I was asked today about the rising prices of Panerai watches...

Here is the question: Did we do this to ourselves? By paying $30,000 for 5218-201A or $45,000. for Slytech? What about $25,000 for a 127? I think by buying and selling these pieces at such an inflated rate we ourselves have priced us (true Panerai collectors) right out of the market!

Here is my response: Good question. In part, yes we did but there is more to the equation. Think of the 5218 or the "A" series like oceanfront property....they aren't making it any more.....so the price continues to climb as more buyers search for a finite supply of magnificent watches.

But on the other hand, in my opinion, we have a double edge sword as far as Panerai Corp is concerned.

The age old rule is when you have a price increase, you will lose a certain percentage of clients. This will be made up in the short term by the higher prices as you continue to cultivate new business to buy the remaining inventory.

Now you ask...Where is the BUT!!!

But your product has to have a value or point of difference that makes it worth each and every price increase. How many brands have 200 years of watchmaking expertise? We know that Panerai, with its in-house movements is new to the movement business....unless these movements are made by another Richemont Company, which they are not saying....(OK disclaimer: 190=IWC...98=GP..you get my drift)

Do we need bouillon, I mean Tourbillion? Well, maybe you need bouillon to pay for Tourbillon.

Keep in mind that if the company gets too far away from what got them to this point, then people can delay the purchase for a year, 2 , 3, or more rather than in the not to distant past when having multiple pieces from the same year seemed so normal.

Thank you

Elliot