I really want to know how...

[miscusi]

I have a VSF 116610LN with VS3135. It was less than $500 shipped from China to my Door.

We all know how amazing that VSF Sub is.. so HOW do they do it?

that 500 bucks includes shipping, the box, the box inside the box, a watch inside that box which is really made of steel and sapphire and with a real working movement AND the quality of workmanship is so amazing.. plus that 500 bucks includes profit for the TD, Factory, wages for the workers etc etc..

How on earth is this possible?

 

[Thatwatchguy]

It’s China.

 

[schlonz]

they are selling Bliger, Corgeut, Debert and the like for around 60-70$ on ebay nowadays even with a Seiko NH35 movement (clone???)
taking into account that the quality level of those watches is not that much inferior to the high end reps from a manufacturing point of view (same raw materials, same manufavturing, same assembly) one can easily deduct that the real cost of a high end rep is somewhere around 50-100$ max. including everything
accordingly, the overall margin within the complete chain (factories & dealers) is in the area of 200-250$ on a 300$ watch with everything beyond 300$ sales price adding mainly margin at no cost

pretty profitable business I would say

 

[hadamokel]

Especially if you look at the recent discounts for Noob Subs and GMT (V-whatever). They were hugely discounted at pretty much every TD, from about 480$ to somewhere around 300$. Simply because there were better options out there. But I am certain even at that price the profit was still sufficient for all parties involved.

 

[p0pperini]

How on earth is this possible?

Because the person who assembled it for you could be getting paid as little as $5 - $10 a day.

 

[sukwonee]

So.... Back in 1999 I worked for a local Swatch retail store. One of the regional head came by one day and told me that the company's margin (without the overhead and R&D costs) was close to 90%. Back then, the cheapest watch we carried was 40 dollars USD. So, it cost then 4-5 dollars to manufacture and package the watch for sale.

 

[pistebasher]

So.... Back in 1999 I worked for a local Swatch retail store. One of the regional head came by one day and told me that the company's margin (without the overhead and R&D costs) was close to 90%. Back then, the cheapest watch we carried was 40 dollars USD. So, it cost then 4-5 dollars to manufacture and package the watch for sale.

Beware of looking at just gross profit per unit, as it gives a highly rose tinted view of the real cost of doing business. It costs Intel less than $15 in materials to manufacture a $500 Core i7 CPU, but the fab costs run into the high hundreds of millions of dollars to build and design, and the R&D costs are many millions of dollars for each new generation. I'm not saying that Swatch isn't insanely high margin because it almost certainly is, but gearing up all that production equipment to actually make a new model is very far from free. Given that, the OPs point that the rep makers can create such a high quality product for such a good price is indeed remarkable, especially as these factories are very young companies, typically without enormous cash reserves to sink into equipment and fabrication process.

 

[p0pperini]

Given that, the OPs point that the rep makers can create such a high quality product for such a good price is indeed remarkable, especially as these factories are very young companies, typically without enormous cash reserves to sink into equipment and fabrication process.

But the rep factories don't have the enormous overheads of design, R&D, marketing etc. to add to their cost of doing business. And their equipment isn't anything special.

I'd recommend taking some time to look at "inside the factory" videos on YouTube to get a sense of how the rep makers are able to make them for the price. Example: https://www.youtube.com/watch?v=jpyVOhzOzgQ&t

 

[YellowFin]

But the rep factories don't have the enormous overheads of design, R&D, marketing etc. to add to their cost of doing business. And their equipment isn't anything special.

I'd recommend taking some time to look at "inside the factory" videos on YouTube to get a sense of how the rep makers are able to make them for the price. Example: https://www.youtube.com/watch?v=jpyVOhzOzgQ&t

This. Omega paid Clooneyboy $2Mil to wear an AT at some public events. The biggest difference in manufacturing and labor cost is the army of skilled/expensive watchmakers at the gen factories. You'll get to max. 80% gen quality with CNC machines and trained personnel for certain manufacturing steps. To achieve 95% you'll have to at least double the cost for more precision and a better trained staff. The last five percent to perfection and consistency (i.e. every manufactured watch is perfect) aren't even achieved at Omega or Rolex and cost a lot more. You'll have to get the best watchmakers and even more extensive finishing/testing like e.g. JLC with their 1000h Master Control process or A. Lange where watch movements are assembled twice with testing, adjustments and a full clean followed by final finissage in between.

