The Economics Behind Luxury Watches

Good morning to the people of the HIVE
Today I am here to talk about the Economics behind Luxury Watches.

Why are these watches so expensive?

The Luxury Watch market stays true a single principle which is not unique to them and many brands follow the same suit. The principle is to Increase their Price with the Scare of Scarcity. It’s that simple just think about it, if you purchase an expensive luxury watch and see the same watch on your friend's hand, your colleague's hand, your boss's hand, and even your intern's hand, would you really consider it a luxury? No, right?

And that's why they produce less quantity of the watches, making it scarce and keeping it exclusive and only for a select few that can afford it. For example, Richemont actually destroyed its designer timepieces. Cartier bought back its stock and Burberry even burned down its own stock just so that they can create the supply shortage scenario in play.

We also know how tedious it is to get a Rolex where you have to go through an entire vetting process just to put your name on the waitlist as well as buy some previous other pieces from the shop to garner some goodwill of the Store.