Manufacturing Costs of Rolex

[rolexfan21]

Does anyone here know How much it costs rolex to make one Submariner watch? I know they probably vary in cost but i think they're probably relatively be the same. Like the average sub sells for like what? around 5K? how much profit do you think ROLEX makes for every watch they sell?

[PhiDeltBeers]

Good question. I'd like to know the same.

[vdave]

Not sure if you know but majority of the rolex profits go to charity. The founder of rolex Hans Wilsdorf had no heir and he formed a Rolex Foundation which to date runs & governs Rolex. Not to mention, Wilsdorf's wife was very active in many charitable foundations and his will dictates what percentage of Rolex profits will go to which charity. It is estimated that about 60% of its profits is going to charity -- pretty much all of Hans Wilsdorf's shares.

[Nick Hacko]

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[ashu2289]

Originally Posted by Nick Hacko

I guess we are all guilty of being blinded by love.
For totally unbiased observer, even an Omega or TAG
would look equally "well made" or "expensive looking" watches.
IMHO TAG Carrera Cal 16 is just absolutely stunning timepiece
- both mechanically and aesthetically - and if TAG
can design, produce and wholesale Carrera for $1K or so
one would imagine Rolex can do it for fraction of TAG's cost.

Zenith, Jaeger LeCoultre, Blacpain - to mention just a few-
manufacture superb watches with in-house movements
despite marginal market share.

Rolex is making hundreds of thousands 16610 Submariners for 54 years -
same product of same design with few minor movement mods.
It is like licence to print money. After 50 or so years in production,
cost per unit has probably dropped to $ 50-150.

Nick very very well said that Rolex have got like license to print money
But whenever I see the reputation, recognition, research n developments n rolex manufacturing processes n units n the gr8 videos they have broadcasted on their sites I feel very contented with the cost Rolex offer although I do agree and vry well know that Rolexes are simply much much over priced.

[BondandBigM]

Originally Posted by Nick Hacko

After 50 or so years in production,
cost per unit has probably dropped to $ 50-150.

I doubt if you would buy the materials for that, you have to factor in many things to get the true cost of a unit, man hours alone will not be cheap in that part of the world and on top tax paid for each employee, capital costs for equipment which is probably renewed every 7-10 years, property costs and even down to how much your utlilities cost, marketing and sponsership of events, supporting the AD's and service centres, The one in Singapore alone won't be cheap. It is an extremely complicated calculation and difficult to say that if one company can sell a product for x amount that any other can do the same.

[padi56]

Originally Posted by Nick Hacko

I guess we are all guilty of being blinded by love.
For totally unbiased observer, even an Omega or TAG
would look equally "well made" or "expensive looking" watches.
IMHO TAG Carrera Cal 16 is just absolutely stunning timepiece
- both mechanically and aesthetically - and if TAG
can design, produce and wholesale Carrera for $1K or so
one would imagine Rolex can do it for fraction of TAG's cost.

Zenith, Jaeger LeCoultre, Blacpain - to mention just a few-
manufacture superb watches with in-house movements
despite marginal market share.

Rolex is making hundreds of thousands 16610 Submariners for 54 years -
same product of same design with few minor movement mods.
It is like licence to print money. After 50 or so years in production,
cost per unit has probably dropped to $ 50-150.

Now Nick truer words have not been spoken,but to design a new movement and tool up to make that movement today thats where the cost is.But once you have that tooling you can churn them out by the million.Now Rolex states they make around 800000 units a year.Thats a lot of watches and impossible to make assemble all by hand.Yes would have thought a very small proportion of watches would get the hand treatment,but these would be the diamond bling type watches.And not the volume Rolex sellers,now movements today like the 3135 are precision mass machined.And anything thats machine made to a very high tolerance is going to get a high pass rate at the COSC.Because basically they are all the same,where as say a all hand made watch would be much more difficult even today to pass test first time.

