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Tips to Investing in the Watch Market

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The market for pre-owned and newly released watches is booming due to a rekindled interest in timepieces during the Covid-19 pandemic that has resulted in an increased demand for the classic piece. Timepieces now hold major investment value, because as demand has increased so have prices. The theory is that watches have risen in popularity so much as of late due to the way the market for high end items remained throughout the periods of isolation and strict Covid protocols when other hobbies and creative endeavors occurring outside the home—traveling for example–-were put on pause. 

The watch market is divided into two categories: the primary and secondary markets. The primary watch market refers to new timepieces, which are intentionally being kept at low numbers of production to retain the value of the pieces, as the demand is increasingly great. The secondary watch market refers to pre-owned timepieces that include rare vintage models. Watches in the secondary market can often be attained for less than those in the primary market as long as they are not the valuable vintage models, but currently there aren’t strong parameters for determining pre-owned watches’ authenticity across the board. 

“The pre-owned watch market is still very much like the Wild West. There are a lot of watch-selling platforms. And customers don’t necessarily know who they’re buying the watch from. They can’t guarantee that it is authentic. They can’t guarantee that it’s not a ‘Frankenwatch.’ And they can’t guarantee that the watch is working properly,” says Toby Bateman, CEO of Hodinkee, a pre-owned watch collection shop selling pieces from 1990 and newer. 

Regardless, there are watch collection businesses who have determined their own criteria for authenticating and preparing used watches for new owners. WatchBox, a luxury pre-owned watch platform, has established their own quality standards, aiming for “mint” condition pieces to sell. The company’s CEO speaks to the market’s demand.

“The demand for high-end watches by the most recognised and established brands exceeds market supply, leading people who never previously considered purchasing a pre-owned timepiece to enter the category. The secondary market affords access to timepieces not readily available on the primary market, from the in-demand and recently discontinued Patek Philippe 5711 to so many pieces in the modern Rolex catalogue and the extraordinary collections by leading independent watchmakers. The (still) new culture of pricing transparency in the secondary watch market provides collectors with the confidence and trust to invest in more expensive items, knowing that there will be a market for them should they wish to trade or sell these items in the future,” says Justin Reis, CEO of WatchBox.

Invest in the Watch Market Because of Interest 

The market is largely a culture of passion and enthusiasm, which is a key element for investors to relate to before joining those involved. Reis continues to speak towards the importance of finding enjoyment in the market.

“And while watch collecting remains a hobby of pure passion for so many in our community, the energy and media attention has attracted many newcomers to the space, both new and emerging collectors, as well as those with an appetite for alternative investments. The demand is expected to continue exceeding supply on the primary market, which in turn perpetuates the current dynamic. Have the confidence to collect eclectically, buying watches you truly like, and trading pieces that no longer bring you enjoyment or that serve as stepping stones to something else. Focus on making your watch purchases meaningful, learning about what drew you to any given piece, enjoying the process of discovery, the rituals around wearing your watches, and the dynamic community of collectors and enthusiasts,” says Justin Reis.

The founder of Pixielane agrees that having passion for the market is a great quality for investors to possess.

“Collecting timepieces is about passion for and interest in a well-loved market, so having knowledge about watches and enthusiasm for them will certainly benefit you in your journey of investing in the market. People are buying new and pre-loved watches because of their interest in the pieces, so the market will last as long as people continue to care about watches. As such, passion for the items in the market is essential to its overall success. You as an investor should also care about the merchandise in order to be an ideal investor,” says Lori Price, Founder of PixieLane.

The CEO of the fine jewelry house Mark Henry adds to this sentiment about passionate people making good investors.

Investing in the watch market can feel like a safer practice than investing in the stock market for those who have any sort of passion or expertise in the field of watches, jewelry, or vintage goods. Some people find that the mystery of the stock market is absent from the watch market since it is already a passion of theirs. Therefore, if you have interests and knowledge in watches or close fields, you are a good candidate for an investor,” says Haim Medine, Creative Director of Mark Henry.

The CEO and co-founder of Eterneva adds to the idea that those who have a passion for the fine details of the watches they’re acquiring will experience greater benefit.

