Investing in luxury watches can be a profitable venture. Various entrepreneurs spend heftily on expensive pieces and hold on to them for a while before reselling them at a profit
Kevin O’Leary, a renowned venture capitalists, is one of the businesspeople who consider Swiss luxury watches to be a suitable investment. In this article, we will discuss the basics of investing in luxury watches, including what determines the value of a watch, what are the best watches to invest in, and how to invest in the watch market.
Contents
What Determines the Value of a Watch
Brand
Like any other product, there are various well-established companies that are associated with luxury, high-quality watches. These manufacturers include Longines, Patek Philippe, Omega, Rolex, and Breitling. Whether a piece from such watchmakers is firsthand or secondhand, it is bound to have a high price tag. As such, watches from these brands tend to maintain or increase in value over the years.
Condition
It is one thing to have a Swiss luxury watch, and it is another thing to have one that is in perfect condition. When it comes to luxury products, the devil is in the details. Are all its parts intact and, better yet, are they all authentic? Are all its decorative elements present? Does it have any scratches or damaged parts? What’s its service history? Does it function properly? Such aspects will either reduce, maintain, or increase the value of a watch.
In line with this determining factor, the completeness of a watch is also a crucial element. For instance, a Rolex that is accompanied by its papers and box is bound to be of a higher value than a similar make without these items.
Background
A Swiss luxury watch that is associated with a famous individual steadily increases in value. For example, in 2008, the simple Longines wristwatch that Albert Einstein wore was sold for $595,000 in an auction in New York.
Rarity
Similar to other luxury items, there are certain watches that a manufacturer may decide to release in limited edition. Such a piece is usually of significant value.
Patina
Patina is the natural aging and wear that occurs on the surface of the watch dial, hands, case, and other components over time due to exposure to environmental factors, such as light, air, moisture, and the oils from the wearer’s skin. It gives a watch a distinctive and desirable vintage appearance, which makes the watch valuable.
How to Invest in Watches
Now that you have the knowledge on what makes a watch highly valuable, it is time to learn some tips on how to succeed in investing in watch business. There are a few different ways to invest in the watch market. One way is to buy a watch and hold onto it for a period of time, hoping that its value will appreciate. Another way is to buy and sell watches frequently, hoping to profit from short-term price fluctuations. Finally, you can also invest in watch funds, which are managed by professionals who buy and sell watches on your behalf.
As an entrepreneur, to successfully invest in watches, you should adhere to the following tactics.
- Know the product. Amassing knowledge on luxury watches usually takes experience. Before investing in these items, learn how to tell a fake watch from an original one. It is also important to understand other relevant aspects, such as the various forms of watch movements and the watches that are suited for different styles and setups. Such information will also help you in identifying the watches that will maintain their value over time.
- Know your client. Luxury watches are often used as a fashion statement and for defining one’s character. Whether the client knows the exact product he wants or not, you play a crucial role in advising the buyer accordingly. As such, it is important to have a personal interaction with each buyer.
- Have the right connections. Have a reliable trader where you can source genuine luxury watches at a price that will enable you to earn a substantial profit. Connections in this business will also assist you in getting the right clients. This approach is founded on the concept of referrals in sales and marketing.
- Learn how to accurately forecast the market. For you to succeed in the luxury watch industry, you must tell what is currently in demand and what is likely to capture the market in the near future. Knowledge of the current trends will ensure that you do not ‘sit’ on a product that is likely to lose value.
- Make the right impression. Simply put, look the part. No one will trust that you are selling them genuine luxury watches if you look like a hooligan. Starting from how you dress to how you interact with potential clients, your appearance should convince your target clientele to come to you for the best watch.
What Is the Best Luxury Watch to Invest In?
Selecting the best luxury watch to invest in can be a complex decision, as it depends on various factors such as the ones we mentioned above like trends, brand reputation, and rarity. Some types of luxury watches that have historically been sought after by collectors and investors:
Some of the most popular watch brands that are good investments include:
- Jaeger-LeCoultre Reverso: Known for its reversible case design and classic Art Deco style.
