Reply With QuoteI recently asked another online dealer for a quote to buy a watch from me, when they were advertising an identical watch at the same time. Price of the one they were advertising? £6k. What they offered me? £4K! Not a bad margin, is it...?
Simon
Just offered to sell watchfinder a watch they have listed for just over 3k. What they did offer? between 1-1.2k.
How do they get watches?! I'm pretty confident most dealers won't have anywhere near those type of margins.
I recently asked another online dealer for a quote to buy a watch from me, when they were advertising an identical watch at the same time. Price of the one they were advertising? £6k. What they offered me? £4K! Not a bad margin, is it...?
Simon
Well they probably look to make 40-50% on their investment before their running costs. Of course there are obviously repair/refurb costs to consider but less obviously there may a considerable cost of capital to include since a less saleable piece may sit there unsold for 3-6 months. Working capital isn't free. This is why margins may be smaller on a sports Rolex than a G-P, IWC or similar where a protracted wait for a sale could be expected.Originally Posted by dachi
Looking at your example, say they aim to sell a piece at £3K, there may be £500 of refurb costs as a worst case scenario and maybe another £200 in capital costs so by my reckoning to make their 50% they need to pay out no more that £2K including these up front costs. Backing out the refurb and capital costs that leaves £2K-£700 = £1300 so not far off what you quote. Of course they have to consider that if it doesn't shift in 3 months, they may have to discount it to £2500 to get rid and this may be factored in at the start also.
Last edited by Padders; 22nd September 2016 at 16:20.
Pretty sure this has been done to death, but that's the gross margin, to get down to bottom lien profit you need to take into account say:
Interest/Borrowing cost of say £10m (probably higher) of watches sat in stock say 5% per year = £1/2m
Staff (front of house and back)
Expensive premium outlet rents
Insurance
Insured Shipping
Cost of fitting out the stores
Taking a loss in auctions say of items that have just sat in stock for too long
Photography
Refurb/Service costs
Repairs under warranty
Claims under the buyback guarantee
Software
Merchant Card fees (probably £60 on a £4k watch)
EPOS systems
Energy
Stationery & other consumables
Advertising (all those adverts aren't cheap)
and much more...
All adds up to not a lot of profit in the end.
I have an immaculate condition omega speedmaster that they were selling for £2000, they offered me £600. Needless to say I declined, and they subsequently didn't get to sell the watch I was looking to PX against.
So why didn't you offer it on here or eBay? If it were worth more it would have realised it. W-F aren't a charity after all.
Ah just noticed your post count, ebay or nothing then I guess.
Last edited by Padders; 22nd September 2016 at 16:29.
Selling a watch at £3,000 also attracts VAT, that's £500 gone straight off the profit.
I spoke to a chap I know in the industry last week as I'm looking to sell some watches. He told me they would take 30%+ margin if they gave me cash or I could go through some firms that operate on a commission basis when the item is sold and would take a smaller %. As mentioned before, there are a lot of overheads to consider.
That is probably not the case, as they are likely to be operating under the VAT margin scheme, whereby they only have to account for VAT on the profit between the price they paid and the price they sell at.
Neil
I am told that the watch business is a particularly tough industry to make a profit in; the real secret....if there is such a thing....is to buy watches and keep them. The more you change, the greater the loss.
You can minimise the risks by buying obvious stuff like Rolex sports watches, and secondhand, but you're still likely to lose money. But then you lose a bit in most hobbies,it's the price to play.
They've just this week offered me £6400 for something they are selling at £7250.
I can pop them on TWF should I feel like it (though doubt they'd sell over there), but I only intend to sell my speedmasters to fund something that really catches my eye (like a SM300 or vintage sub). At the time I got a quote from them as they had a green bezel sub (hulk, kermit, LV, I don't know the correct designation) at an attractive price. I'd definitely rather sell them at a lesser price to forum members than have to hike the price to account for fees.
As explained in the Watchfinder thread 'Zero to Hero' that price would have been higher if you'd part exchanged no?
