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Buyer's
Guide to Fine Wristwatches
What
is the point of spending so much money on a watch?
There has long been elegance and prestige associated with a fine watch
made with precious metals and jewels. Originally, finely crafted, precision
mechanical timepieces also served a serious need in accurate timekeeping
needed to facilitate travel and communications across moderate to significant
distances.
But now, technology has made it possible to have an accurate wristwatch
as the free toy in a fast-food kid's meal. Yet the aspects of watches
as fine functional jewelry with poetic and nostalgic ties to their origins
remain. I'm sure others can better describe and explain the value people
find in owning and wearing fine jewelry.
What it really boils down to is this: any wristwatch over US $200 is
more jewelry than a timepiece. So forget about evaluating such items
by adding up the cost of components, factoring in the value of precious
metals or imagining some supreme value hidden in the mechanism inside.
That takes you on a slippery slope to the insanity of people who argue
over technical specifications they don't truly understand, trying to
intellectually justify wristwatch values for technical and logical reasons
that hold little, if any, tangible merit or benefit.
Since an inexpensive quartz watch will look fine on your wrist and tell
you the time accurately, there is no real functional value to paying
more for a watch. Choosing a timepiece that accomplishes the same function
using a more complicated older mechanical technology, a premium quartz
technology that is marginally more precise, in a casing with highly
refined detailing or of precious metal, or bearing the design hallmarks
of a famous maker are all values that exist only to bring personal and
intellectual satisfaction and enjoyment. In other words, jewelry value.
The truth is that the value of jewelry is entirely emotional. Any penny
spent over $200 on the price of a watch is buying you only more jewelry
value and greater emotional satisfaction in having something more unique--nothing
more
Why
would I want a mechanical/automatic watch when quartz is more accurate?
Simple. Quartz is clearly better on accuracy. But there are many other
advantages and pleasures from wristwatch ownership beyond just measures
of precision levels that are beyond the notice of many people.
Frankly, quartz watches and many other technologies don't really do
anything significant to better people's lives. People with quartz watches
are no more reliably on time than people with mechanical ones. People
driving cars with manual or automatic transmissions still get where
they are going equally well. People still enjoy music about as much
as they used to, even though CDs play it more clearly that tape or LPs
did. You are not likely to have any smarter thoughts simply because
you wrote them down with a computer than with an ink pen. You can easily
spend as much time playing golf or football on an accurate computer
simulation game as on a real playing field, but the experience is not
any more fulfilling at the end of the day. And you can certainly do
a lap around the lake faster in a speedboat than in a rowboat, but what
have you really accomplished?
The newer technologies often gain a level of efficiency that makes them...
uninteresting. In many cases, the older ways and technologies were more
than sufficient, and it is their minor failings that give variety and
character to doing things that way. With the older ways, you usually
have to be more aware of details, understand more of what you are doing,
and take more time being involved in the process. That greater interaction
makes the process more personal and enjoyable for some people.
With the newer ways, you can be pretty assured your quartz watch is
on the right time, your car's automatic transmission won't miss downshift
on the way home, your CD will play exactly the same as it did yesterday,
your computer will catch and correct your typos and misspellings, your
video game won't stop in the middle because of rain or a player injured
in a tackle, and you certainly won't be bothered seeing much of the
detail and wildlife on the lake at high speed from your motorboat. How
boring.
Mechanical watch enthusiasts often compare the movements, the
finishing, the level of adjustment, types of certifications, performance
under different circumstances and other esoteric measures of mechanical
timepieces.
Quartz watch enthusiasts compare mostly accuracy measures.
So if efficiency is your main desire, then quartz is for you. If you
are tired of efficiency and want something interesting instead, try
a mechanical watch.
What
is the real reason why mechanical versions - even of the same watch
- are more expensive?
You will often find mechanical and automatic watches at a significantly
higher price than a comparable quartz model. In some cases, a manufacturer
will even offer the identical watch with your choice of a mechanical
or quartz movement. The mechanical watch will be more expensive. Some
people will tell you it is because the mechanical movements are highly
refined, others that mechanical movements are very expensive and quartz
very inexpensive. Most of that is baloney or exaggerations. Here are
the real reasons why:
1. Cost to Manufacture: The high quality quartz movements used
in better luxury watches are slightly cheaper to make than their mechanical
counterparts, though the difference is not that great. Keep in mind
that cost of the movement in most luxury watches accounts for only a
small portion of the final retail price - less than 5%.
