When you’re first starting out in watch trading, it can seem overwhelming and potentially scary. A lot of that comes from the perceived notion that there is a lot of risk.
One of the perceived risks I hear from people often is that they’re worried they are going to buy a watch at too high a price, they are going to lose money on the watch, and/or they are going to get stuck in a watch that will sit in their inventory for months.
While these risks are potentially valid, they can be almost eliminated if you can get extremely good at one simple strategy – TRADING. Yes, the main word of what we love doing most is how you can literally move in and out of almost any watch deal without worry.
What if I told you you never could really lose on a watch? That the perceived risks that many people have mentioned above about how risky watch trading is, are false? What if I told you you can rarely lose money over the course of your watch trading journey?Most people would be ecstatic, and I guarantee you many more would enjoy watch trading if they believed this.
Well, this is something very attainable, and something that I teach my students how to do. It’s something I’ve learned to get very good at.
So what exactly should you be looking for when trading with other watch owners? How can you make it so you never lose and/or get stuck in a watch? Below are some helpful tips.
- Understand WHY you’re looking to trade. Determine what the intent of you doing a trade is before you strategize your approach. Are you trading because you have a watch that you are in too high, and you want to get out of it without losing money? Are you trading because a trade would actually put you in a position to make more money on the next watch?Are you trading because you see another watch you want, and you think the one you have is good “trade-bait” for the person you’re looking to trade with? Are you looking to trade because you’re trying to solve someone else’s problem, and in-turn solve your own? Understanding WHY is the important starting point, so make sure you clarify that.
- Know What’s In It for the Other Person. I can’t tell you how many times I’ve heard people get frustrated about why trades aren’t working out for them. When I ask them what the details were of the trade, I come to find out they wanted all of the benefits and didn’t even consider why the trade may have benefited the other party. This is a critical mistake that is sure to leave you wondering why you’re never getting one done. If there is no benefit to the person you want to trade with, then you’re selfishly hoping you’ll make this a win for yourself and praying that the other person will accept your offer. To ensure you have a high success rate of completing a trade, always ask yourself “What is the benefit to the other person for doing this trade with me?” I’ll give you an example: let’s say someone has been posting for quite some time on a forum that they want to sell or trade their watch. Perhaps they are looking to try something new, or maybe they are having a tough time selling it. Maybe they are also in the watch in at a high price, and are looking to escape. If you can help that person get what they want first and foremost, you can then make a strong case as to why the trade will benefit them. This is something that is simple, yet so important. If you come from a place of making the trade a win-win on both sides, you are much more likely to get what you want in the end. Positioning yourself as a problem solver will allow the other person to open up their mindset to doing business with you. But, if you come at it from a mentality of wanting to get what you want and that’s it, you will most likely fail. A win-win scenario is always the best way to make trades work in your favor.
- Know How to Value Each Watch. I get the question often about how to value your watch and the other person’s watch in a trade. The truth of the situation is, you’ll probably never know what the other person is in their watch for, and quite frankly it shouldn’t matter to you. What should matter, is getting into the watch for a price that allows you to make money or break-even. You can value your own watch at your actual cost, or you can value your watch at a higher price. If there is room for margin play in your watch, and/or you are not valuing the trade into this next piece as greatly, it is a reasonable strategy. There are many ways to play around with the numbers; just ensure you keep two things in mind: a.) Always ensure you’re getting into the next watch at a price that makes sense for you, and b.) You don’t have to share what value you’re putting on your watch to the other person. You can just tell them what the offer is +/- cash. The counter-party may ask you what value you are placing on each watch. This is common. Don’t worry, you can feel free to share that info with them if you’d like. Just make sure you can justify your reasoning because they may try to use this info against you on the trade.
Here’s Some Real World Examples:
Case 1 – Minimized losses on an Omega I overpaid for (this is the only loss I’ve had over 7 years):
Went 10 months on a combo chain trade. Started with an Omega Seamaster Planet Ocean 8500 Titanium Liquidmetal – Retail: = $8,600; Bought for: $3,900; Bought too high even though it was well worth wearing. Error margin/profit to me = -$1,000.
Traded for: Ulysse Nardin 263-33 + $800 cash. Retail = $6,500 Ulysse Nardin had two extra straps, box, papers, and warranty. Error margin/profit = -$500
Traded the UN 263-33 for: Ulysse Nardin 266-33 Rose Gold – $7,200. Retail = $32,000. Most offers in $6K-$9K range so might have taken a big loss. Most people want a steel older version UN if they want one so this was a tough sell and either needed to wait for the right buyer or should have bought lower. Error margin still = -$500 net to me.
Separate buy: Breitling Chronomat 44 ab011012/g684 which is a slightly higher valued edition of the Chronomat with all boxes, papers, and warranty in MINT condition. Retail = $9,200. Bought for $3,700 which was still slightly high. Error margin/profit on this model = $0-+$500.
COMBO-BONUS: Found someone who wanted the Ulysse Nardin 266-33 and cash or a trade for a Rose Gold Panerai PAM00289 GMT 1950 Luminor Marina. Thing was super clean w/ boxes, papers, and warranty left. Retail = $27,200. Ended up trading the UN + the Breitling for the PAM. So net all in for me was ~$14,900. There are only 300 made and this one was clean. They sell second hand for $17K-$22K. Error margin/profit -$1000/+$3000
Listed the Panerai PAM00289 on eBay and found a serious buyer who was willing to do a deal.
NET All-in he paid $14,500 so net to me after 10 months of ownership lost -$400. So spread over that period, got to wear ~$85,000 worth of watches for $40/month.
Case 2 – Made $1500 being in a Hublot too high
Had the watch for 4 months. Was in a Rose Gold and Carbon Hublot Big Bang for $18,500 which is slightly high. The next lowest comp was $22,000. I got low ball offers all the time on it because people thought it wasn’t worth that much, or they were in between wholesale and retail and wanted a deal. I stuck it out because the cost to replace was too great and I knew if I found the RIGHT buyer (not just any buyer) I wouldn’t lose, even though I was in the watch too high. I ended up going to the guys house in Florida while I was down there (above and beyond to get the deal done). We worked it out and he gave me $15K cash and some lower end watches he had repo’d. Made a profit of $1500 on the watches and came out $1500 net so it was like selling the Hublot for $20K.
This is why trading is so important!