Most luxury watch brands originate from Switzerland, so you might think that buying a watch in Switzerland would be cheaper, but is that actually true?
Buying a watch in Switzerland isn’t necessarily cheaper. The price of a watch in Switzerland will be very similar to that in another country. The only main differences are VAT and customs duty.
However, it is not a given that a watch will be cheaper in Switzerland. In fact, in most scenarios, they’ll be priced similarly to the prices in your country. We’ll elaborate further on this in this article!
Why Would A Watch In Switzerland By Cheaper
It isn’t actually a weird thought that a watch would be cheaper in Switzerland. After all, a large number of watch brands are from Switzerland. This includes brands such as Patek Philippe, Rolex, TAG Heuer, and many, many more.
These brands are all known for their luxurious, yet expensive watches. The thought of a slightly lower price is always an enticing one with these brands.
But why would the price be lower here? Well, that’s because the brands are located here. This means that the watches don’t need to be shipped, which in turn means that there won’t be any customs that need to be paid.
And generally speaking, the country of origin is usually the country where the product is the most affordable. However, when it comes to watches, that’s not always the case.
How Is The Price Of A Watch Determined
The price of a watch is always determined by the watchmakers. Because most Swiss watch brands are luxurious and sell high-end watches, the watchmakers have tight and strict control over the price. In fact, you’ll often find that the price of a watch will be pretty much the same everywhere.
And because most Swiss watches are luxury items, you also won’t see any discounts. Watchmakers actually forbid their retailers from discounting their watches. The price that’s determined will stay there. Your only hopes are a price reduction issued by the watchmaker, but they can just as easily increase the price as well.
Due to these strict rules, you’ll find that the price of a particular watch will be pretty similar in most countries. Of course, there will be some slight differences in price, but generally speaking, they’ll be very similar.
The Effect Of Different Currencies
One factor that can really be beneficial when you’re purchasing a watch in a different country will be the currency.
This, however, will often not be the case for Switzerland. Switzerland is one of the most expensive countries in the world. The Swiss make, on average, much more than most other countries do, including the United States. The higher wages will often drive up the price of any product, including watches.
On top of that, the Swiss have their own currency, which is often quite expensive and unfavorable for pretty much any country. All this combined makes for a generally tougher time to find a great deal. However, keep in mind that although in Switzerland this might not be favorable, it will probably be in your benefit in other countries.
Other Factors That Determine The Price
As we said before, the watchmakers determine the price of the watch, and this decision is based on a few factors. These are usually factors found back in every country and we will discuss them here.
Supply And Demand
This is a classic factor in any pricing-related issue. It’s rather simple, with high demands, you can expect a higher price. With lower demands, you can expect a lower price.
This also works the other way around; If there’s too much supply, chances are the price will drop a bit. If the supply is low, chances are the price will rise a bit.
However, the thing with luxury watches is that the demand has been steady and consistent, limiting the impact of this factor. And since most luxury watchmakers only make watches on demand, the case of too much supply is also pretty rare.
Sometimes, though, there can be a higher supply. With the launch of a new watch, for example, the watchmakers can decide to make a number of watches before they’re actually ordered. But this goes hand in hand with the launch of a new product, and new products are usually pretty set in their price.
Lastly, Swiss watches are very popular in Switzerland, so the demand for them is pretty consistent throughout the years. With all these factors taken into account, you can see why the prices of watches in Switzerland are pretty set.
VAT, or Value Added Tax, is always added to the price of a product. And because VAT is different from country to country, you can definitely find some differences in price here.
The VAT for a watch in Switzerland is 7.7%, which means that 7.7% of the price is added on top of the original price. The VAT will of course be paid for by you.
However, when you compare this 7.7% VAT to the 10% found in the United States, it’s actually quite reasonable. In other European countries, it can even be in the low 20%!
Luckily, there is something in place where you can ask back the paid VAT if you’re not from Switzerland. You’ll need to get a receipt and tax-free form from the store you buy your watch. With this, you can claim a tax refund.
Lastly, there’s also something called a customs duty. This is a form of tax put in place to defend the local economy. It’s a tax on products from other countries, making it more appealing to purchase the same products from your own country.
If we look at the United States, you’re allowed to bring back $800 worth of items without having to pay customs duty. Anything above the $800 will be taxed around 3-5%.
With a $2500 watch, you’ll have to pay 3-5% over $1700, which comes down to $51 to $85 in customs. So when you’re calculating whether or not your watch will be cheaper when bought in Switzerland, take your customs duty into account!
Buying A Watch In Switzerland; Yes Or No?
The question of whether you should buy a watch in Switzerland ultimately comes down to you. If you calculate the costs and find out that it will actually be cheaper in Switzerland, by all means, go for it!
However, with everything discussed above, chances are the price will be pretty much the same, if not higher.
You should also take into account that if you want to buy a watch in Switzerland, you have to go to Switzerland first. This adds even more costs to your total, as you’ll need to book a flight, book a hotel, and might even have to rent a car.
Overall, it almost seems like too much of a hassle to go to another country just to maybe get a lower price. However, it can’t be denied that buying a Swiss watch in Switzerland itself will add to the overall experience.
Generally, I’d recommend to just buy the watch in your own country. It will ultimately come down to a very similar price, but you don’t have to go to another country.
If you’re already planning a holiday in Switzerland, by all means, go for it. Like I said, it definitely adds to the overall experience, even if the price won’t be much lower.