The Role of Resale Value in Your Purchase Decision

[Pw92676]

Originally Posted by beshannon

Personally it is ZERO.

I buy what I like, if I choose to sell it, the money was a sunk cost and whatever I get back is a bonus.

Truer words have never been spoken.

[RobHK]

Originally Posted by Crashblue

I buy what I like but I tend to buy hype pieces way ahead, 15202 in 2010, Chronometre Bleu in 2012, …

What did you buy last year? :)

[RobHK]

Personally I mentally write off about 50%. The rest I expect at a minimum to get back. I would not buy expensive watches where I have to mentally write it off as a zero. There are enough fantastic watches which is not a zero so I don't see the point in buying the very few where I have to mentally write off the full amount.

For the same reason I dont buy a Daytona at 3x retail, because if market goes back to normal, I might have lost more than 50%.

[nickorette]

Resale value makes no difference to me, I've yet to sell a timepiece once it's entered the collection. That being said it makes me feel good about paying over msrp when the market doubles in 6 months

[enjoythemusic]

Originally Posted by RobHK

What did you buy last year? :)

Ladies and gentlemen, that's one smart-thinking man right there

[fullofboats]

I guess I’m one of the newer collectors on TRF as resale is my #2 concern when considering a new watch after “do I love it.” The cost of ownership is way too high for me to “expense” a purchase and knowing/believing that I can recoup x% should my tastes change or if there’s a new toy I want makes spending tens of thousands a much more appealing proposition. I think the perception that watches can be a store of value is a major reason why interest in watches has exploded the last few years. Some seasoned collectors complain about the hot watch market ruining the hobby but they’re also probably the ones who have benefitted the most from their appreciating collections so I rather roll my eyes at all the outrage.

[beshannon]

Originally Posted by Pw92676

Truer words have never been spoken.

[CFR]

Originally Posted by rag5178

The reason I raise the topic is that I sometimes feel as though there is a bit of gatekeeping in the high end luxury watch market. There is a notion that if you can't afford to buy and keep a watch forever, then you are not a "true" collector.

This "gatekeeping" is not something I've experienced among people who are really into watches. I'm not arguing with you at all. Your question definitely comes from somewhere. I'm just curious to know more about where you got that idea from.

I think there's a distinction between "buying" a watch vs. "keeping a watch forever." When it comes to buying, I've definitely heard the idea that "you shouldn't be buying any watch that you'd need to put on a credit card, can't afford to pay cash for, or that would cause you to experience any tangible negative financial consequence if it were lost/stolen." Definitely heard that before -- that if you can't afford to lose it, then you can't afford to buy it.

Regarding the link between "keeping a watch forever" and being a "true collector," there's never been a single, correct, agreed-upon definition about what it means to be a "collector." These sorts of threads come up from time to time:

• "Can a person a be a 'collector' if they don't own more than X watches at a time?"

• "Can a person be a 'collector' if they own 200 watches but if there's no clear theme to their collection -- if they're just someone who 'buys what they like' without any deeper purpose -- or is this just being a 'hoarder'?"

• "What's the difference between a 'collector' and an 'enthusiast'?"

• "Is it possible to be both a 'flipper' and a 'collector'?"

But linking those two concepts -- affordability and long-term ownership -- isn't something I've encountered. I've only really seen separate discussions about each of the two concepts, if that makes sense. I think the real crux of it comes down to how one defines "collector" vs. "enthusiast," if there's any distinction at all there, and why that would or should matter.

[dannyp]

Originally Posted by rag5178

I sometimes feel as though there is a bit of gatekeeping in the high end luxury watch market. There is a notion that if you can't afford to buy and keep a watch forever, then you are not a "true" collector. My personal opinion is very different from this notion.

There's a difference, I think, between being able to "afford to buy and keep a watch forever" because you'll never need to sell it to make the mortgage or replace your car's transmission and being able to afford to hang onto watches you don't wear and still buy others.

The latter simply means you can't afford unlimited numbers of watches... which includes much of the watch-collecting population.

Now, back to the original premise of this thread: I would consider resale purely as a function of what I should expect to pay for a new watch. If a watch has historically poor resale value, then I'd expect to be able to find a brand new one from an AD with a healthy discount. Enter: Many of the greatest pieces out there, available well below MSRP (Zenith, GP, JLC).

[ButtButt]

What watch would require a total write off? You should be able to at least get something back no?

I guess for me I do think about it but it doesn’t really factor into my decision. My thought process goes something like looks/design > movement > brand/history > price > can the AD/boutique get the watch.

[Ichiran]

It's a hobby for me and I'm not bothered with the drop in value after purchase. I treat it like a full expense when I bought it and carry them at zero net book value. Whenever I wear my watches, I feel like I get something useful out of zero value items. If I sell any of them at any value, it's a straight profit because they are zero NBV.

[JR16]

I don’t think there is a right or wrong answer to the OPs question, and it’s very personal and many different factors involved.

