This article will teach you how to buy and sell luxury watches for a profit. I've been buying and selling luxury watches since 2008. Not only have I made money on luxury watches as an enthusiast, I've also gotten to enjoy wearing luxury watches as well. Concurrently enjoying your investments is one of the reasons why I love investing in real estate.
Watches are a man's best friend just like jewelry and diamonds are a woman's best friend. There's nothing quite like wearing a fine watch to an important event. A fine watch gives an immediate boost of confidence to every man who wears one.
When you wear a fine watch, you'll also notice other men who wear fine watches too. You develop an immediate connection with the person that can help build business and personal relationships.
I was at a financial lending conference in SF recently and was wearing my 2008 Rolex Milgauss GV. I was at a booth talking to one of the representatives when the CEO came up to me and said, “Hey! Are we watch brothers?”
He stuck out his wrist and showed me the exact same watch I was wearing. Pretty cool. We got to talking about watches and life and they are now a business partner of mine.
Selling My First Luxury Watch
Although I felt a little foolish spending $6,400 after-tax for my Rolex Milgauss GV, it ended up being a great investment.
The Milgauss GV was a rare watch because Rolex had run out of the green crystal. As a result, the watch was more expensive in the secondary market.
A colleague from Hong Kong wanted it, and when he came over to San Francisco for some meetings, he offered me a check for $8,400. I called Ann, my jeweler to ask whether she had another Milgauss in store, and she said no. The waiting list for one had grown to 10 people, but she’d reserve one for me no problem.
I ended up selling my colleague the watch for a $2,00 profit after just three weeks of ownership. Three weeks after that my jeweler gave me a ring to say she got another Milgauss for me so I bought another!
That moment was when a watch dealer was born!
My Luxury Watch Sales Since
Besides a nice suit, tie, cuff links, shoes, and leather bag, there’s not much in terms of accessories a man can get. To some men, a watch is that engagement ring equivalent. Totally gratuitous, but at least a watch tells time.
I was never one to care since I found watches to be uncomfortable on my wrist. But, once you start making a little bit of money, you start caring much more.
Here are some of the watches that I’ve owned and traded out of within a 3 week period due to the high demand in the market.
- Panerai Black Seal Ceramic – Purchased for $6,200, sold for $8,900.
- Two Rolex Stainless Steel Daytonas – Purchased for $9,600, sold for $11,600 and $12,200
- Rolex Milgauss Black Face – Purchased for $5,900, sold for $8,200
- Rolex Milgauss GV Green Crystal – Purchased for $6,200, sold for $9,900.
- IWC Big Pilot – Purchased for $7,300, sold for $8,700.
- Patek Philippe 5396 White Gold Annual Calendar – Purchased for $32,000 during the 2008 crisis, sold for $39,000 in 2010.
At the time of purchase, every single one of these watches could not be found by the general public. You needed a connection to help procure such a time piece, hence the after market sale price.
One of my favorite watches was the Patek Philippe 5726A Nautilus Stainless Steel that costs around $42,000 retail in 2008, but I could get one for $36,500.
In 2019, the PP 5726A Nautilus now sells for $61,000+ retail!
How To Buy And Sell Luxury Watches For Profit
1) Build capital to buy luxury watches.
Once you have money, it’s easier to make more money. This is true for just about every asset class there is! It’s not necessarily the more expensive watches that return the biggest dollars. What’s more relevant is the perceived rarity of the watch.
There are tens of thousands of Rolex Stainless Steel Daytonas for example, but because of clever marketing by Rolex and the cooperation of watch stores, they create demand by artificially holding back supply. It’s kind of like the diamond industry.
2) Build connections to procure luxury watches.
Now that you have capital, you now need to build connections with a jeweler. The strategy I had when I first started was to approach the hungriest and newest jeweler in the store. I told Ann to call me as soon as she could get a hold of a Rolex Milgauss White. I told her I’d promise to buy from her, and that’s exactly what I did once she rang.
I demonstrated myself as a reliable buyer, which she loved since she has a tremendous amount of flakers. Once you’ve built rapport with the jeweler, it becomes a beautiful relationship.
3) Focus your watch-buying with one salesperson.
