Long Island Watch Talks Tariffs

[mattcantwin]

Not looking to post up a political thread.

Just sharing Marc's explanation of how tariffs will affect his business.



https://www.youtube.com/watch?v=IVwIyciIIiI

[pbj204]

Amazing video. Not just hypothetical numbers, actual numbers! It’s great that he is being so transparent.

[DocHollidayDDS]

Watched that video this morning. I'm left with the thought that I find myself not all that concerned about people who suddenly can't make 3x the cost of a product they are selling. Why is making 2x or 2.5x your cost not enough of a margin? I mean, I've always known that most watches aren't "worth" anywhere near what we pay for them (some more than others), but how did making at least triple your cost become the standard in the industry? Sure, folks like Marc can raise prices and pass all of this new cost along to their customers, but I'm hoping they will at least ride it out for a bit and see where things shake out. If all of the makers start jacking up prices, then I'd imagine many buyers will cut back on discretionary watch spending to some degree, and sellers are left in basically the same financial situation, selling fewer watches at the new higher prices. At any rate, looks like the heyday of bargain basement AliExpress watch deals are likely coming to an end.

Ultimately, I'm hoping that some enterprising entrepreneur (or corporation) will use this climate as an opportunity to bring watchmaking back to the USA, where it was once a huge business. Imagine Swatch opening a Hamilton factory in the States. Wouldn't that be something? A guy can dream...

[Neztuul]

Very interesting video. The whole tariff thing was already pretty complicated as is shown, with differen % for different parts and countries of origin! What shocked me is the x3 retailer pricing of some brands is considered 'normal'. So if I buy a new Breitling for 3000$, 1000$ is for the watch and 2000$ for financing the ad campaign with Erling Haaland?

[mattcantwin]

Why is making 2x or 2.5x your cost not enough of a margin?.

I came across this comment about his post:

You obviously didn't watch his video on his net profit after all costs, taxes, etc.


Apparently, Marc has previously posted a video about his cost of doing business.

It seems Marc has been open about where the money goes when we buy a watch from him.

[DocHollidayDDS]

Why is making 2x or 2.5x your cost not enough of a margin?.

I came across this comment about his post:

You obviously didn't watch his video on his net profit after all costs, taxes, etc.


Apparently, Marc has previously posted a video about his cost of doing business.

It seems Marc has been open about where the money goes when we buy a watch from him.

I haven't watched that other video, but I'll try to track it down. And I wasn't referring directly to Marc with the 3x margin, but he did bring it up in the context of this tariff video (I think in reference to Christopher Ward and their transparent 3x cost pricing model). I've always thought Marc seemed like a good guy, and have enjoyed his YouTube content even if I haven't yet pulled the trigger on an Islander.

[mattcantwin]

I haven't seen the other video, either.

[gwells]

it's actually not that uncommon to have that kind of markup. that's how they cover "overhead" costs. a restaurant food markup is generally in the 3-4X realm.

not unlike back when i was purely a freelance graphic designer. i'd consider it a really good week if 50% of my time was billable work. just so much other crap to do/pay for that you don't always think about until you're running your own business.

[DocHollidayDDS]

it's actually not that uncommon to have that kind of markup. that's how they cover "overhead" costs.

Many microbrands have low overhead, in that many are online-only businesses. It's only in recent years that a few companies like Christopher Ward and Baltic have even attempted to start opening their own boutique storefronts, so maybe those have to close up shop. The big boys have much higher margins, so I doubt they'll have to dramatically reduce their AD networks or their huge advertising budgets spent on celebrity endorsements and event sponsorships.

[Ryeguy]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

[DocHollidayDDS]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

My guess is that you're probably right.

And good call on the Macbook purchase. I'm pretty happy that I just ordered my first Christopher Ward last week, although a check of their website shows prices haven't increased yet. I did have my eye on that upcoming Vulcain chronograph, have to wait and see what happens with their pricing.

[HapaHapa]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

Oh crap. We definitely need to make a similar purchase before summer's end. Waiting to ask the college/engineering department which is preferred based on the software they use. And waiting for the school to be chosen (UCLA, Berkeley, Mines, Purdue ???).

[Ryeguy]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

Oh crap. We definitely need to make a similar purchase before summer's end. Waiting to ask the college/engineering department which is preferred based on the software they use. And waiting for the school to be chosen (UCLA, Berkeley, Mines, Purdue ???).

My kid decided on Trinity in Dublin, Ireland. I'm watching the Euro versus USD exchange rate and not super pleased right now.

[TSD]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

This is definitely going to hurt some good guys. I paid-in-full last year for a watch in an upcoming batch from a Canada-based micro, and understand that a tariff may now be levied upon delivery. It's a gift for my wife. I can't cancel the order or refuse to pay the tariff, but it's like paying grey market pricing on a pre-order...

[Jeep99dad]

That won’t last, just need to be patient

[raf42]

This will last, and unfortunately probably for quite a while.

