Questions about starting a watch business that turned into a social experiment

immmhus · Apr 17, 2022

Hi there,

Long time member, small time poster.

Ive found enjoyment in the hobby of horology and am dabbling with the idea of buying and selling watches so that. 1. I can wear them in the meantime 2. Make it economically viable to do so without me laying under the bridge.

I have just sold a Speedmaster and have broken even but with the deal I made with a supplier of mine I brought 2 watches and got a third lower end well known brand watch for free.

I was wondering if we had any grey market sales people on here who would be able to share their experiences with this endeavour.

Have you made a living buying and selling watches?
what sort of profit margins would you usually aim for?
What's your initial investment in the watches?
Do you actually make any money on these or is all the profit made from social media or YouTube or fixing watches?

I'm starting to learn this is a tricky business importing and exporting watches and we have all probably tried to give it a crack at one time or another.

dsio · Apr 17, 2022

There are many threads asking this if you look around. It’s a very efficient market and margins are slim, you need volume and a pile of capital. The majority of small time watch dealers have it blow up in their face and end badly, sometimes facing legal problems from their actions.

Unless you are a bona fide veteran with years of experience you are setting yourself up for a world of pain, and potentially destroying your public reputation when things go wrong.

cvalue13 · Apr 17, 2022

dsio · Apr 17, 2022

cvalue13
🍿

Yep, precisely. You are genuinely better off getting into day trading or crypto, it’s a less steep learning curve and far less likely to ruin your life.

immmhus · Apr 17, 2022

Interesting response, oddly aggressive and rather specific.

You've mentioned loss of public reputation and legal troubles. It seems you know of people who it has happened too, would you give us an example?

tyrantlizardrex · Apr 17, 2022

immmhus
Interesting response, oddly aggressive and rather specific.

You've mentioned loss of public reputation and legal troubles. It seems you know of people who it has happened too, would you give us an example?

@dsio is one of the forum owners/founders/mods and has spent years dealing with the things that go wrong when people decide to play dealer and do a bad job of it.

Davidt · Apr 17, 2022

I feel the problem with asking a watch collectors forum for advise about starting a watch business is that often (especially if the person doesn’t have years of experience) the person in question solicits free advise from collectors with many years of experience to aid their education.
They then use that free education that was often hard fought and paid for the collectors, to a) compete with same collectors to Buy vintage watches and b) then try to sell these watches to the same collectors at a profit.

If an individual has put in the hard yards themselves over many years and earned they’re often welcomed with open arms.

I’m not saying the above describes you but every few months we get someone along saying they’re going to try and be a dealer and many do fall into the bracket above. Also some practices such as offering a warranty but not actually servicing a watch prior to sale, and banking on only 1 in x crapping out before your warranty expires doesn’t endear certain types of dealers to collectors.

Of course there are many exceptions, but generally the dealers who know what they’re doing and do it well for both themselves and their customers don’t need to ask advice on a forum.

JimInOz · Apr 17, 2022

immmhus
Interesting response, oddly aggressive and rather specific.

You've mentioned loss of public reputation and legal troubles. It seems you know of people who it has happened too, would you give us an example?

Hardly an aggressive response, just fact from years of seeing it all.

Becoming a "watch trader" requires a huge amount of watch knowledge, an even bigger amount of back-up capital (returns/rejections etc) and willingness to take a hit now and again.

Not every buyer is the perfect customer, and unless you can deal with problematic sales to the satisfaction of the customer your reputation can suffer (unwarranted shit reviews etc)

stevec14 · Apr 17, 2022

JimInOz
Hardly an aggressive response, just fact from years of seeing it all.

Becoming a "watch trader" requires a huge amount of watch knowledge, an even bigger amount of back-up capital (returns/rejections etc) and willingness to take a hit now and again.

Not every buyer is the perfect customer, and unless you can deal with problematic sales to the satisfaction of the customer your reputation can suffer (unwarranted shit reviews etc)

I would also suggest that being a watch trader requires being able to get the said watches at a reasonable price for onward sale in the first place! That’s hard, unless you have a relationship with an AD or something. Many watches in the market will be priced about right, and with the current sellers margin factored in.

dsio · Apr 17, 2022

When you’re a dealer the value you add is your knowledge and expertise, and the safety that comes with knowing if something goes wrong there is recourse. That means if you buy a watch with movement issues and sell it on you could need to man up and take a loss, potentially a thousand or more. It also means if you accidentally buy a fake or lose a watch or something goes wrong you need to be willing to take that loss as just the cost of doing business. You also need the cash in hand to be able to solve things if they go wrong because customers don’t care about your cashflow problems.

