I often hear the term ‘value for money’ in my watch-collecting journey. And while it’s mostly applied to lower-valued watches in the tens and hundreds of dollars, the same term recurs into the thousands as well. Undoubtedly, the value of a watch is a personal opinion of an individual. But objectively speaking, how much money is too much? And at what price-point are you getting the most out of your purchase? In this week’s topic, we delve into the economics of collecting watches, with existing theories and experiences to back ourselves up.
More Money = More Better?
The common argument is that a more expensive watch far outweigh cheaper alternative in one form or another. From finishing to brand heritage, paying more means you’re getting more… right? I would say that statement is right and wrong at the same time, confusing, but hear me out.
Applying The Law Of Diminishing Returns
To better put it into perspective, let’s use an existing theory: The Law Of Diminishing Returns.
To put the graph into simple terms, in the green area, brands are working at desirable features: Sapphire crystal, increased water resistance, better movement etc, peaking at the “Point of Diminishing Returns”. At that point, you’re getting the best of both worlds, you’re not forking out an exorbitant price-tag, and you’re getting enough quality.
In the orange area, customers start buying more into brand-name and finishing as opposed to function. In this area, you start paying much more for minute differences. At it’s peak – Point of Maximum Yield, it’s unlikely someone would buy the watch for function, we’re talking tens if not hundreds of thousands of dollars. But, since this week topic just covers “affordable watches”, let’s aim a little lower, and stick within the green area.
The Price To Pay To Get The Most Of Your Money
So, what’s the price that seemingly meets this “Point Of Diminishing Returns”? We think it’s $1000USD, around this price, you would notice that watches seem to transition more into the luxury market. Undoubtedly, crossing from 3 to 4 figures for a timepiece is already a lot of money, but in terms of parts, that’s usually where you get the best of product lines that have not entered ‘luxury’ yet.
We center our blog around that, without delving into watches upholding a luxury name on the dial, we report on watches that provide as much value for prices not exceeding that point where you start to have diminishing returns. So, our pursuit below the thousand-dollar price mark aims to offer objective comparisons and subjective opinions on these watches that you may be interested in.
Why More Affordable Watches Appeal To Collectors
It’s much better to acquire a taste before really devoting your wallet to the hobby. At the higher-prices however, that’s just not possible.
If you purchase a luxury watch and regretted that decision, selling it could be costly. On the contrary, liquidating watches that are ‘affordable’ to you is a much more plausible solution which is less tough on the wallet for finding out what you like. While you may not be able to collect tourbillions and minute-repeaters within this category, you’re free to explore chronographs, divers and even perpetual calendars.
However, at the same time, collecting at this price and the freedom to spend makes a collector vulnerable to the recurring excitement of buying. If you’re overspending on multiple ‘affordable watches’ they can often leave a financial hole the size of a luxury one. So, as much as we advocate learning at this price, it’s good to practice restraint.
Fun And Variety
You can have fun and variety at any price-point, but probably not to the same extent as a non-luxury market. Coincidentally, that’s what makes microbrands so popular.
Microbrands usually produce watches in the hundreds of dollars range. A smaller operation means that just one or a few stakeholder – the brand owner(s). determine just about everything to put in a watch. Meteorite dials, fancy cases and materials are just some interesting features one can expect from these up and coming brands.
Some are successful, some are not. Their popularity are usually determined by their value proposition. How interesting of a watch can a brand offer at an attractive price? That’s usually the determinant of a sought-after release from these small brands.
Servicing a timepiece is a large pitfall most don’t consider when thinking of owning one. For starters, I had many friends approached me thinking of X timepiece costing their maximum budget. When I raise the question if they are ready to fork out a servicing fee a few years down the road, the answer I get is a solid ‘no’.
While you should still service the movement of a more affordable watch, the implication usually won’t be as bad. At the lower prices, brands usually don’t assemble movements in-house – which is the cause of a high service cost. Instead, they use mass-produced movement, Movement manufacturers like ETA, Ronda, or even brands with large-enough factories like Seiko, produces movement cheaply. Because of their abundance, their parts not only have a higher availability, but watchmakers have a much easier time dealing with them. Not to mention, it’s much easier finding someone to service your Seiko NH36 Movement – A movement commonly found in microbrands, compared with the chronograph module of a Speedmaster Reduced.
Affordable and luxury watches both have their appeal, and it’s perfectly fine to interchangeably buy them. A common misbelief is to always “work your way up” the watch hierarchy, while it’s great to hold a dream of owning luxury, it’s not something you have to stick to.
At any price-price, watches have their propositions. In our previous article – How Seiko Caters To Your Different Budgets, we explore how just one brand manages to provide different appeal factors at the differing prices across the line. What are your opinions on affordable watches? Check out our Instagram Page for our educational infographics as well as our Youtube video for this week’s topic, a laid-back alternative to the blog, where you can sit back and enjoy our content narrated in the form of a short video.