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While a wristwatch was once an essential tool for telling the time, today a watch is more of a luxury accessory, albeit a useful one. After all, clocks surround us, and our phones can tell us the time. So, why bother with a watch when digital devices are less expensive and more accurate? For many people and watch collectors, watches are a thing of mechanical beauty that honor centuries of horology and artistic crafts. They can take weeks or months to manufacture, and many steps can be done only by hand. 

The finest watches are some of the world’s most covetable luxury items, next to jewelry and handbags, commanding hundreds of thousands and even millions of dollars. This raises the question: Why are watches so expensive?

Of course, timepieces come in various price points, and not all are created equal. An ordinary watch from an entry-level brand, for example, can cost a few hundred dollars — a far cry from the most expensive Rolexes that go for millions of dollars at watch auctions. Prestige certainly plays a role in determining the price tag of a watch, but it’s not the only consideration. Here, we round up the factors that make luxury watches so expensive to help demystify the final price. 

In This Article:

• Precious Materials
• Research and Development
• Manufacturing Cost
• Production Time
• Limited Inventory 
• Brand Prestige
• Provenance
• Resale Markup

Why Are Watches So Expensive?

Precious Materials

At the core of many watches’ value are the physical materials they are crafted from. Luxury watches are often made of precious metals such as gold and platinum, which are more durable and scratch-resistant than affordable materials like stainless steel or plastic. Even the stainless steel used in luxury timepieces, typically 316L or 904L, is much higher in quality and more durable than standard stainless steel. In fact, 904L is so dense that it can be even more challenging to work with than precious metals, leading to longer production times (which we discuss further in this section).

Luxury brands also create jewelry watches set with diamonds and other gemstones, which require skilled craftsmanship and attention to detail. These gemstones are expensive, which increases the price of gem-set watches. Other times, brands create watches that are more wearable works of art set with significant stones. High-jewelry watches are the pinnacle of jewelry watches, with dozens or hundreds of sparkling diamonds, emeralds, and rubies. The craftsmanship and precious materials used to produce these masterpieces blur the line between watches and jewelry.

Research and Development

A more commonly overlooked reason behind a watch’s premium price is the amount of research and development that goes into creating new watch movements, complications, and designs. Every year, watch manufactures invest millions of dollars into researching and developing new materials, technologies, and manufacturing techniques to improve their existing models and create new ones. These efforts usually focus on increasing the durability and accuracy of timepieces, along with pushing the boundaries of horology. Brands compete to create the thinnest watches in the world, watches with the longest power reserves, and the most complicated watches. Since we hold these brands to such high standards of craftsmanship, it’s not only natural that the performance of their watches progresses with each year, but it’s also necessary for them to stay on top. 

Manufacturing Cost

The most exclusive and highest-quality watches are produced in Switzerland, Germany, and Japan. These countries have a deep-rooted history in watchmaking, attracting some of the world’s most talented artisans to carry on this tradition. They’re also home to most watch factories, where highly skilled and trained watchmakers craft watch movements using premium equipment. Many watch companies import watch parts from these countries and ship timepieces for their final production stages there, which can be very costly. They do this because buying a movement from a supplier is far less expensive than producing movements in-house. A watch company that produces its movements in-house, such as Patek Philippe and Rolex, must produce the bulk of the movement itself (read more in our deep dive into why Rolex is so expensive). That means it needs all the most advanced equipment and a full-time staff of talented artisans to produce even a single luxury timepiece — which really adds up.

Production Time

The most expensive watch brands constantly innovate to maintain their reputation and exclusivity, yielding cutting-edge, ultra-complicated timepieces. In watchmaking, a complication is a mechanism that performs a function beyond telling time. Moon-phase watches, for instance, contain intricate mechanisms that track and display the moon’s phases. These mechanisms can take years of designing, building, and redesigning prototypes until the final result. The most exceptional watches typically present multiple complications, among other impressive features, indicating a high level of complexity and craftsmanship. Skeleton watches, even time-only models, also require top workmanship and hours or weeks of finishing to showcase their beautiful inner workings while maintaining their overall function. 

Most complicated watches contain mechanical movements, honoring the long-held tradition of making watches by hand. Mechanical watches are more challenging to create than timepieces with quartz movements (learn more with our guide to types of watch movements), requiring more time and skill. As a result, the extended production time of these watches leads to limited inventory and soaring prices. 

An excellent example of this principle is the Patek Philippe Grandmaster Chime. It’s the most complicated wristwatch the brand has ever produced, with 20 complications, a reversible case, and two independent dials — not to mention six patented inventions. The brand invested an astonishing 100,000 hours across approximately eight years in developing, producing, and assembling this watch. Moreover, there are only seven examples of this model in existence. The brand kept one model to display at the Patek Philippe Museum in Switzerland and sold the remaining six for $2.5 million each. In June 2024, one of these models fetched a staggering $5.4 million at a Sotheby’s auction in New York. The watch’s high price reflects its limited supply and high demand, along with provenance (which we explain further below), as it belonged to famous American actor Sylvester Stallone. 

Limited Inventory 

Since luxury timepieces take an extended amount of time to produce, it’s virtually impossible for brands to keep up with the high levels of consumer demand we see today. That’s why many watch brands and retailers have lengthy waiting lists, offering highly sought-after timepieces to only their best clients. This scarcity generates anticipation among watch enthusiasts, making luxury watches even more exclusive and desirable as a result. The difficulty in obtaining popular luxury watches at retail also contributes to their considerable resale markup (read more here).

Brand Prestige

As with most luxury goods, you also pay for brand prestige. This can seem superficial initially, but it’s important to acknowledge that luxury brands had to earn their status by developing a reputation for excellence over decades and sometimes centuries. That way, when you purchase a watch from these brands, you know it meets the highest quality-control standards and will last you a lifetime. The more desirable a watch brand is, the higher the premium it can charge. 

Provenance

What are watches with provenance? Simply put, they’re timepieces that someone important owned. Provenance usually increases the monetary value of a watch because of the person’s notability. Paul Newman’s Rolex Daytona (ref. 6239), for example, sold for a staggering $17.75 million at a Phillips auction in New York in October 2017. It commanded such a steep price because Paul Newman was responsible for popularizing the Rolex Oyster Perpetual Cosmograph Daytona, and he was an iconic actor. Since this model belonged to him, with a “Drive Carefully, Me” engraving on the back (a message from his wife, actress Joanne Woodward), it’s an invaluable piece of history — making it priced as such. If you want to learn more about acquiring vintage timepieces, check out our guide on how to buy a watch at auction.

Resale Markup

Purchasing popular timepieces at retail can be difficult due to long waiting lists. Some people speculate that brands purposely limit their inventory to maintain exclusivity. However, these brands couldn’t produce enough timepieces to meet their demands even if they wanted to, which is an indication of strict quality standards. Still, they usually offer covetable models only to top clients, so many people prefer to buy watches from reputable watch dealers such as Watchfinder, Chrono 24, and The 1916 Company, among others. That way, they don’t need to wait on standby until a brand offers them a specific model they want. Of course, this comes at the (literal) price of an extra markup, which depends on the brand, age, condition, availability, and other factors of a watch.