Are watches a good investment? A question we get asked a lot and there is no simple answer to this. Watches should primarily be purchased for enjoyment, however, the pre-owned watch market can also make a great investment and the pre-owned market is projected to grow significantly over the next few years.
Watchcharts.com gives some really interesting insights into the pre-loved watch market. Think of it as the FTSE100 of the watch world. Watchcharts track the average sale price of 30 pre-owned luxury watches over time and as of today (7th April 2022), the Watchcharts index has grown 51.7% in the past 6 months (see above chart, source: Watchcharts.com).
If you had invested money in Bitcoin 6 months ago (as I did unfortunately), over the same period, Bitcoin has dropped 15.64% (source: Google Finance).
So, sell all your crypto and hit the high street and spend all of your money on watches right?
Well it's not quite that simple. The most popular models from certain brands (e.g. Rolex) are in such high demand currently, you can't just walk into a dealership with a wad of notes or your black Amex card and walk out with a posh paper bag with a shiny new watch inside. To get on the extremely long waiting list, typically, you have to have a purchase history or a great relationship with the dealer to be allowed to wait for a watch. This has driven huge demand on the secondary/grey market, meaning that if you were lucky enough to get the call from your friendly authorised dealer, you could walk out of the shop and sell the watch for 2-3 times the retail price without even opening the bag.
On the flip side, if you purchase 'fashion' brand watches (e.g. Gucci, Armani, Michael Kors etc), the moment you walk out of the retailer, you've lost 50% or more of the cost of the watch.
I've put together a few pointers below on how to get the best out of watches as an investment (disclaimer, this does not constitute financial advice and you need to use your own due diligence before making any purchases!):
Love what you're buying - the joy of purchasing a watch as an investment is that you get to enjoy using/wearing the watch, something you can never do with money in shares/Crypto/the bank. Make sure it's something you like, not just something you may make money from.
Pre-owned makes the best investment. Looking for a mint condition pre-owned watch with an appropriate saving means that the asset needs to grow in value much less than if you'd paid full RRP for the item.
If you do buy new, shop around and negotiate a discount if possible. Although many dealers will say no if you ask for a discount, that doesn't mean it can't be achieved. Be cheeky, the worst they can say is no and if they do say now, try someone else!
"Box and papers" - a term used all the time in watch circles, "Box and papers" encompasses a variety of things that make the watch more desirable, e.g. original box, presentation case, manual, warranty card, certificates, purchase receipt, spare links for the strap etc. In a nutshell, the more of these you have (ideally a 'full set' of everything), the more valuable the watch will be if and when you come to re-sell the watch. Not having these (watch only/naked watch) can affect resale prices by typically 25-50% so make sure you're getting these before making your purchase.
Do your due diligence / research - just because a watch is advertised for X price, doesn't mean it's worth that amount. Check eBay sold listings / Chrono24 / Watchcharts.com for accurate data on what the watch is actually worth, not what someone is trying to sell it for.
THE GOLDEN RULE- watch out for fakes/copies/clones - most selling sites (eBay/Gumtree etc) are unfortunately littered with very convincing fakes. Try to look for watches with retailer purchase receipts, ideally with trackable serial numbers. Check every detail with the seller. Check the seller's feedback. Check if they're selling lots of similar items. If they're not forthcoming with answers, if the watch is new but supplied with no warranty card or new and the seller offers their own warranty, these can often be red flags and should be avoided. In short, if you don't know what you're looking for, use a trusted expert to help you.
If you do need any advice on any of the topics discussed above, please don't hesitate to contact me directly and I'd be delighted to help. As we don't operate from a posh showroom with fancy coffees and nice carrier bags, and are independent of the main brands whose dealers often all stick to RRP pricing for customers, we can often negotiate good discounts off RRP using our network of trusted dealer contacts. You can check out www.Wetherbywatches.co.uk for our range of new (with significant discounts off RRP) or pre-loved (with even bigger discounts!) watches and if you have a specific model in mind that we don't have in stock, we'd be happy to try to obtain this with a cost saving to you off RRP where possible. Thanks for reading.
Chris Jacob, Director, Wetherby Watches Ltd, 01937 222 661 / wetherbywatches@gmail.com
