Three things to consider when purchasing a luxury pre-owned watch
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We all know that feeling.. that sensation..the absolute adrenaline rush you get when you buy that amazing brand new watch and get to bring it home for the first time. Fantastic. And the first thing you realise the next morning when you wake up is that is was not a dream, and you truly got ahold of that amazing piece. And if you have not yet experienced that thrill yet I guarantee you it is an amazing one!
The market for luxury watches is an intriguing one, and the quality of some of the most well-known brands such as Rolex, Audemars Piguet, Patek Philippe, Jaeger-LeCoultre, Omega, Breitling and many others is fantastic. And above all an amazing investment (which in some occasions comfortably assists in rationalizing your new pricy purchase :)) in the long-run.
Due to the great quality of these watches, and the long waiting-lists for most luxury watch brands it does not come as a surprise that the demand for pre-owned watches is growing at a rapid pace. Sadly, the information asymmetry between buyers and sellers in this market is huge, and there is always that nagging thought: how do I know that the amazing pre-owned piece that I am eye-balling is not a fake watch?
In this short blog we set out the three largest challenges you will likely encounter when you scour the pre-owned watch market, and how you can best deal with them.
1. How to dodge the fake watches in the pre-owned luxury watch market
Unfortunately where there is business and money to be earned, there are parties that try to make advantage of the success of others. And in the case of the luxury watch market: counterfeiters. While some fake watches are easy to spot, others might require a trained eye. There are countless stories of people who have acquired fake watches, even from renowned platforms such as Chrono24. Which feels like a dagger in the heart of any luxury watch-enthusiast.
As a buyer, you should always thoroughly vet the seller of the watch. Have they sold many luxury pre-owned watches before? What do reviews say? Can you find bad reviews on the internet? Do they have an actual shop? Do they respond in a professional manner to your questions? How is overall communication going and what does your gut feeling say? When your gut says "no".. please realize that there is a reason why we have a limbic brain (and thus your gut feeling might be right)!
And when purchasing online, realize that the "authorized seller" stamp does not relieve you of performing proper vetting procedures, just read the internet..
One thing you can do, is acquiring you rluxury pre-owned watch through local watch boutiques with a solid reputation. These boutiques have the inhouse knowledge to properly authenticate a watch and service if needed, and thus significantly decrease the risk that you purchase a fake watch, or a watch of poor quality. The downside of purchasing your watch at a boutique however, is that these stores charge higher prices because they will need to make up for those (quite often) expensive brick-and-mortar stores. Which are more often than not located at expensive locations in the lager cities, such as here in Amsterdam.
If you do not want to pay for the expensive locations that most boutiques house in, you could consider purchasing your luxury pre-owned watch online. There are roughly two types of online stores for luxury pre-owned watches. The first type is similar to the boutiques we discussed earlier, but which are solely (or mostly) focused on the sale of watches online, such as Watchfinder, Chronext and WatchBox. These parties acquire pre-owned luxury watches themselves, and sell them (with a mark-up), to their customers.
The second type of online platforms for luxury pre-owned watches are platforms that do not have any watches for sale themselves, but purely ‘connect’ buyers and sellers. The largest platform of this type is Chrono24. These platforms however normally do not provide any guarantees that the watch is of good quality, nor that it is 100% authentic. As a buyer, you are exposed to more risk than you might like. Just search the web if you can find any stories of fake watches being sold on Chrono24.
2. The pre-owned luxury watch market is not transparent
Another thing to deal with is the fact that the market for luxury pre-owned watches is not very transparent. How is the price built-up? What is the quality? Who is the seller (in case purchasing of online platforms)? What am I paying in commission fees? And am I getting the best bang for my buck? And so on..
There is a significant information asymmetry between the seller and the buyer of a watch, and due to this information asymmetry, it may prove difficult for any buyer to determine if the price you pay is fair, and that the watch is authentic and of good quality.
The best way to bridge the information asymmetry gap between a buyer and a seller, is to hire/include an independent third party, with the appropriate knowledge, to ‘audit’ the quality of the watch. In case the seller (who has the best knowledge about the quality of the watch) is open to 'including’ such an audit, then that could be an indicator of the quality of the watch.
If the seller would not be open to including an independent third party to assess the quality of the watch, that should be considered as a big red flag. So in case you are thinking of acquiring a specific watch, assess if you could have a third independent party assess the quality of the watch.
The downside of this approach however, is that it might prove difficult to find an independent third party (such as an experienced watchmaker) who can help you authenticate the watch you are considering to purchase.
A second thing to do is doing thorough research into the watch. Think of the market for that specific watch, the seller, the supply over different platforms (and what are similar watches priced at). Doing research will give you an idea of what there is available in the market, and what could be considered a reasonable price-quality ratio. But then again quality is hard to determine from pictures, and even in 'real-life' if you do not have a trained eye and years of experience.
If you do not have a trained eye and the opportunity to check the inside of the watch, assessing the quality and authenticity of a watch is nearly impossible. Reviews of sellers and platforms will bring you a long way in terms of assessing if a watch is most likely authentic, but still does not close the information asymmetry gap when it comes to quality.
So in short – do as much research as you can into the watch, the seller, and the market for that specific watch. Try to include an independent third party such as an experienced watchmaker to assess the quality of the watch, to close the information asymmetry gap between buyer and seller. If a seller is not open to doing so, this should be considered as a red flag. If the watch is of good quality and the price-quality ratio is fair – a seller will almost always be open for it!
3. The pre-owned luxury watch market is not structured
Thirdly and lastly the pre-owned market for luxury watches is not structured, at all, either. There are various players out there whom each have their own upsides and downsides, but also service a (very) focused niche within the already niche market of luxury pre-owned watches - with varying levels of quality and transparency.
As a buyer, you will most likely end up lost and unsure which party to purchase that killer-piece from.
Together with my business partner Kenny we are on a mission to provide a service that is structured, transparent, and most importantly ensures that the pre-owned luxury watch that you purchase is fully authentic and not a fake or 'Frankenstein' watch!
If you have any remaining questions, or if you want to get in touch so we can help you safely purchase a watch, then feel free to reach out through the contact form below!