What it costs Rolex to make a watch

[gallahadesquire]

Don't forget research. The differences between my 1970's date and my random serial Explorer are significant.

[samson66]

Originally Posted by locutus49

Most public companies (Rolex is private) are judged by stock analysts on their margins, meaning profit margin. I don't recall the exact number but I think Apple's profit margin on the iPhone is 40%.

If you use that as a parallel, and do a simple calculation, you can figure out the cost of materials and labor (but not the R&D over the long term).

I'll throw out that Rolex says it takes 3 times as long to machine 904 SS and Platinum than it does gold. So SS is not as cheap as one might think.

Apple makes an obscene profit on their phones. Last numbers I heard was the phone they sell for $650 costs $200 to produce. But who can fault them. If a company can make something with a profit margin like that, more power to them.

[locutus49]

You may want to visit the Apple website. The newest iPhone is nowhere near $690 in price. If I recall they are half that. Samsung is fond of spreading that myth.

Originally Posted by samson66

Apple makes an obscene profit on their phones. Last numbers I heard was the phone they sell for $650 costs $200 to produce. But who can fault them. If a company can make something with a profit margin like that, more power to them.

[Maxy]

Originally Posted by locutus49

You may want to visit the Apple website. The newest iPhone is nowhere near $690 in price. If I recall they are half that. Samsung is fond of spreading that myth.

You are talking about 2 year plans.

Check the unlocked phones - http://store.apple.com/us/buy-iphone/iphone5s

16GB = $649
32GB = $749
64GB = $849

[samson66]

Correct Max

Samsung phones (of which I have an S5) cost about the same as Apple phones. They profit a little less on them because the cost to build them is slightly higher. Both companies make a ton of money on their phones.

[bayerische]

3-5 USD for a loaf of bread, sign me up! Or send me some, the good stuff here is close to 10 USD.

[AbsolutelyROLEX!]

gettin a little off topic here boys, I guess the topic has been flogged to death.
A few years ago i heard that a complete abs system on a chev cavalier costs GM $200 to make, complete, all lines, computers everything.
that was around 2000, and a cavalier was around 12-15 k back then

[Dr DRW]

I wonder how much it cost Coors to make that beer I paid 8 bucks for at the Spurs game, I'm thinking about 10 cents. There's lots worse markups than Rolex

[Laszlo]

Originally Posted by anderl712000

gettin a little off topic here boys, I guess the topic has been flogged to death.
A few years ago i heard that a complete abs system on a chev cavalier costs GM $200 to make, complete, all lines, computers everything.
that was around 2000, and a cavalier was around 12-15 k back then

To put things into perspective, before GM went bankrupt in 2009, they made only $650.00 profit for every SUV sold.

UPS profit per year is only ~8%. Rolex is not any different. They make a profit and I'm sure the margins are reasonable, but they're not ripping anyone off...

[DJJon]

The key to this is to separate the variable cost of making that one last watch, from the cost to run their business and make all the watches.

Rolex stands for perfection. That does not come cheaply. Making one last SS Airking might cost say $1200 USD but distributing the cost of being Rolex over all their output raises it to the $3000 USD level. Just guesses of course.

[AbsolutelyROLEX!]

Originally Posted by Dr DRW

I wonder how much it cost Coors to make that beer I paid 8 bucks for at the Spurs game, I'm thinking about 10 cents. There's lots worse markups than Rolex

good point, like bottled water or tooth paste

[Travelair007]

I'm surprised by how high some folks estimate the cost of manufacturing. My speciality is aerospace and specifically airframes and jet engines. We can manufacture hot section turbine parts far more complex than a rolex for $100....

[Laszlo]

Originally Posted by flagada2009

I'm surprised by how high some folks estimate the cost of manufacturing. My speciality is aerospace and specifically airframes and jet engines. We can manufacture hot section turbine parts far more complex than a rolex for $100....

GM spends $1.9 million dollars a day on advertising alone.

I don't understand the point of this thread.

[Alfredo.]

Originally Posted by anderl712000

good point, like bottled water or tooth paste

Or anything at the movies...

[Presa canary]

I don't get how it's still going... The answer was given page 1. Only rolex knows. That's it. Everything else is a complete guess. Some claim it cost rolex $10, others $2000, they're both right, and both wrong. Or maybe just keep throwing out numbers...

[AbsolutelyROLEX!]

