You're confusing the price of something with how much it costs to make it. Prices are just a made up number. Hopefully, the amount someone will pay you for the watch you made is more than it costs you to make it, and you have a sustainable business, but the funny thing about capitalism is that is not at all guaranteed. If the company wants to juice sales, they'll have a limited time discount. Or how about when the company is bankrupt and out of business? Then theres a fire sale and the price of something is pennies on the dollar. So they could sell the watches for $200, or they could give them away for free, or they can charge $100k, or they could barter for them. It's all a matter of business.

I think you are missing his point - the items are desireable because of the brand. The stories, the movie stars, the songs and so on.

They don’t possess a universal, objectively valuable beauty that motivates the desire. If they did, fakes would be equally desireable and they are not.