The secondary market is a complicated topic for watch collectors and enthusiasts. It’s played a major role in the financialization of watches and “problematic” online market behavior, to the point where we’re left wondering if there’s a potential bubble. We’ve grown weary. And yet, we still heavily engage with it – almost instinctively.
If we’re not on Chrono24 looking at watches, we’re browsing WatchBox’s massive library of YouTube videos. Skeptical as we may be, a lot of our time is spent consuming information hosted or created by the secondary market.
But as nuanced as it is for the watch community, it seems like brands and authorized dealers pay the secondary market little to no mind. Perhaps rightfully so? After all, the two operate very differently in the industry. Brands and AD’s are mostly offline, whereas the secondary market is mostly online. Brands and AD’s sell new, while the secondary market, by definition, sells “used” watches (via unauthorized channels). So why should brands and AD’s worry?
The truth is secondary market platforms like Chrono24 and WatchBox have positioned themselves to compete head-on with brands and AD’s, whether the latter believes it or not. As I see it, the secondary market is using three key narratives to establish this showdown:
“Buying from a brand or AD makes no financial sense.”
The financialization of watches has always been a slippery slope, and particularly so for luxury watch brands with an authorized dealer distribution model. As the financial mindedness and focus of watch consumers grows, more and more everyday consumers realize that buying at retail prices is not a good investment. Aside from 10 references numbers from Rolex, AP, Patek, and Omega, as well as timepieces from select independents like Dufour and Journe, you will get a 10-50% discount from retail prices for everything else online. This is a dynamic similar to new cars, except nobody on the dealership lot is asking about value retention and appreciation.
The secondary market knows value matters. Many wield this narrative as a sales tool. On YouTube, WatchBox makes a regular point to discuss how much better off consumers are buying “unauthorized”, as it shields the buyer from the immediate depreciation in value that comes from buying via authorized channels.
In this slow creeping reality, it feels like brands and AD’s are the boiling frog and the secondary market is making sure to turn up the heat on the “financial value matters” narrative.
“There might be premiums but you can always see and buy what you want right now.”
With the first narrative above, it’s easy to say, “oh, that does apply to most watches, but brands and authorized dealers still have a monopoly on the timepieces everyone really wants.” That’s true; brands and authorized dealers are uniquely the only place to buy hyped timepieces at retail prices. If watches were the lottery, brands and AD’s are the only ones in the industry selling tickets.
But here’s the problem: consumers don’t want to play the lottery for watches. Not in the age of on-demand, instant gratification.
The longer these absurd waitlists become, the more reasonable secondary market premiums appear. Even if we set aside ownership, the secondary market is also often the only place to simply see hyped timepieces. Here’s the perfect example of what I’m talking about: I walked into a Rolex boutique in Hong Kong a year ago and wasn’t able to see a GMT II Rootbeer. They either had none in stock to show, or they didn’t want to show me that they did (always tough to tell). So, what did I do? I walked 10 minutes down the street, and tried one on at a secondary market dealer.
This is to say, the secondary market is not just providing a better online experience, it’s providing the better retail experience that many consumers expect from brands and authorized dealers.
“Trust us, we’re the experts.”
Speaking of online experiences, we can’t forget how the Internet has helped boost the reputation of the secondary market. When a collector wants to check out a watch, my bet is they go to Chrono24 and then check out a Tim Mosso video review, before further stumbling down the rabbit hole of YouTube. Maybe it’s just me, but I don’t think I’ve ever visited most brand and AD websites. What’s there to see on there?
If it’s’ true that “content is king”, then the secondary market has the throne. No contest. Almost every piece of content online worth consuming is produced by players in the secondary market. But it’s not just about quantity, the production value of this content is increasing too, as evidenced by A Collected Man’s recent three-part series on the origins of Journe. These businesses know, like every other business that takes the internet seriously, an abundance of relevant, high quality, educational content always pays dividends.
As we see more of these larger secondary market players (WatchBox, A Collected Man) invest in more high quality content, they will only further solidify their position as the experts to collectors and everyday consumers. From the brand and authorized dealer side of things, there is very little value-add content for collectors and everyday consumers online.
On three major fronts, the online secondary market addresses the pain points of collectors and everyday consumers much more effectively than brands and authorized dealers. It protects consumers better against the loss of value in new purchases. In an on-demand world, it can always deliver what you want fast and transparently. And it invests more in educational content, more than any of the brands and authorized dealers.
Brands and authorized dealers might think they’re safe (“the secondary market is different”), but they miss something critical in their assumption. Consumers don’t care who gives them what they want, as long as someone does. In this regard, the secondary market is no longer an adjacent market; it’s direct competition.
Another day with the beast,
