think the BC, 12, and Pro 300, have improved the situation of late.

Mike, of This Watch That Watch says CWs particular expertise is in the area of procurement, which seems a good shout, to me.

As an aside, if CW do well making a watch for £208, what about San Martin, Baltany, Invicta and many others who make a decent watch for a fraction of CWs cost.

.

I'm not sure I'm following this, perhaps I'm being slow, but are you saying that after shifting 20,000 watches at £750 a pop, CW are only making £340K?
From £15m in sales?
I do appreciate that the figures are not supposed to be exact, by the way, but that doesn't seem right to me.

I voted no, as £10000 is a lot of money to me (and most people), my car is probably worth less then list price of a sub. It doesn’t stop me wanting one but, if I sold all my watches I couldn’t even afford half the price of a sub, but some day I might have one or another Rolex model. I think part of the attraction of a Rolex is its holds its value well, so if you needed to cash in you could. I enjoy when in Belfast having a look in the Rolex windows or popping into Tudor for a look around, it’s kind of the same as looking at Porsches in car magazines or YouTube videos, you just never know when the lottery numbers might come up.

MarkingTime wrote: ↑Mon Aug 26, 2024 8:34 pm

JAFO wrote: ↑Mon Aug 26, 2024 7:58 pm

Stuart1 wrote: ↑Mon Aug 26, 2024 6:11 pm

From my understanding, a C60 Trident is £750 ( including VAT / sales tax at 20%). Ex sales tax £625. This would be the cost that needs to be divided by 3 = £208. The £208 would include all direct costs - case, movement, dial. The balance £417 would cover all other costs - marketing, R&D, delivery etc.

The way UK tax works it is charged after all the costs have been applied. Cash and accounting are very different.

This system is usually called an overhead absorption method. It does get more complex with high street brands because of AD mark up. But i have found the maths works.

I've lost a reply to this twice now.

I think this is really tough. For £208 (£250 with VAT) CW have to produce a watch with a decent swiss movement, case, dial, handset, indices, lume, and strap. And it has to meet the Swiss equivalent of rheinheitsgebot principles.

The remaining £417 has to contribute profit as well, say £17 profit. On 20,000 watches £17 would mean £340k profit. That might be better than CW have managed in recent history, but I think the BC, 12, and Pro 300, have improved the situation of late.

Mike, of This Watch That Watch says CWs particular expertise is in the area of procurement, which seems a good shout, to me.

As an aside, if CW do well making a watch for £208, what about San Martin, Baltany, Invicta and many others who make a decent watch for a fraction of CWs cost.

.

I'm not sure I'm following this, perhaps I'm being slow, but are you saying that after shifting 20,000 watches at £750 a pop, CW are only making £340K?
From £15m in sales?
I do appreciate that the figures are not supposed to be exact, by the way, but that doesn't see right to me.

From memory, I don't think CW were doing very well but the accounts seem stronger now since the BC, the 12, and the pro 300 among others. They are all on record. You can easily check.

I just threw in £17, as the rounding on the end of £417. It might be better or worse than £17. It's just over 2% of £650, though, and that doesn't seem unreasonable for a company operating a tight business.

The true mix will be different. Not all watches sold are entry level.

If all the watches were BCs at £2500 each (£3000 per watch less VAT, although I can't see the selling price stated on line, just the £1000 deposit) then just 8000 watches would produce £20m sales, and I imagine they would be rather more profitable.

^^^Check the archive. It is easy to do. $3600-$4k depending on strap or bracelet.

JAFO wrote: ↑Mon Aug 26, 2024 9:01 pm
I just threw in £17, as the rounding on the end of £417. It might be better or worse than £17. It's just over 2% of £650, though, and that doesn't seem unreasonable for a company operating a tight business.

It just seems very low to me, why would any investor put up significant funds for a 2% return?

I could buy a bunch of watch straps, for example, from a wholesaler and make 20% without even trying.

I posted this a while ago in the Rolex thread. I charted the RRP of several popular Rolex steel sports models against the average salary of a college graduate in the US. For decades Rolex was priced just below the average salary. It was clear that they were after an aspirational educated demographic. In the mid 90s the curve inverts to just above the average take home. It stays that way until about 2004 when Rolex began to buy all of its suppliers and move them in house. From this point the upward trend accelerates. It is clear that Rolex has positioned itself for a different demographic. It is clear that Rolex has removed the overlap in the product line between themselves and Tudor. It is now a continuous ladder from Tudor (where Rolex used to be) up to the top of Rolex offerings. There is pretty much something at price points from $2k to $50k with no overlap.

I do own a Rolex but I bought mine long ago (more than 30 years ago) when the calculus was much different in both the retail environment and the pre-owned world too. While I appreciate what Rolex has done to date the new models don't do much for me. I am lucky in that if I were to dip my toe back in the models I gravitate to trade at the lower end of the pre-owned market for Rolex. But then again, I am happy with my PO and don't have any current desire to trade it in.

MarkingTime wrote: ↑Mon Aug 26, 2024 9:19 pm

JAFO wrote: ↑Mon Aug 26, 2024 9:01 pm
I just threw in £17, as the rounding on the end of £417. It might be better or worse than £17. It's just over 2% of £650, though, and that doesn't seem unreasonable for a company operating a tight business.

It just seems very low to me, why would any investor put up significant funds for a 2% return?

I could buy a bunch of watch straps, for example, from a wholesaler and make 20% without even trying.

The costing model may seem confusing (because it is). The £417 would include profit. As you said the profit level will vary between the different watch models. Also CW does make watches etc for other companies.Overall (from the accounts) CW made about 14% (2024) and 6% (2023) net profit. The Swatch group made 11.3% (2023) net profit, from group accounts.