Let me tell you….
Buying a watch is straightforward. But investing in the right watch that will appreciate in price over time can be tricky, so I’m going to help you out with some simple tips.
Firstly – I do recommend only investing in watches if you have a genuine interest and passion for watches. Because without passion, you will quickly lose interest in the market developments which are often essential to make a successful watch purchase.
There are a few different ways to make money in watches.
One is a “longer-term” investment watch – which is a watch that will be bought and then retained – where you “Park Your Money” in the investment. You forget about it (or maybe you want to wear it) – and then you sell it way down the line. Many years, maybe even decades later. Then there are shorter term investment watches that could be bought and sold instantly, or maybe just within a few months.
Both can make you money. But the longer term one would most likely see your asset appreciate to a much higher degree. The shorter term one will – for the most part – see smaller returns but you can continue to work it, work it and keep working it, to build a decent nest of watch sale related profits.
One is harder work as it is busier. The other, you do nothing but wait…
Now, you will hear me refer to “the right watch” and this is very important. You must know I am not talking about ALL watches. In fact, the vast majority of watches are NOT investment suitable ‘asset’ worth watches. I would be as bold as to say that 98% of watches out there will lose money after buying and wearing them. They will not make you money. And even the remaining 2% of watches that might appreciate in value, if not bought correctly (price / condition / accessories) could still lose you money.
Another important factor of this investment process is investing in yourself.
That is, learning and education. Equipping yourself with the knowledge of what watches are interesting, desirable, collectible and then having the business savvy and acumen to understand the market and how supply and demand works. So that you have this “certain degree of confidence” that you will be able to achieve your desired selling price from a future marketplace and a hopeful hungry watch buying audience.
A big part of the buying and selling, involves doing your market research on what is hot and what is not. Giving people what they want at the price they are willing to pay. Some people come to me asking me to sell their watch for them and when I ask the price they hope to get for it, they are living in a dream world.
There is a difference between what people hope to get for their watch and what someone is prepared to pay. In fact, a watch that is up for sale is worth ONLY what someone is prepared to pay.
It’s best to buy watches that people are prepared to pay top money for. You also need to know that – as with any investment – there is potential for gains and losses.
The pricing of watches is driven by the market. As interest and demand for watches can increase and decrease, the prices of watches can possibly rise and fall. Just like stocks, shares, bonds, foreign exchange and precious metals and property. They all have the ability to boom and crash.
Be careful and invest smart!
- Buy The Right Watches
It isn’t easy or straightforward. If it was easy, everyone would do it.
Look at watch related data. Past and present. Look at market trends. Hot watches and styles.
Consider the second bounce of the ball…what will be hot in the future?
Sports watches still? Big watches? Small watches? Dress watches? Gold? Other precious metals?
Can you predict future styles?
Look at interest. Look at demand. Look at ‘collector’ watches. Iconic watches, historical watches, rare watches, limited edition watches or watches made with errors.
Interesting Watches made in low production numbers, manufacturing quirks, tropical dials…
Consider the condition – the better, the better. The watch must be all original. All the parts. No Frankenwatches. Look for full sets. Collectors love this. But genuine full sets – not franken-sets.
Look for interesting provenance. Look at historical significance. Do your Research. Watch tutorials and videos. Mechanical watches are more collectable than quartz for the most part, but there are some pretty cool quartz watches out there if you do your research – so don’t rule quartz out entirely.
Read books. Speak with experts. Get advice. Get guidance.
Be careful with gold watches when buying NEW. Pre-owned is often the way to go with gold.
Always check pricing of gold watches on the secondary market to see what the comparison price is for like-for-like watch new Vs pre owned. The depreciation hit of a new gold watch can be scary.
2. Buy the right watches – from the right people and places
You need to find your sweet spot somewhere with some or all of these buying options and locations..
Look for good deals with Authorised Dealers.
Buy newly released watches directly from the brand (eCommerce) – many brands making this move.
Do good deals with Gray Market dealers.
Hustle with dealers on the Secondary Market.
