The Business of Watches [47] WatchCharts Top Executives Talk Morgan Stanley's Secondary Watch Market Report And Where Prices Might Be Heading¶
Published on Wed, 4 Nov 2026 16:00:00 +0000
Charles Tian and Hamza Masood discuss what's driving secondary market watch prices, what brands and models are hot and which are lagging, and whether the recovery in watch values is here to stay.
Synopsis¶
Andy Hoffman of Hodinkee's Business of Watches talks with Charles Tian (founder and CEO of WatchCharts) and Hamza Masood (partnership business specialist) about the company's latest quarterly report with Morgan Stanley. They say the secondary market has recovered since early 2025. Prices remain below 2022 peaks, but demand is broader across brands. Collectors are moving beyond Rolex toward mid-tier enthusiast brands and high horology names like Lange, Vacheron, Patek, and F.P. Journe, whose prices have roughly doubled in some cases. They describe this as a "ripple effect" driven by collector taste.
They explain how WatchCharts builds its prices. The company collects data daily at scale from many sources, classifies it down to the reference level, and adjusts for factors such as condition, box and papers, and seller type. They argue that confirmed sales alone are not a perfect measure of market value. They also cover the limits of regional data and the Western bias in their coverage. They say tariff effects are hard to isolate in secondary-market data, and that AI works as a "force multiplier" for building features and collecting data. They are also adding integrations with AI chatbots.
On inventory and value retention, they say record inventory is not a repeat of 2022 because demand is also at record highs and largely organic. Only Rolex, Patek, and AP trade above retail in aggregate, and IWC was the only brand to raise retail prices in Q3. Gold prices have had little impact on modern gold watches. They see Rolex Certified Pre-Owned as a legitimizing force that is growing fast, with roughly $229 million in quarterly sales. Other brands would struggle to copy it because of sourcing, servicing, and pricing power. The episode closes with WatchCharts' goals of consumer advocacy, price transparency, and a commission-free marketplace that acts as a matchmaker between buyers and sellers.
Links¶
Transcript¶
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| Andy Hoffman | This episode of the business of watches is brought to you by Watches of Switzerland, the premier retailer of the world's most prestigious timepiece brands. Stay tuned later in the episode for a special offer for listeners of the show. Welcome to the business of watches, the Ho Dinky podcast where we go behind the scenes and talk to the business leaders, executives, and industry players who make things tick. I'm your host, Andy Hoffman. Today we are talking to a couple of data specialists, technology guys from the Watch World and Watch Industry. These are the two gentlemen at the top of the totem pole at Watch Charts. That is the data collection and data processing watch industry group that provides services online. Charles Tian is the chief executive officer and founder of WatchSharts, Hamza Massood is the partnership business specialist at the brand. Gentlemen, thank you for joining us on the business of watches. |
| Charles Tian | Pleasure. Thank you for having me. Thanks for having us. Yeah. Yeah, |
| Andy Hoffman | this has been a long time coming, and I'm I'm glad we're uh finally doing this and uh it's great to have you on. And I think you know, we'll we'll try and focus at first at least on uh your most recent uh Morgan Stanley report, Watch Charts puts out a quarterly report in conjunction with Morgan Stanley that tracks the trends on the secondary market uh quarter by quarter. And you know, to start off, gents, you know, we are looking since the first quarter of 2025, we have been in positive territory in terms of secondary market price increases. Is it too early? Is it um overly optimistic to say that um the the recovery is uh is is in full effect here and and we are back to uh stable times for secondary market watch prices? Aaron Powell |
| Hamza Masood | Yeah, I think it's it's fair to say that |
| Charles Tian | it is a recovery. I think that you have to look at the market in a couple of different uh perspectives from sort of a quantitative standpoint, in terms of just pricing, which is perhaps the hottest topic, prices are not recovered to 2022, you know, COVID levels. But also, I don't think that's necessarily a realistic expectation given the sort of extremely unique environment and set of circumstances that we saw at that time. I would definitely say that prices are up again now for about a year and a half, and that broadly the market is in a healthier spot. It is sort of in a better state of equilibrium compared to where things were maybe five or six years ago. So we're seeing broadening demand across more brands versus, you know, if you think back to COVID, it was really just uh Rolex, Paddock, AP, you know, a handful of brands that were really dominating the market. The demand in the market is broader now. Um there are a lot more brands which are I think seeing increased um collector interest, increased uh sales for. So yeah, overall I think that it's fair to say at this point that the market has recovered and that things are uh uh looking good. |
