Rolex Platinum - The Ultimate Profit Margin?

[tomchicago]

I was shocked to see what little premium there actually is to physical platinum over gold versus what Rolex charges for their timepieces. Platinum costs only 4% more than gold on the global metals market! Are platty Rollies The Ultimate Profit Margin?:

$57,600 for the platinum and $32,550 for the white gold day-date.
In the ddII, $74,300 for the platty and $37,550 for the white gold.
Market price for gold is approx $1209/oz and only $1261/oz for platinum!

Is there some other reason for the wide disparity relative to actual market price of the metal besides marketing-generated exclusivity and wider profit margin?

[HL65]

Much less supply of platinum for starters and far harder to work with than gold. Of course also is exclusivity factor of platinum like it or not.

[aleeboy]

Exclusivity.

I own a gold watch, but don't own a Platinum one.

Platinum is also a lot rarer and has more desirable metallurgical properties.

Having said this, I would still take a YG over platinum any day of the week.

[brandrea]

Simple answer is .... Because they can charge more for it, and people will pay.

[tomchicago]

The global metals market disagrees with your statement of "much less supply of platinum". That's the point of the post. Platinum costs only 4% more than gold on the world metals market.

So then platinum Rolexes must be The Ultimate Profit Margin!

Originally Posted by HL65

Much less supply of platinum for starters and far harder to work with than gold. Of course also is exclusivity factor of platinum like it or not.

[Tools]

Originally Posted by tomchicago

. . . Is there some other reason for the wide disparity relative to actual market price of the metal besides marketing-generated exclusivity and wider profit margin?

There is seldom any relationship to precious metals market or spot-price and a piece of jewelry made from that metal..

Platinum is popular now in jewelry of all types and the price of those pieces reflect that popularity, not the market price.

[iazrollie]

You are looking at pure gold. Rolex uses 18 carat. So, you are off by 25%.

[Im Lauf der Zeit]

Rolex uses 18K yellow gold, an alloy that is 75% gold. Platinum is not only more expensive and harder to work with but they use an alloy that is 95% platinum--27% more of a more expensive precious metal than in 18K yellow gold and it requires special tooling.

[Kokoshawnuff]

Until recently platinum was typically 20-200% more expensive than gold, so watch makers and jewlers would have to charge more...these days there is littler difference (as was mentioned in the OP), but the consumer is used to the premium, and are willing to pay.

Ultimately every precious metal watch represents wonderful profit for the maker, even in the heavy sport models like the Platona there is only about $5000 worth of platinum

[HL65]

Originally Posted by tomchicago

The global metals market disagrees with your statement of "much less supply of platinum". That's the point of the post. Platinum costs only 4% more than gold on the world metals market.

So then platinum Rolexes must be The Ultimate Profit Margin!

Doesn't matter fact is there is MUCH less supply of platinum in the world than gold. It is a far rarer metal and much harder to work with thus much higher price for platinum va gold watches for every brand not just Rolex. Also much more expensive jewelry i. e rings, bracelets, etc. for same reason. Read article in link and you will understand why: http://www.gold-eagle.com/article/pl...rich-mans-gold

[Snow-Dweller]

I always understood that platinum is very much more complicated (ie. expensive) to machine than gold.

[kilyung]

I like platinum. A lot.

[Presa canary]

Originally Posted by HL65

Doesn't matter fact is there is MUCH less supply of platinum in the world than gold. It is a far rarer metal and much harder to work with thus much higher price for platinum va gold watches for every brand not just Rolex. Also much more expensive jewelry i. e rings, bracelets, etc. for same reason. Read article in link and you will understand why: http://www.gold-eagle.com/article/pl...rich-mans-gold

Good read. Thanks

[HL65]

Originally Posted by Presa canary

Good read. Thanks

[sturgeon123456]

It's actually 20% more for the platinum as its 95% pure vs 75% for 18k

The second biggest factor.....PLATINUM IS HARDER TO WORK WITH.

At the jewelry stores a gram of manufactured platinum in let's say a ring may sell for 200 bucks or more, the same gold ring will cost maybe 75 bucks a gram in 18k.

It costs the store more as it costs the manufacturers more to work with.

Also density.is the BIGGEST factor .....

A solid gold Daytona may weigh 100 grams less than a platinum.....seriously that's 3 ounces more material as its more dense.

