Should I Consider A Luxury Watch Trade?
When a collector decides that the time has come to sell a watch, he should explore his options for trading watches. Asking, “Should I consider trading my watch?” should be a universal step in the decision process when rotating the contents of a luxury watch collection. There are two primary avenues to pursue: private trades, and dealer trades.
Is A Luxury Watch Trade For You?
Before exploring trade options in depth, it is important to note that not all owners of luxury watches will find trades attractive. If a person simply possesses one or more watches and wishes to convert his holdings to cash, then a trade makes little sense, and that owner should explore his options to sell watches outright. However, a watch trade is ideal for the collector who enjoys refreshing his collection on occasion.
The watch collector’s first option is to trade with another collector. Trading with another collector can offer advantages in terms of camaraderie, trade value, and speed. Several measures should be taken in order to ensure security and integrity during these exchanges.
For reasons of society and shared interest, collectors who maintain rotating collections might be well served by trading amongst themselves. Social engagement and friendship are an important part of the watch enthusiast scene, and local club meets can be a practical means of scouting trade partners. In addition to discussion with like-minded collectors, these meets can offer opportunities to survey the collections of others and propose trades.
Speed and potentially higher trade value are additional advantages of trades between collectors. By trading in person with another end-user, the collector of luxury watches can skip the shipping, insurance, and procedural delays required when exchanging goods with a distant commercial dealer.
Higher trade value can be realized when trading watches between private collections. By nature, a pre-owned dealer purchases or trades for luxury watches with the intent to sell them to end users who collect. Put simply, the difference between the dealer’s trade offer and its eventual sale value is the dealer’s profit. That rule doesn’t apply when a collector choses to trade watches with another collector. Each party to the transaction plans to keep the watch he receives and wear or display it. Given this fact, personal trades can offer somewhat higher “yields” in terms of watch value returned for watch value exchanged.
Two guidelines apply when trading watches between collectors. First, only trade in person; second, never trade without the input and witness of a third party.
Being able to meet in person – and trade in person – is critical when trading between collections. For simplicity’s sake, assume good intentions by all parties to a trade. While experienced pre-owned watch dealers often have standardized systems for rating the condition of inventory, collectors often find themselves lacking perspective (i.e., limited experience) or given to over-valuing watches due to sentimental value (i.e., rose-tined glasses).
Because individuals rarely offer upfront return guarantees, it is important to inspect proposed trade watches meticulously and personally before deciding to execute a trade.
The aforementioned rationale for in-person watch trades assumes noble motives; reality dictates otherwise. Trading between collectors who never meet is an extreme risk given the global epidemic of mail, check, and banking fraud. In rare instances, two collectors of repute with many independent references may find security to be sufficient, but this only revives the original quandary of evaluating condition and agreeing upon the value of unseen goods.
A collector trade should not take place in a vacuum. While initial thoughts might be exchanged in private, it is prudent to involve both a witness and a professional inspection before consummating a trade of high-value watches. An impartial witness such as a notary, an inspecting watchmaker or jeweler, a bank employee involved in a wire transfer, or a mutual acquaintance with knowledge of watches should be present for discussion of final terms and the exchange of valuables.
The trade of a watch between private parties should involve the equivalent of an automobile collector’s “PPPI,” or Professional Pre-Purchase Inspection. While specialized vintage watches may require expertise beyond the local resources of casual collectors, a local jeweler or watchmaker can inspect two watches prior to trading in order to check conventional measures of authenticity, water resistance, and mechanical functions.
In short, the advantages of watch trades between collectors are social engagement, potentially higher trade value, and speed that bypasses the shipping-and-inspection phases of dealer trades. Drawbacks of collector trades include the risk of fraud when trading remotely; the difficulty of finding a “perfect match”; the tension between market value and a person’s reckoning of sentimental value; the largely undocumented nature of private trades and recriminations if one party becomes aggrieved.
The second installment of this series will explore the advantages and challenges associated with trading watches with a professional pre-owned watch dealer.
Should I Consider Trading My Luxury Watch
Trading a watch is the natural course of action for a collector who plans to stay in the hobby and prefers not to sell watches outright. Although trades between collectors can offer speed and society, they also involve a higher degree of risk and less flexibility to the collector. By contrast, conducting a trade with a specialist pre-owned luxury watch dealer can offer a practical alternative to the private trade scene. This survey will explore the potential challenges and advantages of trading watches with a dealer.