| Hamza Masood | The only thing that I would add to that is insofar as pricing is a consideration for buyers, up until maybe a year ago, um this this would have been true and it certainly remains true to to a very large extent today as well that if at any point in the last five years you could have chosen to get into watches as a collector, as an enthusiast, and were looking to buy on the secondary market, that it was the best time of the last five years to buy. Prices obviously have appreciated a little bit in the last year. So maybe that's not absolutely true, but it certainly still remains the case that, you know, like Charles said, the market recovery is is is broad and steady and just from a buying standpoint, you know, it's it's maybe no longer the absolute best time to buy, but it is probably still a very good time. |
| Andy Hoffman | Indeed. And it's interesting. Um we see in the latest quar quarterter over quarter that Rolex SA, which I guess includes Tudor as well, is up by zero point six percent. All the big groups, swatch group, Brishmall, LVMH, Rolex that you track were in positive territory quarter over over quarter. But um uh Richmond and Swatch Group posting you know two point three percent gains uh for Richmond and one point one percent for SWATS and then LVMH the same as as Rolex. What does it mean, you know, um because you know, we I d I think it's right to say that we've seen Rolex sort of been leading the recovery in terms of their price gains over the past few quarters. Um what does it mean that they seem to be slowing down in terms of that growth? Aaron Powell |
| Charles Tian | Yeah I think that's definitely a a really good observation. And it's certainly, you know, we've been doing the mortgage standard report now for um over four years, and it's certainly the characterization that we have um sort of perpetuated over that time. And uh certainly it was the trend when the market, you know, was rising that Rolex and, you know, these other um sort of big, you know, high end aspirational brands were uh dominating. And then when the market bubble sort of popped, you know, they were also the brands that were uh falling and declining the most. I think the reason, you know, yeah, right now Rolex is in a in a in a kind of a uh interesting situation on the secondary market. And if you look at the sort of brand by brand breakdown in three Q, I believe it actually ranks, you know, in the in the bottom half um of brands uh you know, you know, during that quarter. |
| Andy Hoffman | Right. And I think that um it's |
| Charles Tian | for a few different reasons. I mean uh first of all, as I said, I think that there's just it's not so much necessarily as Rolex being weak as a lot of other brands being strong. I think that if you take a step back and look at the bigger picture, um, you know, a lot of the collectors that got into the market, you know, over the last um, you know, half decade, a decade or so, who, you know, obviously maybe started with the most well-known brands, you know, with the Rolex or with uh you know Cartier or with an Omega, are now sort of broadening their horizons and um looking at, you know, other more enthusiast uh brands. And I think that that's drawing definitely a lot more demand for those brands. Uh in our Morgan Stanley report, we discuss these so called mid level brands, these brands that maybe trade somewhere around three to ten thousand dollars US on the secondary market on average. And if you look at this bucket of brands, we've seen not necessarily more longer-term price appreciation, but definitely a disproportionate amount of uh growth in demand relative to the more popular brands. So that sort of goes along with what I was saying about uh the market sort of being more equitable, the interest in the market being more broadly distributed across a wider uh number or range of brands. And then the other thing that I think we're seeing more recently is um really this renewed interest in the high horology brands. Um so brands like uh Vacheron, you know, brands like Longa all have performed quite well. I think Chopard um have all performed quite well over the past quarter. And also of course Padak Philippe, which um has been sort of far and away the leader, you know, in the recovery, perhaps being, you know, the most well-known, the most aspirational um high horology brand. So I would say it's more like the interest and the attention in the market has sort of shifted a little bit. Um obviously Rolex remains far and away the dominant leader. But as the I'm sure if we, you know, I'm sure we'll get into later as well, Rolex also um has a bit of a uh a supply issue right now. |