Many many Rolex WIS types will say it must cost a whole lot more (maybe as much as a £700-£1000) to make a Rolex chronometer movement compared to the some say humble common ETA. Perhaps so,but it will always remain quite a mystery to me because Rolex sells movements one part at a time. If the cost of manufacture is reflected in parts prices, the only out of the ordinary (most expensive) parts in a Rolex movement are by-far escapement and Breguet overcoil hairspring,but again thats my opinion I am not a watchmaker. A balance complete for a Rolex 3135 sold for around £70 in the late 90s more expensive today, and much harder to find out the prices. A pallet fork was £18, and a complete reverser assembly was about £16. Average current cost of a balance assembly for the ETA 2824-2 is £12, pallet fork...£8, reverser...£9.Nivarox balance spring is now owned by Swatch/ETA group everything now is made in-house.

The lowly to some non chronometer ETA 2824-2 will cost over well £220 when purchased one part at a time. A complete chronometer grade 2824-2 used to cost around £40-£45 wholesale.But today there is little difference proportionality between price and quality, with most watches today. The value of a commodity like a watch truly is only today in the price the market will bear,but today most of the cost is in the name.

[Tombstone]

I would like to know this fact as well, it is a topic nobody from Rolex will discuss. My guess under $500.00

[rolexfan21]

Originally Posted by Tombstone

I would like to know this fact as well, it is a topic nobody from Rolex will discuss. My guess under $500.00

REALLY? under 500$? I very much doubt that... they gotta do a lot of tests and stuff too, and they're handmade.

[Jocke]

Originally Posted by vic_the_pro

REALLY? under 500$? I very much doubt that... they gotta do a lot of tests and stuff too, and they're handmade.

I will not say handmade. The parts in a SS watch will
be below $500 but the cost of the machines that
made the parts have cost a fortune. So it´s not that
easy just to set a price. It´s like Windows
software, a CD cost below $1 but they ask for $200.

Jocke

[C.J.]

There's very little about a Rolex that is handmade. Most, if not all, of the watch is assembled by machines. My best guess, the AD is buying them for about half of the suggested retail price, so for a Sub that's about $2500 US. Take into consideration the cost of shipping, packaging, testing, advertising, etc, etc. I would think Rolex is all in for between $400 to $800 per watch with the rest being pure profit. This is just my best guess, mind you. I honestly, have no idea

Originally Posted by vic_the_pro

REALLY? under 500$? I very much doubt that... they gotta do a lot of tests and stuff too, and they're handmade.

Hand made by robots maybe.....all accounts I have read from people who have been through the factory say it's very automated. How else could they make approx. 1 million pieces per year?

BTW I have also seen the COSC testing is something like $150 per watch.

[Goodwatch]

This is both one of the most often asked questions and one that is virtually impossible to answer. As Rolex are a foundation, they are exempt from publishing an Annual Report and balance sheet so there is no way to know exactly how much profit they make. And even if we knew, it would be meaningless.

The last figure I came across, and that was deducted from a lot of speculation, was about US$ 800 for a 16610. But that figure is meaningless as well, as no one knows for sure.

And i.m.h.o. it doesn’t really matter. Most luxury or sought after items come with a premium and we sure can’t make a Rolex ourselves.

I know of only one exception and that is the Bugatti Veyron. VW has lost almost US$ 2,000,000 on every Veyron they produced up until today (development costs divided by number of cars sold) but they only wanted to prove they were able to make such a car.

[mlb]

Think of the man hours and precision it takes to put these together. Not just the parts but the people who put them together

[Solo118]

I would say its total cost (after materials, man hours, boxes, shipping, insurance all of that) must be at least a quarter of its retail price. We all have a small idea of how much effort goes into making each and every Rolex on our wrists. Quality does not come cheap, And I am glad we pay for this quality!

[Launch Mini]

Don't forget the advertising budget.
THat eats up a huge amount of "manufacturing costs"
About 15 years I read that VW spent approx $3000/car in advertising.
That budget includes all the tennis, yachting, auto races etc etc etc

Originally Posted by Launch Mini

Don't forget the advertising budget.
THat eats up a huge amount of "manufacturing costs"
About 15 years I read that VW spent approx $3000/car in advertising.
That budget includes all the tennis, yachting, auto races etc etc etc

Now there I agree, but that's not "cost to make it" as much as "cost to market it."