2. Warranty Service: Since there is almost nothing to go wrong with
a quartz movement, warranty claims for quartz watches are very small.
Mechanical movements are more likely to incur an in-warranty service,
so that cost is factored into the price.
3. Distribution: Mechanical movement watches are sold in much smaller
quantities, so have less economies of scale in the distribution system.
While collectors and enthusiasts often prefer mechanical watches, the
general public still predominantly buys quartz. So mechanical watches
do not turn over in inventory as fast as quartz, causing the manufacturer
and dealers to have a somewhat slower return on their investment in
stocking them.
4. Exclusivity: As with virtually all jewelry -- and don't kid yourself,
any wristwatch over US $200 is mainly jewelry -- there are premiums
you pay for certain above average features. Precious metals, synthetic
sapphire crystals, mechanical movements, advanced timekeeping modes
(complications) and precious stones all are at significant premiums
over their mere cost.
Which
watches are collectible?
The whole concept of specific watches--or anything else--being "collectible"
is a falsehood. People become mindless lemmings because of some mystic
significance to items being called "collectible." They hear
things called that and go out and spend money because they blindly think
it is a good thing to buy them. There is a broad public perception that
things that are labeled "collectible" are good investments--when
in most cases, they are far from it.
Beanie babies are a good example. Trivial little toys that ought to
cost well under $1, yet people pay outrageous prices in the tens to
hundreds of dollars to get them to complete the collections they feel
compelled to build. If you ever wish to get your money back out of this
'investment,' you have to find someone even more driven by the collectibility
craze than you to sell it to.
The latest form of this collectibility craze began back in the 1970's
or so when people started discovering that some items they or their
relatives had gathered over the years were suddenly in demand by buyers
of memorabilia. This created a 'gold-rush' mentality as everyone started
hoping that some of the old items in their basements or attics would
be worth huge sums of money. The $1 million find: a first edition comic
book, a one of a kind early work of a later famous artist, or some other
rare, special or in-demand item from the past.
Once people rummaged through all their current family possessions looking
for hidden treasure, they were still unsatisfied--because most of it
really was worthless junk. So to continue the gold-rush of trying to
get rich off items that collectors desired, people then started buying
up things they hoped would magically become valuable. This has led to
a society of people who spend tremendous amounts of money buying items
old and new, hoping some of it will become like a lottery ticket, magically
paying off in the future.
You should NEVER buy something just because anyone tells you it is collectible.
Instead, buy what really appeals to you without regard to whether anyone
else is collecting them. The term "collectible" has become
a cheap label that sellers will slap onto anything--knowing that it
causes people to mindlessly associate greater value--usually without
even questioning the validity of the claim.
However, keep in mind that "rare" and "hard to find"
(if truthfully applied to an item) are positive attributes that make
things interesting additions to your collection. But anything being
automatically or inherently "collectible" itself is a completely
meaningless concept. You should be listening only to your own counsel
on what is meaningful or interesting to you to own.
The truth is that anything is collectible if someone wants to collect
it. Some of the most valuable collections were items that people had
no idea would be valuable in the future. And if your objective really
is to try to make money, you would likely be much more successful
putting your money in traditional financial investments rather than
betting on 'rare finds.'
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What
is and is not important when choosing which NEW watch to buy?
Often, you will find yourself choosing between two or more intriguing
NEW watch purchase options. So how do you determine what factors you
should most and least consider?
BRAND REPUTATION is IMPORTANT--
Learn about the reputation of the watch manufacturer. Don't ask watch-store
sales people, they often are staggeringly ignorant on watches and often
speak a lot of authoritative sounding nonsense, half-facts and downright
wrong information. Instead, ask people who already own the types and
brands of watches you are considering. Post questions on Internet forums
dedicated to watches. And certainly, read all you can here on the Chronocentric
site.
RESALE VALUE is IMPORTANT, but
ONLY IF YOU UNDERSTAND IT CORRECTLY-- Many buyers
have lost lots of their money on poor watch purchase decisions made
based on poorly understood measures of "high resale" value.
People usually incorrectly focus on how much of their investment they
will get back if they resell a watch. But you should instead be focusing
on how much you gain or lose in the transaction.