Learn about auctions.
Make friends with watch Wholesalers.
Join Forums. Chat. Make friends. Look for good deals.
Learn about and spend time on Marketplaces – Chrono24 & eBay.
This is where you will find possible watches.
A simple rule – when you buy a watch – you buy the seller. Look for good, reputable sellers who are trustworthy, friendly to deal with, knowledgeable, approachable, have a good trust score, and are discoverable online (not elusive).
They should be a registered company. Do your research on the company. Check out the company online. Check out the company owners / directors. Buy safe! Don’t take chances. Trust your instincts.
3. It’s not just about buying the right watch – it’s about buying them at the right price.
It is sometimes said that you make money when you BUY the watch. This is kind of true, especially if you want to sell the watch quite quickly after buying it. But not as critical if it’s a longer term investment.
Anyone can buy a great watch at above market price even for the market asking price.
But the key to maximising your profits is buying for below-market price. Anyone can buy a £10 note for £11.You want to buy that £10 note for £8. This is where your business skills as a buyer come into play, so that you can earn a decent and reasonable profit out of your investment. Anyone can buy a great watch at above market price even for the market asking price.
4. Don’t be easily fooled.
When buying a top quality investment watch, if it looks too good to be true, it probably is.
Don’t be lured into the sticky web of deceit and deception. If there are 10 of the watch you want on Chrono24 all trading at around the £20,000 mark, be very cautious if you see this watch available for £15,000.
It’s not impossible for great deals to arise, but be wise and savvy and don’t be fooled.
I would recommend once you get your new watch, take it to be checked by a horologist or an industry professional who can inspect and validate the authenticity of the watch and all its parts. They can inspect the movement to ensure it is all genuine and above board.
5. Be mindful about WHEN you are going to sell because that will affect the selling price.
Do you want to sell straight away. Or a few weeks? Or months? Or years? Or decades?
Remember many top end investment watches will simply appreciate with the passing of time.
Watches will blow up in a hype bubble – like we are seeing at the moment with the Rolex OP 41 ‘Tiffany
Blue’ with an RRP of £5000 trading on the grey market for £30,000, £40,000 or even £50,000.
Fair play if a dealer can get that price but be careful if it is you buying it as an investment watch.
Some watches will simply rocket up in price as a result of an opinion from an influencer.
Be mindful of how the market moves, why it is moving and when it is moving.
6. Don’t invest more than you can afford to lose.
Spend only what you can comfortably afford and never spend more than you can afford to lose in its entirety. Physical goods (or assets in the terms of this video) can always be stolen, broken, damaged, lost or awarded in a divorce settlement – all of which are bad.
If you can only afford to lose £5,000 and you buy a £10,000 watch you’re going to be stressed about resale value. But if you buy an £8,000 watch and can potentially afford to lose £10,000, you will sleep soundly knowing that you are within your comfort zone. Peace of mind goes a long way in this game.
7. Get wise and smart with your finances to help kick off potential investments.
Something here for the aspiring investors with less disposable income and perhaps a lower amount of disposable working capital. Note – I must advise here I haven’t done any of this but I know it’s an option and I would recommend seeking financial advice.
You could potentially leverage creative financing to help you buy an investment watch. Use other people’s money. Do your own deep research here. Consider low interest personal loan or low interest credit cards.
Or Paypal credit to help kick off your journey. Nowadays many watch sellers offer payment plan options for buying watches they have to sell.
Don’t get into debt. Pay off your loans before the interest time kicks in. Sell the watch you purchased before interest time and pay off the watch in full to have made some money. Don’t do anything you are not comfortable with or that’s out of your financial grasp. Or could land you in financial difficulties at any point.
Worst case – save and save and save and save enough to get your first watch and kick off the investment process and begin buying – selling – compounding investments.
Play safe. Play wise. Play smart.
8. Learn how the market works.
The watch market moves a bit like the stock market. Trends, social media, influencers, economy, trade deals between countries, foreign exchange, material costs, shipping costs, Micro and Macro economics, recessions, sentiment, good news or bad news around the world. They can all have an impact on the watch market.