Most watch collectors keep a mental inventory of needs that must be satisfied before conducting business, and security of transactions ranks at the top of the list. Trading with an experienced dealer maximizes security and offers many after-sale assurances.
Luxury watches have been bought and sold online for two decades, and the dealer scene has reached commercial maturity. In the late 1990s, the first online pre-owned watch dealers emerged on eBay, TimeZone, and early iterations of private online storefronts. Today, the best of those original trailblazers represent an experienced pool from which collectors can pick and choose trading partners.
One of the advantages of commercial maturity is that longstanding pre-owned dealers have accumulated reams of eBay feedback, written testimonials, Google Business Reviews, Yelp evaluations, Trustpilot ratings, BBB reports, and satisfied customers willing to act as personal references. Today, watch collectors have all of the tools necessary to distinguish reliable trade partners from segment newcomers and bad seeds.
Moreover, commercial entities are dependent on clarity, transparency, and consistency in order to remain in business.
Clarity comes in the form of written terms of sale, means of payment, after-sales support – especially warranties – and procedures for returning a watch if a customer is not satisfied. Transparency comes in the form of up-front market-based trade estimates, continuous communication from sales and service personnel who handle a watch to be traded, and detailed information about a watch to be received in a trade; revealing macro photos are the bare minimum standard in pre-owned disclosure. Consistency of business practices should be demonstrated by a long history of positive online business reviews and satisfied customers willing to act as references.
While disagreements do occur, and even excellent dealers may generate an occasional report of dissatisfaction, it is hard to imagine an established dealer taking possession of a watch, returning nothing in exchange, and disappearing from the face of the Earth. By contrast, private party fraud is a significant black market enterprise.
In short, the chance of being defrauded by a dealer with decades of positive feedback and a long-term dependence on its reputation is low. One-off private trades have a far greater chance of turning sour, and this is particularly true of one-time trades conducted remotely between private parties.
Flexibility is another advantage of trading watches with pre-owned dealers. Except in rare cases, the inventory of a dealer will dwarf that of private collectors. It is far easier to find a match within a commercial collection of 2,000 watches than it is to find a perfect exchange between collectors with a combined tally of ten watches.
The larger the dealer, the greater its trade flexibility will be. While the sheer size of commercial inventories allows for easier location of trade targets, significant dealers also offer flexibility in the form of service capacity and liquidity that a private trading partly likely would lack.
Consider service capacity as a measure of flexibility. Private collectors shy away from trading for a watch that might need parts or service. In contrast, a dealer with extensive watchmaking staff and facilities likely will consider trading for a watch that requires some degree of investment prior to re-sale.
Liquidity is another factor that increases the flexibility of a dealer to make certain trades. Trades that involve exceptional value (e.g., trading an Audemars Piguet Royal Oak Tourbillon 26510ST for a Patek Philippe 5070P and $50,000) are more likely to succeed when dealing with a counterparty that maintains a pool of currency specifically for transactional purposes.
While dealers pay less than end-users due to their need to re-sell inventory, trades with dealers do tend to bring greater value than outright watch sales to dealers. Since the amount of value changing hands is limited to the surplus or deficit relative to a watch being traded, the dealer has less exposure than if it had to pay the entire currency cost of acquiring an incoming watch. In other words, a dealer might pay $6,000 outright for a certain Rolex Daytona, because the dealer knows that it will sell the Rolex for $8,500 and generate a $2,500 profit.
However the same dealer might be willing to allow a trade credit of $7,000 for that Rolex when taking it in trade for a $10,000 Vacheron Constantin Overseas. The dealer will make a reduced profit of $1,500 on the eventual sale of the Rolex but will realize a profit of $3,000 on the trade-plus-cash for the Vacheron. The dealer ultimately makes more money, the collector gets a better deal than if he had sold his Rolex to the dealer, and the result is equitable to both.
Finally, the flexibility of a dealer trade should extend to include after-sales assurances. Private collectors rarely – if ever – promise to warranty and correct a watch once a trade has been concluded. Moreover, even a courtly collector is unlikely to execute a trade and then allow a return exchange if the counterparty is unfulfilled or suffers buyer’s remorse. In both cases, many reputable pre-owned dealers would ensure that the after-sales experience remained a positive one for the customer, and this often includes no-questions-asked right of return policies.
When a watch owner asks, “Should I consider trading my watch?” it is imperative for him to decide whether he wishes to continue collecting or to simply receive liquidity. For those who choose to remain collectors, trading a watch with a pre-owned dealer often represents the most secure and flexible means of converting a current watch into a desired watch.