Just selling to WF? Nope
Just buying? Nope
Part exchanging - good deal
in my albeit small experience
My £600 for a £2000 watch was a part exchange quote.
That sounds like an excellent offer then
When I was standing in a queue while on holiday I was staring at the various exchange rates being offered by that bureau in Prague. The diff between buy and sell for GBP was very small: 31.2 vs 32.2. The diff for whatever it is they have in the Ukraine was massive: 6 vs 11.
I think sometimes the emotional aspect clouds our judgement when enthusiasts talk about watch dealer margins.
After all, presumably those members with collections valued at tens, sometimes hundreds, of thousands of pounds are enjoying the fruits of their well paid job or are presumably running businesses that operate with reasonable margins. Otherwise they wouldn't be able to afford the luxury items they have.
When I went to WF to buy my Explorer; when the guy got the watch out he picked a bit of A4 out the bag and put it to one side ...
When he went off to change the bracelet for me I took a sneaky look; it was the purchase invoice for the watch with all the sellers details; WF paid £3100; I bought it for £3300 so on this model I'd say their margins were slim.
Ahh, that old trick.
Cheers..
Jase
No, it's a margin scheme, not flat vat.
Hahahahaha. That's what I was thinking!
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Jeepers. Ok scratch that plan. Maybe in parenthesis (if you're selling them a 'hot' watch they clearly want)?
That's about the differential they gave me too. Bought for 6K and I think they'll sell for 7K
They maybe have 'want to buy' lists too so if they can match incomings to buyers it may give them scope to take less margin for a quick turnaround?
Cheers..
Jase
LOL that did occur to me at the time but the price had already been agreed so there was no negotiation being done at that point; I believe it was genuine ...
I suspect they know an Explorer will sell quick so they can flip on a slim margin; other brands/models may hang around so demand bigger margins.
The guy who sold that Explorer....wonder how much he paid for the thing he was trading in the Explorer for....?
They offered me £7k for my steel Daytona and are selling them for £8400 odd for a similar vintage. (2008/2009). I'd be happy to sell at that price when I come to sell and don't think it's too unreasonable the margin hey are trying to achieve.
20% VAT !
VAT is recoverable and they'll be on the VAT margin scheme so only pay VAT on difference between buy and sell
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I'd hazard a guess it's a Rolex
They'll offer a far higher price for a Rolex as they can sell them easily and at a good price.
I've just dealt with them again and had another good experience.
I have previously traded with them and I got 4200 for a 42mm explorer at the time that they were going for less than 4 grand around here.
I've always had a bit knocked off any purchase i have made so I wonder if inclusion of some wiggle room might add to a supposedly inflated margin
They offered me £3200-£3400 for my 1999 GMT last week and had one for sale at £5,500 at the same time.
I wasn't really looking to sell although if they'd offered me a better price I may have considered it and bought a Seadweller.
That's an insult! Glad you turned it down!
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You're lucky with that or as the other chap said, that old trick. They have huge margins.
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Not if it were a Speedy Reduced with a dodgy chrono module it wasn't of course, they cost a lot to fix. Not casting aspersions but I bet it wasn't a 1861 Speedy Pro at that selling price and they will punish the piggyback movement models because of the increased service/fixing costs.
Not that they'd actually service a watch unless it were returned under warranty!
Profit seems to be a dirty word in this place !
Guess what , it doesn't come easy . You have to invest in it . Marketing , advertising, SEO , lots of other routes as well as longevity of your business .
How many times do you dissect the profits of a BMW dealer , the local takeaway or Tescos ?
I'm not defending Watchfinders markup but I am their right to ask what they seem viable of the products they sell and to make a profit at the end of the year and cover investers and other costs .
I'd hazard a guess it's a Rolex
They'll offer a far higher price for a Rolex as they can sell them easily and at a good price.
Indeed it is and I shall be taking them up on it most likely, it's a LV Submariner that I thought I'd be keeping but picked up an explorer recently which already struggles to get wrist time.
