Friday, November 29, 2013

Made By...

So an interesting discussion on Facebook regarding the legitimacy of putting Swiss Made on the dial of a watch when only a percentage is required to actually be, well, Swiss.

Now what I find fascinating in all of this is the "dog chasing its tale" picture that this paints for me:

1.  Watch company says - you should buy our watches, they are SWISS made which is, of course, the best!

2.  Well, we'd like to show you our facilities, but they are (of course) top secret!

3.  As you can see we are a true manufacture because we make our own movements right here!

4.  Well, no, we don't make our cases, dials, hands, crystals… we buy those from specialist suppliers…

5.  Well, no, we don't actually case (read assemble) the watches here.  It makes more sense for us to use an "assembling" company.

6.  We don't actually have production facilities "here", assembly is handled "elsewhere" - i.e. I could tell you, but I'd have to kill you ; )

So what does all of this really mean?

Well, I don't think that this is a "stop the press" news flash, but let's say that an unhealthy percentage of watch "brands" don't actually make watches.  So what exactly do they do?

Glad you asked!  Very often the "Brand" is some administrative offices that house sales, marketing, PR, Accounts Receivable, meeting room and the boss's office.  And POSSIBLY some storage for assembled watches before they get shipped.

So where are the other watches?  You mean apart from the "company watches" on the wrists of the employees there or the ones already put together awaiting dispatch to their distribution points?

Ah - this is the wonderfully elaborate shell game known as "Private Label".  Now what we would REASONABLY consider "private label" would mean that you are making a special watch for your company employees (Mercedes Benz did this back in 2002/2003 by making a manual winding alarm watch for their North American sales staff).  Okay, that makes sense.  A company orders a watch for its company, I get it.  Well, take that idea and feed it steroids and suddenly you become a "manufacturer for brands".

Okay you say to yourself, these private label companies must have ENORMOUS factories producing all of these watches.  Guess again.  Think of the "private label" company just like that brand that we were talking about earlier.  Administration offices.  And not coincidentally, "offices" in the "Far East".  While I am not an expert, I am fairly certain that Hong Kong is not a Swiss Canton.  Okay, so where do they "make" the watches?  Refer to point #6.

Think of the "private label" company as a general contractor.  Not unlike the folks who are putting your house together, they do the Swiss equivalent of driving down to the Home Depot to find the various parts, and then farm them out to the actual "assemblers" that bring it in for the best (i.e. lowest) price.

So, you go to your retail store to buy a brand "X" watch that was designed by a contracted designer.  The design was then sent to the private label company, who then farmed it out the various suppliers and assemblers and with a healthy dose of magic Swiss "pixie dust", the exclusive brand "X" watch is born.

One watch with hundreds of parents - It truly takes a village ; )

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