Like many others, I only buy watches I like. Thought process is always lead by “do I really like it or not and do I really want to own it”. Then cost comes into it- can I afford it comfortably? Is it worth its price to me? Are there other things in life I’d rather spend money on at this point in time. Then, If I’ve decided I want to purchase the watch, the question is do I buy it new or pre-owned…. So this is the first point in which re-sale value becomes a factor. I’ve bought both new and pre owned over the last decade, and when there is a big delta, in most cases pre-owned makes sense to me.

Now, in the current environment , re-sale value plays another role when there is a watch I *think* I will really like but am not 100% confident. For example, a watch I can’t easily first try on, one that may be borderline size for my *current* tastes, dial color (I admittedly got caught up in the green fad w the subc LV), etc. In these cases, I’d be lying if I didn’t at least subconsciously consider how much of my $ I could recoup if my tastes change in a year or 3 or 5. Such was the case w the subc lv for me. I am very fortunate to be in the financial situation I am in now, but I am by no means so wealthy that losing money doesn’t matter to me. Looking back, I am definitely net negative on actual executed trades, but have learned a lot from those purchases and trades and like to think those losses make me a better enthusiast/collector and buyer , the latter of which is an part of this cool hobby we are privileged to have.


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[lanteanflux]

Buying at retail when new old stock can be brought grey for 50% off is just plain stupid. For this reason knowing the resale aka the actual market value of the watch is always important.

Secondly, the fact a watch has a secondary value is important to me as simply speaking it means I can buy more watches. They can be treated less as an expense and more as an asset. If I had to write off all my watch purchases I would have a lot less watches, whereas if i know they have a resale value then it can be not too different from converting your cash to equities - both can derive gains or losses over time but at the time of transaction your net wealth is unchanged - IF you bought secondary.


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[rag5178]

Originally Posted by JR16

I don’t think there is a right or wrong answer to the OPs question, and it’s very personal and many different factors involved.

Like many others, I only buy watches I like. Thought process is always lead by “do I really like it or not and do I really want to own it”. Then cost comes into it- can I afford it comfortably? Is it worth its price to me? Are there other things in life I’d rather spend money on at this point in time. Then, If I’ve decided I want to purchase the watch, the question is do I buy it new or pre-owned…. So this is the first point in which re-sale value becomes a factor. I’ve bought both new and pre owned over the last decade, and when there is a big delta, in most cases pre-owned makes sense to me.

Now, in the current environment , re-sale value plays another role when there is a watch I *think* I will really like but am not 100% confident. For example, a watch I can’t easily first try on, one that may be borderline size for my *current* tastes, dial color (I admittedly got caught up in the green fad w the subc LV), etc. In these cases, I’d be lying if I didn’t at least subconsciously consider how much of my $ I could recoup if my tastes change in a year or 3 or 5. Such was the case w the subc lv for me. I am very fortunate to be in the financial situation I am in now, but I am by no means so wealthy that losing money doesn’t matter to me. Looking back, I am definitely net negative on actual executed trades, but have learned a lot from those purchases and trades and like to think those losses make me a better enthusiast/collector and buyer , the latter of which is an part of this cool hobby we are privileged to have.


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I agree completely with your experience and opinion on the matter.

[Crashblue]

Originally Posted by RobHK

What did you buy last year? :)

My last purchases:
2020: PAM 1661 and PAM 1314
2021: Girard Perragaux Laureatto blue dial
2022: Blancpain Fifty Fathoms in Titanium blue Dial, MAD 1 RED

[DonLee]

I love watches, but resale value is still very important to me, because if I buy a watch that is ultimately going to make me lose a lot of money, that is pure spending. Like buying a luxury car. I'm they type of guy who wouldn't waste $20 if I didn't need to. Buying a $50k watch just to spoil myself is just a big no. If I buy a watch that appreciates and makes me money, it's not much different to buying any investment, then I have no hesitation to do so.

[justcruisin]

If it loses a max of 25%, buy new. More than that, buy pre-owned. I like the fact that watches don't technically depreciate to 0, so there is SOME value even years from now.

[thekman]

My philosophy is similar to yours. Since we call it a hobby to me part of this hobby is having an ever changing collection. There are tons of watches I would like to own at some point and experience but not necessarily keep in my collection forever. So while I do not buy to make profit I just make sure to get the best deal. If it's a current production watch that sells above msrp I will only buy from an AD as to not lose my pants should the market collapse. If it's a watch that loses a ton of value I will just make sure to buy it preowned.

[RoscoPico]

Originally Posted by rag5178

I wanted to gather some thoughts and perspectives from the members of this non-Rolex forum on the role that resale value plays in your purchase decision.

Do you buy without any regard to resale value? Is your purchase decision primarily driven by resale value? Or do you sit somewhere in the middle?

The reason I raise the topic is that I sometimes feel as though there is a bit of gatekeeping in the high end luxury watch market. There is a notion that if you can't afford to buy and keep a watch forever, then you are not a "true" collector. My personal opinion is very different from this notion.

My view on the matter is that personal taste and interest in watches changes. After a year or two or three or five, I may swap a watch out of my collection that no longer fits my needs or taste for something new that does. Not only does this help me afford new watch purchases, but it forces me to be deliberate and discerning in my collection. For that reason, resale value plays a role in my purchase decisions. Also, no matter how much due diligence you do before making a new purchase, you never really know how much you will enjoy a watch until you get to wear it regularly.

