Apart from the fashion and style statements people make through costumes and accessories, a watch too is an accessory that adds sparkles to one’s personality, charms, style and fashion.
The ups and downs of the prices of the watches shake this industry. Eric Brahms, a competent watch dealer, has his fingers on the pulse of the secondary market prices for both modern and vintage watches. Eric, who is also the President of MAE Capital, LLC, constantly keeps on eye on the entire situation of watch market.
The financial years of 2020-2021 witnessed the massive increase of the prices of the modern Rolex and Patek Phillipe. In that period, according to Eric, the prices of the watches kept multiplying. Stainless steel Daytona, priced at $14,000, started selling for $50,000 in the secondary market. Although everyone was aware of the fact that these prices were unsustainable, but no one had any idea when the correction would come.
COVID-19 turned out to be another reason for the price increase. COVID together with a rally in the stock market and real estate gave jump to unsustainable price increases over the last two years. Rolex, the most popular and giant watch makers of the world, then stepped into. In March 2022, they released a massive number of modern pieces back into the marketplace. Additionally, Rolex stopped shipping to Russia after the country invaded Ukraine, then diverted all of its watches (which were due to be shipped to Russia) to the rest of the world.
Eric Brahms recently issued a statement on the current situation of the market, saying, “What has happened in just one month is amazing. Prices for the modern Rolex watches has fallen 20-25% across the board. Dealers are now buying and selling watches at prices not witnessed since December 2021. Liquidity is no more now. Dealers are no longer buying every piece they can get their hands on. And they are not buying much at all. Everyone is scared to stock any watches for fear that the prices next week will be 10% lower and they do not want to get stuck with inventory.”
The situation is good for consumers seeking to buy and own the watches. There is a misconception that when a dealer sells a $14,000 Daytona watch for the price of $50,000, the dealer makes a big chunk of profit. The truth behind is that when the customer buys a watch for the amount of $14,000 and then sells it for $45,000 to the secondary dealer, is the one who makes grand profit chunk. Secondary dealers work off of 10% margins.