TYPE OF DEALER you shop at is IMPORTANT--
Look at what types of stores are the authorized dealers for the brands
you are considering. If you are spending a lot of money on a watch,
do not just shop at general department stores or stores that sell mainly
low to mid price jewelry. Look at what choices are only available at
the much better jewelry stores to get a fuller understanding of the
whole spectrum of watches available. The "best" brand at a
department store is not necessarily your best choice or best value for
your money. Also, make sure you understand whether the dealer you are
considering buying a watch from is an authorized dealer for that specific
brand.
UNDERSTANDING YOUR WANTS AND NEEDS is IMPORTANT--
You will make the best choice in your purchase if you understand what
you want and what is really important to you in owning a fine watch.
Many people get caught up in excessive details that end up impairing,
rather than increasing, their enjoyment. Consider what you want: a watch
to impress other people, one to impress you, something stylish, something
that makes a statement, one that only you know it is special, with unusual
functions, of specific metals, for dress/casual/recreational/active/sports
wear, so accurate that you never need to think of resetting it between
time changes, or any of dozens of other attributes. Once you have a
good handle on these aspects, it will be much easier to select a watch.
KNOWING WHAT YOU BUY is MORE IMPORTANT than
BUYING WHAT YOU KNOW-- Often, the best brands of luxury products
in terms of quality and value are ones the 'average Joe' may seldom
if ever hear of. Rolex and Tag Heuer are the two premium watch brands
that are best known to the general public. But simply being popular
is not a guarantee that those brands are your best choice or the only
high quality, high value products the market has to offer. It is far
more beneficial for you to research all your options instead of blindly
selecting among the few brands that are 'household names.' You may still
end up choosing one of their watches--but do so out of knowledge of
your choices, not ignorance of them.
BRAND HISTORY is of SOME IMPORTANCE--
While many brands trace their heritage back 100 years or more, you
need to consider how informative this is based on whether the watch
you are about to purchase is better because of the experience this
history implies, or is merely riding on the coat-tails of ancient
successes or bought out fine names of long ago. A number of modern
brands bearing fine names are mere shells of what their companies
meant decades ago. Look at their new models and compare them to the
older models for sale on used watch dealer sites and Internet auctions.
Are 5 year old models of this brand worth anything? Are the much older
models worth more than more recent ones? These can be signs of dramatic
changes in the quality of watches from a manufacturer.
WATCH MOVEMENT DETAILS are usually of LITTLE
IMPORTANCE-- Unless you are an expert, connoisseur or collector,
do not worry to much about the details of the movement inside a watch
beyond whether it is a) quartz, b) certified mechanical (Chronometer),
or c) non-certified mechanical. Frankly, most watches from any premium
brand are sufficiently fine devices for keeping time that will give
you several decades of use if properly maintained. Technical details
of the mechanical "movement" (the actual mechanism inside
the watch) are seldom particularly important unless the watch you
are buying is over $10,000 or has some unique functions. Over 98%
of mechanical watches made mainly tell the time, date, and maybe include
chronograph functions. All mechanical watches with just these basic
features use technology invented over 75 years ago, and nobody has
really improved it since then. So do not waste time fooling yourself
into believing one standard mechanical watch mechanism is perceptibly
different from another--especially to the extent of paying more for
one watch over another based on that attribute alone.
ROMANTIC NOTIONS OF WATCHMAKING are MOSTLY
UNIMPORTANT and OFTEN FALSE OR MISLEADING-- Many fine watchmakers
try to give the feel that their expensive products are finely hand
crafted. They do this by creating an image of your watch being made
by generation old families of dedicated watch craftsmen, in a quaint
village in the Swiss Alps, with movements made by the same people
who make the rest of the watch, each crafted over long periods of
time. But all of that is nothing more than romantic baloney designed
to make you feel better about spending so much money on a watch. The
truth is that very few watches under US $20,000 are hand crafted.
Most are mass produced by machines in large quantities. Even the highly
reputed Rolex is mass produced--they make over a million watches a
year! Notions of the movement of the watch being better if made 'in-house'
than if made by a separate company (even if owned by the same parent
organization) are antiquated concepts that have little to no meaning
in the modern age of large corporations and mass production. In fact,
it is the modern techniques of mass production that ensure the higher
level of consistency and quality that we enjoy of modern watches.
