Selling Your Watch: Direct Sale Vs Consignment – Which Is Best For You?
Both watch collecting enthusiasts and casual wearers can agree that sometimes you fall out of love with your timepiece.
Sometimes you want to change your Reverso for a Moonwatch, or your dress watch for a chronograph. Whether you want to thin out your collection or free up a little cash, we are all motivated to sell our watches from time to time. Maybe you just want to recoup some of the initial cost or maybe your plan is to MAKE some money – and who could blame you?
The horological world is vast, exciting, full of deep rabbit holes and teeming with possibilities. Selling a watch to make way for a new purchase is an exciting time. But the process of selling a watch can sometimes seem a little daunting. I know. I’ve been there countless times, even before I started doing it professionally so, I feel your pain here.
In today’s mixed world of ‘bricks and mortar’ stores and the disruptive attack from online eCommerce and seller marketplaces, what is the best way to sell your watch? Do you sell it? Do you trade it? Do you part exchange it? Direct sale to a dealer? Or do you consign it?
The million dollar question is which method is best?
I have a lot of people come to me asking what I think is the best way for them to sell their watch. As there are a few options, choosing the right one can be a little confusing…
The three main ways to sell your watch:
1. Manage the sale yourself, privately. Sell directly to a buyer through forums or marketplace middlemen like Chrono24 and eBay or, if you have a rare or high value watch, via a specialist auction house.
2. Sell your watch to a dealer who buys it directly from you.
3. Consign your watch to a professional to sell on a ‘consignment’ service – sometimes known as ‘sale-or return’ or “brokering”.
There are unique benefits for these options and they can differ depending on your circumstances.
NOW, If you feel your “time” is more valuable than “maximising” the amount of money left in your hand after the sale, you aren’t to tech savvy and don’t like possible headaches and hassles and risks that would come with selling a watch. Or you just can’t be bothered with the process and you have bigger fish to fry, you might be better off selling or consigning your watch to a dealer or watch professional. On the other hand, if you feel you can get more money selling watches on your own, you have spare time, are up for the journey and the challenge and are comfortable with the potential risks, then selling yourself might be your best approach.
If you’re planning to sell to a watch dealer, a shop, store or industry professional they may offer you the options of a ‘Direct purchase’ or ‘Consignment’.
There are Pro’s and Con’s to both and there are a few variables to take into consideration.
DIRECT SALE
This is where the dealer makes you an offer for your watch based on the current market price of the watch. The dealer will consider how much they think they can sell it for now or in the near future and how much profit margin they want (or need) to satisfy the business needs. Taking all business overheads and costs into consideration they will then make you an offer.
It’s worth noting here that what you paid for the watch is kind of irrelevant here. It is all based on current trends and market demands. For example, if you paid ￡4,000 for a watch that is currently trading at around ￡9,000, they won’t offer you ￡5,000 based on what you paid for it. They will more than likely offer you ￡8,000 because this is ￡1,000 less than what they can sell it for meaning they want ￡1,000 in Gross Profit. Or perhaps they will offer you ￡7,000 because their business model requires them to make ￡2,000 on this watch owing to their business overheads and strategy. Another thing to note here is that if a dealer sells a watch for ￡9,000 after buying it from you for ￡8,000, it may seem that they are making ￡1,000, but really they are not. Well sort of. ￡1,000 is the GROSS PROFIT they are making on the watch but the NET PROFIT (the amount of money they actually keep) is likely to be close half of this after business deductions such as Margin Scheme VAT payments, salaries, rent, rates, system fees, banking fees, business and delivery insurance and platform fees.
The margin gets eroded away very quickly. The reality is whatever the profit amount you think they are making on your watch, you can pretty much half that as a very approximate calculation. It may even be less.
Sometimes they will offer you cash for your watch. Sometimes a bank transfer (also referred to as a wire). I am also hearing of payment being made using crypto currencies also (Bitcoin), (Ethereum), (Binance Coin) and (Solana). Whilst a direct sale to a dealer is fast and efficient it can often be a rather cutthroat and bullish process where dealers can sometimes operate in a no-nonsense, unfriendly approach.