The trouble is when you’re early on in dealing watches you make far more mistakes, so you’re far more likely to get things wrong, buy a redial or a watch with non authentic parts or movement problems.

Then since you’re starting out and don’t have a bottomless pit of money backing you, those mistakes lead to cashflow problems which lead to customers getting upset that you can’t make things right. Then your PayPal account gets frozen because one watch collector tells everyone else you’re a crook who owes him money so others decide to cancel deals in progress and demand refunds.

Then you’re in a position of having to borrow money any way you can or do what many do and short sell watches or sell watches you don’t have / don’t belong to you, knowing you’ll refund them eventually as sort of “non consensual loans”.

Pretty soon there are warnings with your full name and address on a dozen websites and people are reporting you to the police as a conman.

The number of times this has happened, honest men who started out with a legitimate goal of being a watch dealer and making a bit of cash on the side turning into people who’s lives are falling apart is very significant.

In summary you need to be a subject matter expert, you cannot depended on other people to be the experts for you. To make a small amount of money you need to start with a very large amount of money. You need to be extremely professional and organised. You need to be willing to take a loss if things go wrong or if you screw up, and you will often. And you need to understand that if you screw up transactions with a few people you could suffer lifelong reputation damage that can harm you and your career indefinitely.

immmhus · Apr 17, 2022

Shit for a world with a million watch collectors and a million watch salesmen. Competition in the market is one thing you expect. Its rather cutthroat by the sounds of it.

Im definitely not new to the trading watches as I have been doing it for many of years now and have often found that I learn the most about watches by making my own mistakes.

With these responses it seems like the secrets everyone keeps is the key to unlock the door into the world of watch trading. Or just don't do it at all .

I was thinking with sucessfull watch businesses most of their capital would come from social media marketing etc..

immmhus · Apr 17, 2022

dsio
When you’re a dealer the value you add is your knowledge and expertise, and the safety that comes with knowing if something goes wrong there is recourse. That means if you buy a watch with movement issues and sell it on you could need to man up and take a loss, potentially a thousand or more. It also means if you accidentally buy a fake or lose a watch or something goes wrong you need to be willing to take that loss as just the cost of doing business. You also need the cash in hand to be able to solve things if they go wrong because customers don’t care about your cashflow problems.

The trouble is when you’re early on in dealing watches you make far more mistakes, so you’re far more likely to get things wrong, buy a redial or a watch with non authentic parts or movement problems.

Then since you’re starting out and don’t have a bottomless pit of money backing you, those mistakes lead to cashflow problems which lead to customers getting upset that you can’t make things right. Then your PayPal account gets frozen because one watch collector tells everyone else you’re a crook who owes him money so others decide to cancel deals in progress and demand refunds.

Then you’re in a position of having to borrow money any way you can or do what many do and short sell watches or sell watches you don’t have / don’t belong to you, knowing you’ll refund them eventually as sort of “non consensual loans”.

Pretty soon there are warnings with your full name and address on a dozen websites and people are reporting you to the police as a conman.

The number of times this has happened, honest men who started out with a legitimate goal of being a watch dealer and making a bit of cash on the side turning into people who’s lives are falling apart is very significant.

In summary you need to be a subject matter expert, you cannot depended on other people to be the experts for you. To make a small amount of money you need to start with a very large amount of money. You need to be extremely professional and organised. You need to be willing to take a loss if things go wrong or if you screw up, and you will often. And you need to understand that if you screw up transactions with a few people you could suffer lifelong reputation damage that can harm you and your career indefinitely.

Thank you for taking the time to clarify. It's definitely food for thought and a few pearls of knowledge to lead me on from here.

Ive been trying this for the last 7 years on and off and am often the source of naive dream chasing.

The pearl in this bunch is the saying that you need to become an expert and don't let anyone else be the expert for you. Great advice that.

S.H. · Apr 17, 2022

immmhus
The pearl in this bunch is the saying that you need to become an expert and don't let anyone else be the expert for you.

Like every business, you have to pick a target, assess your capacity, and learn a lot. Money questions are secondary.

First determine what kind of business you want (repair, selling, old watches, used watches, new watches, collectible watches, which brand, for what kind of customers, where, ...) and what could be your added value. BTW, these last two words take years to build, becoming an expert, a repairman or building a professional network/reputation is not easier in the watch business than anywhere else.