Very interested to hear opposing viewpoints. I think that the majority of this forum is firmly opposed to deliberate flipping, but views on the nuance of buying without the intention to flip but with consideration to resale value is less clear to me.

honestly 0. Although had I known I wouldn't be able to buy some pieces ever again, I would have bought them when I could have

[RoscoPico]

Originally Posted by Crashblue

My last purchases:
2020: PAM 1661 and PAM 1314
2021: Girard Perragaux Laureatto blue dial
2022: Blancpain Fifty Fathoms in Titanium blue Dial, MAD 1 RED

Loving the GP right ? I know I for sure am. I call it the perfect Genta piece.
Has a hint of all 3 "holy trinity" Genta's but in a way is better than all of them

[dchang81]

This is probably going to be crazy, but i kind of want a watch that will depreciate just a bit so I can beat it up and not care, but I guess for me that's more in the thousands range not the tens of thousands range. As much as I felt the same way about my other pieces, it makes it a little harder to enjoy when their value is more than I feel comfortable with. I know they're just watches but for me it's a big chunk of change.

[Justindo]

For me, resale is, of course, a factor but not the deciding factor. If I really love a watch and think I'm going to keep it for the rest of my life, the resale price doesn't mean much to me. I've only sold a few watches and did not lose money on any of them, except for opportunity cost. Also, everything I've bought I'd likely at least break even on (not factoring in opportunity cost). Ultimately, I buy what I like and don't consider it an investment, although I try to buy smart (i.e., I'm not going to pay retail on a watch when it can be had new at a discount).

[subtona]

Only as much as it protects the investment if I later decide that I want to move it to make room for something else.

I have had many experiences where I thought the watch was a keeper and learned later that it wasn’t for me. Pics vs wrist.

Perfect example was the current Pepsi on jubilee… wanted it for 2 years…was certain it would be wonderful… wore it twice and sold it, just didn’t like it on my wrist. Was happy to get what I paid for it to apply to something else.

[Nathan_]

Agree with others, re-sale doesn't matter as I'm yet to sell a piece.

Also agree with others, It's the buying process I value more. Where I like to get the best initial $ deal and will seek out that opportunity.

Case in point when I purchased my Montblanc Nicholas Rieussec with a 40% discount (it's pretty much the market value today).

[Boopie]

Originally Posted by raclaims

Of course it does.
it's a very large expenditure.

People love to say it's not an investment and deride all who see it as such....as if they have the moral high ground.

Yet, what could be more elitist than to say, I don't care about my money, I throw it away because I have so much of it...and anyone who cares about money is in it for the wrong reasons.

Of course you should always buy what you love but to throw away money without concern is a very quick way to not have much money!

That said, I'm def not a fan of flipping and think it destroys the hobby...but who am I to judge someone who is trying to make money?

Great point!

I don’t look at resale exclusively but it is a factor, just as with cars. I see no reason to sink $5k into a watch to have it worth close to nothing. My husband spent a lot of money on a TT automatic TAG 20 years ago, and it’s basically worth much less than the cost of servicing it. If a watch costs, say, $500 or less, I look at it like clothing and shoes, i.e. buy what I like knowing that it’ll have no resale value at all (but that being said, I buy quality items that I expect to last).

[cszy67]

I just picked up a Jaeger-LeCoultre Polaris Chronograph and walked out knowing I took a hit. The AD softened the blow although in the end I am not overly concerned regarding loss of value, liquidity, etc.

I am wearing the watch right now loving it.

[DJ2020]

Resale plays absolutely no part in my decision to purchase a watch. If I like it, I buy it. Now if for some reason I end up not liking it, I will trade it in on something else with my AD at 0 or very little loss or I will gift it to a relative or sometimes a good friend.

But I also usually only buy brands I trust by previous personal history. Price also has no bearing. I know watches and movements. If they are excellent quality weather $1000 or $10,000, I buy what I like. Meaning I don't pay attention to hype or really care what someone thinks of my purchase.

[Crashblue]

Originally Posted by RoscoPico

Loving the GP right ? I know I for sure am. I call it the perfect Genta piece.
Has a hint of all 3 "holy trinity" Genta's but in a way is better than all of them

I do like it but I also own the competition however, I have to admit I hardly wore it, the whole integrated braclet sport watch thing is to in for me right now.

[Rolexguy$]

Resale value always matters to me. Besides, I might love a watch today and after a year or two I don't admire it as much or it could be tighter or loose or something. There are many factors that can influence the decision to want to let go of a once loved watch and at that point the resale value is paramount. So yes, it's an important factor.

[ap1]

Originally Posted by Ichiran

It's a hobby for me and I'm not bothered with the drop in value after purchase. I treat it like a full expense when I bought it and carry them at zero net book value. Whenever I wear my watches, I feel like I get something useful out of zero value items. If I sell any of them at any value, it's a straight profit because they are zero NBV.

You are a special man