Thinking about a small startupwatch-company

[wiseman]

I have for quite some time nurtured the idea of creating a small startup-company that would specialise in "niche-watches" - preferably in the type of watch I like myself, ie. rugged and heavyduty watches.

Think B&R or Seiko 007 or Seiko Black Monster type of watches.

As my brother-in-law is in the special forces I was thinking about asking him and his specop collegues to be my guinea pigs if and when I decide to make a small batch of watches.

I previosuly had a small company together with my wife in a very different area (fitness), but we ended the company several years ago.

In my professional career I have also built up the brand of a security company in Scandinavia together with a collegue.

Being a techie I was surpised that I liked the brand-management and selling as much as I did.

I started to look into companies that could possibly help creating a small batch of my own watch-designs (that I only have in my head and on sketches on paper, since I suck at graphical software) and I was wondering if someone at RWG could point me along the way?

I have very briefly talked to a Swedish company called Capella Industries AB that designs and manufacture at least two brands:

Lambretta Watches:

http://www.lambrettawatches.com/

SAS Watches: (This is just an example on an online retailer that has some good pics of them)

http://www.klockor.nu/sas-c-670.html?language=en

The "problem" I saw when talking to them was that they were not too keen of letting an outsider provide a design, but mainly wanted me to "pick and choose" a watchdesign from their existings designs, ie. I could opt for hands from one model, a case from another, the crown from yet another of their model etc., which would be fine normally, but I wanted to use my own designs.

Also, it seemed that they were quite expensive, since they wanted to involve a lot of people and drag out on the design-process (6 months+)

Now I dont have unlimited funds, but very limted money, so I need to think outside the box and perhaps find other ways of doing this.

I appreciate all the ideas you may have on this.

Thanks

[paralizer]

I'd PM flav and ask him about their start up with LUM-TEC. Seems like a good place to start. Good luck to you though, seems like an ambitious project.

[wiseman]

Thx, I will definately send a PM when my plans gets more "real" and not only in my head...

I am currently looking for some sort of CAD or similar software that are aimed for watchdesign so I can get my ideas out of my head into the real world.

I have Googled the web and found out that some use "ordinary" vector graphics software for watch-design, but I am not positive that this really would suit me.

Perhaps there are no specialised software for this? Or is it?

Anyone?

[chubbchubb]

I think the problem you will run into is that most of the "smaller" watch companies do not really do their own top down designs. There are companies - like the one you spoke to - who will deliver to you a personalized (branded with your wiseman watch co. name) batch of watches but the underlying design of the watch is from their catalogue and might be sold at the same time - in a similar combination of case, crown, movement, strap.... - to another customer somewhere else.

It is all about money - the more pieces you sell of any give design, the better the profit and the quicker design and manufacturing cost are amortized. Think about it - if you gave them your own design - how many pieces would you order of that watch? What would you be willing to pay to them? What could you resell them for? What would be the cost to do (cnc) a watch (just case, bezel, dial, crown) from scratch? Add movement, hands, crystal and assembly, packaging....

[RobbieG]

Really tough to do. You are better off setting up a gen watch internet retail company and marketing via watch forums aggressively and tactfully to get going and also coop advertising with some bigger fish in the fashion industry and give them a rip on what you sell. You will never have a problem finding AD's to sell to you at close to cost. It helps them with the brands and makes them look like they are doing a ton of volume so they can get great co-op stuff from them - cars, trips, etc. And you may read that legit AD's don't sell to grey marketers - BULLSH*T with a capital B.

I have a dear friend who is in the grey biz and know some of the AD's that sell to him and you wouldn't believe it. He got them all from one call to the owner. Easy. Hi, I am a grey guy and I don't need papers with the watches so no trace. I'm just a guy off the street buying a watch every time. I'll give you all my XYZ biz - should be 5-10 watches a month to start and up from there. They will take all comers. I know a huge AD that sells to a half dozen grey guys. Seriously - a half dozen! The brands think they are heroes and doing it all with foot traffic. Yeah right. What planet are they on. Walk ins never buy sh*t - except in Vegas maybe. LOL. Every WIS I know shops AD's all over the country. They even tell the dealers not to do phone biz. LOL. The funny thing is how stupid Switzerland is. If not for interstate biz and grey market the whole industry would be out of business.

[RobbieG]

Sorry - to your original idea there is not enough money in it even if you are succeeding. Too much risk exposure for the reward. If you are a no name the price points need to be low to compete. A labor of love and passion for sure and if you are rich already and want to be a watch designer for fun why not. But assuming you need to make money this will be a tough road without a big payoff in the end.

Let's say you got to a point where you could sell 100 of your designs a year which believe me sounds like a low number but will be harder to do than you think. If your price point is say $600-700 which it would need to be starting out to compete and you make a 50% profit which will be a tall order without economies of scale in manufacturing, advertising costs, etc. you just grossed $30K. See what I mean? Out of business.

OK but now you sell 500 watches a year (as much as IWC does with special editions) at $1000 a watch cause you grew - Now you grossed $250K, but how much of that will you keep with all the costs. See what I mean? (again). You end up really successful and selling all these watches and your only making a hundred grand a year in your pocket.

If I'm going into business and going to kill msyself I have got to have the prospect of grossing a million a year or more or I'm not doing it. That way you can miss every goal and still make a great living. I just don't see how anyone could get there in the watch biz unless you buy a two hundred year old Swiss company, jump start it and sell it to Swatch or Richmont. You are better off borrowing the money or taking in VC to do that deal if you could find it because you could negotiate all kinds of stuff - a seat on the board, tons of free trading and prefered paper. You could get rich doing it. But not with a startup non-Swiss brand name. In Wall Street terms we call it "A Dog"

You can make as much on each watch as a grey guy without ever exposing yourself to any risk or cash outlay. Some AD's will even drop ship for grey guys (although I wouldn't recommend doing that though). Plus once you build a following you will sell higher end watches and make several thousand on each of those. You can make $150-300 pretty easily on each piece with no risk and no costs other than commerce bandwidth which will be cheap in the beginning and grow with you as your traffic increases.

[lanikai]

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paralizer Posted Jan 31 2009, 08:59 AM

I'd PM flav and ask him about their start up with LUM-TEC. Seems like a good place to start. Good luck to you though, seems like an ambitious project.

[genevaroth]

plus, with the recession... forget about it for a couple of years. besides, most of these small co's sell a shitty look alike products. don't waste your time.

I also have looked at it and ran the numbers and like the other poster said, it is not worth the time. get a paper route, or try the grey thing but 150-300 bucks a watch too low % for me.

This is the site that promotes all these micro brands;

http://forums.watchuseek.com/

all hurting designs made by the same case maker;

http://www.w-fricker.de/

if you want to see what real watch making is about read these articles;

http://www.tp178.com/tg/dufour/dufour.htm

http://www.thepurists.com/watch/features/i...four/index.html

Read everything you can about this guy and you will feel so embarrassed of even thinking about putting out more of the same [censored] that everyone else is.

Philippe Dufour