PRICE is NOT IMPORTANT -- "What?"
you say? Price not important? That's right--it is not!! Price is only
one measure of the value and deal you are getting. What good is a
low price alone when the dealer is unable or unwilling to resolve
a problem and you have no recourse with the manufacturer because you
bought through an unauthorized cut-price dealer? What good is saving
an extra few percent on a very expensive purchase if the product never
arrives, turns out to be a counterfeit look-alike product, lacks good
warranty coverage, or otherwise will disappoint you or cost you more
money in the long run? So always choose your watch over the value
you will receive for your money, not simply the lowest price for something
that looks like what you wanted.
NUMBER OF JEWELS INSIDE THE WATCH is NOT
IMPORTANT -- The number of jewels in the watch movement
are normally prominently mentioned as if they really meant something.
But in fact they are a just a red herring. These are not jewels of
value. They are small synthetic ruby elements used as extremely low
friction pivots for a few critical parts of a watch mechanism. They
are worth only a few pennies and do not add value to a watch. The
exact number that is appropriate for any watch movement depends on
the exact design and functions of the movement. It is perfectly normal
for two watch movements with identical performance and functions to
use a different number of jewels. A standard mechanical movement usually
requires a minimum of 17 jewels--but beyond that, more is not better
in any way that you could interpret.
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What
does a COSC certification or Chronometer rating on a watch really mean
to me?
While highly touted, a COSC certification or Chronometer rating on a
mechanical (manual wind or automatic) watch really doesn't
mean all that much anymore. Most any modern mechanical watch from a
luxury watch brand is capable of operating at the performance level
tested to receive these certifications. The rare case of a certified
quartz movement is a different issue.
People frequently mistake a chronometer rating as an absolute guarantee
of performance to a particular specification--usually the often quoted
-4 to +6 seconds per day which is actually only one of the seven performance
measurements used in the test. In fact, the certification testing is
nothing more than an additional quality control test that the movement
in the watch passed at some time in the past, long before it was even
assembled into your watch. It is not a guarantee that the watch will
never deviate outside a particular range. In fact, mechanical watches
are normal to deviate--that's why the chronometer rating exists in the
first place. The range of these tests were established decades ago,
when the average mechanical watch was nowhere near as accurate as they
are today.
Imagine getting an A+ in math in high school and then being expected
to never ever make a mathematical mistake the rest of your life. That's
not how performance tests work. They only certify that you have proven
once to have achieved a specific measure of performance under reasonable
conditions. They neither mandate that you can never vary below that
level in the future, nor do they prove that someone else who did not
take that same test can never meet or exceed your level of performance.
But having once established that you can achieve that level, the certification
gives greater public confidence that you can perform similarly well
in the future.
Same with your mechanical watch. It may have passed a test in the past,
showing it was capable of getting an A+ in performance. But the actual
day-to day performance of any mechanical watch--certified or not--can
change a lot based on how well the watch is wound, what position it
is left in overnight on your dresser, whether it takes a significant
bump during the day and other factors. So do not give tremendous amount
of weight to the significance of these certifications. In particular,
do not assume that a specific watch is inferior because it lacks a certification--it
did not take the test and fail, it simply never took this optional extra
test.
The reason that some watches are still submitted for these certifications
is more as a marketing and sales tool among competing brands. The presense
of a certification can give you a small measure of additional confidence
in the selection of your watch, but nothing more than that. Most any
mechanical watch from a premium brand, when adjusted properly, will
perform to within the certification ratings.
I
am worried after reading about some people having a problem with
the watch I'm thinking about buying.
Virtually none of any of the 'problems' you might hear about are
more than isolated cases. Expensive watches are not different from
any other elaborate mechanical item, whether it is Rolex, Omega,
BMW, Mercedes, or other such items that are simultaneously high-end
and large production volume products. Despite superior quality control
procedures, all are subject to minor manufacturing inconsistencies
and technical glitches. It is virtually impossible to find any luxury
brand of technical product that at least a few people have not had
a problem with.
In addition, many first-time owners of luxury and mechanical watches
have misunderstandings and unreasonable expectations of the operation,
accuracy, durability and limits of these fine timepieces. So often,
complaints or criticisms come from concerns not actually related
to any real defect or problem with the watch itself.
