What Makes a Watch a Great Retail Flip | Watch Trading Academy

What Makes a Watch a Great Retail Flip

You may be wondering what the differentiating factors between watches that move fast for big margins to retail buyers versus what types of watches will sit forever are. 

The reason a lot of folks stick with Rolex and sell at wholesale margin is because it’s easy. And that’s good. So what if you knew you could also combine your portfolio with other watches that move just as fast and make 3X+ the average margin?? 

There are three key things to consider when determining if the watch you’re about to buy is going to sell easier and for big money:

1.) Universally Accepted Aesthetics
2.) Market Landscape Analysis
3.) Positioning

1.) One of the most important things to consider when determining if a watch would be good for retail buyers is if the watch is aesthetically desirable.

Humans have a tendency to gravitate towards designs that are beautiful, symmetrical, and desired by other humans (pack mentality). If the watch you’re looking to flip checks off all of these boxes, then you’re much more likely to sell that watch for a premium even if it’s not the top selling brand (Rolex).

One of the reasons Rolex timepieces are so desirable is because they check off all of the boxes mentioned above. Their designs haven’t changed for generations, because they do this so well. Most of their models are made of precious metals, are symmetrical and simple, and tout colors that look really enticing. Take a blue-dial Submariner for example; the face and bezel are very symmetrical (especially the no-date version). Blue and black are two base colors that have always done well in fashion and the watch industry. So if you pair either dial color with a steel or gold case, it looks amazing. These types of designs are universally loved, so if you can find similar combinations in other models no matter the brand, you will have the chance to market that watch to a larger audience that loves these similar design details and aren’t necessarily specific to the brand alone.

Some of the universally accepted design specs that people love are: blue, black, white, steel, yellow gold, rose gold, 44mm, 42mm, 40mm, 36mm, chronograph function, moon phase function, subdials, round case, precious metal bracelet, rubber sport strap on luxury diver model, precious metal bracelet on luxury sport model, leather strap on dress model, see-through case-backs, and precious metal clasps. 

2.) Understanding the market landscape at a 10,000 ft broader view is something that will help you buy watches that will resell well to retail buyers.

This means understanding that if a person has $X,XXX amount of dollars to spend, what types of watches will they be thinking of buying. Remember, most retail buyers aren’t traders like us, so they don’t know that they can get in and out of watches without losing money. Therefore, they tend to be more cautious about how they buy and what they buy since they believe it will be a piece that forever stays in their collection.

For example, say someone has saved up $12,000 for a watch and they think they want a Rolex Daytona because it’s what they’ve been dreaming of for a long time. Considering their limited knowledge (due to Rolex’s presence and advertising prowess), they tend to look only for that model. But this also yields an opportunity for you. If you have a watch of similar style that has the same design aesthetics, looks amazing, and is within their budget (and perhaps even slightly less), they may consider changing their course of purchase action. So in the example with the Daytona, maybe they always thought they wanted a white-dial stainless steel Daytona. They research the market and realize none are going for under $14,000 now, but when they’re searching they stumble upon your Vacheron Constantin Overseas with white dial and steel bracelet that looks very similar in design to the Rolex Daytona. They see that they can get that watch for $12,500, so they do more research on Vacheron Constantin and see that the brand is in the Holy Trinity of watch making and a phenomenal brand. The best part is, you have much more margin in a timepiece like that than you do selling a Rolex Daytona anyway. So as you can see, if you are marketing watches with similar desirability and perhaps a better value for the price range, you can win new clients who THOUGHT they knew what they wanted.

The same goes for understanding why you should or shouldn’t buy certain watches at certain price points. If you know what other options are available to buyers on the market at the same price range, you can determine if it’s a smart flip investment. For example, if you’re thinking about buying a $35,000 yellow gold Cartier, understand that someone in the market with $35,000 looking for a gold piece also has the option to buy a Rolex Skydweller or a gold Audemars Piguet. You have to ask yourself what competition you’re up against and if selling this Cartier against all the other options makes sense at that price point.

3.) Positioning is the final piece to moving watches to retail buyers more effectively.

How you position your watch to someone who isn’t a wholesaler or trader makes a difference. Oftentimes as traders stuck in our own world, we try to sell watches by specific details like reference numbers which hold no relevance to someone who is a retail buyer. Retail buyers care about other things, like how much they think they’re saving off of the retail MSRP price of a watch. If you are selling a watch with an original MSRP of $27,500 and offering it for 60% off at $11,000, that seems like a much stronger proposition to a buyer than saying that your watch is $500 less than any other of the same reference number model on the market.

Another positioning strategy that’s relevant to retail buyers is positioning the watch as an investment. People are much more likely to spend money on a luxury if they think they are investing versus spending it on something that will depreciate by 50%. Not everyone thinks this way of course, but the majority of retail buyers are hesitant to buy a watch they know nothing about or think will tank. This again is one of the main reasons people buy Rolexes. Their perception is that they’re investment grade watches and that they can potentially hand them down to their children or at least not lose money on them. If you start educating serious buyers as to why other models and the pieces you’re selling are investments and why the value is so strong to them, they will think that way.

So remember, always position your watches when selling them as a fantastic value and opportunity for someone. Frame up the market landscape for the buyer as they probably know much less than you about their options. The more information you provide them with before they make their own assumptions, the better chance you have of making money and getting them to buy from you.

Cal Knight
 

I’ve had a passion for luxury timepieces my entire life, and it wasn’t until 2011 that I started collecting and flipping those assets with the techniques learned here at Watch Trading Academy. Mastering the intricacies of the watch market, the boutique brands, and how to approach the process have all been essential to making intelligent investment decisions which has resulted in $100k in profits in less than 5 months, be sure to check out how I did it here.

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