TheSav 2 Posted June 19, 2014 Okay so the title may not make complete sense but bare with me. I'll get to the point...... Eventually. Today I received my third Obris Morgan timepiece. Pictured below for those that can't read, or have a need for pictures. Having played with this watch most of the day it got me wondering. You see this watch was only $279 including shipping. For that money i received what I think is a good looking piece. It is also very well made. The finish is good with no sharp edges. The pearl is centred. The bezel is tight with no play. The AR is well above average. The list goes on: Movement is a miyota 9015 automatic I custom ordered the print on the dial as the finish I wanted didn't come with the red print option It has a 12 month warranty It came in a pelican case The case contained the warranty cards, instruction manual, a cleaning cloth, spare lug bar, a NATO strap and a screw driver. All this for $279!!!!!!! So my question is: Does it cost more to replicate a watch or does it cost more to produce an affordable gen? Both have R&D and tooling involved. Affordable gen manufacturers surely spend more on marketing/promotion. The design process of producing a gen would certainly cost more than what it does to buy a gen to replicate and tear to bits. In my opinion it would seem that it would cost more to design and develop an affordable gen than to produce a rep. Although I may be wrong. What are your thoughts? Share this post Link to post Share on other sites
Mariner89 0 Posted June 19, 2014 In my uneducated opinion I'd say that they cost about the same ... but as a gen factory has better equipment and larger output i'd say that they can possibly produce for cheaper ... and let's think about it ... with this watch for example they are offering a warranty and quality product ... a decent pay for employees and all other random costs that go into operating a legit business all while still making a profit ... so i'm thinking they are easily producing this for about 100 bucks ... in my mind a rep factory is probably producing at half that cost and without all of the overhead ... so take a guess at their profit margin !!!!! Share this post Link to post Share on other sites
plankton 1 Posted June 19, 2014 It would cost alot to design and do 1 gen. But when you start figuring the deviation a gen will have on everything to make it fit and tight, the labor (unionized), quality of supplies -- I say the gen far and above. By the way- beautiful choice in your watch, pictured below is my DSSD keeper. Share this post Link to post Share on other sites
gtwc 1 Posted June 19, 2014 I think you got a great deal and a great looking watch ! Well done Sav. Share this post Link to post Share on other sites
bgreg 0 Posted June 19, 2014 I love that or Orbis Morgan watch from who did you purchase it? To your point I believe it cost more to produce the gin because of the overhead cost in the unionized labor. They probably have a smaller profit margin but because sales are greater they still make good money on the product. Share this post Link to post Share on other sites
HeavyKrush 16 Posted June 19, 2014 It would be interesting to see the cost breakdown for a rep. Likely bribes are part of the equation. Also, if I'm a CNC mill factory in China, I'm likely charging more to produce a counterfiet watch case over a gen case that's likely been put to bid to many factories. But it's like how many licks to the center of a Tootsie Roll pop.... The world will never know. Oh, and another stellar pick up mate! Share this post Link to post Share on other sites
TheSav 2 Posted June 19, 2014 I love that or Orbis Morgan watch from who did you purchase it? To your point I believe it cost more to produce the gin because of the overhead cost in the unionized labor. They probably have a smaller profit margin but because sales are greater they still make good money on the product. http://www.obrismorgan.com/pradatapage.html Oh, and another stellar pick up mate! Thanks Greg. It's a great value watch for a daily beater. I sold the nevon you helped me to source to fund this one but wish I had both now. You must consider the economies of scale, the cost of reverse engineering and tooling costs. Or in case of authentic watchs, economies of scale, the cost of design and tooling costs. Cost of reverse engineering will be similar to cost of original design. Replica watch manufacturer - reverse engineer, make low-cost tooling which gives a lower quality (requiring a lot of manual re-work to do it right) and lower parts over life of a tool before you have to make a new tool. ... And a rep mfr makes small batches = much higher costs per piece. Genuine watch manufacturer will develop more effective tools that costs less to operate (and with no re-working required), and will do more parts. Maybe 200 pieces typical manufacturing run for rep watch. Genuine watch manufacturer may make 20,000 at one time. Unit cost is significantly less than with large production runs. Gen Labor Cost is probably 8% of total cost ... this is normal ... for people talking about labor costs. Rep Labor Cost will be much higher due to significant hand work required due to low-cost, low-quality tooling ... but is China at 0.50$ USD per hour and no benefits so again, labor - it is not a significant cost. If I was guessing ... and I'm good guesser ... I would say a watch selling for 300$ USD has 15$ to 20$ fully burdened cost (fob factory) for genuine and 65$ to 85$ cost for replica. Distributors will work on 22.5% to 42% gross margins. Cost of Sales ... advertising budgets, salespeople, etc. ... will be vastly different betwn rep and gen of course. Some very valid points and very concise. However, there are many boutique manufacturers producing small runs of gen watches for the sub $500 mark. With different designs they will be retooling as well to an extent. I guess as Greg says we will never truly know but it does make me wonder. Share this post Link to post Share on other sites