- A. Lange & Söhne Lange 1: Features a unique asymmetric dial layout and exceptional German craftsmanship.
- Rolex Submariner: Iconic dive watch known for its durability and timeless design.
- Patek Philippe Nautilus: A sought-after sports watch with an elegant and versatile design.
- Audemars Piguet Royal Oak: Another iconic luxury sports watch with a distinctive octagonal case.
- Omega Speedmaster Professional: Famous for being the “Moonwatch” worn by astronauts during the moon landing.
- IWC Portugieser: Recognized for its clean and elegant dial design, often featuring a large case.
- Panerai Luminor: Notable for its robust design and historical connection with the Italian Navy.
- TAG Heuer Monaco: Gained fame as Steve McQueen’s watch in the movie “Le Mans,” known for its square case.
- Breitling Navitimer: A pilot’s watch with a slide rule bezel, favored by aviation enthusiasts.
- Hublot Big Bang: Distinctive for its modern and bold design, often featuring innovative materials.
- Vacheron Constantin Overseas: A luxury sports watch collection with a focus on comfort and versatility.
- Cartier Tank: An iconic rectangular watch with a rich history and timeless elegance.
- Longines Master Collection: Offers a variety of classic and sophisticated watch styles.
- Seiko Prospex: Known for its rugged and reliable dive watches, often with an affordable price point.
Where to Sell Luxury Watches
There are several avenues where you can sell a luxury watch. Here are some common options:
- Authorized Dealers or Boutiques: Consider selling to brand-authorized dealers or boutiques with buyback programs.
- Auction Houses: Explore luxury watch auctions by renowned houses like Christie’s, Sotheby’s, and Phillips.
- Online Watch Marketplaces: Utilize platforms like Chrono24, WatchBox, Bob’s Watches, and WatchBox for listing your watch.
- Local Jewelers and Watch Shops: Approach local stores dealing with luxury watches for potential sale or consignment.
- Watch Forums and Communities: Engage with watch enthusiast forums for selling opportunities.
- Luxury Consignment Shops: Look into consignment stores specializing in high-end items.
- Private Sales: Sell directly to individuals via personal connections or online classifieds.
- Social Media: Utilize platforms like Instagram, Facebook, and Twitter, particularly watch-focused groups and pages.
- Pawnshops: As a last resort, consider pawnshops that deal with valuable items.
Is Luxury Watches a Good Investment?
Investing in luxury watches can be rewarding if you are passionate about watches, have the time and expertise to research the market, and are prepared for the risks involved. On the positive side, select luxury watches, particularly those from prestigious brands or limited production lines, have demonstrated historical potential for appreciating in value over time. When building a Swiss luxury watch collection, it is important to identify the products that will maintain their value, those that will increase in value, and those who will soon be of low value.
However, the luxury watch market can be unpredictable, with prices susceptible to shifting trends, consumer preferences, and economic conditions. The lack of liquidity compared to more traditional investments and the ongoing expenses for maintenance and storage should also be acknowledged.
While investing in luxury watches can be a profitable venture, it’s essential to approach watch investment with a long-term perspective and a well-informed strategy.
Luxuary watch investment FAQs
Which watches will increase in value?
While it is true that luxury watches appreciate in value, it is impossible to say for certain which watches will increase in value. However, some of the factors that can affect the value of a watch include:
- The brand: Some brands are more sought-after than others, and their watches tend to appreciate in value more quickly.
- The model: Some models are more rare or desirable than others, which can also affect their value.
- The condition: As with any investment, the condition of the watch is important. Watches in mint condition will fetch higher prices than those that are worn or damaged.
- The demand: The demand for luxury watches can fluctuate, so it's important to buy a watch that is in high demand.
Who buys luxury watches?
Luxury watches attract a diverse range of buyers. Some of the most common include: wealthy individuals, collectors, business professionals, investors, and watch enthusiasts.
What are the best investment watches under $5 000?
Some of the best investment watches under $5,000 are Seiko, Hamilton, Tissot, Citizen, Oris, and Orient.