[hobbit712]

That won’t last, just need to be patient

I have to wonder how long they will last also. I think the primary thing is to attempt to even out the tariff situation worldwide. A LOT of countries have a LOT higher tariff of USA goods going into their respective countries. I think it might be a way of levelling the playing field so to speak.

[Jeep99dad]

That won’t last, just need to be patient

I have to wonder how long they will last also. I think the primary thing is to attempt to even out the tariff situation worldwide. A LOT of countries have a LOT higher tariff of USA goods going into their respective countries. I think it might be a way of levelling the playing field so to speak.

There will be negotiations and they’ll drop down. One way or another they won’t last. It’s not sustainable as is today, they won’t stay high.
It’s a tool not a end goal

[Jeep99dad]

This will last, and unfortunately probably for quite a while.

Hope you’re wrong.
What is a while ? 6 months , 6 years ?

[HapaHapa]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

Oh crap. We definitely need to make a similar purchase before summer's end. Waiting to ask the college/engineering department which is preferred based on the software they use. And waiting for the school to be chosen (UCLA, Berkeley, Mines, Purdue ???).

My kid decided on Trinity in Dublin, Ireland. I'm watching the Euro versus USD exchange rate and not super pleased right now.

Looks beautiful. I have very distant relatives in Cork. Enjoy visiting.

[59yukon01]

I'm on the no pain no gain side even though I've lost over $100K in my retirement account in just a few weeks. Negotiations will proceed and progress will be made eventually. We've basically been butt phucked by countries for decades and it's time to say enough.

It seems right after WWII we slowly sold our American made souls to the overseas devil and now we're too reliable in a country that quite frankly is our biggest threat, whether you want to believe it or not

I had a discussion with a former secret service agent to Ronald Reagan 15 years ago that said it's a well known fact, in his line of work, that a certain country that starts with a C is indeed that threat. I believed it then and certainly now, especially after 2020.

[raf42]

This will last, and unfortunately probably for quite a while.

Hope you’re wrong.
What is a while ? 6 months , 6 years ?

I hope I"m wrong too. No clue on timing, but Switzerland (as and example - while there are others that may deserve tariffs or the attempt to use them as a negotiating tool) does not seem to. From a tiny amount of research they don't tariff/duty American goods in anything that exceeds a percent to two, so levying 31% on them and saying it's "reciprocal" is fake math and does not seem grounded in reality or anything resembling fair trade.

If I'm off base please correct me. Just glad I got my EXP I before this happened.

[Ryeguy]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

Oh crap. We definitely need to make a similar purchase before summer's end. Waiting to ask the college/engineering department which is preferred based on the software they use. And waiting for the school to be chosen (UCLA, Berkeley, Mines, Purdue ???).

My kid decided on Trinity in Dublin, Ireland. I'm watching the Euro versus USD exchange rate and not super pleased right now.

Looks beautiful. I have very distant relatives in Cork. Enjoy visiting.

My wife and daughter are heading to Ireland tomorrow for a deeper tour and visits with students from my area. It seems odd to say they are visiting Ireland for a long weekend, but I expect it will become the norm over the next 4 years.

My niece married a boy from Dublin, so we have in-law relations in the city, but I welcome any other connections the Dub has to offer. Boston to Dublin is close, but also pretty far.

As an aside, I proud of her for wanting to go to school so far from home. Proud, but nervous- so normal parent emotions.

[CarloDWC]

Ultimately, I'm hoping that some enterprising entrepreneur (or corporation) will use this climate as an opportunity to bring watchmaking back to the USA, where it was once a huge business. Imagine Swatch opening a Hamilton factory in the States. Wouldn't that be something? A guy can dream...

I had the same thought and hope. Fred Amos of Bernhardt watches used to produce his watches here in the USA, minus the movement which was either Swiss or Japanese. But as far as I understand he was sourcing the rest here in the US and then assembling the watches here too without overcharging for his watches either, they were reasonably priced.

[gwells]

My guess is these tariffs are going to crush the micro / "impulse buy" watch business.

The guy who wants a $16K Rolex today will likely buy a $21K Rolex tomorrow.

I'm fairly happy with my current watch collection and there isn't really anything I'm going to kick myself for not buying pre-tariff. I am, however, going to buy the Macbook my daughter asked for as a graduation present right now.

My guess is that you're probably right.

And good call on the Macbook purchase. I'm pretty happy that I just ordered my first Christopher Ward last week, although a check of their website shows prices haven't increased yet. I did have my eye on that upcoming Vulcain chronograph, have to wait and see what happens with their pricing.

Here’s a link to some info about how Christopher Ward is going to handle things in the very short term from the Christopher ward forum. The OP there, Kip, is the forum manager and has a really good relationship with the owners, so I’m sure what he’s saying there came from them.

USA Tariffs - How CW will handle.
https://r.tapatalk.com/shareLink/topic? ... source=app