Why are platinum watches so expensive?

[KarlS]

We have been told that as Pl is harder than Au that it takes 4x longer to mill the cases and polish etc etc and has more wear & tear on the manufacturing tools blah blah blah. So if Pl and Au was exactly the same price we would have an incremental differential between the two with Pl being the dearest. Just using some useless statistics. In April 2013 (arbitrary choice of year) Platinum was $1500 per oz and Au was $1400.

A). platinum was 7% more expensive than gold.

Move forward to April 2016 we have platinum at $966 and gold at $1400.

A). gold is now 45% more expensive than platinum. The price of platinum has dropped
B). Platinum has dropped 35% in price
C). Gold has dropped 11% in price

So I guess the questions are:

A). Did the raw material decrease in value get passed onto the consumer or just make PM watches now much more lucrative than SS (hence why some SS models are so difficult to find) and thus make the manufacturer greedily richer?
B). Is the price differential / premium between Pl and Au the same or is Pl unexplainable more expensive than gold. Remember by doing nothing platinum watches are now 35% more profitable than 3 years ago!
C). There is no correlation at all as its not priced for metal content but rather the price the market will bare!!

Or are we just happy that by not regulating price with raw material content at least there is some price stability and purchasers are not losing money hand over dust when precious metal prices move!

Or actually it doesn't matter and the only reason I bothered on these mental gymnastics is that I am bored at an airport??

[locutus49]

Platinum is rarer.

[Star Ferry]

Been discussed many times here. Practical reasons are that Rolex uses 75% pure gold and 95% pure platinum. Further, platinum is 11% denser than gold so it takes more mass to achieve the same dimensions.

Other reason is that the price difference is a historical vestige of the times when platinum cost much more than gold, and that for marketing reasons Rolex has decided that platinum will be their most exclusive material.

I have read several times that platinum is harder to machine than gold - I'm not sure if this is true or not.

[Tools]

There is no need to try and guess at this stuff, it is almost never precious metal prices or difficulty to obtain.

Platinum jewelry is almost always more expensive than gold because that is the market price structure.. Go out and find Platinum earring or ring settings, they cost more..

A) irrelevant
B) irrelevant
C) Irrelevant

These things are only relevant in actual manufacturing costs to the manufacturer, not in final retail prices in the marketplace.

It's nothing but cache' to buy platinum - everybody knows that you paid a pretty penny, end of story !!


(isn't $50,000.00 for a watch kind of insane anyhow, nothing justifies that price but prestige, raw materials are a tiny, tiny fraction of that)

[madmax21]

Originally Posted by Tools

There is no need to try and guess at this stuff, it is almost never precious metal prices or difficulty to obtain.

Platinum jewelry is almost always more expensive than gold because that is the market price structure.. Go out and find Platinum earring or ring settings, they cost more..

A) irrelevant
B) irrelevant
C) Irrelevant

These things are only relevant in actual manufacturing costs to the manufacturer, not in final retail prices in the marketplace.

It's nothing but cache' to buy platinum - everybody knows that you paid a pretty penny, end of story !!


(isn't $50,000.00 for a watch kind of insane anyhow, nothing justifies that price but prestige, raw materials are a tiny, tiny fraction of that)

Well put I completely agree

[KarlS]

Originally Posted by Tools

There is no need to try and guess at this stuff, it is almost never precious metal prices or difficulty to obtain.

Platinum jewelry is almost always more expensive than gold because that is the market price structure.. Go out and find Platinum earring or ring settings, they cost more..

A) irrelevant
B) irrelevant
C) Irrelevant

These things are only relevant in actual manufacturing costs to the manufacturer, not in final retail prices in the marketplace.

It's nothing but cache' to buy platinum - everybody knows that you paid a pretty penny, end of story !!


(isn't $50,000.00 for a watch kind of insane anyhow, nothing justifies that price but prestige, raw materials are a tiny, tiny fraction of that)

So basically we getting ripped off? The absolute prices of both gave reduced over the past 3 years (one more dramatically) and the consumer hasn't benefitted

[madmax21]

Originally Posted by KarlS

So basically we getting ripped off?

I've said many times that me personally I would never buy a WG or platinum watch and would always choose to go stainless steel. I have an interesting philosophy on this my feelings are that in some ways it's almost like buying a fake stainless steel watch but that's only my theory on this.

Ultimately luxury watches are just that it's all about how it makes you feel and you really shouldn't worry what others think

[Dyim]

Because rolex can.

Perceived rarity and prestige.

[PJ S]

Originally Posted by KarlS

So basically we getting ripped off?

Boredom or not, you don’t really have a firm grasp on the concept of luxury, do you?

There is no correlation with the commodity price and the finished article, other than associated costs for production – it’s completely all about perception (a lot of smoke and mirrors) and Veblen effect.

In regards to production costs – gold is softer than stainless steel (904 and 316), and platinum is a bit harder.
Tool wear is genuine, but the same is true also of grade 5 titanium (Grand Seiko/Omega/etc), and yet because it’s not a PM, it doesn’t have the same desirability, so as a consequence, can’t be sold on that basis.
Strength, lightness, and hypoallergenic – it sells due to its technical properties.