| Andy Hoffman | For sure. And it's interesting. Hamza, tell me, I mean, you know, when I look at the um uh performance of specific brands quarter over quarter, we see um Longa and Zona um doing quite well leading the pack up four point four percent. We've also seen a similar uh increase in interest and pricing in the um high-end auction market for that brand, and obviously others like um Francois Paul Journal, F.P. Journ, um, how reflective is, you know, when we see the watch charts overall market you know price tracker data per brand, how reflective is it of um sort of shifting tastes and you know uh directions that collectors are moving in as a group? Because yeah, I mean that that long uh um increase would certainly reflect what we've seen um on the high-end auction market as well. Aaron Powell |
| Hamza Masood | Right. So the um tracker at the brand level is essentially our market index for each of those brands, which is based on the 30 most popularly transacted watches by the brand on the secondary market, weighted by transaction value, rebalanced once a year. So at the start of 2026, whatever the 30 most popular Longa watches were in 2025, then relative to their transaction value, they were all weighted and set up as the index. And so when we say, for example, Longa is up quarter over quarter, 4.4%, it's that bucket of watches that has appreciated by that amount. And so obviously Longa makes more than that many watches, but that's the approach that we take to defining the brand level metric. So I just wanted to kind of start with that. I think the interest that you see on the auctions probably including some of those references, but also probably including either some of their older references or some of their rarer and more desirable variations of the the standard watches in their catalog. And why that happens, why Longa suddenly is receiving interest as opposed to not receiving, let's say, that much interest in past auction seasons, why Cartier's r has received auction interest in in you know preceding years. I I think is just reflective of collector taste. I think collectors are an interesting bunch where the the the hive mind becomes interested in in one thing or another at at different points in time. Some of that is organic, some of it is manufactured, some of it is just, you know, thought leaders and influencers in the watch world kind of saying, oh, this is what we're interested in. And then kind of, you know, the crowd to some extent follows them. And then that starts showing up in the, you know, the market observations that that we make and and that others make. And that's why you would start seeing appreciation in um you know in in in auction results as well. Right. So long answer short, I think it's I think it's just one of those things that happens in watches. Now it seems to be happening with longa. And the reason it can happen is that the fundamentals for the brand that would result in this kind of appreciation and value are all there. Excellent watchmingak, low production volumes, you know, decent reputation for customer service in some respects, and you know, continued sustained collector interest in the brand and in the product. And those are all ingredients that can ignite interest in any number of brands over time. And this quarter it seems to be Langa that's that's one of the brands that's that's appreciating the most as a consequence of that. |
| Charles Tian | Yeah, I I would just add, you know, the the ripple effect in watches uh is definitely real um and we've seen it you know over over the years. Um it's hard to say where the ripple starts, but you know, once it's there and once like Hamza said, you know, the collector hive mind sort of latches on to you know an idea or uh you know particular category of watches that's uh just you know becomes really hyped, um it's it's difficult to stop. Uh one of the brands that uh you know, you know, Handy, you mentioned |
| Charles Tian | the FP Jorm, uh, this is a |
| Charles Tian | brand that you know obviously attracts a ton of uh collector interest. And it's also one of the brands that we get asked about the most because it's actually not a brand that we really publish data for right publicly right now. But it is a brand that I wanted to speak to briefly and I think can shed some more light on this topic because we have been doing some sort of more internal research and analysis lately. And roughly what we're seeing is that a lot of FPJ models have roughly doubled in price over the last year, year and a half or so, after prices being relatively stable or even uh on the decline, uh sort of when the market was in a worse state uh between twenty twenty two and twenty twenty-four. But these prices of of these um you know most popular, like for example, the Alligate 48 or the Chronet Blue, um, you know, we estimate in fact the Alegate, we say it's you know almost tripled in price in our sort of internal preliminary estimates um since 2025. And so I think that you know this broader uh interest in high horology is also sort of a ripple effect um starting perhaps from you know the most coveted uh hot you know auction market brands like shorn, which then also causes collectors to look at alternatives that may play, you know, sort of in the similar realm like Vashrod, you know, like Longa. Aaron |