[Nick Hacko]

,

[Launch Mini]

Originally Posted by Nick Hacko

Advertising costs are not manufacturing costs, they are "branding costs"
I was referring to costs of design, material, labour and manufacturing equipment per unit.

I understand that, hence the "quotes" but I think people were trying to get at how Much Rolex makes from each watch.

[JJ Irani]

My special AD, Mr. Me Wob Yu, hands them out at 50 bucks a piece. Wonder what the actual manufacturing cost is?

[C.J.]

Originally Posted by JJ Irani

My special AD, Mr. Me Wob Yu, hands them out at 50 bucks a piece. Wonder what the actual manufacturing cost is?

It's Mi....Mi....Mi......MI Wob Yu You could ruin a sheeps wet dream, couldn't you?

[langejl]

i read somewhere that Rolex sells the watches at double their cost and then the AD add's another 30% for the MSRP.

[Lane from s.c.]

Langejl, that sounds right. But the other way of looking at it, if you costed out all of the parts from a parts list and then assemembled the watch I bet it would be 15k. I love everything about that company. The charity part I like very stable pricing and control over AD. I bought my watch in apr. 1985, I still have the reciept it was around $950 I could prolly get $2500 for the watch. Thats what I like. In this f`ing walmart world we live in, its nice to see quality.

Regards,
Lane

[langejl]

I agree. I feel proud when I wear mine.

[pcarson]

Originally Posted by Lane from s.c.

Langejl, that sounds right. But the other way of looking at it, if you costed out all of the parts from a parts list and then assemembled the watch I bet it would be 15k. I love everything about that company. The charity part I like very stable pricing and control over AD. I bought my watch in apr. 1985, I still have the reciept it was around $950 I could prolly get $2500 for the watch. Thats what I like. In this f`ing walmart world we live in, its nice to see quality.

Regards,
Lane

Couldn't agree more. I couldn't care less what it takes to "make" it since the figure is (although interesting for sure) meaningless. The figure to know is what it costs to make it what it is, and that's a lot more.

The temptation to go from manufacturing cost to some assessment of value is always there, but we should resist it. No-one's going to tell us what they cost to make, but in a world full of crap, I'll part with with dough to have nice things even if I have a lot fewer of them.

Of course, that doesn't answer the question, but I think it's unanswerable.

[trashboss]

Gee i didnt know Omega, Tag etc, used 490L SS in their watches like the 16610.
A tool maker friend of mine estimated that his shop would charge somewhere around $10,000 (USA baby!) to make a prototype of equal strength and quality and it wouldnt look anywhere near as nice as the real thing - and that was just for the shell with no motor or crystal.

Originally Posted by trashboss

Gee i didnt know Omega, Tag etc, used 490L SS in their watches like the 16610.
A tool maker friend of mine estimated that his shop would charge somewhere around $10,000 (USA baby!) to make a prototype of equal strength and quality and it wouldnt look anywhere near as nice as the real thing - and that was just for the shell with no motor or crystal.

Well of course making a one-off is more expensive. And if I was getting parts made for me, I'd find another shop! That sounds very expensive to make a relatively simple case......

And BTW it's 904L....

[mikey]

You paid $950 for a Sub. I bet the pricing to produce in 85 has not changed. Since Rolex doesn't have to report anything then I agree on the $500 or much less to produce. Its supply and demand. Rolex sells every watch they make. These forums are a complimentary showcase for someone plugging in a google search for a Rolex forum. Its fascinating and it will go on forever.

[SPACE-DWELLER]

Originally Posted by vic_the_pro

Does anyone here know How much it costs rolex to make one Submariner watch? I know they probably vary in cost but i think they're probably relatively be the same. Like the average sub sells for like what? around 5K? how much profit do you think ROLEX makes for every watch they sell?

A LOT!

[chris_nor_cal]

ugh i really think i dont want to know id probably get sick.