9. Understand the various pricing levels based on how and where the watch is being sold.
First, there is the MSRP -the manufacturer’s suggested retail price.
This is the price you will see new watches selling for in the shops, usually by ADs (authorised dealers) who are licensed to sell watches from top brands. Then you have a wholesale price, which is a new watch that is being sold by a wholesale store at a discounted rate – think Costco.
Then you have Gray market pricing, which is private businesses normally who are not officially authorised to sell top brand watches, but can and do. Then you have secondary market pricing which is just a mixed grill of new and pre-owned and vintages watches being sold by dealers and stores and individuals. Then you have private sellers and flippers. And you have dealer to dealer “trade” pricing.
Be aware of these different levels and try to understand how the adding of peoples margins affect the price of a watch. Think of it a bit like the game snakes and ladders. A watch is bought, it is flipped and that person makes £1,000. A dealer sells it on and makes £1,000. Then that individual wears it and sells it on to a dealer and brakes even on the sale. That dealer sells it on and makes £500. Then that private individual who buys that watch runs into financial difficulties and sells it at a big loss to a dealer because he needs quick cash. (Down the ladder) and up it goes again.
10. Buy with your head. Don’t buy with your heart.
Don’t suffer FOMO – don’t buy anything for fear of missing out. This is complex in the psychological sense; it’s a social anxiety born out of exposure to outside influences especially on social media – and it’s a marker of personal insecurity. So assert yourself against the powerful pull of Social Media.
If you’re falling prey to the FOMO impulse then you’re most likely being driven by outside influences and failing to think independently. Don’t worry about what others have. Don’t worry about what your friends think. Don’t try to keep up with the Jones’.
11. Look for value.
Look for undervalued, well priced watches. Find the great deals. Learn how to negotiate then negotiate enthusiastically to get good deals. Hustle. It’s OK to think outside the box sometimes. When everyone is looking at Rolex sports models, you might find great deals on pre-owned, solid gold Longines and Cartiers that are hugely undervalued. When everyone is obsessed with AP, check out excellently priced Vacheron Constantin’s, Breguet or JLCs. While there is a frenzy on Patek Philippe, I’ll bet there are some amazing Blancpain, Gerrard Perregaux, Breguet, H Moser or Bulgar Octo’s kicking around.
And don’t forget the Independent watchmakers too. FP Journe, Laurent Ferrier, Kary Voutalienen, Philippe Dufour, Greubel Forsey, MB&F, Urwerk, Kari Voutilainen and of course, Roger Smith.
There are others but these are some of the more famous ones… Now, these watches aren’t easy or cheap to come by but, great investment watches they are.
12. Study what makes a good investment watch.
Learn what features you should look out for when considering purchasing a watch for investment purposes.
13. Look for watches that are in high demand.
When looking for a watch that will retain its value over time, it is important to look to the past and evaluate brands and models that have continued to perform throughout generations. Everyone knows the safer brands Patek Philippe, AP and Rolex are safe bets – BUT – honestly – there are watches from these brands that AREN’T good investment watches and they wouldn’t offer profit certainty and price appreciation. Whilst the BRAND is an in-demand brand, not all the watches they release are.
Likewise if you research well and then buy well you can make money on certain models from just about every prestigious watch brand out there. Honestly, I have made a profit on SO many different watch brands and it comes down to choosing the right watch bought at the right price.
One thing is for sure, you will find it hard to make money buying and selling watches not many people are interested in and are not in demand.
14. Purchase from trusted and secure sources when buying on the pre-owned market.
When looking for a watch to invest in, you shouldn’t limit yourself to new models. A certified pre-owned or vintage watch can make just as good an investment, if not better than a new watch. But the market for vintage timepieces can be filled with landmines. Often you’ll find ‘Frankenwatches’, meaning that they have had parts exchanged, often unbeknownst to the next owner. Of course, once no longer in its original state, a watch can lose a lot of its value. That’s why one should be careful and buy from a trusted source.
