patrick_y[PuristSPro Moderator]
28689
I see where you're coming from.
Jan 26, 2015,11:26 AM
FYI, this Panerai Radiomir comes with the "better" movement so it would've cost more than 6500 Euro. But yes, it still wouldn't cover the total discrepancy you visualize.
I totally see where you're coming from, but let me play devil's advocate and show you how much it could cost Panerai to make this watch...
Let's look at it this way...
1. The engraving only takes a week. Let's say 40 hours. Let's assume this employee is paid around 1500 Euro a week, and let's assume that the company needs to supply this employee with health insurance, other benefits, an office, tools, training, etc. So it probably costs the company almost 2500 Euros. They need to make a margin on that, so by the time you add in safety margin, profit margin, wholesale and distribution costs, and more you're looking at 5000 Euros.
2. A committee had to be assembled to design the watch. A designer was tasked to design the watch. Multiple designs and many weeks of work were invested and many designs were made, only one was chosen. Prototypes were made at great expense. Amortize this cost over only 99 watches and you have a high cost per watch.
3. Corporate overhead. Marketing expenses. Etc.
4. At 18,800 Euros and with only 99 pieces made, that's a total revenue of 1.8 million euros. That's a lot of money, but keep in mind Panerai probably spent that amount or more just on the renovation of the Firenze store (remember, retail construction is quite expensive).
At 18,800 Euros, I think the watch is high but not unreasonably priced. Hmm, now I really want one!