What Exactly Is Consignment?
Sometimes called “sale or return”, consignment is when an individual or a business sells your watch on your behalf. No money exchanges hands at the start of the partnership. You own the watch through the process until it sells. You are the consignee (the person consigning the watch). The Seller is the consignor (the person tasked with selling it).
You and the watch-pro go on a little watch journey together where you both join forces and work together on a common goal. Selling the watch for the highest price possible, as fast as possible. The watch-pro’s job is to find the best buyer and then will take a cut of the sale as commission.
How Does It Work?
The professional will deal with all the admin involved with selling the watch the right way and take all the headaches and hassles to help you avoid all the possible perils and pitfalls of selling a watch. They earn a commission at the end of the journey once the watch is sold.
As a really quick example – if you had a watch that was valued at ￡5,000 on the marketplace. Let’s say you paid ￡3,000 for it. If you sold it to a dealer they might offer you ￡4000 for it. If you consign to a dealer THEY might sell it to the end buyer for ￡5300 and keep a ￡600 commission. So you get ￡4700 – an extra ￡700 than if you SOLD it to the dealer. If all goes to plan the end result is that you get to earn more from the sale than if you had sold directly to a watch business. If the watch doesn’t sell for whatever reason – normally because it is priced too high, then the agreement can be terminated and the watch is returned to you (if the dealer has retained it).
What Is The Advantage of Consignment?
1.?Extra cash for you?– For many watch owners, making an extra ￡200 or ￡500 or ￡1000 (sometimes much more) out of the sale of their watch is a significant extra amount.
2.?Wider Reach and bigger audience?– In the luxury watch world, consignment allows you to tap into professional networks and reach a wider audience that you would otherwise not have access to. The people in these networks tend to be more experienced buyers who are actively looking for high-end luxury timepieces. This increases the pool of potential buyers and your chances of finding someone willing to pay your asking price.
3. Advice / Consultation?– A good consignor can also help you value the watch in the current market taking into account your buy price and target sell price. Advising if that is a reasonable target or too high/ too low.
4. Expertise?– They will fetch a fair price for your watch based on market trends. Something you might not be able to do if you were selling your timepiece on your own.
So you get to be guided through the process by a professional and achieve a higher selling price over a direct sale.
5. Management and experience?– you get to tap into their good knowledge and buying/selling skills. Thus saving you time, headaches and hassle.
Consignment also has advantages for a watch professional like me that are on the smaller side when compared to behemoths like Watchfinder with their huge employee count, snazzy city offices around the world and enormous bank balances and working capital.
It allows me the opportunity to sell watches, build new relationships with the seller and the buyer – without having to lay out cash upfront which can be a challenge for a smaller company like mine where cash flow and working capital is an occasional challenge if for example, I have spent my funds getting watch stock into the business.
Whilst there are pros and cons to both large and small dealers it is likely a larger company will most likely charge a higher amount for their watches as they need to make higher profits in order to cover their large overheads and also satisfy their investors and shareholders. Whereas someone like me or other smaller, independent dealers do not have these factors. Also because of their monster overheads, they will need to be brutally aggressive with their buying too – which isn’t good for sellers.
So here you see the different driving forces and the business motivations. Cold cash and profit making versus relationship development and being a helpful guide. However, that’s business and what makes the world go round. There are options out there for everyone and some people will like dealing with big organisations and some will prefer a smaller company. I have a personal opinion about the profits made from the sale of a watch. I see it that this is your watch and you deserve to make and keep the lion share of the profits from the sale of your watch. But ultimately in your selling process it comes down to what is more important to you. Faster cash with lower sales amount. Or longer wait with resulting with more cash in your hand
So Why Doesn’t Everyone Make Use of Consignment?
Consignment can be a longer process with no guarantee that your watch will sell.