“Be invested in the watch market because of personal reasons. Those who invest purely for the money are missing the point of the enterprise compared to those who have a personal stake in what they’re doing. Buying and selling for reasons of style, taste, and preference is a great way to be thoroughly invested in the watch market as an enjoyable passion. Don’t just purchase and own watches because it’s the thing to do and can provide you with a high rate of return. Do it because you desire to own pieces that appeal to you. If you don’t have any deeper interest or knowledge, you won’t excel as much as those who understand why certain timepieces hold more value and intrigue,” says Adelle Archer, CEO and Co-Founder of Eterneva.

Determine How To Become Involved

Involvement in the watch market can take various forms depending on how much of a firsthand role you want to take in buying and selling watches, which is where the demand lies. The CEO and founder of Diamond Mansion addresses the different ways to take a role.

“Investing in the watch market can look like becoming a shareholder of a successful watchmaking business or pre-owned reselling platform, or it can look like buying, owning, and reselling watches yourself. The latter requires patience and a knack for timing as timepiece values fluctuate, but it also leaves room for the aspect of passion. Those well experienced in buying and reselling who have a love of fine watches will do well in the watch market while dabbling in a niche they love,” says Omid Semino, CEO and Founder of Diamond Mansion.

Don’t Be Afraid To Participate in the Watch Market

The co-founder of Sebastian Cruz Couture points out the reasons why you don’t need to fear involvement in the watch market at this time based on the lasting appeal of classic well-made timepieces. 

“No one knows how well the watch market will maintain its recent rate of growth, but getting involved by purchasing high quality watches is a seemingly secure approach, since luxury watches have always been in demand. They are a status symbol, and therefore retain their value. For instance, top of the line Rolex watches have held their value over time as quality staples. You won’t find that any Rolex you’ve purchased since the 1970s has depreciated in worth nor desirability. Instead, as demand rises like it has in the past few years, value increases. You can think of putting money into owning a high quality timepiece, whether newly released or pre-loved vintage, like buying stock in a successful company. While you receive an actual item from the sale (your own watch), its value is in its rarity and the demand for it,” says Cesar Cruz, Co-Founder of Sebastian Cruz Couture.

Once involved, you should keep an eye on the trends to have a better understanding of which pieces collectors are looking for, as the founder and designer of 6 Ice points out.

“It’s important to remain aware of the trends in timepiece appeal. Because buyers and sellers are largely passionate individuals who treat the actions like a highly profitable hobby, demand is largely based on details about the watches that enthusiasts love, such as a watch’s appearance, weight, material, design, and of course, brand name,” says Jordan Duran, Founder and Designer of 6 Ice.

The co-founder of Andar reinforces the general consensus that the market value of watches will remain stable going forward.

“Watches are so in-demand because volumes are not being increased as a method of retaining the high value of quality timepieces. Watch collection and re-selling businesses are learning to adapt their inventory to reflect the shifting interests that enthusiasts desire to acquire. The macro trends of the primary and secondary watch markets are stable since there is every reason to expect that people’s enthusiasm over timepieces will continue; collectors can rest assured that their investments are secure. Timepieces have been appreciating greatly in the last couple years and are expected to continue to do so,” says Eric Elggren, Co-Founder of Andar.

Don’t Feel Bound to Your Purchases

The watch market is an enjoyable sport for those passionate about timepieces, which means it is evermoving. The co-founder and creative director of Western Rise says to keep up with the demand by selling pieces you are done with.

“Luxury watches have always been a sign of the wearer’s fine taste and ability to purchase such an item, but now more than ever, as their value continues to skyrocket over time, they carry more symbolism in their usage. With such desire for high-quality and vintage watches, wearing one of these timepieces is a statement of your market savvy and impeccable timing to own such a sought-after item. Watch collecting has become very personal as people buy selections based on their preferences. Pieces aren’t meant to be held on to forever in the watch market, since pre-owned items are in demand. If you’re involved in the watch market, don’t feel as though you have to keep watches you’ve scored for eternity. If you want to make somewhat of an art and a hobby out of watch buying and reselling, keep your selling practices fluid. When you’re ready for something new, pass on your less-exciting-to-you watches, as others will be eager to take on ownership,” says Will Watters, Co-Founder and Creative Director of Western Rise.

While the watch market may seem new and complex, these tips for how to invest in it provide you with knowledge on what you can expect when getting involved. Don’t be afraid to make a move now if you’re contemplating your participation. There’s no greater time than right now when it comes to the value of timepieces.

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The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur.

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