When you have answers to these basic questions you can start thinking about money. Until then, it's pie in the sky. From your first post, nobody could tell you much, because it looks like you are still unclear about all this.

immmhus · Apr 17, 2022

S.H.
Like every business, you have to pick a target, assess your capacity, and learn a lot. Money questions are secondary.

First determine what kind of business you want (repair, selling, old watches, used watches, new watches, collectible watches, which brand, for what kind of customers, where, ...) and what could be your added value. BTW, these last two words take years to build, becoming an expert, a repairman or building a professional network/reputation is not easier in the watch business than anywhere else.

When you have answers to these basic questions you can start thinking about money. Until then, it's pie in the sky. From your first post, nobody could tell you much, because it looks like you are still unclear about all this.

Well there are also questions like, where are you going to get these watches from, which country will you try to sell them too, what is the world doing at that time. I'm a student and shall always remain one, if there comes a time to teach I shall share what I have experienced.

Really I know all the answers to the above questions I had asked but those are from other business avenues I have had.

It's really about sharing experiences to create a better whole community, because nobody will have a monopoly over the grey market ever.

S.H. · Apr 17, 2022

immmhus
Well there are also questions like, where are you going to get these watches from, which country will you try to sell them too, what is the world doing at that time. I'm a student and shall always remain one, if there comes a time to teach I shall share what I have experienced.

Really I know all the answers to the above questions I had asked but those are from other business avenues I have had.

It's really about sharing experiences to create a better whole community, because nobody will have a monopoly over the grey market ever.

From your posts I can't even figure clearly what you are talking about. I don't know the country you are based in (not everyone here is a US American). I don't know what type of watches you are targeting. The speedy you spoke of for example: a 25k$ mint 105.003, a 1500$ 7750 auto from the 1990s, a BNIB 3861? A moonswatch?

It's like saying, "I want to start a car business, share your experiences". Sure, but what are we talking about? (car wash, second hand dealership, repair shop, classic car restorations, leasing business, official dealership, etc...).

Please spare me the "sharing experiences to create a better whole community" feel-good talk, just be specific about what you are asking us (to help you earn money). I did start a watch business, I worked my a$$ off, I did not launch vague questions about it to random strangers on the internet, that is not the way it works. Ask some specific questions and you may have relevant answers, until then it just white noise.

wrist time · Apr 17, 2022

immmhus
Interesting response, oddly aggressive and rather specific.

You've mentioned loss of public reputation and legal troubles. It seems you know of people who it has happened too, would you give us an example?

If that's how you interpreted that you might not be ready to deal with customers when issues arise.

Donn Chambers · Apr 17, 2022

To add to the other responses here (all good, IMO), I note that the primary reason you are interested in starting a watch selling business is:

“1. I can wear them in the meantime.”

That, IMO, is the absolute worst reason to start such a business. First, you will be buying watches you want, not necessarily watches the end customer will want to buy at a significant profit to you. Second, you will immediately degrade the value of said watch if you wear it (note all the posts here noting every minor nick/scratch on watches for sale, and how they aren’t worth the list price because of it).

Buying/selling watches as a hobby is fine — just don’t expect to make much (if any) profit.

If you really want to do this as a business and make sufficient profit to keep it going, then you have to take a completely different approach — buy watches cheap that you can make the most profit on, whether you like them or not. And that is becoming harder and harder nowadays with an over-saturated market (due to the proliferation on online dealers in the last decade). Don’t forget, you need to establish a presence where people can find your shop, and that requires savvy social-media skills and/or advertising.

Dan S · Apr 17, 2022

It seems to me that the only people who can really do well selling watches are the people who are able to command a hefty premium because potential buyers see them as highly trusted top-notch reliable experts. This is even true for collectors selling watches on the forum. Just try selling a watch once you reach 200 posts. Without a strong reputation, the only way you can sell a watch is by putting a low price on it.

Larry S · Apr 17, 2022

I once had a bricks and mortar vintage dealer and watch/ clock repair shop owner in Chicago tell me wistfully that years ago you could buy a large mixing bowl of watches for 25 bucks. That was the time to get into this. The ship has sailed.

S.H. · Apr 17, 2022

Donn Chambers
buy watches cheap that you can make the most profit on, whether you like them or not.

And be prepared to have big problems if you don't know how to properly assess/repair a watch, if you buy vintage. That is why I asked about the target, dealing vintage or recent, two wildly different businesses, risks and rewards.