 

[miscusi]

"inside the factory" video

thats a nice video, I never seen anything like it! thanks

 

[Roadster]

I know it goes without saying but it's only because the reps are reps, in other words copies of Rolex, Omega, Audemers Piguet, Hublot etc etc they can demand the $$$ they do. Watches manufactured in China of the same quality without the luxury branding would struggle to sell at the same price point if at all.

 

[DrHack]

Because the person who assembled it for you could be getting paid as little as $5 - $10 a day.

This is a huge part of it. And you can see from the video they are not spending a lot on the factory - it's strictly whatever machines are needed, no frills. I was surprised, though, by the quantities of watches they were producing.

 

[miscusi]

Especially if you look at the recent discounts for Noob Subs and GMT (V-whatever). They were hugely discounted at pretty much every TD, from about 480$ to somewhere around 300$. Simply because there were better options out there. But I am certain even at that price the profit was still sufficient for all parties involved.

I did notice that the older versions of the Noob subs (best available at the time) are discounted substantially now. and yes, they were selling at the same level of money as the VSF but those older ones contained flaws that deterred me for years, mainly the SELs were pretty horrible to look at... fake looking, But since VSF came out with that really nice sub for the same level of selling price, I started wondering how they can do it. such tight tolerances of all the parts...

I ordered a noob explorer 1 which on trusty's site is stated to be the best one noob is offering, and the price was on sale under 300, and it looks pretty okay. I cant wait to see it in person..

 

[hadamokel]

I did notice that the older versions of the Noob subs (best available at the time) are discounted substantially now. and yes, they were selling at the same level of money as the VSF but those older ones contained flaws that deterred me for years, mainly the SELs were pretty horrible to look at... fake looking, But since VSF came out with that really nice sub for the same level of selling price, I started wondering how they can do it. such tight tolerances of all the parts...

I ordered a noob explorer 1 which on trusty's site is stated to be the best one noob is offering, and the price was on sale under 300, and it looks pretty okay. I cant wait to see it in person..

I know, exactly my thinking. Let’s just hope VSF doesn’t pick up their prices due to the hype... and let’s hope their QC remains good.
Welcome to the Explorer-1 Family you’ll be pleased, I am sure. I have the BP 904 version intime sells, it’s become my go-to dependable daily watch.

 

[Ams55557]

thats a nice video, I never seen anything like it! thanks

I could watch these all day long

 

[sw821]

I dont know exact numbers on what is the profit per watch, but if you think a little bit...

1. Buying and maintenance of CNC and other type of machinery. Those machines are super expensive, consuming power and mother pieces like crazy

2. Employees. Okay, its China, their wages are very low, but hey, its an ilegal business, so you pay extra to keep their mouth shut. And who takes care of the watch? For sure a reputated and professional watch smith. That costs way more money than the 20 year old guy polishing the watches...

3. Authorities. Cmon, they have to pay authorities yes or yes in order to keep the business alive. “The money is good for everyone so lets be quiet and bring us the bag every week if you want to keep working”

4. Genuine pieces. Someone has to buy a 20.000€ genuine watch in order to make a rep from it, and sell the reps after that. Imagine how many gens they bought along the years, but also think how many gens they bought and didnt sell their reps because people just dont like them.

5. Infraestructure. Computers, buildings, materials, websites, tools, transportation, etc etc.

In conclussion, not a 90% profit, not a 70% but maybe between 30% and 35%? 500/1000 watches sold every day for $300/320 each?

PD: waiting for a sub and a seamaster LOL