To give some perspective to the issue, consider the largest of the
luxury watch manufacturers, Rolex, who manufactures over 1,000,000
watches a year. Even if they have an astronomically high 99.995%
perfection rate (they do not publish their actual rate, so this
number is purely an example of an extremely high perfection rate),
that means that over the past ten years, 50,000 watches may have
been sold with imperfections that might need to be addressed.
Most of the people you see posting on Internet watch forums have
bought at least one and frequently three to five new expensive watches
in the past 10 years. When these people mention any bugs they experienced,
you are seeing a sampling of problems across a huge number of watches
and a large number of years. Certainly any brand will have some
reported problems. But given the relatively small number of problems
mentioned of Omega, Rolex and most other premium watches in the
online forums, that sampling rate proves that these watch manufacturers
have an excellent success rate. The unfortunate but inevitable imperfections
appear to be at an extreme minimum and are normally addressed within
the warranty period.
Occasionally an unhappy customer of a product will post an anti-company
propaganda web site to harass the company--often out of vengeance
or a 'pay me off to shut me up' motive. Despite a lot of emotional
wording, these crusades attempting to scare customers away from
the company's products are seldom based on anything more than an
isolated case of customer confusion or mishandled customer service.
Some continue to post disparaging information long after the issue
was amicably resolved with the dealer or manufacturer.
So do not let any isolated complaints or problem reports scare you
off any of these fine brands. For every isolated problem report
for a top brand luxury watch, there are thousands of satisfied owners
who never experience any difficulties.
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What
are the real advantages and disadvantages of buying from authorized
dealers?
While authorized dealers are normally the safest choice for buying an
expensive watch, there are many other options. Making the most informed
decision is always the best choice.
Authorized dealers normally offer these advantages over
unauthorized (gray market) dealers:
1. If you buy from an authorized dealer, then have a problem that they
can not or will not solve, you can get the manufacturer to intervene
on your behalf. But manufacturers have no control over or influence
with unauthorized dealers, so won't be able to bail you out of a problem
with them.
2. *Some* authorized dealers are adding their own 1 or 2 year warranty
extensions over the manufacturer's factory warranty.
3. The factory warranty you get through an authorized dealer can be
honored by any other authorized dealer and the manufacturer's service
center. But the warranty from an unauthorized dealer will only be honored
by that specific dealer. If your unauthorized dealer goes out of business,
your warranty coverage goes up in smoke.
4. An authorized dealer can special order accessories and unusual versions
(like on optional bracelets/straps or special purpose calibrated chronograph
bezels) that non-authorized dealers usually cannot.
5. Many people do not realize that you can mail order from an authorized
dealer. If you know what you want, you do not have to physically visit
an authorized dealer's store to make a purchase. Most can accept a credit
card purchase by telephone or fax and ship the watch to you. If you
give them the measurement of the diameter of your wrist, they can even
pre-size the watch bracelet for you.
But authorized dealers are far from consistent or perfect. In addition
to usually offering only modest discounts off of the manufacturer's
retail price, authorized dealers sometimes come with these disadvantages:
1. Highly variable in knowledge, courtesy and willingness to negotiate.
Sometimes staffed by sales people with only basic sales experience from
working in non-jewelry stores. Some will not take you seriously as a
customer if you do not look like an extravagant or wealthy person.
2. You may have multiple dealers in your area, requiring you to shop
multiple locations and different stores to find the item you want or
negotiate your best deal.
3. You may have no dealers in your area. Authorized dealers are concentrated
mostly in and near highly populated cities, so are convenient shopping
venues for only a moderately small portion of the watch buying public.
4. It can be difficult to find out what all the authorized dealers are
in your area. Not all manufacturers are able to provide complete or
current lists when you contact them for dealer information.
5. Typically, you must travel to them during the days and hours they
are open.
6. Dealers often have very limited subsets of the watches available
from any one manufacturer. They will usually offer to order other models
for you. But at that point you are no better off than ordering it direct
by telephone or Internet.
7. May have watches that have been excessively handled by browsing customers,
faded or otherwise impaired from being left in a sunny display window,
are no longer with their correct box and other packaging, or have had
parts like straps, clasps or premium display boxes swapped out with
other watches of the same brand to make one customer happy at another's
expense.
8. Dealers seldom bother to carry original accessories for the brands
they sell. If pressed, they might offer to special order them for you.
But it is often less trouble ordering them yourself from the manufacturer's
service center.