| Hamza Masood | Powell If you think back to another example from a few years ago when integrated bracelet sports watches were all the rage and uh you know 5711 Nautiluses were were trading at over $150,000, $200,000. You saw the effect all the way down to the overseas, to even the L'Oreado where these watches started becoming difficult to find at retail because okay, well, if you couldn't afford a Nautilus at 200,000 and you couldn't afford a Royal Oak at 100,000, then well, what was the next thing that you could buy? At for a time it was the overseas. And then for some time it was also the L'Oreado. And so, you know, you saw that sort of price appreciation happen for some period of time. And then the collective hive mind sort of moved on from integrated bracelet sports watches and then, you know, prices for Laureados and overseas kind of came back down to a different equilibrium. So that sort of thing also I think with with how hot the independence market is, I think Longa to some extent is seen as at the least adjacent to that market. Sure. And also probably explains why you know they've they've appreciated as much as they have. |
| Andy Hoffman | This episode of the Business of Watches is brought to you by Watches of Switzerland, home to a carefully curated collection from the world's most prestigious watchmakers. And whether you're chasing a grail or buying your first serious watch, Watches of Switzerland is a great place to make it happen. And for listeners of the business of watches, there's an exclusive offer: take $200 off your first order of $1,000 or more on full price items at watchesofswitzerland.com. Just use the code HDKPPOD-HOLIDAY-two hundred at checkout. That's H D K P O D Holiday with a capital H-200. The code is case sensitive and the easiest way to get it right is the link in our show notes. The offer is valid in the US only, online only, through January 4th, 2027 while supplies last and is subject to availability. Exclusions apply so see the full terms at watchesofswitzerland.com you know I think we should probably explain and Tech is leading the pack year over year, at least as of the third quarter in 2026, up you know, almost 18%. Um, Tudor doing very well, and Cartier also doing well, as is uh Vacheron, whereas in the quarterly, you know, it seems that certain brands can have a all of a sudden have a a few references that are suddenly in demand or enough of them to move the needle in your in your data collection. So explain for those who who don't know what the actual technology process is for you determining your prices on watchcharts.com, which people who have a subscription can see day by day, even I think hour by hour changing. |
| Charles Tian | Yeah. So it's it's day by day. We update our prices every day. And to sort of take it back to the the indexes or the price trackers as well, um those are the same prices like Hamza described uh that are that are weighted and then used to represent uh the brand as a whole. Uh sort of speaking broadly, because obviously uh you know we've we've been developing our methodology for, you know, well over uh over half a decade now. And um there are sort of a lot of uh unique and and interesting problems and sort of trade-offs that you have to consider when trying to do this analysis for watches specifically. But at a high level, it all comes down to sort of data The watch market is a very noisy market, right? And before cla platforms like us were around, it was also a very opaque market. Uh, you know, five, ten years ago, if you wanted to know what a watch was worth, uh your best bet was probably uh to, you know, ask a dealer that you knew and hope that they would uh tell you the truth or at least their perception of the truth. And so uh what you know the approach that we take is really uh trying to be you know one of both uh scale and uh quality. So we uh we look at publicly available data because we're not a dealer, you know, we're not a uh a a transactional platform uh right now where people are buying and selling and and we're recording all the transactions right now. But we really sort of take this philosophy of scale where uh we try to collect data from a wide variety of high quality sources around the internet. And then we try to, you know, we build statistical models and we try to analyze and understand and classify this data to determine, you know, what a fair uh purchase price for the watch would be. Um so we model a lot of different factors, including you know whether the watch is uh inclusive of box and papers, where the watch is being sold, um the condition of the watch, the type of seller and all of these things um sort of factor in. So basically we have this uh big data pipeline which is constantly ingesting you know all this all this information from all these different uh you know dealers, marketplaces, uh private sales sources, and so on. And then we try to classify it down to the specific reference and then track everything at a reference level. And so if you're able to build the you know price history and the the set market price for you know each reference, then also that sort of services the foundation for building up to the market indexes, which is what we talk about primarily in the Morgan Salier report. |
