If you read our website, chances are you like Swiss watches. But some are pretty expensive. This leads to the question: are watches cheaper in Switzerland?
Watches sold in Switzerland are not really cheaper. If there are savings to be made, it is only a tiny amount. You also would be charged taxes that might negate your savings. It would not justify the additional effort to travel to Switzerland or to buy online.
Why do people think watches are cheaper in Switzerland?
It is logical to think that Swiss watches would be cheaper in Switzerland.
The watches are from a Swiss company, manufactured in Switzerland, and sold there.
There is no import duty, minimal logistics fee as the watches are not shipped halfway around the world.
Prices should be very competitive too since every Swiss watchmaker will be selling their watches at home.
Of course, we cannot assume the same for non-Swiss watches. This is because if they enter the Swiss market, they would be subject to import duty and additional taxes. That could make them more expensive.
But yes, logically, Swiss watches sold in Switzerland should be cheaper. However, in reality, it’s more of an exception than a rule.
What Factors Affect Watch Pricing?
Watchmakers have many ways to determine the pricing for their watches and merchandise.
Watchmakers have a reputation and agreements to uphold. This determines their pricing.
For example, just because Rolex wants to be competitive in Switzerland, they cannot just give random discounts on their watches.
Part of the experience of buying luxury goods is paying a premium for them. If Rolex were to give discounts, it would cheapen its brand and damage its prestige.
In fact, many luxury watchmaker companies explicitly forbade their worldwide resellers from giving discounts.
Another thing to be considered is the watchmakers’ relationship with their resellers. A watchmaker needs to be fair to its resellers all around the world.
That means everybody should be selling at the same price, especially for new watches.
For example, if Audemars Piguet were to allow its Swiss resellers to give great discounts, buyers from France, USA, or India would buy from the Swiss resellers.
That means less business for resellers from their home countries, which is unfair.
In short, watchmakers have a lot of reasons to keep pricing even all over the world and not make it cheaper just because it’s Switzerland.
ALSO READ: What Makes A Watch A Luxury Watch?
A VAT (Value Added Tax) is charged in many European countries on purchases, including watches.
In Switzerland, the tax is 7.7%. If you picked up a $1,000 Victorinox, you would pay another $77 on top of that for the VAT.
You might balk at 7.7%, but the VAT could be a lot higher in certain European countries, some up to 20%.
This tax might erase any possible savings you might have made if you decide to buy watches form Switzerland instead of from home.
But if you are a foreigner on holiday in Switzerland, you can claim back the VAT at the airport. Just drop in the receipts at the VAT claim office, and you will get the funds back.
Now that you know you can claim back your VAT, you might start thinking about buying your Swiss watches from Switzerland.
Please wait, because we now have to talk about the customs in your home country.
Many countries charge an import duty if you bring in merchandise or products from a foreign country. The goal here is to protect local industries and keep them competitive.
Certain countries are known to slap import duty on jewelry and luxury goods – watches are considered part of jewelry in many countries.
When it comes to the US, you can bring up to $800 worth of goods duty-free. However, you will need to declare it at the customs and pay import duty when you cross that.
|No Duty levied
The first $1,000 past the original $800 are charged 3% import tax.
If your watch is $1,500, you will be charged 3% on the extra $700 (that passed over the $800 limit). That’s an additional $21.
Not a lot, right?
But once you move into purchasing more expensive watches, you start to see Uncle Sam’s ‘Dracula fang.’
Once you cross the first $1,000 threshold, the tax rate will go from 3% to 6.5%. If you paid $10,000 for a Rolex Submariner, you have to pay an additional $563 in tax.
On top of that, you might have to pay extra for some additional paperwork to process VAT tax returns in Switzerland too.
This import duty would probably erase any savings you might have made buying watches from Switzerland.
Issues such as currency conversion may also affect pricing.
The Swiss use their own currency, the Swiss Franc (CHF), one of the world’s most stable currencies. It is also solid, with a value similar to the US Dollar.
The Swiss also have a very high standard of living, with an average income per capita of 73,620 PPP Dollars. Compare that to the US at only 66,060.
That means the Swiss have higher purchasing power, and naturally, prices of goods there would be higher.
If you take the price of watches there and then convert them to your local currencies, you might not see much savings. They might be even more expensive.
Supply & Demand
Watchmakers understand the concept of supply and demand and use this to their advantage.
Rarely do you see premium Swiss watchmakers flood their watches in the market. Perhaps watches on the lower spectrum of Swiss watches do this, but not all.
This keeps demand high, and they will then tune and adjust their production to fit this demand to keep prices high.
This is why you do not see massive discounts from premium or luxury Swiss watchmakers to eliminate excess inventory. Even if you do, it’s infrequent.
Why Should You Buy Watches Locally
Now that we have shown you how the dream of a cheaper Swiss watch from Switzerland might not be true after all…
We would like to propose that you buy watches from home instead. Here are our reasons:
When you buy watches from the home market, your purchase details are logged in immediately with the reseller at your home market.
If there are warranty claims, you can get it done a lot more easily.
If you buy watches from Switzerland, do not be surprised that your warranty claims may face additional delays to be processed by the reselling agent from home.
This is because at times, warranty details may be different by countries.
They might just ask you to claim a warranty from the reseller in Switzerland or request you to pay extra to process your warranty through them.
When you purchase from home, you will get better service for your watches.
This is because, at times, watches might have different configurations to adjust to their local home market. Sometimes, watches of the same model may have different movement or dial in different countries.
Servicing and warranty claims might be more complex if your watch is bought from Switzerland.
You might not have a better experience servicing your watch.
You might be able to sell your watch easily, especially if you bought them at home market.
This is because people will always prefer watches sold at home markets. The watch is registered with the local reseller, and it will be easier to prove your ownership.
The watch should be easily serviceable by the new owner since it will have the same spec as the local market. That means the local service center would have all the spare parts for the watch.
All these factors will help your watch stand out, and buyers will buy your watch without worrying too much, even in pawn shops.
Supporting Local Merchant
Finally, this might not matter to some, but if you spend money to purchase something, why not support a local merchant or reseller?
This ensures your money circulates within your local economy instead of overseas, enriching others.
Wrapping Up: Are Watches Cheaper In Switzerland?
Watches in Switzerland might not be cheaper than at your home market due to many reasons – tax, customs duty, currency exchange, and many others.
We also think it would be better for you to purchase your watch from the home market. If you do that, you get a better warranty, service, and reselling price for your watch after your purchase.