Realism 72 Posted June 19, 2014 if you know how much the COGS is... you wouldn't be here... you'd be speculating oil futures instead Share this post Link to post Share on other sites
Realism 72 Posted June 19, 2014 good for you ^ have fun speculating on unreleased data of another industry Share this post Link to post Share on other sites
greg_r 83 Posted June 19, 2014 Lovely watch, mate. The inexpensive gen vs rep build cost comparison is potentially interesting - of course there are some obvious differences in the way the two markets operate, which has a great deal to do with it. But then, of course, are the higher-priced gen manufacturers. What makes a higher-priced gen that uses a bought-in movement (I'm sure we all know plenty of examples) worth hundreds - or even thousands - of dollars more than the Obris? I think I shall be needing something to munch on... Share this post Link to post Share on other sites
parisianshut 0 Posted June 19, 2014 If I was guessing ... and I'm good guesser ... ok so.... then .... what is the color of my pants ? ahahah Share this post Link to post Share on other sites
Irishcain 0 Posted June 19, 2014 good for you ^ have fun speculating on unreleased data of another industry Business is business. It is all similar. Sure there are variants but essentially, in the end, similar. Not much speculation required to extrapolate information. Speaking as a former CPA (Certified Public Accountant), I can agree about the similarities of business models. Share this post Link to post Share on other sites
Realism 72 Posted June 19, 2014 good for you ^ have fun speculating on unreleased data of another industry Business is business. It is all similar. Sure there are variants but essentially, in the end, similar. Not much speculation required to extrapolate information. Speaking as a former CPA (Certified Public Accountant), I can agree about the similarities of business models. Good on you... I must be a bad cpa Share this post Link to post Share on other sites
Dendo 93 Posted June 19, 2014 Reverse engineering and low production runs seem to me the reason that some reps are way more expensive than similar specification gens such as Seikos. Share this post Link to post Share on other sites
greg_r 83 Posted June 19, 2014 I think, overall, the general consensus has to be: Share this post Link to post Share on other sites
Realism 72 Posted June 19, 2014 I think, overall, the general consensus has to be: The arrow is mis-directed though... from the turn of the time with paper money and Marco Polo... it has always been trending up Share this post Link to post Share on other sites
Irishcain 0 Posted June 19, 2014 good for you ^ have fun speculating on unreleased data of another industry Business is business. It is all similar. Sure there are variants but essentially, in the end, similar. Not much speculation required to extrapolate information. Speaking as a former CPA (Certified Public Accountant), I can agree about the similarities of business models. Good on you... I must be a bad cpa Only you are calling your competence into question. I only interject based on my former financial background and the fact that I currently teach business analysis and modeling for the New York University system business school. Share this post Link to post Share on other sites
Realism 72 Posted June 19, 2014 good for you ^ have fun speculating on unreleased data of another industry Business is business. It is all similar. Sure there are variants but essentially, in the end, similar. Not much speculation required to extrapolate information. Speaking as a former CPA (Certified Public Accountant), I can agree about the similarities of business models. Good on you... I must be a bad cpa Only you are calling your competence into question. I only interject based on my former financial background and the fact that I currently teach business analysis and modeling for the New York University system business school. like i said i must be bad... it's ok. I can't predict the future or so they say... or else I'd be buying million dollar gens ATM or at least wearing a gen aquanaut like Soros Share this post Link to post Share on other sites
bgreg 0 Posted June 19, 2014 This shit is getting deep........I think I'll will order me one of those Ob Mo's they also have it in DLC. Start adding to my (affordable) gen collection. hahaha Share this post Link to post Share on other sites
greg_r 83 Posted June 19, 2014 .... time to break out the waders, methinks... Share this post Link to post Share on other sites