| Andy Hoffman | Yeah. and you know, you guys were among the first um to do this certainly and you know, scraping or gathering data. You have a number of competitors now, I think of every watch, um obviously Chrono 24 through its Chrono Pulse indexes in service also tracks prices. Um and what Chrono 24, for example, say is that they have final transaction prices. They have they have access to that data through obviously their own service as a platform where transactions are taking place. Give me the pitch for um why um you guys believe that Watch Charts uh has the most accurate and best secondary market uh price data |
| Charles Tian | i wouldn't necessarily you know try to I think it's important you know speaking from a data perspective that you know people do their own research and make their own decisions. And that goes for, you know, collecting and and watches as well. Um so I wouldn't necessarily try to, you know, deconstruct what the other uh you know people are doing and explain to you why we're better than them. I would say that, you know, first of all, having the confirmed sales is not everything. In fact, it's you know, I think this is a a a misconception of sorts where people assume if you if you don't have confirmed sales then the data is garbage and if you have uh confirmed sales then the then the data is uh is is perfect. Uh you know, certainly I think this is less of a perception now, but definitely sort of one of the uh bigger uh pushbacks and challenges that we've had over the years. I think that a single data point, right, in in this type of market where the market is so sparse, right? You know, we track uh 30 something thousand references that we publish on our website. But even if you look at you know confirmed sales for this watches, you might only have a handful, maybe a dozen or so a year on average for a lot of these watches. And even a big platform like Chrono 24, any individual dealer is really just seeing, you know, sort of a single point of time, a single person in the market, you know, willing to pay. And so I think that supplementing the confirmed sales, and I believe that this is what the competitors do as well, uh, with the just sort of listing data um is very important. And also as I said, what is extremely important is the methodology by which you try to normalize and make sense of the individual data points that you have. Because uh just because you have a data point of a sale of this of a particular watch, again, with a particular condition, with a particular sort of box paper's uh status at a particular location by a particular seller does not necessarily mean that that is the market for that watch, right? And so that's fundamentally at a high level, you know, the problem that we're trying to solve is again, you have this fungibility problem, right? Where no two watches on the secondary market are identical, right? And then you also have, you know, such a wide array of references, such a broad catalog, and you really have a global market as well. Aaron Powell Or |
| Hamza Masood | even if they were of similar condition that the sellers for both watches did an equal job of promoting and displaying their listing with the quality of the photography and the writing around it and so on and so forth. Aaron Powell |
| Andy Hoffman | For sure. And so I think again, |
| Charles Tian | you know, we we would encourage uh the |
| Charles Tian | feedback that we've gotten uh overwhelmingly, and I think the way that we were able to, you know, sort of build our reputation at the beginning and |
| Charles Tian | establish ourselves was through |
| Charles Tian | the rigor and the |
| Charles Tian | uh sort of uh deliberate uh |
| Charles Tian | intent that we took with trying to really you know the word that's coming to mind is perfect, but I don't think that anything's perfect. But you know, it's really try to make the methodology as as strong as possible, as complete as possible. So I would sort of end with with two things. Um the first is again, the this I I think that it's uh you you can't necessarily treat, even if you say I have a I have a confirmed uh transaction at a certain price, you can't necessarily treat that as the market value. And then the second is I think, you know, really again, uh to do your own research and you know to look at all the data from all the platforms that are out there and decide, you know, what you trust the most. Aaron Powell |
| Andy Hoffman | And I wonder a couple of things. I wanna ask you about AI, which is something we were talking about before we um uh started recording the podcast. But geographically, how much data and insight um are you able to get from what you gather and and d you know, gauge the health of various regions or countries in terms of uh secondary market for watches there. Aaron Powell |
| Charles Tian | Yeah, so definitely um we see the market as global and as |
| Charles Tian | moving sort of maybe not in unison, but obviously like very strongly |
| Charles Tian | correlated between markets. We track sort |
| Charles Tian | of uh data at the regional level. |
| Charles Tian | So we look at uh North America, |
