Parked outside of a mall in my car with a stranger, I was wondering if I was about to get robbed for $8,000. I was selling a watch to a middle-aged guy I met on Craigslist. It was a Rolex GMT Master II, “Batman” edition. That was the most expensive watch I owned at that point, and it was then I knew I was going about this watch trading thing VERY wrong!
I was in my mid 20’s trying to make a couple hundred dollars enjoying luxury timepieces I loved, but I was making some really reckless mistakes that could have lost me everything.
I’ve seen far too many people get scammed, lose money, and even stabbed doing watch deals because they made extremely risky errors starting out like I did. That’s why I’m giving you the inside scoop on my 3 biggest mistakes, so you don’t royally fail buying or selling watches.
Hustler vs. Investor Mindset:
At the time, I was happy to make any profit enjoying the watches I was wearing. The goal was simply NOT to lose money. This sounds easy, but looking back on how much capital risk I was taking on to enjoy a very small reward, it makes me cringe.
With the Rolex Batman example, I purchased the watch for $8,150. Can you believe that? A pre-owned like new GMT Master II Batman for less than MSRP at the time!? Those days are far gone! Anyway, I digress. The point is, I paid $8,150 for this watch which was my largest purchase to-date, and ended up selling it to a local executive for $8,500. At the time I was thrilled to take home $350, and have worn a beautiful Rolex most people dream of now. But that could have gone south so quickly! Looking back on the details, that deal was insanely stupid, and not worth the time spent or risk at all. I met the guy in a parking lot outside of a Rolex boutique to do a cash deal. Fortunately, I had done some diligence on the guy and met him at the boutique so they could authenticate it. I later wrote an article saving you from all these similar terrible situations.
All said and done, he turned out to be a nice customer. That engagement was 5 hours out of my day, a potential theft, and then cash deposit hurdles to deal with all for 4%. For parking $8K of my money, I should have seen how much downside potential there was and that it would have been much better to hold out to a retail sale of at least 15-25%. This showed me a lot about knowing the numbers and being disciplined to make wise investments, something that is taught in detail in Watch Trading Academy. That same watch today is for sale on the secondary market for 2X what I bought it for then. I no longer put my capital into timepieces unless I’m confident that the risk/reward spectrum leans heavily in my favor, and/or I think the market will appreciate overtime on a watch like. It’s more like investing in timepieces vs. hustling. Hustling for small dollars is a mistake I see rookie traders make who go out of business if one large issue arises.
NOT having a checklist:
When I started buying timepieces that first year, it seemed much riskier because I was still building up my network of watchmakers, repair shops, and communities I could tap into. These people save me from buying fakes and unforeseen issues. I had little to no idea when I had a timepiece in hand if everything was working as it should. I would just wind it, and see if it was keeping time close to the digital clock on my iPhone. This lack of quality control review cost me a couple of hundred dollars on the first Panerai I purchased. It had an issue with the crown closing, and the amplitude was low. This additional $200 service wasn’t devastating, but it was enough to put me out of commission selling for 2 weeks and ate up a lot of my profit margin. Instead of making a nice 11% on the sale in 3 days, I ended up letting it go for only $150 more than I was in it for, and netted 3%. That 1 month hold time blocked me from other opportunities on watch deals I could have bought and traded. It also taught me that it’s critical to have a process in place to check the functions and timekeeping of a watch right when it lands in my hands. This way, if I do have to resolve an issue, I can usually get a resolution much quicker from the seller. This also helps avoid the risk of reselling it and having someone else encounter the issue and then you’re stuck with the problem. Little steps go a long way in this trade. Check out my watch quality control checklist here.
Buying Fish from Fishermen:
Unless you first master how to fish, then you can learn the difference between when it makes sense and when it doesn’t. On one of the trades I did that first year, a loss I took was on the Breitling Navitimer. I had purchased it from a local dealer. I did the deal because he was a trusted person who had helped me on other repairs, and I wanted to build a relationship with him. This is all fine and well, and there are times of course when it does make sense to buy from dealers and establish mutually lucrative relationships. However, when you’re starting out, you’ll realize after a while it’s the quickest way to get stuck in a watch too high. If I had known what was taught right from the beginning in Watch Trading Academy, I would have never bought fish from fishermen starting out. It may seem like a good idea due to ease of the transaction, but I can assure you when everyone has to make money, you’re sure as Hell not getting the majority of the profit left buying from fishermen. Dealers and wholesalers have to make money and they’re not going to give you seemingly amazing deals when they take on the risk and time to catch it. So to expect them to hook you up, when all you have to do is buy their pre-caught fish (watches) is naive. While some of these deals really can work out, I suggest you wait until you’re a master trader, and really know your Bottom Cash Value numbers before going that route. Of course buying from private sellers who don’t know the markets as well can be slightly more work at first, but this is the skill that provides you the best returns and makes the risk and time well worth it. You’re essentially functioning as a mini dealer without all of their operating costs and overhead risk.
After going through the ringer on my first four trades, I had enjoyed the ride, but was lucky to get away unscathed only netting a $-250 loss. The following year, when I joined Watch Trading Academy, I was able to 10X+ that return and make over $10,000 in net profit. While this was a humble profit to make, at the time it was like a light-bulb had gone off in my head. I had proven I could do this and scale it to whatever level I wanted. And having the support of the online community in the insider Facebook group and the training had helped me avoid some of these hard life lessons going forward. That $10,000 turned into $30,000 the following year, and then the year after I was making $30,000 in 3 months. This allowed me the option to quit my 9-5 job, and grow my passion for timepieces while controlling my future.
Don’t make the same critical mistakes I did starting out. With all of the information and access available on the internet including Watch Trading Academy which shows you how to start from A-Z, there’s just no good excuse to lose. I’m seeing more and more regular people break over 100K in profits a year investing in watches than ever before starting with as little as $1500. And the best part is, they’re doing it in much less time than I could.