A successful sale is dependent on your chosen partner’s ability to market and promote your watch and network of buyers. Which is why some dealers who know their target audience very well and know what their buyers are interested in – are selective about what models they choose to take on to increase the chances of a sale. For example, I might have an audience of 20-70 year old business professionals that are interested in a certain range of watches. Another dealer may sell to celebrities, footballers, pop stars and have an entirely different audience to me. So this person may not be able to sell the sort of watches I can so they chose not to take on a certain watch for consignment. Likewise a dealer may specialise in vintage watches and have a vintage buying client base not one who would buy large sized, iced out bling watches.
Let’s take a quick look at some of the Pro’s and Cons of some different Selling options.
SELLING YOURSELF
Three PROs of selling yourself are:
1. Get your cash faster.
2. No middle man (which can have pros and cons). You are in full control.
3. Maximise your profits.
Three CONs to selling yourself are:
1. The Risk – the buyer (exposure) and handling payment. There are scammers out there.
2. The Hassle and the headaches.
3. It can be time consuming and distracting.
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DIRECT SALE TO A DEALER
Three PROs of selling direct to a dealer are:
1. You will get your cash faster.
2. It is low risk.
3. It is low hassle
A CON to selling direct to a dealer is the lower price you will get for your watch. Missing out on potential cash. Lately I’ve had a lot of people come to me angered by the VERY low price offering from dealers.
CONSIGN TO A DEALER
FOUR PROS to consign to a dealer are:
1. Higher return for you. You get to keep more of the sale profits.
2. You get to work with a trusted professional as a guide/consultant. It can be a fun and interesting journey.
3. It is a low hassle for you. The dealer will do a lot of the heavy lifting.
4. It is low risk as the dealer will have experience.
Two CONs for selling your watch on consignment are:
1. It will most likely take longer than a direct sale to a dealer.
2. Risk of choosing a bad partner.
If you are looking to make a quick sale and generate money immediately, consignment might not be the right option for you. It can take weeks or even many months to find the right buyer.
Why I Personally Offer Consignment In Addition To Direct Watch Purchasing.
I would like to add a note about consignment. I am often concerned with getting into what I call “the buyer / seller dance” when it comes to valuing a watch. This is managing the two opposing forces at play here. The buyer wanting a low price for obvious reasons. And the seller wanting a high price for obvious reasons. These opposing forces are very real, like the opposite sides of a magnet repelling one another. The process can sometimes cause bad feelings and that’s not something I enjoy. This is why I sometimes like to offer people the option to consign their watch for sale. Whilst I do often purchase customer’s watches if my funds are low, which is a genuine business challenge for a small/medium size dealer who has all their business capital working on pre-purchased stock, consignment allows me the option to still provide a professional service.
I don’t have bottomless pits of money so can’t buy everything that comes my way, but I still like to provide a service and be helpful to my customers. I personally achieve a lower amount than if they bought and sold the watch directly, but I can still make a small financial return with consignment. More importantly I can provide a useful service and HELP someone out by selling their watch and getting THEM more money.
Being helpful is something I love to do and at the same time it opens new relationships with customers. Win-Win? Right?
Consignment services do sometimes have a bad wrap when unscrupulous dealers get up to their naughty tricks. But a key difference with me compared to some other dealers is that I invite clients to keep hold of their watch. I don’t need to retain their watch but I do need to inspect it (for all the right reasons) before selling, but once inspected I am happy to return it. I also provide formal documentation for everyone’s peace of mind.
You’ve Decided to Consign Your Watch. What Now?
Before you consign your watch, make sure you partner up with a reputable and dependable professional that you can rely on. One of the most important things when buying and selling watches is to be sure to work with someone you can trust. A good, trusted professional will become your mini business partner who will help pave the way to a successful outcome for you. You want to avoid a situation where your timepiece becomes damaged or worse lost because the store shuts down. Trustworthiness is everything. It removes risk. Creates good feelings. Banishes worry.
Here are the three tips I promised you for having your fingers on the pulse when consigning a watch and choosing the right watch business, dealer or partner.
TIP 1.