9. Often unaware of new models and options due to insufficiently updated
manufacturer's catalogs and lack of access or desire to read the manufacturer's
website.
10. Often use ploys of creating fear, uncertainty and doubt to scare
you away from other dealers, rather than offering a true value advantage
to earn your business.
Watches
with a good resale value are a good investment, right?
Watches can be a good investment--but not for everybody. One really
important thing to remember, watches, like automobiles, normally lose
value over time and are not good investments unless you really know
a lot about the market and specific items you are investing in. Anytime
you buy a watch or car new, the value immediately drops. For fine wristwatches,
many can be resold for only 40% to 80% of what you will pay for them
from a new watch dealer.
For the average watch enthusiast, buying and selling of watches is usually
at a loss. Maybe a break even at best. Most consider this simply the
cost of owning the watch for the months or years they enjoy it.
Do not be confused or misled by statements that certain watches have
a 'higher resale value' than others. Since almost all watches (except
the truly rare and special collectibles) lose value over time, you have
to judge the resale value of a watch by what you lose, not what you
get back.
For example, say you have a choice between a $3500 watch that has an
80% resale value versus a $1750 watch with only a 60% resale value.
The more expensive watch sounds like the better investment. But when
you look at how much you will lose, the result may be surprising.
$3500 new, resell for $2800 (80%), net loss $700
$1750 new, resell for $1050 (60%), net loss $700
While these numbers are only examples, they show that you need to specifically
evaluate your choices rather than simply relying on generalizations
about 'better resale.' For investing and resale, used watches are often
a better financial deal because they are already depreciated to the
resale value--so you are much more likely to be able to resell them
at close to what you paid for them.
Watches
not a good investment? But many classic watches sell for far more now
than when new!
Sure, there are many stories of watches that are worth much more than
was paid for them years ago. But as described above, do not let general
statements and shallow analyses mislead you on what truly is or is not
a good investment. Again, watches are seldom a good financial investment--and
then only for the people who are truly lucky, truly knowledgable or
are dealing with one of a few very high-demand watch models.
For example, someone asked about a Omega Speedmaster Professional bought
in 1969 for $300 which today sells in good condition for a minimum of
$1000. Sounds like the watch has more than tripled in value by looking
at just the raw numbers. But has it really? Let's look at the same scenario
converted to "real dollars."
Based on the Consumer Price Index in the USA, $300 in 1969 translates
to about 4.7 times as many dollars in 2000. So spending $300 on a watch
back then is equal to buying a $1400 watch today. If that watch is now
worth at least $1000, then it has retained over 70% of its real value.
In "real" terms, that watch has only cost 400 modern dollars
(plus maintenance) for 31 years of enjoyment. Quite respectable, but
certainly not the astounding "tripled in value" story that
it initially appeared.
In another example, a basic Rolex DateJust bought in 1981 for $900 would
equal $1700 spent in 2000. This watch is now worth at least $1400, so
has also retained over 80% of its "real" value. That translates
to a cost of 300 modern dollars (plus maintenance) for 20 years of enjoyment
of this watch.
So while almost all watches are depreciating investments--meaning they
will lose, not gain, value over time--many if cared for well maintain
enough value that their cost of ownership is not only very affordable,
but potentially less than many lower priced watches.
So
what makes a watch have good resale value?
Firstly, there is no magic formula for making money off of watches with
high resale values. As described above, watches are generally quite
poor as financial investments. The best you should expect is to buy
a watch that you will enjoy. If you think yourself likely to ever resell
your watch--something only a small percentage of luxury watch owners
ever actually do--then the tips below should help you choose with a
clearer understanding of what does and does not contribute to resale
value.
The primary factors in why resale values vary among brands, models and
individual pieces are:
• The objectives of used watch buyers are somewhat different
than for new watch buyers. Used watch buyers seek greater value
in their purchase in return for foregoing some of the benefits of purchasing
their watch new. Therefore, the appeal and attraction of various watches
may be noticeably different on the new versus used market.
• New watches are priced with 'exclusivity' premiums for
certain luxury features such as precious metals, diamonds, mechanical
movements or special editions. The resale market still values such premium
features, just not at the heavily inflated values of the new market
prices.
• Condition plays a major part of used watch values.