[madmax21]

Originally Posted by PJ S

Boredom or not, you don’t really have a firm grasp on the concept of luxury, do you?

There is no correlation with the commodity price and the finished article, other than associated costs for production – it’s completely all about perception (a lot of smoke and mirrors) and Veblen effect.

In regards to production costs – gold is softer than stainless steel (904 and 316), and platinum is a bit harder.
Tool wear is genuine, but the same is true also of grade 5 titanium (Grand Seiko/Omega/etc), and yet because it’s not a PM, it doesn’t have the same desirability, so as a consequence, can’t be sold on that basis.
Strength, lightness, and hypoallergenic – it sells due to its technical properties.

This is to anyone who feels the price is too high...

Like the cliché goes if you build it they will come, they built it and people are waiting in line to buy them so they will keep selling them for ridiculous prices because people want them. If you don't agree that the price is fair speak with your wallet

[KarlS]

Originally Posted by PJ S

Boredom or not, you don’t really have a firm grasp on the concept of luxury, do you?

There is no correlation with the commodity price and the finished article, other than associated costs for production – it’s completely all about perception (a lot of smoke and mirrors) and Veblen effect.

In regards to production costs – gold is softer than stainless steel (904 and 316), and platinum is a bit harder.
Tool wear is genuine, but the same is true also of grade 5 titanium (Grand Seiko/Omega/etc), and yet because it’s not a PM, it doesn’t have the same desirability, so as a consequence, can’t be sold on that basis.
Strength, lightness, and hypoallergenic – it sells due to its technical properties.

you must be nice to us dummies. You missed the point completely. In a sophisticated world that I am used to you go into your manufacturing Jeweller and he quotes you the price per gram for the metal in whatever composition you want + manufacturing cost per gram as determined by difficulty and hardness. So if both metals are same price manufacturing cost for platinum is higher and thus it will be more expensive for the manufactured article!!! Comprendo?

However both metal prices have dropped over the past 3 years irrespective of which is more difficult etc and I say this hasn't been passed on to the purchaser. It means the profit margin has increased significantly on platinum watches for no extra effort

[AK797]

The jump from say an SS Rolex to gold is very steep and one that I have made a few times but then the jump to platinum is also pretty steep. Historically when plat prices were higher this was easier to bare than more recently with higher gold prices.

[Abdullah71601]

Originally Posted by KarlS

you must be nice to us dummies. You missed the point completely. In a sophisticated world that I am used to you go into your manufacturing Jeweller and he quotes you the price per gram for the metal in whatever composition you want + manufacturing cost per gram as determined by difficulty and hardness. So if both metals are same price manufacturing cost for platinum is higher and thus it will be more expensive for the manufactured article!!! Comprendo?

However both metal prices have dropped over the past 3 years irrespective of which is more difficult etc and I say this hasn't been passed on to the purchaser. It means the profit margin has increased significantly on platinum watches for no extra effort

You are speaking of the sophisticated world of the metal price and the making price When buying jewelry one always subtracts the metal price from the retail price and assesses the fairness of the making price. The haggling is done against the making price.

Rolex PM prices don't work that way. The metal price is such a small percentage of the retail price as to not even be a factor. Rolex builds a very large margin into its making price. The metal price can double or halve without affecting the retail price (hence no change in RRP over long periods). And, since Rolex manufactures their own PM, and accumulates large stocks of metal, market price fluctuations don't affect Rolex PM as much as a jeweler that you might order a piece from.

[Star Ferry]

Originally Posted by KarlS

you must be nice to us dummies. You missed the point completely. In a sophisticated world that I am used to you go into your manufacturing Jeweller and he quotes you the price per gram for the metal in whatever composition you want + manufacturing cost per gram as determined by difficulty and hardness. So if both metals are same price manufacturing cost for platinum is higher and thus it will be more expensive for the manufactured article!!! Comprendo?

However both metal prices have dropped over the past 3 years irrespective of which is more difficult etc and I say this hasn't been passed on to the purchaser. It means the profit margin has increased significantly on platinum watches for no extra effort

I think Rolex is more of a marketing company than it is a jeweler. Their pricing is not cost-plus

Platinum watches are priced at a higher profit margin with the expectation that fewer will be sold. The customer in return can enjoy higher exclusivity.

[Mr Daytona]

You lost me at "the manufacturer greedily richer"..............

I can't have a conversation with people who think like this particularly when we are talking about LUXURY goods.

[KarlS]

Originally Posted by Star Ferry

I think Rolex is more of a marketing company than it is a jeweler. Their pricing is not cost-plus

Platinum watches are priced at a higher profit margin with the expectation that fewer will be sold. The customer in return can enjoy higher exclusivity.

upper deck versus lower deck!!