Yes, conclusion? its anyones guess.
Its interesting to see some points brought up that no one thought of, like the cost of living in Schweiz!

[tom2517]

Originally Posted by Laszlo

GM spends $1.9 million dollars a day on advertising alone.

I don't understand the point of this thread.

I think he is just talking about the cost of manufacturing a part, not all the costs associated with maintaining a brand, like marketing, advertising, and etc.

I have seen a part that was made by the company I worked for at Homedepot for 14 bucks, we sold the product for about 1 dollar to Homedepot.

So I can relate to that sometimes things are made much cheaper than one would have thought.

[Laszlo]

Originally Posted by tom2517

I think he is just talking about the cost of manufacturing a part, not all the costs associated with maintaining a brand, like marketing, advertising, and etc.

I have seen a part that was made by the company I worked for at Homedepot for 14 bucks, we sold the product for about 1 dollar to Homedepot.

So I can relate to that sometimes things are made much cheaper than one would have thought.

Sure, I see your point. But regardless of what a part may cost, it could be in the hundreds of thousands of dollars just to get the tooling done for just that one part to cost just one dollar. And you really need to compare apples to apples.

[MP5]

Any of yall use printer ink?

[Georg]

The OP is asking about something called COGS - cost of goods sold. Now, apparently Rolex does a lot of its own manufacturing so that makes it even more interesting since it's a production value not just resale.

It's a fun thing to think about, and I'm glad this was asked.

I'm with another poster and think the bracelet is higher proportionally. How did you account for the labor cost of assembly? Shouldn't that be its own line item rather than spread across components? Also, what's the thought on the dial and hands being so high? I don't know much about this part. I would expect the new SS bracelet to cost quite a bit more than the old one since it's harder to work with.

If anyone knows how many hours it takes to assemble, we can get pretty close.

[Andad]

How about we pick another product.

[And]

This has been an interesting social study.

How do you get a load of Rolex fans to avoid answering a question? - Ask them what the direct cost of their watch is.

[Presa canary]

Originally Posted by And

This has been an interesting social study.

How do you get a load of Rolex fans to avoid answering a question? - Ask them what the direct cost of their watch is.

Who's avoiding the question I see 4 pages of fans attempting to answer the question. All just taking a shot in the dark, but attempting nonetheless....

[tom2517]

Originally Posted by Laszlo

Sure, I see your point. But regardless of what a part may cost, it could be in the hundreds of thousands of dollars just to get the tooling done for just that one part to cost just one dollar. And you really need to compare apples to apples.

I am not in the watch industry so I don't know how much it cost to make one, neither is anyone in here, but it wouldn't surprise me if it cost Rolex less than 10% of MSRP to make one.

[Welshwatchman]

Originally Posted by tom2517

I am not in the watch industry so I don't know how much it cost to make one, neither is anyone in here, but it wouldn't surprise me if it cost Rolex less than 10% of MSRP to make one.

There are plenty in the industry on here, including Rolex ninjas themselves from time to time.

No one's talking though; too hot to handle.

There may actually be less than £5 worth of raw metal in a base Rolex, but they do have to make them and move them to the dealer.

It costs them 70% of $4,000,000,000.00 to do this every year, if you believe the article and the senior Rolex person interviewed.



I am fairly sure that Rolex could make a whole lot more money or drop their prices significantly if they stopped advertising or sold mail order only.

Also, if they moved from the incredibly expensive Switzerland to China or Indonesia.

Better still, they could "do an Apple" and have the watches made to pretty exacting stands by a Chinese factory, perhaps to 85% of the current workmanship.

A $2,000 Official Non-Swiss made Rolex is certainly possible (including shipping and taxes).

It's not going to happen though.

[HogwldFLTR]

On a yearly basis wouldn't it be (Sales-profits)/(units/year)= cost per unit

[Furbo]

Originally Posted by Welshwatchman

I am fairly sure that Rolex could make a whole lot more money or drop their prices significantly if they stopped advertising or sold mail order only.

Also, if they moved from the incredibly expensive Switzerland to China or Indonesia.

Better still, they could "do an Apple" and have the watches made to pretty exacting stands by a Chinese factory, perhaps to 85% of the current workmanship.

A $2,000 Official Non-Swiss made Rolex is certainly possible (including shipping and taxes).

It's not going to happen though.

That would make it even cheaper that $2,000, worthless to be exact.