The short and somewhat obvious answer as to why some watches are more expensive pre-owned is because of supply and demand. Not enough of a particular watch in a market coupled with a strong demand will always lead to higher prices. For a better answer, let us take a quick look at what some of the factors are that might contribute to the price of your next pre-owned watch.
The Ever Elusive Limited Edition – No Watch For You
On the supply side we should start with watches that are purposely made to be more exclusive: the limited editions. They have a long tradition in the luxury market, creating exclusivity for the buyer and envy for those who missed out. OMEGA has made more than a few of these limited editions with the Speedmaster line, the most famous of which is the second edition of the Snoopy. When it launched in 2015 you could pick one of the 1,970 pieces up for a little over $5,000. If you were lucky enough to buy one and hold on to it for the past six years you could now sell that same watch for well over $40,000. Omega made a great looking watch, but with the limited production they knew it would become a more expensive piece as time went on, and as more people discovered it. This is the draw of the limited edition – you have to move quickly, but if it becomes a popular design the limited supply could potentially increase your investment significantly over time.
Watches that Become Popular After Production – You Miss 100% Of The Watches You Do Not Buy
Some watches are simply not as popular when first released. To use another recent OMEGA watch as an example, the OMEGA Speedmaster Tintin released in 2013 was to be designed in collaboration with the comic book character Tintin. The planned collaboration fell through, but the watch was still released with the red and white checkered pattern from Tintin’s rocket ship. With the collaboration called off and a lack of initial success, OMEGA quickly stopped producing the Tintin. Less than 2,000 are believed to have been made. Although this was not intended to be a limited edition, it became one when production was cut short. As general interest in watches grew worldwide, the Tintin was rediscovered, and this initially overlooked timepiece went from being a bargain bin find to costing over three times its original price. The Tintin is a perfect example of why you should buy what you love and not what is most popular. It could wind up being a great investment.
Brands Limit Supply to Keep up Quality – Say Hello To My Little Production Numbers
Now let’s get into the exclusive brands, the ones that only make a handful of watches a year. They do not restrict supply to put out limited editions but rather to ensure continued quality. These can include ultra-limited brands such as Roger Smith and Philippe Dufour, or more mainstream ones such as Audemars Piguet. The brand that has really exploded in recent years is F.P Journe. Started in 1999 by its namesake Francois-Paul Journe, F.P. Journe is known for pushing the technical limits of traditional watchmaking. The popularity of these watches has soared, but the production numbers have not. In order to keep the high standard of watchmaking that is integral to Francois-Paul’s vision, the annual watch production is limited to approximately 800 watches per year. A simple time-only watch from them known as the Chronometre Bleu retailed in 2016 for $23,300. The after-market price however has gone from the mid $40,000 in early 2020 to over $100,000 in late 2021. With no plan to increase the production numbers, it is almost impossible to buy these watches new. Those looking to purchase an F.P. Journe will most likely have to search the pre-owned market, where the cost is much higher than retail.
Increase in Demand – You’re Going To Need A Bigger Industry
The reasons a watch may be short in supply would have no impact without the increase in demand the watch industry has seen in the past 15 years. The luxury watch industry was devastated in the 1970s and 1980s with the introduction of the quartz movement. Fortunately tastes change over time and a mechanical watch went from being just a tool to tell time – something a quartz watch can do much better and cheaper – to being a luxury item, not unlike a painting or vintage car. This change took time, and it meant a larger emphasis on quality, tradition, materials, and the overall art of mechanical watchmaking. With the reintroduction of brands like Blancpain who in the 1980s declared that “since 1735, there has never been a quartz Blancpain watch, and there never will be,” the rebuilding of the luxury watch industry was in full gear.
Back in 2005 Switzerland exported a total of about $3 billion in watches worth approximately $3,000 apiece. This year Switzerland exported about $1.5 billion per month in the same price category. While the appetite for watches had been growing, it was social media – namely Instagram – that really allowed the demand to take off. Founded in 2010, Instagram has become the place for watch enthusiasts to show off their latest acquisitions and for brands to directly advertise to a growing collector’s market. The only problem with this rapid increase in demand is that there is a limit to how many watches can be made each year while maintaining the standards that are expected of each brand.
Empty Stores – How Do You Solve A Problem Like Rolex
The most obvious example of this increase in demand is Rolex. They are not only the most well-known brand in the watch community, but Rolex is also one of the most well-known brands in the world across all markets. With the demand for a Rolex being so high, customers have become increasingly frustrated at the anemic selection of watches available for purchase at any Rolex AD. Walking into a Rolex store in 2021 can be a very depressing sight as you can expect to find nothing but empty green boxes and maybe a lone Cellini sitting in the corner at the very back. There are significantly more salespeople willing to put your name down on what will probably be a yearlong wait list for the Rolex of your dreams than there are watches in the store. Because scaling up production fast enough to meet the demand is nearly impossible, almost all Rolex watches out there sell for more than their retail price. Consumers are willing to pay much more for a pre-owned watch than a new one in order to skirt the extensive wait.
The Unobtanium – Show Me The Money
Other brands like Patek Philippe will have a watch such as the Nautilus that is intentionally hard to get. They want you to buy into the brand and become a loyal consumer before you are offered the watch that is most in demand. You can walk into a Patek Philippe dealer and immediately buy most of the watches they offer, but not the most in-demand models. The purposeful restriction of supply leads to higher demand on the pre-owned market as most people are willing to pay a premium for the watch they really want. The Nautilus 5711/1A in steel with a blue dial became so popular and hard to get that while its original retail price was an already eye-watering $30,000, the pre-owned market now has it trading at over the $100,000 mark.
It is frustrating to have to pay higher than the original retail price for a pre-owned version of the watch you love. On the other hand, seeing the value of your watch increase is a great sensation. The boom in the market has led to some great investments for both buyers and sellers. No matter if the watch you bought is above or below the retail price, what’s most important to remember is to enjoy your watch and buy what you love.