Flipping Watches for Fun and (Sometimes) Profit, Part 1

As I mentioned in my last post, several months ago I started paring down my watch collection to the bare essentials, because, to put it simply, you can only wear one watch at a time.  The watches culled from the herd were posted in the for sale subforum on WatchUSeek and on eBay.  I'd never considered myself a flipper - what many watch enthusiasts who often buy watches only to "flip" them by resale only a short time later - but that's basically what I've become, having sold at least a dozen watches to forum members and eBay buyers. 

The craziest part is that, when everything is tallied up, I've actually made back more money that I spent on the watches in the first place.

This is about as far from the norm as flipping can get.  Most of the time, flipping a watch will net you only a fraction of the price you've paid for it.  It's simple supply-demand economics: why would someone buy a watch - a preowned one, for that matter - from you when they can get a brand-new one straight from the source?  The most straightforward answer is "because they can get it from me for a whole lot cheaper."

But offering prospective buyers a good deal entails more than undercutting the retail price.  The supply-demand ratio of the piece - whether it's discontinued, a limited edition, or just a highly sought-after model - is the ultimate arbiter of what kind of price you can realistically expect to get.  All the watches that managed to bring home more than I spent on them had some sort of supply limitation that only amped up their demand - and enabled me to sell them at an aggressive price.

Example #1: Rolex Explorer I 114270
Purchase Price: $3570
Sale Price: $3800

Several things converged to enable this profitable flip to take place.  First, the 114270 was discontinued and replaced with the 39mm 214270 model - a model that has gained infamy for its stunted hour and minute hands.  Second, I picked up the watch preowned - a common necessity for discontinued models, unless you come across old-new stock - which meant that I paid considerable less than Rolex's bloated retail price.  Third, this particular watch had an extremely recent serial number that pegged its production in the year directly preceding the discontinuing of the model, which made it attractive to those who were interested snagging a 36mm Explorer I that was as close to new as possible.  These factors, coupled with the brand attraction that Rolex exerts on a significant portion of the watch enthusiast market, enabled me to price the Explorer competitively at $4000 - and find a buyer within 24 hours of posting.

Wait a minute, you say - if the buyer paid $4000, how come the sale price I listed is only $3800?

The cost of doing business - specifically, shipping/insurance costs, and PayPal fees - reduced the $4000 to a little over $3800.  You have to account for those costs if you want to make an actual profit on the flip.

The lessons learned from this transaction:

- People will pay well for discontinued models, if they're popular and/or rare enough.
- If you buy the watch used to begin with (and at a bargain price), it's far easier (but not necessarily easy, per se) to recoup or make a profit over your original investment.
- People love a Rolex.  I've only had one watch sell faster than this one, and it was priced to be a steal.

Next time: the resale value of a limited edition Omega only sold in Japan.

Watch Principle #1: No matter how many you own, you can only wear one at a time.

A lot has happened with regard to my personal watch collection since the last Watches-To-Wear post in July.  I've been reexamining my needs based on the axiom in the title of this post:

No matter how many watches you own, you can only wear one at a time.

There is a very narrow exception to this rule (which some might say proves it) with regard to Presidents and CEOs of watch companies, and even then only while attending an international watch convention or press event.  (Example: President of Omega Watches, Stephen Urquhart, in this 2011 interview with ABlogToRead.com's Ariel Adams.)  So for those of us who aren't tasked with running a major watch brand, one watch is the most we can expect to be able to wear at any given time without looking as odd and out of place as a businessman walking around with multiple cellphones - or worse, a Bluetooth headset in each ear.

When my collection was at its largest, I'd often find myself feeling guilty when selecting my watch for the day at how much money's worth of timekeeping steel I left sitting neglected in my watch box.  The notion of paring down the collection to a single watch - essentially becoming one of those blessed individuals for whom  one watch is all they've needed, or even conceived of needing - has always held a strong attraction to my minimalist, form-and-function-over-frivolity aesthetic.  So I decided to cull through the collection the same way that Immortals cut through one another in the Highlander franchise: repeating the mantra "There can only be one."

The Omega Speedmaster Professional 3573.50 eventually proved to be the MacLeod of this contest, besting a Rolex Explorer I 114270, Omega Seamaster 2253.80, Omega Speedmaster Reduced 3510.82, Stowa Marine Original, Xetum Tyndall, and, at the end, a Nomos Tangente Gangreserve to be the last mechanical wristwatch standing.  While the Speedy Pro's complexity as a chronograph and sporty-if-classically-so aesthetic technically disqualifies it as a dress watch, its near-ideal dial proportionality and understated color scheme make it suitably universal, especially in a day and age where most onlookers would have trouble telling whether one's shoes are oxfords (aka balmorals) or blutchers (aka derbys).  (The distinction lies in the "throat" of the shoe - closed-throat lacing for oxfords, considered more formal and classically paired with suits, and open-throat lacing for blutchers, considered more informal and classically paired with more casual trousers or even jeans.)

Despite my aspiration to become a one-and-only-watch person, I'm still too contingency-minded to not keep a handful of spare timekeepers on hand, just in case.  Quartz movement watches are well suited to the backup role, given their accuracy and ease of maintenance.  The Citizen Stiletto AR3010-65A, whose hour-hand-and-minute-hand-only minimalist dial and slim profile qualifies it as a quintessential dress watch, was my choice for primary backup quartz.  Its black-dialed counterpart, the AR3010-57E, along with a completely blacked out version, the AR3015-53E, can still be found on Amazon.com.  It remains one of the least expensive watches I know of that includes a scratch-resistant sapphire crystal, rather than the more scratch-prone mineral crystals typically found on watches at its price point.

I've also retained a digital quartz watch as a backup chronograph and "beater" watch, in the form of a Casio Protrek PRX-2000T-7JF, which is a Japan-only version of the popular Pathfinder "ABC" - Altimeter, Barometer, Compass - watches.  The Casio Pathfinder PAG240-T7CR uses the same module and retains the same functionality at a fourth of the price.

The moral of story is to keep your watch collection from getting out of hand by remembering the inescapable truth that, no matter how many watches you own, you'll only be able to wear one at a time.  Therefore, the more watches you own, the less time, proportionally speaking, each of them will spend on your wrist.  When you expend considerable resources - some might say too many - on the watches in your collection, the notion that most of them will spend much of the day sitting quietly in your watch box (or worse yet, collecting dust on your counter top or languishing forgotten in a desk drawer) should give you pause.

Next time, I'll talk about how I managed to "flip" the watches that I pared from the collection - even making a slight profit on a few of them.