It’s always interesting to me when I hear people say things like “watch trading only works in the USA”. Or things like “the market here just doesn’t work for trading as much”.
While there definitely is some truth to the fact that countries’ markets operate differently, it doesn’t mean there aren’t opportunities. So in this latest article I’m going to break down two overarching strategies you can use whichever country you’re in. So no more making excuses, and you’ll have a new strategy you can apply all over the world.
The first way to buy watches abroad in any country is by taking advantage of the arbitrage between the two places you go (where you travel and where you live) and finding watches that trade over retail price. Typically when buying in foreign countries, if you are traveling back home within a relatively reasonable timeframe and not staying there, you can take advantage of the VAT tax (or other retail tax) refund. VAT = value add. It’s a charge integrated into all sales of luxury goods and can be taken off if the proper forms are filled out and mailed in the airport. For example, when I traveled to London recently, I was able to pick up a Rolex GMT Master II Rootbeer and all-in after VAT taken off be in it for $12,500. Those same pieces go for $17,500-$18,500 in the U.S. market today. The VAT tax here was about 16.5% off.
Also, it’s much more difficult to find these allocations in the USA stores, but it wasn’t as hard in another country. Certain countries are still dry on hard to find pieces, and certain countries are flooded with them. Think of places in the world where the economy may be struggling right now, and they still received their annual allocations of watches. So the people in the area aren’t buying them all, and they still have them for sale. Sometimes you get lucky and just walk into the right dealer.
I’ve found that with this strategy the method works best if you’re getting pieces that trade over MSRP, and the tax reduction is very favorable. You can fly across borders and avoid certain customs charges too if you’re smart. Have the dealer or your buddy over in the country ship the boxes separate. Carry the watch(es) by wearing one or in your travel watch roll and stick the warranty cards/papers in your wallet. This makes it look like you were just traveling with your collection. You have to be careful here as carrying too many watches will get you caught, and you’ll have to pay the customs fine which funny enough is sometimes less than the VAT tax reduction. So it may still be worth it.
The second strategy can be used no matter where you are in the world as long as there is a liquid market for timepieces. Is it true that most countries are less liquid and active than the USA when it comes to luxury watches? Yes. Because Americans are luxury consumer whores and will buy anything and everything to look good even if they’re poor. That said, it doesn’t mean that other countries aren’t buying away too.
I think the common misinformation I’ve heard from other WTA members abroad is there’s really no market for anything but Rolex. I fully disagree with this. Obviously Rolex is King no matter where you go in the world but the margins are smaller and the trading game is tougher unless you’re getting MSRP dealer type scores. There is still plenty of room to build your own niche with brands like Omega, Breitling, Cartier, Audemars Piguet, etc. I call these the second most popular type tier brands that have been around for generations and people still are very aware of. Just because they aren’t the #1 in demand brand doesn’t mean people aren’t looking for them. In fact, your opportunity lies in your ability to resell and market these brands better than the other guy out there who is just lazy and not a full time trader. The fact that there are less comps on the market for these beautiful pieces gives you more margin play to make profits. It’s up to you to get creative, be proactive, and market your watches more prominently. So don’t take the opportunity to be the lead mover of other brands besides Rolex in your country for granted. It can yield a huge ROI for you.
Finally, don’t forget that us WTA members span the entire world. There’s some of us everywhere and most of us are more than willing to meetup, network, trade, and help each other do deals across borders. If you take the time to join the WTA international group, and reach out to other members in the Facebook community, you’ll see there’s more people you can deal with than you probably thought.
In London this last week alone, we had a dozen guys come out to network and do some trades. I sold a Panerai and made profit that way as well.
Please do let us know in the Facebook group if you utilize some of these strategies and which ones worked for you. Also, if you can think of another please do share! Happy trading WTA fam!