How To Become A Watch Dealer? A Complete 8 Step Guide 

July 25, 2024

To become a watch dealer:

  • Understand the watch market and study watch trends 
  • Create a business plan and register your business 
  • Find reliable watch suppliers and build your network with dealers and collectors
  • Research and understand the watch market 
  • Develop a powerful brand and an effective marketing strategy
  • Hone your negotiation skills
  • Keep track of your expenses and revenue
  • Adapt to market changes and aim for continuous learning 
  • Rolex expert Peter Piccolino, shares how he started watch-flipping with $2,500. He bought and sold his first Rolex on Craigslist, and made $900 on his first deal. He was motivated by the profit and looked for more deals on Facebook Marketplace. He’d often drive long distances to land the best deals. Peter used Chrono24 and eBay to identify the selling price for each watch. His watch business slowly grew because he reinvested the profits. He leveraged his network to get more business referrals. 

    Despite watch-trading's popularity, not everyone thinks it's a good business idea. Flipping watches takes luck and a lot of work. There are so many factors you need to get right in watch-flipping. 

    This article shares a complete 8-step guide on becoming a watch flipper. It discusses the skills and qualifications of a watch dealer and the legal requirements involved in the business. I'll share how watch-flippers make money and some pros and cons. Personal experience of those who have done this biz is also shared in this article. 

    Complete 8 Step Guide To Watch Flipping

    • Understand the watch market and study watch trends. Learn about different watch brands, models, and market values. Understand which watches appreciate and why. Rolex, Patek Philippe, and Audemars Piguet are known for their high resale value. Some models appreciate by over 100% in just a few years.
    • Create a business plan and register your business. Create a detailed business plan that outlines your goals, target market, budget, and business model. Register your business accordingly and check for special licenses and permits. The U.S. Small Business Administration found that businesses with formal business plans are 50% more likely to grow and succeed than those without one.
    • Find reliable watch suppliers by joining auctions and online marketplaces. Auctions offer rare finds. Asses the watch’s condition to ensure its authenticity. Check the certificates, original packaging, and service history.  
    • Establish your online presence. Create profiles on Instagram, Facebook, and YouTube. Engage with the watch community by joining forums and online discussions. 
    • Develop a strong brand and an effective marketing strategy. Use SEO and content marketing to attract the right audience. Attend watch fairs and trade shows to showcase your watch collection. Events like Baselworld and Watches & Wonders attract thousands of attendees. It’s an excellent opportunity for building your network on the watch biz.
    • Hone your negotiation skills. Develop a pricing strategy based on your market research and desired profit margins. Skilled negotiators are 42% more likely to close deals than those who are not.
    • Keep track of your expenses and revenues. Reinvest your profits to acquire more watches and grow your inventory. 
    • Adapt to market changes and aim for continuous learning. Keep up with the latest trends in the watch market to stay ahead of your competitors.

    What are the Skills and Qualifications of a Successful Watch Dealer?

    Successful watch dealers have a strong understanding of the watch market, the different brands and models, and the latest trends. Technical skills are also necessary to assess watches from the inside out. Knowledge protects dealers from counterfeit and costly defects. Watch dealers should also be excellent negotiators and salesmen. 

    They should be able to provide great customer service to build a loyal customer base. Dealers should also be able to understand cash flow and manage an inventory. They should pay close attention to details to examine the watch’s condition and authenticity. Watch dealers should be meticulous in keeping an accurate record of all purchases, sales, and inventory. This keeps the business operation smooth and trouble-free. 

    What are the Legal Requirements To Become a Watch Dealer? 

    • Business Registration: Register your business name at the local county clerk’s office. Apply for an EIN through the IRS website for tax purposes. 
    • Licenses and Permits: Get a general business license from your city or county. Some states may even require a secondhand dealer’s license. This regulates the trade of stolen goods. 
    • Compliance with Federal and State Laws: Adhere to federal and state consumer protection laws. Also, be aware of anti-money laundering (AML) regulations because you’re dealing with high-value items. 
    • Business Insurance: Get general liability insurance, property insurance, and possibly product liability insurance to protect your business against potential risks and losses.