I do a lot of collecting of gold and platinum jewelry and have had many pieces custom made. Platinum is just more expensive to work with and more dense.

[Presa canary]

To answer the ops question, yes.

[andrewd]

Couldn't resist doing the calcs:
density Platinum =21.4 g/cc
density Gold = 19.3 g/ cc
If you consider that 18k gold has 75% gold and platinum95 is 95% Platinum, you can calculate how many grams of precious metal there in each cubic cm of watch.

For gold there is 14.5g per cc of watch, and Pt there is 20.4g.
Thats 40% more precious metal in the pt watch.
factor in a 4% price premium for Pt and you can explain a 46% premium for Pt.

Pt prices are more volatile so there is probably extra allowance for that, plus some extra for the exclusivity factor.

[mikeceee]

Originally Posted by sturgeon123456

It's actually 20% more for the platinum as its 95% pure vs 75% for 18k

The second biggest factor.....PLATINUM IS HARDER TO WORK WITH.

At the jewelry stores a gram of manufactured platinum in let's say a ring may sell for 200 bucks or more, the same gold ring will cost maybe 75 bucks a gram in 18k.

It costs the store more as it costs the manufacturers more to work with.

Also density.is the BIGGEST factor .....

A solid gold Daytona may weigh 100 grams less than a platinum.....seriously that's 3 ounces more material as its more dense.

I do a lot of collecting of gold and platinum jewelry and have had many pieces custom made. Platinum is just more expensive to work with and more dense.

Bingo, 75% gold vs 95% platinum. Density (same watch band contains more weight of platinum), and difficulty to work with. These 3 factors make it much more expensive than the 5% difference per oz on the open metal market.

[bmpwatch]

as others have said have to account the YG Rolex is only 750 gold (18k)....also platinum is the ultimate in exclusivity

[busytimmy]

If I were Rolex, I'd charge what they charge. Simple economics. People are willing to pay. Let them.

[fixinbones]

About 5 years ago for our 15th wedding anniversary my wife and I purchased Day Dates for each other. My wife a WG DD with diamond bezel and dial. For myself, a platinum DD with glacier waves Arabic dial. When u put the watchs side by side there is no comparison. The platinum watch is so much brighter and pure silver in color. The WG DD almost looks dull compared to the platinum. On another note both watches retailed for the same amount. I'd say that there's more a of profit margin for Rolex bezel and dial diamonds then their platinum watches.

[RolexJNJ]

Originally Posted by kilyung

I like platinum. A lot.

X2!!

[Manofsteelpt]

Originally Posted by Kokoshawnuff

Ultimately every precious metal watch represents wonderful profit for the maker, even in the heavy sport models like the Platona there is only about $5000 worth of platinum

Not true... Idk the weight of the Pt Daytona, but I bet there is a lot more than 4oz of Pt in it.

[tkerrmd]

Originally Posted by Manofsteelpt

Not true... Idk the weight of the Pt Daytona, but I bet there is a lot more than 4oz of Pt in it.

It's heavy!!

[ssultan]

Originally Posted by brandrea

Simple answer is .... Because they can charge more for it, and people will pay.

x1

[ssultan]

Originally Posted by HL65

Doesn't matter fact is there is MUCH less supply of platinum in the world than gold. It is a far rarer metal and much harder to work with thus much higher price for platinum va gold watches for every brand not just Rolex. Also much more expensive jewelry i. e rings, bracelets, etc. for same reason. Read article in link and you will understand why: http://www.gold-eagle.com/article/pl...rich-mans-gold

Good read. Fun topic.

[StevePirates]

This was a hugely informative thread.

[tomchicago]

lots of interesting psych here...

[phils]

My diver's watch is made from the super rare pluplatitatium.

Costs double that of 18k gold and platinum combined.

[Kokoshawnuff]

Originally Posted by Manofsteelpt

Not true... Idk the weight of the Pt Daytona, but I bet there is a lot more than 4oz of Pt in it.

Ok, so let's pretend every gram of the 282 is platinum (I don't know how much the movement weighs, the crystal, the bezel, the dial, or the towel he was using). That's just over 9 troy ounces, which is a little more than $11k.

Ultimately doesn't change my point; when a SS Daytona is around $10k and the platinum is around $50/$60k...it isn't because of the raw materials.