Comparing a low-cost Epson AL55 with a high-end Minerva calibre M16.31 helps to illustrate the impact of scale on price.

The main reason behind the price of watches is: scale.

There will always be some development and tooling cost involved, so it will have a stronger impact on retail price when the watch is produced on a small scale. If it is produced in a big scale, these costs almost become insignificant.

BIG SCALE

Below is a picture of the calibre Epson AL55. It is designed for mass production, so very little effort is spent on cosmetics:

The mainplate is in injection-moulded plastic (probably lined with fiberglass), which requires no oiling, and the back plate that holds the parts in place is just punched out of a metal sheet and left with the raw surface.

The bottom line is that Epson can produce this calibre by the hundreds of thousands, wholesale it for less than the price of a bottle of water at Walmart and still make a profit.

(image source H & W Perrin Company Ltd.[1])

SMALL SCALE

The movement below is the Minerva M16.31. It is produced for Montblanc in very limited numbers, one hundred… from time to time.

Since the only way to recoup the development cost is to have a high wholesale price, it does not “cost” that much more to refinish each component by hand.

Footnotes

[1] AL55 Epson Watch Movement

Categories: Manufacturing

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