Q & A: Authorised Dealers, Watch Prices and Micro-brands

37. Inside & Out Marloe Cherwell.JPG

As I found my response to a comment growing ever larger and more ill-suited for that small comment box, I decided to write it up in full. Here are my thoughts on authorized dealers, watch prices and micro-brands. 

Very interesting article. I respect your opinion and agree that the vast majority of companies and brands have awful web presence and experience. I think the days of the AD are numbered, unless there's some radical root and branch change coming. However, I disagree with you on pricing. Most watch companies are going to have to cut prices and pass on savings to the consumer if they're to survive. Watches aren't essential anymore and, as you've said, watch enthusiasts are a small subset.
With the explosion of micro brands and other watch systems, and the collapse of the middle class, price is becoming a very critical factor for the purchases. A small number of brands, because of the cachet and market can keep prices inflated, the majority can't. As always some thoughts provoked by what you've written. Cheers. Mark.

I'm glad that someone else agrees about the awful web presence and experience of far too many of the big brands but I do disagree with Mark about authorized dealers (ADs) going anywhere soon. The resurgence of vintage watches is relegated to the bubble of watch geeks and the brand only boutique experience is equally as limited to those who are geographically lucky. For the majority of people, he says without a shred of evidence, they will most likely experience a brand through an AD rather than a brand boutique. Yes the service, staff knowledge and overall experience of a brand-ran boutique is always going to be superior but it's not worth opening up one in every city across the world.

The AD will remain the usual location for customers buying watches until brands figure out a way to better sell their watches directly to the consumer online.

ADs make money for the brand with a smaller investment and at much lower risk than opening a store themselves; successful ADs can warrant more investment to further promote the brand and failing ADs can simply have the brand withdrawn from sale to allow stock to be freed up and attention to be focused on more profitable locations. ADs aren't perfect though, I'm sure we've all had a bad experience dealing with a unknowledgeable salesperson spouting out false information in order to get a quick sale ( To my shame I've probably been on both sides). ADs also suffer from getting newer models later than brand boutiques and in smaller numbers and walk in at the wrong time and you'll be stuck with the new kid who doesn't know a Planet Ocean from a PloProf. 

Is this Ref. 5513 the same as the Ref. 114060? No, but the retail price of these similar watches couldn't be further apart.

Is this Ref. 5513 the same as the Ref. 114060? No, but the retail price of these similar watches couldn't be further apart.

When it comes to pricing, I'm partially in agreement with Mark about the need for cut pricing and 100% in agreement about the disappearing middle class. It's no secret that that the price of watches is not representative of the time, effort and skill used to create it and the brand's position in the market is more the deciding factor. With the ubiquity of movements and the interconnected web of supply chains between brands more apparent than ever, this huge disparity between what we're paying for and what we get can get under the skin of many a watch fan. 

This is probably one of the main reasons that in-house movements get so much promotion and love, even if they are priced at a much higher premium than those brands using a generic ETA movement, as they show a brand actually making something rather than buying something.

As mechanical watches have become more useless as technology progresses, the pricing model of some brands seems at complete odds with reality. A Submariner no-date cost $150 in 1957 and if kept in line with inflation it would cost $1265 today, yet instead it costs over $7500. What was a tool for professional divers to bang around is now a luxury item that now remains out of reach for the vast majority of people. I understand that sixty years of progress has been made in the production of the Submariner and that Rolex's business strategy has changed but can you really tell me that is a reasonable price for that watch? It's no surprise that the vintage market has never been more popular, especially for Submariners and Datejusts. Why pay more for a watch when you can get essentially the same thing for a thousand dollars cheaper, and have it delivered to you. 

Companies that made yearly price increases their de facto business model have wandered towards a precipice and now find the ground beneath them crumbling amidst ever lowering export figures. Currently they are all mimicking Wile E. Coyote, running on ground that isn't there and refusing to look down otherwise gravity might take hold. The only alternatives are to fall or to start walking backwards towards a slimmer margin. 

It might not have been for me, but the Orion from Watches by Nick is a far more nimble and adaptable watch than any from the big brands.

It might not have been for me, but the Orion from Watches by Nick is a far more nimble and adaptable watch than any from the big brands.

If larger brands are a hulking mass then micro-brands are a nimble, yet delicate, butterfly. Their strength is their small size, lower prices and being able to directly communicate with their smaller client base. Kickstarter brands get a lot of flak from the community but they communicate with their audience better than any established brand do. Without a crowd wearing the rose-tinted glasses of heritage, these brands have to be reasonable with their pricing and realistic in their expectations.

The paradox of micro-brands is this: if they succeed to a point where they are directly challenging the known brands then they won't be micro anymore, they'll be...err...macro? You can only be a scrappy young upstart for so long before you're the very thing that your customers wanted to rebel against. Micro-brands are still so new that their effect on the industry is either too small to notice or cannot be properly documented. In fifty years time, will Chase Fancher be held in such high esteem as Jack Heuer or Nicolas Hayek? Only time will tell but things can only work in their favor when main brands ignore the market, ignore their customers and ignore the internet.