For years, we have seen their advertisements all over the newspapers, magazines and on television. This has created a desire within us, even if not all of us understood why it costs so much.
When we become older and start making our own money, we start to research more about it. The more we read, the more we are convinced that owning a Rolex watch is worth our money.
Before long, we find ourselves swiping our credit card as we splurge S$10,000 for that dream Rolex watch.
But have you ever wondered why Rolex watches are so expensive to begin with? [h=3]Background Of Rolex[/h]
Established in 1905, Rolex is known globally as the biggest Swiss luxury watchmaker.
The company produces about 700,000 watches each year, or roughly about 2,000 per day. On first look, this may seems like a decent number, but that only represents about 2% of all Swiss watches sold annually. More tellingly, it represents about 0.06% of the 1.2 billion watches sold worldwide each year.
Starting at an entry-level price of about S$8,000 for an Oyster Perpetual, a Rolex watch is expensive to own. With that kind of money, one can easily buy the next 6 versions of the iPhone and still have some money left. [h=3]How Much Does A Rolex Cost? [/h]
Since Rolex is a privately held company own by a trust set up by its late founder, there is no public information with regards to its financial figures. That said, an extensive search online have most people pegging the product cost of a Rolex watch to be between S$750 to S$1,000. This is of course at best, an educated guess.
If between S$750 to S$1,000 feels a little high to produce a watch compared to the S$3 watch one can manufacture in China, it’s worth noting some aspects of Rolex watch that makes it intrinsically more valuable.
For starters, each Rolex watch is carefully created with the kind of precision you expect from a Swiss watchmaker. These include the type of steel used, the technology that the company introduce, adopt and innovate and of course, the human touch and obsession to quality it takes pride in. All these takes time, skills, resources and of course, money.
Rolex watches are produced entirely in Switzerland. With Switzerland being one of the world most expensive countries to do business in, cost is naturally high. It’s nevertheless the stringent standards that the company has adopted which allows it to charge a premium for its watches, and why buyers are still happy to pay for it. [h=3]The Rolex Brand [/h]
Similar to other luxury goods like designer bags, jewellery, supercars and high-end fashion brands, Rolex is able to charge its customers more because of the brand it has built up over the past decades.
Even buyers who are not watch enthusiasts and who do not fully appreciate the craftsmanship and technical complexities that goes behind producing a Rolex are willing to pay a high price for it.
If you base a watch value on functionality, a digital watch would certainly be worth more. Yet even the casual customer will know that a Rolex is more valuable and that equates into brand equity that Rolex is able to capitalise on, and which is what people pay for.
A large part of what creates the desirability of a Rolex comes after years of years of advertising. Rolex is known for sponsoring sporting events such as tennis Grand Slams and important golf tournament. These are events that attract their affluent target market. These people in turn sets the trend creating further demand within their social circle for people desiring a Rolex watch.
