Crazy Prices

[glassdial]

Lets face it prices aren't that crazy, only about 3 watches sell over MSRP, the Daytona, Hulk I don't understand why as its an ugly watch but people seem to like it, and even then its only a $3k over MSRP, same as the BLNR, and thats only $2-3k over MSRP. Other than that you can pretty much wait a year or so to get the Hulk or BLNR, so it not outrageous.

Subs are easy to get if you can be bothered to call a few ADs and wait a few months.

Even with the Daytona you can pay $5k over asking and get one tomorrow. So I don't see why everyone is outraged because they have to pay premium for about 3 watches if they want them tomorrow.

[tyler1980]

Originally Posted by glassdial

Lets face it prices aren't that crazy, only about 3 watches sell over MSRP, the Daytona, Hulk I don't understand why as its an ugly watch but people seem to like it, and even then its only a $3k over MSRP, same as the BLNR, and thats only $2-3k over MSRP. Other than that you can pretty much wait a year or so to get the Hulk or BLNR, so it not outrageous.

Subs are easy to get if you can be bothered to call a few ADs and wait a few months.

Even with the Daytona you can pay $5k over asking and get one tomorrow. So I don't see why everyone is outraged because they have to pay premium for about 3 watches if they want them tomorrow.

the starting point for a Daytona C is close to 14k, not $12,400. 14k is equilavant price in todays dollars since the last price increase in the US. Rolex has not adjusted for inflation in 6 years. Then the premium seems even more reasonable.

In other words paying 12,400 in 2012 is the same as paying nearly 14k in 2018.

[AK797]

Originally Posted by No SUBctitute

Demand for a Veblen good goes up BECAUSE price goes up. In the case of the LVc, the disco rumors caused demand to increase, and the increased demand caused prices to go up. An increase in price did not cause the increase in demand.



If people increasingly desire a watch due to profitability, that is NOT an indicator of a Veblen good.



Interesting points you make. I would love to see a supply increase of stainless steel sport watches to test the Veblen theory. I do not think as the price goes down that demand will also decrease because people think they aren't exclusive enough.

Thanks for the great dialogue!

Yes initially the price rose due to the rumours but as I said they persisted in rising as did demand because the prices went up, and then when the disco rumours proved false they did not fall like a normal good would. I used this an example as there is no supply side issue to muddy the waters. On the Black subs I don't think supply has changed much and yet prices are continually rising and so is demand, both genuine, which is Veblen, and flipper, which is perhaps not, but the supply issue is not so clear cut.

But yes, interesting dialogue, it is not so clear cut as to what is exactly happening and there are many factors at play, but in the UK the huge premiums on many models, 50% on LVC and BLNR now, show the Veblen effect more clearly than in other countries.

[No SUBctitute]

Originally Posted by douglasf13

A) First point: That's essentially opinion and marketing. Plenty of people choose other brands over Rolex. I mean, the 3135 movement, while a good one, is decades old and can't really touch the tech of a Co-Axial. The newer Rolex movements are a nice step forward.

B) These are Veblen goods, and the price for sale isn't necessarily predicted by the cost to make them. We're talking about mass produced watches made of steel. There were some great old threads about how much these things might cost to make. I mean, we're talking a movement that's been made for decades, and likely costs less than a hundred or two bucks to make, considering you can buy a top grade ETA 2892 for less than couple of hundred bucks off the shelf. And so how much does a steel case, dial, hands, etc. cost???

C) My point about Porsche is that their cars are still leading edge technology, whereas NO mechanical watches are leading edge technology. They were surpassed by quartz/digital. Yet, despite that, their prices have risen dramatically vs. a brand like Porsche, which also proves their pivot to Veblen good, luxury items in the '80s.

A) Well, I guess all buying decisions are opinion. Your comment that the 3135 is decades old is a little disingenuous. Updates have been made to the movement. Your statement that Rolex "can't touch the tech of a co-axial" I sort of agree with. The co-axial has more bells and whistles. Although it needs a bigger package to do it; the thickness of the Planet Ocean 6 years ago caused me not to consider it. I'd be more impressed with Planet Ocean if the watch was as thin as the Sub. The old Seamaster Pro 2500 was a great size!

B) I remember some of the cost threads. They were interesting! Here is my response. If the watch can be made for a lot less money, then I think a company should do it. Make a watch for less with the same quality steel, movement, clasp, hands, size, reliability, running for more than a decade without service, overall robustness, style, tolerances, etc. I'd like to see how much it costs a company to make a watch with every bit the quality of the Sub. There are watches that are half the price but are more than half as good (maybe the Brietling Super Ocean for $4000). But what watch is the same quality of the Sub for less money. You could argue the Planet Ocean. I think the list is slim.

C) No mechanical watches are leading technology? I find that an odd statement. There have been advancements in horological engineering and research which have borne witness to more technologically advanced movements. They can't be compared to quartz watches. Those are computers. Mechanical movements are delicately engineered machines powered by movement that are built to withstand great tolerances. I find them pretty technologically advanced. I'm guessing Rolex also has a lot of technologically advanced machines that help them build the watch components.

[No SUBctitute]

Originally Posted by AK797

Yes initially the price rose due to the rumours but as I said they persisted in rising as did demand because the prices went up, and then when the disco rumours proved false they did not fall like a normal good would. I used this an example as there is no supply side issue to muddy the waters. On the Black subs I don't think supply has changed much and yet prices are continually rising and so is demand, both genuine, which is Veblen, and flipper, which is perhaps not, but the supply issue is not so clear cut.

But yes, interesting dialogue, it is not so clear cut as to what is exactly happening and there are many factors at play, but in the UK the huge premiums on many models, 50% on LVC and BLNR now, show the Veblen effect more clearly than in other countries.

Yes, that is an interesting observation on the LVc's price. I would contend that when disco rumors proved false that demand stayed high because of the publicity that the disco rumors gave it. And that demand ket the price high. Not that the high price caused demand. I do appreciate your thoughts on the matter, though.

You don't think the supply of black Subs have changed? I don't know. Anecdotally, they seem to be harder to get. I don't see them and ADs tell me they aren't getting them.

I don't see how the 50% premiums in the UK show the Veblen effect. It seems like that the high price is caused by limited supply and high demand. Overall, though, I see that Veblen is at work to some degree with Rolex. Although, I am still not sure if the price were cut in half we would see less demand for Rolex--as that's how a Veblen good would behave in the long term.

[MrCowboy99]

Originally Posted by BillA

It is called the principle of supply and demand.

[wrxsti]

Originally Posted by glassdial

Lets face it prices aren't that crazy, only about 3 watches sell over MSRP, the Daytona, Hulk I don't understand why as its an ugly watch but people seem to like it, and even then its only a $3k over MSRP, same as the BLNR, and thats only $2-3k over MSRP. Other than that you can pretty much wait a year or so to get the Hulk or BLNR, so it not outrageous.

Subs are easy to get if you can be bothered to call a few ADs and wait a few months.

Even with the Daytona you can pay $5k over asking and get one tomorrow. So I don't see why everyone is outraged because they have to pay premium for about 3 watches if they want them tomorrow.

You call the hulk ugly that's your opinion I prefer the hulk over the blnr but I don't go around calling the blnr ugly or say I don't understand why people like it!

It's called taste and everyone has different likes or dislikes no biggie, I think the blnr is a good looking watch just not for me.