[madmax21]

Originally Posted by KarlS

you must be nice to us dummies. You missed the point completely. In a sophisticated world that I am used to you go into your manufacturing Jewellery and he quotes you the price per gram for the metal in whatever composition you want + manufacturing cost per gram as determined by difficulty and hardness. So if both metals are same price manufacturing cost for platinum is higher and thus it will be more expensive for the manufactured article!!! Comprendo?

However both metal prices have dropped over the past 3 years irrespective of which is more difficult etc and I say this hasn't been passed on to the purchaser. It means the profit margin has increased significantly on platinum watches for no extra effort

Rolex is in the business of making as much money as they can like I said if you think it's expensive don't buy one

[threemonkeys]

Originally Posted by Star Ferry

I think Rolex is more of a marketing company than it is a jeweler. Their pricing is not cost-plus

Platinum watches are priced at a higher profit margin with the expectation that fewer will be sold. The customer in return can enjoy higher exclusivity.

It's really this simple. It's marketing, folks. Perception is everything.

[descartes]

Despite the fact that gold costs more at the moment, platinum is my favorite metal for watches. IMO, it is the most luxurious and magical due to the weight. Plus, it's stealthy, which really appeals to me. It is also more durable than gold.

IMO opinion, there is more to it than marketing.

[herts9]

Platinum is more dense and it takes its toll on the instruments used to shape and fabricate.

Albeit more rare, its applications are more limited than gold and silver.

[twoweeled]

Originally Posted by PJ S

Boredom or not, you don’t really have a firm grasp on the concept of luxury, do you?

There is no correlation with the commodity price and the finished article, other than associated costs for production – it’s completely all about perception (a lot of smoke and mirrors) and Veblen effect.

In regards to production costs – gold is softer than stainless steel (904 and 316), and platinum is a bit harder.
Tool wear is genuine, but the same is true also of grade 5 titanium (Grand Seiko/Omega/etc), and yet because it’s not a PM, it doesn’t have the same desirability, so as a consequence, can’t be sold on that basis.
Strength, lightness, and hypoallergenic – it sells due to its technical properties.

HUH? Veblen effect? Wat dat?? Gotta admit it. I had to look it up. I apparently also had to display a bit of my ignorance while I was at it!
OH well!
Now have the perfect rationalization NOT to purchase that platinum Daytona I admire so much. Back to the WG blue sub consideration.

[77T]

Didn't Mom tell you the facts?

Life ain't fair - nor the price of a Platinum Rolex. Or Johnnie Walker Blue. Or Pappy's...


Sent from my iPhone using Tapatalk

[SearChart]

Hey, the watchmaker needs his money too!

[Andad]

I think the Pt v YG v SS v WG v RG v Ti v etc. argument deserves its own sub-forum by now.

But the answer is: it is wot it is until it changes.

And once again there is to much misinformation.

Some of us have seen the videos of Rolex punching out the blank stainless steel cases from the stainless steel strips prior to machining.
Are the Pt cases made the same way and the remains of the strip just thrown in a bin?

The Rolex PM range is a different animal altogether and every speck of machined material has to be accounted for and recycled - this alone is a major exercise in efficiency and security.

I have said this before - I could give you a kg of gold or Pt but you couldn't make a YG DayDate or a Pt Daytona.
I will even throw in the movements.

[bayerische]

It's piece of mind that you have something more expensive than white gold.

I really like platinum.

[Andad]

Originally Posted by bayerische

It's piece of mind that you have something more expensive than white gold.

I really like platinum.

And peace to you Jason.

IMO gold is yellow and any variation to the colour is just wrong.
(Apart from rose gold as I quite like that)

Pt is a different animal and has to be judged on its own merit.
It is rarer than gold but it looks similar to stainless steel.
Do buyers choose a Pt product because they like Pt?
They want to 'fly under the radar'?
Or gold is too 'in your face'?
Other numerous reasons for the reasonably large premium.

Didn't take me long to decide on a PM Rolex.

[Andad]

Oops, it was round and yellow.

Jeez, iPads and their tiny pix.

[MonBK]

Originally Posted by directioneng

I think the Pt v YG v SS v WG v RG v Ti v etc. argument deserves its own sub-forum by now.

But the answer is: it is wot it is until it changes.

And once again there is to much misinformation.

Some of us have seen the videos of Rolex punching out the blank stainless steel cases from the stainless steel strips prior to machining.
Are the Pt cases made the same way and the remains of the strip just thrown in a bin?

The Rolex PM range is a different animal altogether and every speck of machined material has to be accounted for and recycled - this alone is a major exercise in efficiency and security.

I have said this before - I could give you a kg of gold or Pt but you couldn't make a YG DayDate or a Pt Daytona.
I will even throw in the movements.

I'll accept the challenge Eddie.

Send me a KG Platinum and a movement and I'll give it my best shot.

[Andad]

PM me your address.
I'll ring you regarding the side bet.

Can we do the deal in my side alley?

[MonBK]

Originally Posted by directioneng

PM me your address.
I'll ring you regarding the side bet.

Can we do the deal in my side alley?

No problem, I'm an iconic alley cat.