Obviously I don't know the answer to this, however I'd love to know the following for each watch IW sell:
1. The highest price it's selling for globally.
2. The lowest price it's selling for globally.
3. The average price it sells for globally.
I'd hazard a guess almost none of these watches sells for the RRP or anywhere near it. What does this tell you? The RRPs are mostly based on nothing more than as you say an inflated value to encourage sales of the product.
When a manufacturer knows it has a quality product coupled with demand, they can sell their products for or close to the RRP, without giving ridiculous discounts except perhaps for the occasional (genuine) sale. If the entire marketing world worked with RRPs the way these watch manufacturers and IW seem to we'd have this:
This new build house has an RRP of £1 million, however we're selling it for the great price of £250k.
This model of car has an RRP of £100k, however we're selling it for only £25k.
etc etc.
I think with quality watchmaking brands, not always but on the whole, you'll find the RRP's tend to be closer to reality than not. Obviously the higher up the luxury scale you get, then of course the RRPs can get seem a bit higher to take account of percentage discounts of more exspensive watches can be quite a bit. IE 20% off a £500 watch is £50 but 20% off a £5000 watch is a £1000, so luxury brands will up the RRPs a bit so that dealers can still give a good discount and still make money. Although that's my guess cause i'm not an economics expert.
On the other hand, there has been a lot of new brands in the last couple of decades, who don't make their own watches, but buy them in at substantially low cost from China and then set ridiculously high RRP's that are no where near indicative of the quality or value of the watch they are selling.
Just as an example, If we look at Shield last night,
The Shield Atlantis -200 mtr Dive watch – NH35 movement (prob £25 wholesale) – RRP £606 – Selling £149.99
And if we compare to say a established Swiss watchmaker.
Certina DS PH200M – 200 mtr Dive Watch - Powermatic 80.111 movement (hard to get a price, as these are movements, usually just used by the likes of Hamilton, Tissot, Mido and Certina, but in layman’s terms it’s an improved ETA2824 with an 80 hour power reserve, but will be a good bit more than £25
) – RRP £680 – Selling £680 (in a sale, or if your a regular at your local jeweler, can get up to 20% off), but you’ll never pick this watch up new for £149.99 or near that, you might get a used one on ebay at that price, even then it would need to be one that hasn’t been looked after and in poor condition, in good condition would be closer to £400 for a used one.
I think the over inflated RRPs have two factors/reasons behind them and both reasons is to mislead and dupe potential buyers. One is to give the appearance that the watches are a quality product, way above their true quality value and secondly, the discount factor, where with an inflated RRP they can give way bigger discounts than normal and give the customer the feeling they are picking up a quality watch at a real bargain price, a too good to miss bargain.
One other thing you find as difference between say the Certina watch and the Shield watches in general, The Certina watch sells on it's merit, not it's price, it's sells because people know it's a quality watch, uses good movements etc, the brand has good quality control etc, with very little to no negative feedback. The Shield watches on the other hand will be like a lot of low cost Chinese made watches, a bit of a hit or miss, with very little quality control, you'll have a lot that work fine, and then you'll have some watches that stop working after week or two, hands falling off etc, the feedback will a real mixed back, some will like a lot and some with throw them in the bucket and comment on them being duped into buying cheap crap.
I know I've mentioned it a few times, but the fact that Shield watch has 660ft/220mtrs on the dial just screams out at the lack of quality control there must be at the factory where they are made.