    Pejman Ghadimi’s 5 Tips For Successful Watch Flipping in 2024

    • Establish a strong social media presence. Pejman Ghadimi explains that people need to see you as real and trustworthy. Having a strong social media presence helps people trust you more in high-value transactions.
    • Master the art of selling. Sell yourself, your product, and your image. Effective selling is a blend of product knowledge, personal branding, and customer relationship management.  You can improve by learning from books and online courses.  
    • Be disciplined in your finances. Watch trading involves large sums of money. Without proper financial management, you could end up in debt or worse. Treat money as a tool. Be responsible with it to maintain a sound reputation. 82% of failed businesses are because of poor financial management. 
    • Be True to Your Word: Honesty and reliability are paramount. In an industry where large transactions are based on trust, being true to your word can make or break your career. One misstep can destroy your reputation, so always deliver on your promises. 43% of customers are willing to pay more for peace of mind.
    • Make it a passion. Passionate dealers are often more knowledgeable. Passion enhances the seller’s credibility.  60% of luxury watch buyers are enthusiasts who appreciate the craftsmanship and history behind each piece.

    Best Watches To Flip For Beginners

    The best watches to flip for beginners include Hublot’s Big Bang, Aero Classic, and Classic Fusion. These models are popular for their distinct “skeletonized” dials. Ulysse Nardin’s Marine Chronometer and New Freak are beginner-friendly watches too. They're known for their precision and power reserve indicator. 

    Cartier’s Skeleton, Roadster, and Santos stand out with their open-worked designs and iconic cases. Panerai’s 1950 models are valued for their robust, cushion-shaped cases. The Seiko SKX Series is an affordable ISO-certified dive watch. The Omega Speedmaster, the “moon watch,” has a rich heritage. Tag Heuer’s Carrera has a clean dial and chronograph movement, while Tudor’s Black Bay Fifty-Eight is loved for its classic dive watch look.

    How Do Watch Dealers Make Money?

    Watch dealers make money by buying below market value and selling them for a profit. Flippers search the secondary market to find profitable deals. They also build networks with other flippers and collectors to get first dibs on great deals. This is important since Chrono24 found that 70% of successful watch flippers rely heavily on their connections within the watch community. Flippers focus on watch models that have the potential to increase value. Limited editions and discontinued models often have significant price appreciation. 

    How Much Watch Dealers Make?

    Full-time flippers who have been in the business for quite some time make from $50,000 to over $100,000 annually. Part-time flippers make from $5,000 to $20,000 annually depending on the type of watches they flip. Those who have a good eye for valuable pieces can earn more. Some Rolex models make a profit of 20% to over 100% of its purchase price. Patek Philippe’s Nautilus has the potential to make 50% more than its retail price. 

    Pros and Cons of Dealing Watches

    Pros of Dealing Watches

    High potential profits 

    There's a consistent demand for luxury watches. 60% buy it as an investment. 

    Access to rare and limited-edition watches

    Build a network with business people and celebrities. 

    Cons of Dealing Watches

    High capital requirement 

    Fluctuating market trends 

    Risk of counterfeits 

    High-end clients can be demanding 

    What People Think of the Watch-Trading Business

    This Reddit commenter thinks watch flipping is a great way to make money. However, you'll only make little profit out of it. 

    You need a lot of expertise and experience to be a successful watch dealer. It's easier to lose than make money according to this commenter. 

    This commenter believes only Rolex and Patek increase in value. He warned against the high cost of entry. Watch appreciation is a bit slow. You may need to hold on to the watch longer to make substantial profit. You can't command the market if you're not an established seller. 

    Watch enthusiasts think flippers are "clogging up the waitlist". He said flippers should consider their current network before starting. They should have access to real buyers of luxury timepieces. Flippers also need a wide knowledge of the different brands and models before making it a business. 

    Flippers Share Their Sentiments in Watchuseek’s Forum

    This flipper warned about the costs. He said Paypal fees, shipping, and depreciation quickly pile up. 

    Another one said he lost more money on expensive watches. 

    This one lost $100 after eBay and Paypal fees. He also lost $200 on an NIB Diver he sold on the forum. 

    Impatience is a killer on the watch flipping biz. This commenter says he marks down watches that don't sell fast and moves on to the next. 

    My Low-Risk and Stable Alternative To Watch Flipping

    My low-risk and stable alternative to watch-flipping is local lead generation. This business builds simple websites and ranks them on Google. Income with local lead gen is far more consistent than in watch-flipping. Lead gen is a business, while watch-flipping is more like a hobby. The watch-flipping biz is at risk of counterfeits and defects. Some counterfeit watches are nearly indistinguishable from genuine ones. 

    The luxury watch market is very volatile. Changes in a brand's reputation, economic conditions, and consumer trends can cause price fluctuations. New traders might get tempted to overspend or mismanage funds. Authenticating watches requires expertise. It's not a beginner's business because of its complex nature. 

    I prefer local lead generation because ranked assets only require minimal management. It has higher profit margins of around 85% to 90%. There's lower competition because I'm competing with local businesses. Local lead gen is a dependable online business that's enough to replace my 9-to-5. 

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