15. Don’t invest in watches if you aren’t passionate about them.
I mentioned this at the start but I’d like to repeat it to reinforce it. This should be a passion investment project. Hopefully you will have other investments in your portfolio and watches are one of a few. Which means it CAN and SHOULD be a passion investment.
If you don’t love watches but you want to make money out of them it won’t be fun and it won’t be enjoyable and it may feel like “work”. I want this to be a fun project for you.
16. Get a guide. Someone that can expertly share knowledge, advice and wisdom based on experience.
If you insist on investing in watches and you are not at all interested in them and it will just be purely transactional, then better if you are guided by an expert. A professional in the industry.
17. Beware of watch trading fads and bubbles.
Be careful buying massively over inflated pieces from scalpers who are reacting to a market change. Like stocks – ideally you want to buy undervalued stocks that are at the bottom of the pricing curve. And sell at the top of the curve (before it goes back down again). So now, at the top of the curve, we are seeing Rolex Daytona and Patek Philippe Nautilus. All new Rolex OPs with coloured dials. Once upon a time, it was Jacob & Co, Harry Winston and Franck Muller. But not any more.
Be cautious about buying watches that are at the inflated end of a bubble. It may burst.
18. Look after your investment watches.
Like cars – watches don’t like to be sat idle for too long. They need to run to keep the oils running through and lubricating all important parts. So wind your watches occasionally. If you’re going to wear them. Take care of them. No rock climbing. If you really want to protect your asset – get TWO. One to rock and one to stock. One that gets put away. And one that you can wear with care.
19. Store your investment watch wisely.
Where will you keep it? Home safe? Hidden at home? Bank vault or safety deposit box? Someone else’s safety deposit box? Work safe?
Think about the risks of each and every option and ask yourself “Is there a better / safer / more secure way I can store my watch to reduce risk of theft and damage?”.
20. How much to spend on your watch investment project?
Hopefully you have taken note when I said to diversify your alternative investment portfolio and also not to spend more than you can comfortably afford. However, I WOULD SAY THAT OF YOUR ‘ALTERNATIVE INVESTMENT PORTFOLIO’ I would have watches account for maybe a 25% of your investment spend. Never spend ‘bill money’. That means that you should never spend money that you need to pay your household bills. All investment carries a risk and you don’t want to miss important ‘life’ bills.
Use money you have set aside for investing then use that and start looking at watches in your investment price range.
21. Know the Pros and Cons of buying New Vs Pre-owned watches.
I would like you to research the pros and benefits of new and pre-owned watches as investments.
Both have their advantages and disadvantages and it depends on the brand and the watch and the availability. When investing in pre-owned watches, you could potentially make a higher return quicker.
Once worn, watch prices often fall dramatically (apart from a few models from a few brands).
If you buy a watch at a good price and then invest in its restoration, you can stand to make a good return.
Buying pre-owned is wise because when you buy pre-owned – you sell pre-owned. When you buy an investment watch as new, you can’t enjoy the watch and wear it. So unless you lock it away in a safe, and don’t rock it – you buy new and sell pre-owned. Buying pre-owned you take the upfront hit out the watch straight away.
Only a very small handful of very special watches DO NOT experience this hit.
22. Attempt to reduce your risk.
Just like diversifying your investment portfolio, it is wise to have a portfolio of a few different watches from a few different brands in case. As we saw with Jacob & Co and Franck Muller, interest can suddenly vanish leaving watches that were once being bought for tens of thousands, being sold for just a few thousand.
23. Deep research the watch you want.
Don’t just buy the first one you see on any website. You need to do your due diligence. Use several reputable online watch sites to get a fair price comparison. This will help you determine the actual value of the watch. Use Chrono24 to see what price watches are selling for. But be mindful – just because this is what they are listed for, this doesn’t mean this is what they are selling for. Or what people are actually prepared to pay. But it is a good starting point.
Look for watches that are like for like – country – contents – condition. The less watches available on the platform – the better. This is the number one reason that most investors fail at making a profit on luxury watches. They are not interested in doing the research.