| Charles Tian | Europe, and and Asia as three separate regions. |
| Charles Tian | I would say that definitely we have a Western bias. And |
| Charles Tian | um there are some markets |
| Charles Tian | that are perhaps a bit more isolated, like China, which you know,, maybe I I don't think our data is necessarily that reflective of. |
| Andy Hoffman | Yeah. And also, you know, those markets |
| Charles Tian | tend to move a bit more um independently |
| Charles Tian | as well. So yeah, I would say that we definitely have a Western bias, a North American and European bias. But also, you know, there's there's a couple of uh there's there's a sort of a distinction here because just because |
| Charles Tian | you know you you know where the watches |
| Charles Tian | are coming from does not necessarily mean that |
| Charles Tian | you know uh where the watches are are are |
| Charles Tian | exiting the market, right, or who the buyers of these watches are. Um a lot of these platforms, you know, online now uh let you |
| Charles Tian | buy uh internationally. And you know, I know |
| Charles Tian | and I think many other people as well, you know, like um there's definitely a sort of a lot of the sourcing, I think, for the Western market comes from uh Asian markets like Japan in Hong Kong. And you know, for me personally, especially I think if I I want a watch this in really good condition, I definitely prefer to, you know, go and look in Japan. |
| Andy Hoffman | For sure. So yeah, I |
| Charles Tian | I think I would sort of leave it at that. |
| Andy Hoffman | And you know, um uh when we talk about you, know, countries and regions, etcetera, you know, w the one of the major stories over the past couple of years as far as the secondary market goes has been tariffs, the US tariffs which have um jumped around in terms of what they are for each country, but you know, for the major um uh watch producing countries, Switzerland, Japan, Germany, they're all at around 15 percent now. But from what we've seen so far on the data you've gathered, what has been the impacts and the effects of the US tariffs on watches and what has that done to the secondary market? Um has it made it in the the case of US, has it meant more trade internally and has it slowed down the international aspect of this industry? |
| Hamza Masood | I think anecdotally, the answer is yes. I think on the primary market where um you know retailers have to import and just it's it's just the the cleanest possible scenario of how and when um tariffs are applied. I think there has definitely been, again, at least anecdotally some impact. I think on the secondary market, because like Charles characterized it as a global market where buyers and sellers are geographically fluid to quite a significant degree. It's really hard to see anything in the data that you could pinpoint as being the effect of um you know the the the tariff policy. Um for example, we haven't seen necessarily prices in the US become um, you know, like you said, the the the tariffs on let's say Swiss watches are 10% or 15% or whatever the latest number is, like does that suddenly mean that there's a 15% increase in um secondary uh prices for for for those Swiss watches? Um I I don't know that it it would be as clean as that because I mean even just asking that question presumes that all secondary market supply is coming from Switzerland. For watches that are already here and that are being transacted, it's it's it's it's obviously there's there's no tariff uh to be applied. So So to that extent, are dealers who source watches and then sell them within the US, are they having to source at a higher price? And then are they passing on those prices to customers? How much of uh of any potential increase in prices is caused by that versus inflation versus exchange rates? Um it it's very difficult, I think, to tease out how much any of these factors has an impact on on prices and and availability. And also I think the the question that I would ask is as certainly as an academic exercise, I think it's a very interesting question to ask. but as a buyer, and so for us, like, you know, the the question that it always comes back to is like are we helping collectors and enthusiasts be more informed buyers? Is answering that question really that valuable? And I don't know the answer to that question is a resounding yes. |
| Andy Hoffman | Fair enough. Fair enough. And yeah, I mean, you know, um AI remains a major topic across all avenues these days. Um, in the watch world we're thinking a lot about the way it's changing some of the pictures that we take, whether we mean it to or not. But how is it changing your business? Is it making data gathering easier? Is it making coding easier? I presume it is, but how is AI changing the data collection and and data distribution part of the watch market for you? Aaron Powell I |
