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I’ve never heard of this company but according to the video below, they’re large enough to have a huge building. How do these economics work? I’m guessing they

• School-Cotton 2y ago
  They are both extremely well-known luxury watch manufacturers. The fact that you haven’t heard of them has nothing to do with them, it just means you’re not into luxury watches.
  • atonse 2y ago
    Indeed. In case I didn't explicitly state it, I was expressing more of a fascination that there are these companies that seem to make high priced luxury items (so they have to be low volume, and likely handmade) but are still large enough in scale to afford these massive fancy buildings, as opposed to be boutique watchmakers, which is how I would intuitively think of this class of craftsmanship.
• deleted 2y ago
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• dharmab 2y ago
  To give you an idea of margins: - A real Rolex dive watch costs $5k-15k. - A similar Swiss-made dive watch from a less famous brand costs $2k-4k. - A similar Japanese-made dive watch from a famous brand costs $500-1000. - A Chinese-made replica/fake Rolex, mechanically identical to a real one, and only distinguishable by an expert under high magnification, costs about $400-800. - There are some low-volume watches that are sold for 4-6 figure sums to repeat buyers. Richard Mille in particular has done one-offs for celebrities in the range of 7-8 figures. As you can imagine you don't need a high volume with margins that large.
  • yjftsjthsd-h 2y ago
    That's the price, but as someone ignorant of this area, I don't know enough to even guess margins from that. How expensive are the parts? I would assume that grade of mechanical components aren't cheap. And we should probably price in the labor.
    • nextos 2y ago
      Panerai is a good example to estimate margins. When they were unknown, watches costed $1-2k. This was in the mid 90s. Same models now, distributed by a big luxury conglomerate, cost 5-10x more. Quality and components on comparable models are virtually the same. Likewise, long ago, Rolex was a toolwatch brand and their products were relatively affordable. They are still great, but prices are insane. Vacheron Constantin is on a different class, though, as they sell lots of watches in the high horology category. Insanely complex and difficult to produce. Some similar brands have had financial issues or gone bankrupt.
      • wincy 2y ago
        I’d imagine a single one of your watch makers dying/quitting would be catastrophic to your business with something that requires this level of skill.
        • ehnto 2y ago
          I was unsure how to word it, but I think there is a pricesless aspect to the talent that this took. Even though they were probably paid a wage, sometimes outputs by individuals at a company a literally irreplaceable.
    • noitpmeder 2y ago
      The labor and design are probably the most expensive parts. Think hundreds if not thousands of hours of many ultra specialized people's time. The actual raw material has to be a fraction of the worth.
• lossolo 2y ago
  Richard Mille is well known to anyone interested in watches, especially very rich people. You probably haven’t heard of Jacob & Co? Or maybe you’ve heard of Hublot? It’s the same story with Loro Piana when it comes to clothing, and Koenigsegg or Pagani when it comes to cars. In certain circles, all of these brands are as common as Nike or Mercedes are to the general public.
• __loam 2y ago
  Vacheron Constantin is one of the big 3 Swiss watch brands that also include Patek Phillipe and Audemars Piguet. These are a tier above Rolex and Omega and they specifically trade on scarceness and exclusivity. You haven't heard of them because they advertise in very specific places to watch nerds and the very wealthy. Each watch can be like $30,000 to $50,000, or even $120,000 for small run products with unique complications. There's more interesting brands like Moritz Grossman and Bovet that make even rarer pieces but fewer people have heard of them.
• sbassi 2y ago
  Richard Mille watches, priced at $500,000 or more per piece, are primarily used by wealthy individuals, elite athletes, and Hollywood stars.
  • magicalhippo 2y ago
    > primarily used by wealthy individuals, elite athletes, and Hollywood stars I'm assuming the two latter categories are sponsored to get the first category to buy? I just know these brands from F1 where the drivers are sponsored, which is very obvious from the way they wear them.
    • bookofjoe 2y ago
      You will notice at Grand Slam tennis matches the first thing the winner does — even before walking out for the interview — is put on the watch made by their sponsor.
  • KaiserPro 2y ago
    Richard mille watches are a brilliant way to work out who is a prick. Neer trust anyone who wears one.
    • milesrout 2y ago
      [flagged]
      • nottorp 2y ago
        Do they have money? Or do they want to make you think they have money?
      • KaiserPro 2y ago
        I work for a FAANG, I’m in a team that was part of a buyout, I’m surrounded by millionaires. One is wearing a patek phillipe right now. I’ve never seen them be rude to a waitress. However, richard mille owners on the hand…..
• bitmasher9 2y ago
  > economics * Margin. A relatively low prestige Swiss brand (Tag) has stated they charge 3x bill of materials for their watches. The more exclusive the brand, the higher this number goes. * Volume might be higher than you think. Popular Swiss models sell in the tens of thousands of units a year. Not bad if you’re charging four or five figures per unit. * Consolidation. There’s a handful of actual parent companies for watch making that are responsible for most sells. Swatch, Citizen, Rolex. They share resources between each other. * Common suppliers. Some movements are used in multiple brands, even across multiple parent companies. Sometimes a company will buy a movement, modify the movement, and completely rebrand it. This allows better economics of volume for the most complicated aspects of watches. * Marketing works. There’s no practical reason to buy a $10k (or $40k) Rolex compared to a $25 Casio. There’s a reason James Bond wears expensive watches and that reason is product placement. Some watch conglomerates are publicly traded, so you can look at how much they spend on marketing. * The fact that you haven’t heard of the brand is part of the point. If you’re wearing >$100k on your wrist you probably don’t want everyone to know. Even at this price point, it’s a highly liquid asset in some cities.
  • jsheard 2y ago
    > There’s a reason James Bond wears expensive watches and that reason is product placement. Only since Goldeneye when Omega started paying for product placement. Bond had worn Rolex since the original novels, which were written before their big pivot to luxury, so him wearing expensive Rolexes in later films was more of a historical accident. Rolex never actually paid a cent to appear on screen.
    • microtherion 2y ago
      The novels always had a lot of wealth signaling from Bond. E.g. in 1953, he ate an avocado, which to British consumers at the time was virtually unknown.
      • dharmab 2y ago
        Originally Bond wore a Submariner, which wasn't a wealth signal at a time- it wasn't a _cheap_ watch, but also not the choice of a wealthy person. The Submariner was originally a tool watch, used by naval infantry. The modern equivalent would be wearing a G-Shock DW5600 with a tuxedo. It hints that Bond is a military vet.
• quickthrowman 2y ago
  Vacheron is part of Richemont, a watchmaking conglomerate/holding company. https://en.m.wikipedia.org/wiki/Richemont https://en.m.wikipedia.org/wiki/Richemont It works like any other luxury company, charge an arm and a leg, control the supply so you don’t overproduce, spend a ton on marketing. Almost all Swiss watch brands (by volume) are owned by either Richemont, Swatch Group, or LVMH. Rolex, Patek, Audemars Piguet, Breitling, and Chopard are the last of the big Swiss independents, but there are smaller ones like Czapek and Cie, H Moser & Cie, Gruebel Forsey, Richard Mille.