Posted on in Todd Talks by Todd Johnson

I've had a fascination with watches for at least 20 years. Most of the watches I like are well beyond what I can afford. It's amazing that there are watches that cost more than most people's homes. I mean, it's a watch. Something you wear on your wrist to tell time. I have a cell phone in my pocket that can tell me infinitely more than a watch can. How can a company justify trying to sell one of these for six figures when I can go to Walmart and buy one for $10?

First, let me just say that, obviously, ultra-expensive watches aren't for everyone. They aren't even for all watch collectors. They're basically forms of art and are often treated as such – rarely worn and only displayed – like other works of art.

So, what makes them so expensive? A combination of several factors. But, before I get into that, I want to say that there are watch companies that invest heavily in marketing their watches as a luxury brand when they aren't much more luxurious than a brand you can get at a local mall. Think brands such as Fossil, Citizen, Bulova and the like. These companies all make nice watches, but they're hardly luxury items. When I talk about luxury brands, I mean brands like Patek Philippe, IWC, Chopard, Blancpain, and Audemars Piguet to name a few. These are brands that not only spend a lot of money marketing their watches but also spend a lot of money making them. 

Some watches take years and millions of dollars just to design. That investment of time and money is then spread across the entire production run of the watch model. And whereas Casio might make millions of one watch, the luxury brands often make just hundreds. Sometimes fewer. Like one.

High-end watches are each hand-built by highly skilled watchmakers. That skill doesn't come cheap, and a watchmaker can take a long time to build a single watch. Some watches can take a year or more to create.

The most expensive watches use high-end materials such as gold, silver, diamonds, and other precious resources. The crystal (watch face) is made from harder sapphire crystals to better resist scratching and chipping. Mechanical watches (which do not contain batteries) also use jewels as bearings in the movement. Nowadays, these typically are synthetic jewels but can sometimes be precious stones like rubies, sapphires, and diamonds. Other components of high-end watches, such as the watch face, hands, and parts of the movement, are often crafted from precious metals like gold, platinum, silver etc. 

Often, the face of a luxury watch will have intricate patterns that are hand-engraved into it. Furthermore, the bezel can have precious gems embedded to add to the beauty of the piece. These decorations are added by skilled artisans, and the work can take a long time to complete. 

In watchmaking, complications are anything on the watch other than the display of the time. Things like the date, moon phase, tide, or even astrological displays can be amazing to see and add to a watch's costs. 

These are just some of the aspects that factor into the cost of manufacturing high-end watches. But most of the time, the differences between ultra-expensive watches and their moderately priced counterparts is significant. It all comes down to what the customer is looking for. It's the same for almost every product. You can usually find both high-end and economy models.

Sometimes, you can even find high-end products at reasonable prices. Like products from Penn-Troy. We engineer our products to last and use skilled labor to machine, build, test and paint our products. Then, we follow through with customer service that our customers can count on. That creates a value that can be trusted – time and time again.