All new watches are assumed to be in new condition and warranted. But
used watches bear additional variability and risk. Specific brands,
models and movement calibres may have reputations for better or worse
than average reliability.
• General interest and demand for specific brands and styles
fluctuate. Sometimes a positive review of a particular model will
notably increase demand for them on the used market.
To understand what makes a watch have a good or bad resale value, you
really need to look at it from the perspective of what makes a buyer
more or less willing to pay for a particular used watch?
Aspects that have a very positive influence
on resale value:
• RARE or HARD TO FIND - Following the basic economic
principle of supply and demand, anything people want but is hard to
get, they will be willing to pay more for.
• LIMITED EDITIONS - Watchmakers occasionally release
"limited editions," often tied to celebrating some company
anniversary, historic event, or to boost enthusiasm for a model line.
These editions are often uniquely numbered. If adequately limited to
a small number, these have a very decent resale value later.
• ACTIVE WARRANTY - Definitely a plus if the factory
or dealer warranty is still valid and transferrable to the buyer.
• TRACEABLE TO A FAMOUS PREVIOUS OWNER - One unique
category of valued watches are those worn by some person of note. In
particular, specific watches documented to have been worn by movie stars
or historical figures--especially during the filming of a movie or at
an historical event--do command premium prices on the used and collector
markets.
Aspects that may have only a small influence
the resale price:
• NOT SO LIMITED "LIMITED EDITIONS" - Releases
of limited editions of a model are not very limited when quantities
reach 5,000 to 10,000 or more. These numbers may sound fairly small,
but are not that far from how many of a specific model variation the
company would sell in a year or more anyway. When a company releases
too many of a supposedly 'limited' release, the resale values drop to
close to what a regular edition of the watch would sell for.
• MECHANICAL VERSUS QUARTZ VERSIONS OF THE SAME WATCH
- Some watchmakers release identical or similar models in quartz and
mechanical movement versions. The finer brands usually add a moderate
'exclusivity' premium to the prices of their mechanical watches. At
resale, the mechanical versions still command a premium over quartz
counterparts. But the differential is often reduced enough to make the
quartz versions have a slightly better resale value compared to their
original price.
• ORIGINAL BOX AND PAPERS - While many people like
receiving the original boxes with their purchase, few people do anything
with them but store them in a closet. So the original packaging may
improve the salability of a watch, especially if the watch is to be
a gift. But the boxes and papers do not add much to the selling price
unless the watch is close to new.
• INTERESTING SERIAL NUMBERS - On rare occasions, a
watch will surface with an interesting serial number. Examples include:
even numbers; numbers with interesting patterns; numbers that relate
to beginning, end or year changeover in production; or hidden meanings
like an Omega Speedmaster Moonwatch with the date of the moon landing
appearing in the serial number or a James Bond Rolex Submariner or Omega
Seamaster Pro with serial number ending in 007. While these add a novelty
interest to the watch, the influence on resale value is usually trivial.
Aspects
that lose the most value on resale:
• GOLD, PLATINUM or other PREMIUM METALS - While precious
metal watches do sell well on the used market, they do not command the
same premium that they did when new. Such watches carry very inflated
'exclusivity' prices when new--often 10 to 20 times the value of the
metals used. Upon resale, the values better reflect the market value--not
the exclusivity premium.
• DIAMONDS - Diamonds on dials, bezels and other parts
of a watch are an expensive addition on new watches. But like with precious
metal on watches, these bear a significant 'exclusivity' premium in
the new watch pricing that is several times the value of the diamonds
themselves.
• BOTTOM OF THE LINE MODELS - A few premium brands
have a clearly bottom of the line model that lacks the features and
status of their main product lines. Rolex in particular does this with
their "Air-King" series and other models where the least expensive
version lacks the date or COSC certification. Buyers of new watches
are sometimes attracted to these models as the least expensive way to
get close to the watch they want for less money. But these step-down
versions almost always lack the better values and desirability on the
resale market, so are often a poor choice when resale is of concern.
And finally, aspects that notably hurt resale values:
• WATCHES WHERE SERIAL NUMBERS HAVE BEEN REMOVED -
An unacceptable but somewhat frequent practice of gray-market dealers
is to remove serial numbers from discounted watches. For some brands,
the manufacturer may refuse to service the watch at any authorized service
center or supply certain replacement parts to independent watch repairers
for that watch. That risk reduces resale the value, especially for brands
that have publicly declared they will not service such watches.
