Why do watches cost so much? Check out this Bloomberg video and hopefully it will give you an idea of the many hands the sale of a watch is split between. Precious materials such as gold, platinum and even diamonds only make up about 15% of the cost of a watch. The majority of the cost comes from the manufacture for their research, design, movement making, marketing and brand management. Finally, retailers and wholesalers will take their cut.

One thing to note (you would have seen this change over the past few years), is that the manufactures are placing a bigger emphasis on controlling the entire chain. i.e. being not on the manufacturer, but also the wholesaler and retailer. For example, Rolex is moving away from its distribution network and expanding their boutique sales points. Other brands are doing similar as well in a bid to offer better customer experience, but also to control pricing and distribution.