Last edited by -Ally-; 22nd September 2016 at 23:15.
This, plus the fact that the OP says they have one for sale for £3000, do they want another?
Like you say if it is a slow mover that has been in stock for 6 months, I imagine taking another into stock would be quite low down their priority list.
[QUOTE=chrisparker;4092780]Selling a watch at £3,000 also attracts VAT, that's £500 gone straight off the profit.[/QUOTE
That old chestnut
Input VAT is recoverable but Output VAT (such as that arising from these sales) is irrecoverable.
If you wish to know about partial exemption special methods and the possibility of a "de minimis" override arising for those of us with more complicated businesses (where residual VAT needs to be determined), just ask.
Haywood
Last edited by Haywood_Milton; 22nd September 2016 at 23:45.
Its a shame that with some makes you need to take a bath on the resale.
I would love to buy a Zenith but due to the depreciation on these I'm put off a bit.
It pretty much means that the Rolex and PP brands become ever more popular as people see the sort of bomb proof depreciation on certain models.
Sort of strangles the market a little bit for the other guys.
Offered me £3000 for my El Primero. They had one in for sale at (IIRC) £4750.
I sold it on C24 for £4100, although it did take 4 months to sell. (I wasn't in any hurry)
I got the distinct impression from the (email) conversation that they are only interested in buying of people who are desperate for money, the emails were very terse and in a "take it or leave it" tone. Of course this model isn't a fast seller, and they already had one in, so a large amount of "we're only interested in it if it's extremely cheap and we can make loads of it when it eventually sells" may have been involved.
The experience has certainly put me off buying anything from them. It was far from what I would expect from a large, professional company, so I now have very little confidence in their ability to take care of me as a customer, during a sale or in any after sales service.
Fraggle, pretty much every business you can think of boils down to 'buy low sell high' . What they offer you is the ability to buy your watch immediately but at a cost to you of a lower price than if you sold through other avenues. You will never sell to a dealer at the same rate as a retail sale. It doesn't make them dodgy. When you buy from a dealer it will also be more expensive than say a forum sales price but then you have consumer protection, which has a value.
Cheers..
Jase
I traded in a Breitling and a Bremont within the last two weeks against one of their watches.
Breitling, they gave me £2000 and put it up for £2950.
Bremont, they gave me £1300 and put it up for £2250.
So in my case they put £950 on each watch regardless of buy in price.
With regard to dealer prices in general, there's a dealer on YouTube, Paul Thorpe who makes a very valid point when you sell to a dealer. It's a done deal, you walk away with cash and there are no come backs.
Last edited by MartC; 23rd September 2016 at 08:32.
Having just gone into high street retail the overheads are almost criminal, business rates, rent, service charges and insurance almost make it not worth bothering unless you are a chain or charity shop....
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I can illustrate this, including staff wages. I have high street shops, some in prime locations but not even in London, with an average of 20 staff per store. On average I will have to make (not take) over £500,000 per shop, every year before we make any profit. We don't have borrowings, either; if we did, you could add on a bundle more overhead in interest payments to finance several million in stock.
I've seen enough jewellers and watch dealers fold because bricks and mortar add cost to their business that they just can't sustain.
Haywood
I'm finding retail exciting and fascinating but the majority of people have no idea of the cost, and sheer effort it takes so they can browse products at they leisure...
I have no issue with this, why should they know or care but it can be very demoralising when a customer is obviously highly offended because they think you are trying to rip them off...
Recently a customer accused us overcharging for a product that was half the price in a large national chain store, apart from the obvious bulk buying power the chain store has, it turns out they sell a vastly inferior product that is only similar (and is not in walking distance of this customer)...
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We only have to look at our empty high streets to realise the prohibitive costs of retailing. Well, I say empty, there are the charity shops and money laund.... I mean tanning salons. Oh and bookies too..
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And be prepared to be told at regular intervals about how you have "a little gold mine"!
Obviously all your turnover is profit and you have no expenses to consider!
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