24. Invest in quality over quantity.
Unless you like being a busy-fool, consider buying a few GREAT WATCHES than many lesser-quality, sub-standard watches. They will not increase in value as fast or as much as a top grade, luxury prestige watch. There will be more work in acquiring them and selling them. And more to store, wind and manage.
25. Consider buying in watches from other countries.
Once upon a time, I could freely buy watches from all around Europe without having to worry about the additional 20% VAT payment I need to pay as part of import taxes when importing goods from outside the UK. Being based in England and since Brexit – this is a very real thing.
Not only has it made buying watches from Europe much more expensive – it has also shrunk the amount of watches being traded around the UK as less watches are coming in because of this unwelcome price hike. It has made the watches here in the UK more expensive because there is now less supply of watches on the island making the ones that are traded here sell at a premium it seems – good old supply and demand.
So, what does this mean for buying investment watches?
Most of the time we are tempted to only buy from the UK or – depending where you are watching this – from your country – or else we begrudgingly pay the import taxes. However, DO pay attention to watches that are overseas as are there are some great deals to be had. Even paying the 20% – or whatever your local import taxes are – to bring them in, they can still be cheaper than buying that same watch from a local seller. Japan and The US have some very well priced watches.
26. Love Limited Edition watches.
Be on the lookout for these limited edition watches.
Whilst some brands are mocked in the watch community for always doing limited editions and because their “limited” runs are barely limited because their runs are so high, do keep an eye out for genuinely cool limited edition models from cool watch makers. They are sometimes sold before they are launched to the market. They often coincide with the premier of a sporting event or movies, or a cool store, or cool partner brand like cars for example.
Also watches that have a great backstory can become solid collectors items. Just look at what Omega did with the Moon Watch. And Tag did with their Steve McQueen Monaco.
Limited creates scarcity. Scarcity creates demand – of the right watch from the right brand.
27. If you want to play safe, don’t start with an obscure brand.
If you want to lower your risk, have money to spend and don’t want to invest the time to research and educate yourself – my tip is to remember FIVE from FIVE.
Buy from the top 5 luxury watch models from the top 5 watch brands.
Get in touch if you want to know what I believe the top 5 watches from each of these are.
28. When you can’t get the model you want because of high demand for a hot model, look for similar alternatives.
When a hot watch is trending and has become unobtainable, consider buying the models big brother or little brother, older brother or younger brother or a stable mate. If it’s unobtainable for you, it will be the same for hundreds, thousands, maybe millions of others too. So people now and in the future will be happy with the next best thing. That might be an older model, or a version a few millimetres bigger or smaller, maybe a different movement but it is likely their demand will rise in the slipstream of the hot model.
29. Develop contacts in the industry and get the help of experts.
Get to know people in the industry that are avid collectors, buyers, sellers and enthusiasts.
There are some cool watch events to meet like minded people. Here in the UK we have Redbar and Time for a Pint. I’m sure there are others. Plus there are whatsapp groups, Forums and Facebook groups too.
It will help get to know collectors and sellers so that you have easier turnaround times when selling. This goes along with developing contacts in the field because it never hurts to have help.
Researching watches has been done by many people, seek them out and learn from them.
30. Finally – Have patience when buying and selling.
Investing is not an overnight success story, it can take time to learn and research and hunt and seek and buy. Takeyour time. Know the process. Don’t rush. Relax. Be cool.
It can take a while to find a good seller of the watch you want – or buyer for the investment you are selling.
And here is a little bonus tip for you…
Consider alternative ways to invest in watches
If you are not sure where to start or don’t have the budget for an entry level collector’s timepiece that might set you back £5,000 or £200,000. Or if you don’t want the grief of researching, buying, selling, storing, winding, maintaining and insuring watches…
Something else to consider is buying shares in watch related companies.
Watches of Switzerland
You could also consider fractional ownership. Check out Koia, a relatively new company that breaks collectibles down into digital fractions allowing anyone to invest in a cool selection of in-demand assets.