For the large majority of timepieces, you had to have at least $50,000 in past purchases with the store before even getting on the waiting list. But, you don’t want to spend $50,000 on stuff anybody can buy. Hence, you go back to step one and build rapport with the hungriest dealer at the store.
After you prove your reliability, you’ll be offered more and more timepieces until you’re deemed reliable to jump to the top of the list. You’ll be surprised how quick you can get to $50,000 in purchases when you’re buying and selling $6,000-$8,000 watches!
4) Save on taxes when purchasing.
To save on state taxes, I had all time pieces shipped to my vacation home in another state where the jeweler does not have a presence. This is why it’s best to target a boutique jeweler, and not a behemoth like Tourneau, who is everywhere.
Having the store ship my watches to my second home is totally legit since I go at least four times a year. A 10% savings on $6,000 is a significant amount of money.
5) Make sure you don’t go overboard.
Based on my capital and risk tolerance, I focused on watches priced between $5,000-$10,000. Such timepieces were almost always stainless steal. They are in the sweet spot for demand because not many people can afford more than $10,000 for a watch.
There was one time where I overestimated the demand for a particular watch because the company began to produce more. As a result, prices dropped and I had to go back to my dealer and ask for store credit because I couldn’t make a profit.
Luckily, I had my friend use my credit and buy a watch through my dealer while I used the rest to buy some gifts for someone. Things turned out well. Just don’t become a regular returning of merchandise because you’ll then get downgraded on the list!
Where To Find Buyers Of Luxury Watches
1) Craigslist. Although there are a lot of scammers on Craigslist, you can basically do enough due diligence to tell whether they are legit or not. There are a lot of watch buyers who proceed to then resell in their countries of origin. There are other individual watch buyers who don’t have the connections or buying history to procure your time pieces. Craigslist is a huge marketplace that has something for everyone.
2) eBay. I have never sold a watch on eBay because Craigslist and my network of friends were enough to fulfill the demand. However, I constantly checked on eBay to make sure my pricing was competitive. I’m sure you can sell just as easily on eBay, however, I like to meet my buyers and get the watch verified.
3) Friend’s of friends. If you don’t have an immediate network of friends who can afford whatever price you are buying, I’m sure if you ask around enough, you’ll find someone who knows somebody. We’re all connected in some way. A lot of my buyers are guys in their 30’s who might also be going through a mid-life crisis. Many more are engaged and want something nice too.
A Patek Philippe Is Cheaper Than a Seiko
A $42,000 Patek Philippe is cheaper than a $500 Seiko. While a Seiko depreciates in value, a Patek Philippe almost always increases in value.
It’s like buying a F12 Berlinetta Ferrari for $350,000 vs. a $43,000 Ford Explorer. If you get your hands on the F12 early enough, you can probably drive it for six months and still make tens of thousands of dollars in profit. If you are the first to buy a Ford Explorer, you are guaranteed to lose money if you try to sell it!
If you want to make money with watches, build your capital and your buying reputation. It may sound ridiculous to spend $42,000 on a watch, but not so when you can sell it for $60,000 several years later.
It’s actually more crazy not to take advantage of your connections and capital when basic material prices have been skyrocketing for years, and will likely continue to rise in our entire lifetimes.
The Rolex Milgauss GV I bought in 2008 for $6,400 after-tax now sells for about $8,800 after-tax. Just like housing and stocks, the trend is generally up and to the right.
Luxury watches are wonderful items to enjoy and invest. The next time you buy a watch, make sure it's a rare luxury watch so that it has appreciation potential!
Invest In Private Growth Companies
Finally, consider diversifying into private growth companies through an open venture capital fund. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment.
Check out the Innovation Fund, which invests in the following five sectors:
- Artificial Intelligence & Machine Learning
- Modern Data Infrastructure
- Development Operations (DevOps)
- Financial Technology (FinTech)
- Real Estate & Property Technology (PropTech)
Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!
The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments
Fundrise is a long-time sponsor of Financial Samurai and Financial Samurai is an investor in Fundrise.
How To Buy And Sell Luxury Watches is a Financial Samurai original. Luxury watches are rapidly increasing in price, partially thanks to inflation. Also check out investing in first print books from promising authors. It's always fun to be able to enjoy your investments and watch them potentially go up in value over time.
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