How much does it cost to start a watch brand

How much does it cost to start a watch brand

Postby koimaster » August 31st 2017, 8:40am

Parts are available cheaply and that market has been a real race to the bottom on quality and price. It is hard to appreciate real quality from just pictures. I have purchased $100 watches that has $9 of parts and $1 in shipping in a envelope. I have also bought a $250 watch that was every bit as good as some $500 Swiss made watches from Tissot.

I was shocked to find out recently that many watch manufacturers no longer have inhouse movements anymore. Most $5,000 watches from Tag Heuer are using same Swiss ETA movements that you can find in a $500 Tissot. All the rest is just styling and branding.






Francis Jacquerye, worked at Longines Watches


Updated Aug 4 2016






I am assuming that by producing a watch, you are talking about proprietary designs?

GREATER CHINA

If you browse a B2B portal like HKTDC.com, you can find publicly-available information on manufacturing cost. Chinese Private Label companies can supply catalog watches in bulk, with Japanese mechanisms, from USD 15 upwards.

If you are willing to settle for a catalog design, you can probably start with a bulk order of 100 to 300 pieces. That means a production budget of USD 1,500 to USD 4,500, for a very basic watch in stainless steel. Nothing as fancy as those microbrands.

Above 300 pieces, you can actually start thinking about having your own design, which is what the best of those microbrands do.

GERMANY & SWITZERLAND

This is probably not 100% accurate, but based on the above publicly-available information I am using Purchasing power parity in the respective countries to compare manufacturing costs. Raw materials like surgical steel and leather do cost the same, no matter where you buy them, but wage still accounts for most of the added value.

With China at USD 12,900, Germany at USD 45,900 and Switzerland at USD 58,100; it would roughly cost 3.5 times more to produce a watch with similar specifications in Germany and 4.5 times more in Switzerland.

That puts your minimum production cost at USD 67.50 for a Swiss-Made watch, in bulk of 300 units; corresponding to a budget of USD 20,250.

BRANDING COSTS

In terms of branding, you should probably pick a name that doesn't conflict with existing trademarks and register it in the prominent markets: USA, Canada, European Union, Switzerland, China, Hong Kong and Japan. It can be settled with a budget between USD 3,000 and 5,000.

There is also the possibility of protecting the novelty of your design to put yourself further from reach of competitors. Having your own design rather than using a catalog one is a good way of doing that.

I work with watch startups on a weekly basis via my consultancy Woodshores AB[1], and a solid business plan, a strong brand idea and a great design concept do contribute to success. The common denominator between successful microbrand and upcoming brands is that they had those three things figured out from the start. It doesn't necessarily need to be laid down on paper, but at least they have a clear vision of what they want to achieve.

Some of the entrepreneurs that I meet tend to overlook this and put the cart before the horse. I've recently worked with one of them, and he just ended up wasting tens of thousands of dollars by changing idea every two months and putting the blame on all the parties involved. The worst disservice that an entrepreneur can do to himself is not having a clear business plan, having a vague brand idea and no real design concept.

OPERATIONAL COSTS

You should look into incorporating some form of business, which will make you look more credible to all involved parties.

It will require man-hours to come up with a design and formalize it, handle suppliers, sales, customer inquiries, after-sales and deliveries. Depending on your skills, budget and availability, you might want to subcontract some of those tasks.

In terms of logistics, you also need to account for shipping fees, import duties, storage rend and order fulfillment fees.

[Edit 2016–08–05] corrected a few spelling mistakes.

Footnotes

[1] http://www.woodshores.com



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Re: How much does it cost to start a watch brand

Postby foghorn » August 31st 2017, 10:21am

It costs whatever it takes to start a kickstarter site.
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Re: How much does it cost to start a watch brand

Postby ocean » August 31st 2017, 1:55pm

I think I can answer this!

1.4 million in production costs including the building it can go much higher if you don't lease the equipment.
Payroll for 5 years 1.5 million
Distribution costs in about the 500k range
Marketing 1 to 2 million
Prototypes out of pocket 200k
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Re: How much does it cost to start a watch brand

Postby ocean » August 31st 2017, 2:01pm

Fuck the shitheads that order out of a catalog , buy a movement and can't come up with an original idea.

Fuck the geeks on Kickstart.

I wouldn't ask for a dime from my own family to try to start up my own .

So am I bitter, No but any jamoke can start up a catalog kickstart
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Re: How much does it cost to start a watch brand

Postby TemerityB » August 31st 2017, 2:09pm

ocean wrote:Fuck the shitheads that order out of a catalog , buy a movement and can't come up with an original idea.

Fuck the geeks on Kickstart.

I wouldn't ask for a dime from my own family to try to start up my own .

So am I bitter, No but any jamoke can start up a catalog kickstart


One of the greatest posts in the history of this esteemed forum. Thanks, Ocean, for the sanity.
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Re: How much does it cost to start a watch brand

Postby biglove » August 31st 2017, 2:47pm

Whatever happened with our own WL's movement design?
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Re: How much does it cost to start a watch brand

Postby ocean » August 31st 2017, 3:16pm

biglove wrote:Whatever happened with our own WL's movement design?


It's in a safe. 6 in different Prototypes and one very very expensive choreograph module.

To answer your question I had about 2 years of the 5 year plan covered but my marriage and kids are way way more important than any watch.
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