Make sure the company is solid and reputable. Don’t be afraid to go deep here and do deep checks. Just having a website isn’t good enough. Any scammer with a spare ￡300 can make a nice looking website.
Can you find out information on the person you are dealing with?
Are they discoverable? Are they on Linkedin? Do they have any online presence (Instagram/YouTube/Website). Or are they illusive?
Check to see if the company is registered on Companies House. Does the business have a company number? Check the company directors. Any CCJs, County Court Judgements? This can be a sign of the types of people you are dealing with. It isn’t always clear cut but the information is there if you need it or want it. Are they VAT registered? Whilst this is by no means critical, it denotes a bit about the size of the company. For example if they trade under ￡85,000, they will NOT need to be VAT registered. If ABOVE ￡85,000, they will need to be VAT registered. A watch dealer could potentially burn through ￡85,000 very quickly. That is one AP or Patek. Or several Rolex sales. It wouldn’t take long.
Some watch dealers like to be “creative” with how they work with cash flow and each to their own I say, but you can make your call.
Check company reviews on Trustpilot. Testimonials. Maybe trade references. Are they accredited with any industry bodies? Dial in your antenna and listen to your hunches. Trust your gut feeling.
TIP 2.
Something to consider which I touched on earlier. Don’t necessarily be sucked in by the tractor beam of BIG organisations. They do have BIG gravitational pull because of their advertising and marketing clout. But bigger doesn’t necessarily mean better. And smaller doesn’t necessarily mean less capable. Don’t confuse a big company with a good one. Or a small company as a bad one. Often smaller companies work harder and are more spirited, ambitious, dogged and have a determined approach to doing business. Smaller companies are normally more flexible.
Big organisations often start experiencing the curse of greed and need to drive higher profit margins to feed the beast. A higher employee count with large salaries to cover and huge building overheads will mean higher prices. Maybe even shareholders to please. On the down side smaller businesses will most likely have less working capital. Less “disposable income”. Which means cash flow will be more of a problem than with bigger, cash-rich companies. But that doesnt mean a smaller organisation will be less capable, professional or caring. As long as there is experience, trustworthiness, capability and dependability you should be OK.
Perhaps small is the new big..?
TIP 3.
Check the consignment agreement and the fine details. Ask for a clear example of how it works. Ask for company details, information on the seller and see how they react. If squirmish, this could be a red flag. Nothing to hide as far as I’m concerned.
Be sure to get a receipt for any watches you leave. Ask if keeping the watch yourself is an option for you? Find out how/where watches are stored Are they covered on business insurance? Ask to see their business insurance.
It’s very important to filter the good professional watch dealers that offer a consignment service with the genuine interest to achieve a win-win outcome, from the disingenuous ones. Not all watch dealers and sellers are created equal and like to work the same way. Requirements, personal drivers, business models, financial goals vary from company to company. Selecting the right company DNA, culture and ethics that match your personal style are very important.
A single-method or a fixed “my way or the highway” approach of working with a trusted watch dealer isn’t ideal for most people. You must do your homework on the dealer and not be lured into an untrustworthy web. Don’t be pressured to work in a way that doesn’t suit you or makes you feel uncomfortable. Trust your instincts here. We have all been gifted with that wonderfully weird little sixth sense. That it is there for a reason. If you find a trustworthy dealer with a good heart and good intentions then there is no reason why a consignment service cannot work!
What Happens Next
Once you’ve chosen a consignor, it’s time to enter into a formal agreement that sets the terms of your consignment. This agreement includes things like:
What I Do When I Get A Watch For Consignment Selling?
I’m sure it would be similar for others but this is my personal process.
Even getting the watch delivered safely alone is no small undertaking.
UK to UK isn’t so much of a problem but delivering watches internationally requires expertise. Getting the watch packaged up suitably, booking the courier using ALL the correct information requires a lot of knowledge and experience or the watches risks getting stuck in customs and not being delivered.
Handling the import and export documentations and being sure the import tax payment process is explained clearly, in advance to the buyer plays a VERY important part in a successful delivery.