• CUSTOMIZED WATCHES - Watches, like automobiles, sometimes
get customized by their owners. Often this is done by inscribing names,
dates or memento information on the back, or by using aftermarket parts
or parts from different models to make a unique piece. While these modifications
cost the owner more money, they usually devalue the watch and reduce
the chances of finding someone else that would want one customized in
that manner.
• BRANDS WITH POOR DURABILITY - Not all expensive brands
are made equal. Some mid range brands sacrifice long term durability
in their products.
• BRANDS WITH HEAVY RETAIL DISCOUNTS - Resale prices
are usually based on the retail selling price, even when some discounts
are customarily available. But brands sold officially through cut rate
stores or places where they are often marked down heavily usually have
poorer resale as they are readily available cheaply. Note that this
does not effect premium brands that sometimes found--quite unofficially--through
warehouse stores like Costco and Sam's Club and other clearly non-authorized
dealers.
Why
is the warranty sometimes longer depending on where you buy the watch?
Watch manufacturers typically offer limited--often only 1-year-- factory
warranties on their products. But in this modern world, that is a pretty
nominal warranty period for such an expensive purchase. To give customers
a greater feeling of confidence (and combat the tactics of unauthorized
dealers), many authorized dealers offer to extend the warranty out an
additional one or two years.
What is important for you to know is that--in most cases--this additional
warranty coverage is not through the manufacturer or their official
and international service networks. The watch manufacturer's warranty
obligation to you ends under the terms of the original factory warranty,
which usually covers just the first year. After that time, the manufacturer's
service center any other authorized dealers will not be able to provide
free service under the "extended" portion of the warranty.
Those additional year(s) of coverage are between you and the specific
dealer who sold you the watch. So should you need service during the
"extended" period, you must take the watch back to that specific
dealer.
Unauthorized (gray market) dealers, who cannot include even the initial
factory warranty with watches they sell, have been trying to gain a
competitive advantage by offering their own warranties of longer durations.
But again, any such warranty is through that specific dealer and will
not be recognized or honored by the manufacturer or any other watch
dealer.
What
does it mean when someone sells a watch with an 'open warranty' or 'open
papers?'
The phrases "open warranty" and "open papers" create
an impression in the novice watch buyer's mind that the warranty is
transferrable and opened ended--so it can be activated whenever they
want to start the (usually one year) warranty period. But beware, this
is often far from the truth!
What it actually means is the warranty paperwork was inadequately completed.
Incomplete paperwork can cause your warranty to be effectively null
and void. In some cases, the warranty is validated by a dealer stamp,
but the date is left blank. In other cases, it may mean the warranty
card is totally blank. In either case, the warranty is likely useless.
A warranty card is not a pass to free service all by itself. A dealer
or manufacturer's service center may well request further documentation
beyond just the card to establish the date of purchase or authorized
dealer status of the point of initial sale. This is not unusual as many
warranty cards are lost, unreadable or incomplete--even coming from
many of the authorized dealers.
So no matter what the warranty card says, it is not by itself a guarantee
of service. If it cannot be backed up with the owner providing a sales
receipt from an authorized dealer that matches the date of sale, then
the warranty card will likely NOT be honored. People have tried playing
games with warranty cards for decades and the manufacturers' service
centers know what to look for to spot bogus warranty claims.
What
are 'gray market' watches?
Gray market watches are genuine watches from the original manufacturer.
They are not fakes or factory seconds. The only thing that makes them
different is that they passed through an unauthorized dealer or reseller
on the way to you. Where this becomes an issue is that the manufacturer's
warranties are not valid on these watches.
What
about fake, replica, look-similar, and counterfeit watches?
Most popular makes of fine watches are prone to having their designs
copied by manufacturers of replica watches. These watches sell from
as little as $10 to several hundred dollars--but $100-150 appears to
be the most common range. They vary from generic look-alike to exacting
reproductions of the exteriors of the genuine watch. Often, even details
such as the manufacturers logo, serial numbers, and other markings are
reproduced.
Also, some of the department store brands of watches including Peugeot,
ESQ, Fossil, Citizen, Wilson, Timex, and even Seiko will make watches
that look suspiciously similar (but not quite close enough to get them
in trouble) to the popular models of the high end brands like Omega,
Rolex, and Breitling.
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