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Patek Philippe Inflating Prices?

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An amazing piece on Velociphile about PP’s habit of inflating prices. Amazing.

So says Philippe Stern, but Patek Philippe has been supremely successful in conjuring a frenzy for its line of current wristwatches. What has Patek Philippe allegedly done specifically? Well, at the start of the 80s, Patek started aggressive buying of their vintage pieces on the second hand market “for their museum”. A strategy allegedly proposed and developed by Alan Banbury (acclaimed horological expert who was a personal consultant to Philippe Stern during the creation of the museum collection) to reawaken interest in the brand. Crucially they also made sure the results were loudly accounted in the press as evidence for the mounting value of old watches. Remember up until this point, that watches were really not bona fide collectibles. That all changed, particularly when the Calibre 89 fetched $3.7 million. Suddenly, this event created a market among collectors for wristwatches.

The Ultimate Shill [Velociphile’s Journey into Watches]

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3 COMMENTS

  1. Patek Phillipe regardless of model and complication, like all other Brands of similar quality are overpriced! They do make watches of extremely high quality, but in no way they keep better time than your Chronometer rated Omega or Rolex. It’s just that collectors are driving the prices up by hoarding… like toilet paper after a disaster. Patek Philippe and other makers are playing up to this for the purpose of ROI. Boycott these brands, and you will see amazing price reductions and possible Gray Market offerings. They also limit their production to enhance collector interest… and PRICE! Handmade yes! Worth the actual price… NO! Remember these guys (which includes the collectors who hoard) are out to make money! Buying a High Quality Luxury watch has become like buying stock and real estate… it’s what the market will bear. Buy an Omega or Rolex, the watch will probably keep better time, cost you less, and if it breaks, will not cost you an arm or leg to repair. A good throw away if it breaks is Seiko, or a lower end Tag Heuer if you want a little more. Yes, a PP is impressive to have on your wrist, but don’t be a victim of this MUST HAVE Swiss Watch Craze.

  2. I disagree. A luxury timepiece, like any luxury item, is not overpriced if enough people are willing to pay for its premium to satiate some consumer want. They are basic tenets of consumer behavior and economics.

    We’re not talking about gasoline companies gouging the working class here. It’s about using pricing as a marketing cue to give the Patek a perception of high-endedness to a niche target market.

    Patek charges what they think they can get for their watches. They are not aiming their products at some shmuck in tennis shoes, with a Costco card looking to save 30% off MSRP on a grey market watch. No offense intended to all the shmucks out there in tennis shoes, and a Costco card…I’m one of those shmucks although I won’t buy a grey market watch.

    They are aiming it for the social elite who can also afford Brioni suits, beachfront property, and BMW M3’s.

    For luxury watches, one is not only paying for the manufacturing cost, but also paying for the branding, the image, and the opportunity to own something that not everyone can afford. You are also buying the status and the emotion.

    Also, you should not buy a new luxury timepiece as an investment. You’re better off in the stock market.

    Finally, luxury timepieces are not about accuracy. Not even COSC certified automatics are quite as accurate as a digital watch.

    It’s not easy to pinpoint the reasons that people buy what they buy. For some it’s about social status, others cite they admire the workmanship and engineering in high end time pieces…whatever. However, one cannot indict someone for buying whatever they buy at whatever price. If they buy it, and no one is holding a gun to their head, then they bought it because it is worth it to them.

    I know it’s not logical or practical but not everything we buy has to be practical and utilitarian. Sometimes its nice to indulge if it’s within your grasp.

  3. The two comments are complementary to each other if one wants to be rational.
    One additional idea is: companies like Patek Philippe must keep their products value alive, what they should be careful is to not force the market too much.
    The very high prices are important to attract midia attention amd keep the brand in the community alive.

    Second they must have some very good entrypoints (in price) for new products, so that new collectors or consumers can enjoy their high end products at reasonable prices. They must have a growing community!

    Third they must keep a difference in design and keeping perfect designs in production for a very long time. A mistake made by Parker Pen Company was to stop manufacturing the Parker 51. Sometimes a product has a permanent atraction. They reintroduced the Parker 51 at a very high price and with poor quality.

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