Editor’s Note: This post has been updated in updated in 2021 with new analytics. The new information provided is up-to-date as of May 2021, and reflects a more accurate estimate of the premium that dealers command using a more comprehensive statistical model.
One of the most important considerations on any secondary market watch purchase is not only what watch you’re buying, but also who you’re buying it from. You’ve heard the saying: buy the seller.
There are two different kinds of sellers: dealers, who are in the business buying and selling watches, and private sellers, who are individual collectors looking to sell pieces from their own collection.
In this article, we’ll shed some light on the benefits from buying from a dealer, the value proposition of private sales, and how you should decide when to buy from which party.
Buying from a dealer vs. private seller
We at WatchCharts believe in buying and selling privately between members of the community. That’s why we aggregate listings from the most popular online watch sales forums: Reddit WatchExchange, Watchuseek and more. Trading within the community not only allows you to find the best deals, but it also ensures that the watch that you’re buying or selling is changing hands from one enthusiast to another, and going to a good new home.
That being said, there is a case to be made for buying from a dealer. Dealers are supposed to be professionals, which means you’re more likely to get things like authenticity verification, a warranty, or a return policy. When you buy from a dealer, you’re not only paying for the watch. You’re also paying for a service.
Now, that doesn’t mean that buying from a dealer is without risk. There are legitimate dealers and shady dealers, just like there are legitimate private sellers and shady private sellers. Buying from a dealer reduces certain concerns such as the payment processing and post-transaction recourse. But no matter the seller, make sure you feel comfortable with them and thoroughly vet their transaction history.
If you’re buying on the community sales forums, you can use our RepCheck tool to quickly check the listing and feedback history of any seller on WatchExchange, Watchuseek, and RolexForums. Check out this article for a comparison of these communities.
Expect to pay a premium when buying from a dealer
As I said above, you’re paying for both a product and a service when buying from a dealer. That means that buying from a dealer will generally be more expensive. But how much more expensive?
To find out, we analyzed a dataset of hundreds of thousands of listings from within the past year. We broke down the data by brand and model, and compared the prices of listings on community forums versus listings from dealer-driven sites. The results may surprise you.
On average, a dealer asks 13% more than a private seller for the same watch. This estimate also assumes that the watch is in the same condition and comes with the same accessories.
The following graph shows the average dealer markup for the top 25 most popular brands in our database.
Dealer Markups (sorted by brand popularity)
Dealer Markups (sorted by markup percentage)
Though the average dealer markup is 13%, the actual markup varies greatly brand by brand. Casio is the lowest, with a 8% average dealer markup, while TAG Heuer is the highest, with a 20% average dealer markup.
The brands with the highest dealer premium are TAG Heuer, Tissot, Bulova, and Hamilton. These are all brands that generally trade in the sub-$1,000 range on the secondary market. This trend seems to indicate that the dealer markup is higher for more affordable brands. However Casio is a notable exception, having the lowest dealer markup out of the brands we analyzed.
When should you buy from who?
So here’s the big question: when should you buy from a dealer, and when should you buy from a private seller? The simple answer is, buy from a dealer when the benefits of a dealer outweigh the cost savings of buying private party.
That might mean buying from a dealer for higher value watches where authenticity is a concern. But again, make sure you pick the right one; being a dealer doesn’t inherently make the seller more reputable.
Rolex is a classic brand that many people prefer to buy from dealers. They are commonly faked, and the dealer markup is relatively lower since the market is more liquid.
You might also want to buy from a dealer when you value things like a generous return policy or pre-owned warranty. Again though, these services are only as good as the entity who backs them.
Or, if you are in the fortunate position where the dealer premium is not a concern, then buying from a dealer will generally allow you to make the transaction and get the watch in your hands in the fastest manner.
But if you’re looking for the best deal, you should look to purchase from a private seller. It’s not impossible for a dealer to be selling a watch for less than a private seller, though the chance is low.
For example, the Seiko SARB035 is a great value-for-money watch at the entry-level price point. As of the time of writing, you can save nearly 25% when buying private party.
If you’re newer to the watch hobby, buying from a private party is also a good way to become part of a watch community and get to know other collectors. Just be aware that often times private sellers will be hesitant about selling to first-time buyers, so it helps to have some feedback or transaction history on eBay or other platforms to help show you’re trustworthy. It doesn’t even necessarily have to be for watches.
Even if you have no prior private sales history on the internet, you can still buy private party by doing the transaction locally in person, or by paying in a non-refundable manner, such as wire transfer or Zelle. This proves to the seller that you’re trustworthy, but is also more risky as there’s not much recourse if something goes wrong. So again it’s important to talk to the seller beforehand and make sure you’re both comfortable.
No matter who you’re buying from, don’t spend any money that you can’t afford to lose. Watches are a hobby after all, and the money you spend should be discretionary. Getting started buying private party can be daunting, so I recommend starting with lower value transactions. But over time I find it to be far more rewarding.