| Hamza Masood | think it's a force multiplier. I think it's something that lets us take our existing engineering resources and increase by hopefully an order of magnitude in the eventual output the, quality of the work we do and the volume of the work we do. So I think just purely speaking as a as a company, as a, as a tech company, um that's that's building a you know an online SaaS subscription service, I think we are able to move quicker and we are able to ship stuff faster that does eventually show up as you know, uh hopefully a richer customer experience. The most recent prominent example of which I can give is advanced mode on our website where if you're a subscriber, um, there's a much more powerful way to, you know, b kind of explore the data around watches by filtering for watches that have gained the most in value or lost the most in value, or certain case materials, or certain case sizes, and then just being able to see all of that information in a compact, easy-to-consume view, which if you are of an analytical persuasion, which I think lots of watch collectors, especially those that are predisposed to be subscribers on our website, are, you know, is a much richer experience than we were able to offer before. So the the speed at which we're able to build something like that has definitely increased. And then also on the data collection side, I think AI basically just supercharges our ability to deliver a better service. To us, ultimately the question is not just, you know, doing AI for the sake of doing AI or being able to to to use it as like a uh as a marketing term to say, oh, we're an AI-first company or anything of the sort, far from it. I think what we are biased towards is seeing what are the tools that best equip us to be able to provide the best customer experience and solve the problems that we are trying to solve in the best way for for our users. And to the extent that that AI helps us do that, you know, where we're gonna rely on it every step of the way. |
| Charles Tian | The other thing I think we've seen in the market is at least sort of within our audience, which again could have, you know, some s obviously some sort of bias, is that a lot of people are using a lot of collectors are using AI to track their own collection or to sort of build like a collector profile for themselves or help themselves figure out you know what watch to buy next and to |
| Andy Hoffman | that end we are launching |
| Charles Tian | a more complete set of tools that will allow you to use the watch charts data and potentially even integrate our own collection tracking into uh the AI chatbots like ChatGPT, uh Claude and Gemini, and so on. So you'll be able to get the watch charts data to help facilitate, you know, your sort of um ideation and collecting process um through AI. Um and that's already rolled out in a preliminary format for our highest tier subscribers on our website, but it's going to be something that we're bringing more generally as well soon. |
| Andy Hoffman | Interesting. Interesting. And you know, to that to that point, I mean back to the Morgan Stanley Q3 report. You know, um we see uh data that you've gathered you know saying that inventory levels for the biggest brands that you track, I guess which is Rolex, Patek, Otomar P Gay, and um Cartier, Omega and IWC um in this case. Is that right? Yeah, okay. And you know, inventory levels, you know, now that we've had a sustained period of uh of price recovery. Um, we're seeing that inventory levels are at record highs, I think, for all uh of the brands. Are we looking at a 2022, 2023 scenario |
| Hamza Masood | In a word no. In a word no Yeah, |
| Charles Tian | I think it is quite different. Um there's a few things. Uh first of all, I think the market is just bigger today than it was, you know, four or five years ago. Um probably by by quite a substantial margin. Obviously, like we discussed, you know, the prices are lower, but um |
| Charles Tian | just in terms of the volumes, the amount of trading |
| Charles Tian | activity, again, and and that's more equally distributed uh outside of the biggest brands as well, we've seen really |
| Charles Tian | a massive uh increase. Um Cartier |
| Charles Tian | is one brand which really stands out in particular where their secondary market demand, even though the prices have maybe not moved that much, just the amount of organic demand I think has really skyrocketed. So when you look at inventory levels, you also have to look at the rate of turnover. And I would say that if the turnover remains constant, but the inventory levels rise, then that actually means that you have um of just a |
| Charles Tian | bigger, more organic, uh, |
| Charles Tian | more healthy market. I think you also have to look at, you know, the motivations that collectors have for selling. The prices today are rising much |
| Charles Tian | more slowly, much more organically. |
| Charles Tian | And the other thing is that we don't really see what was one of the big things that characterized the 2022 was um a lot of this like hoarding of sort of uh you know brand new sort of uh unworn condition inventory, right? So people would source these watches uh from the primary market, keep them, you know, just never uh keep them in unworn condition sealed or with the box and everything. Um, and then, you know, try to sell it on the secondary market. And so if you look at the proportion of unworn versus pre-owned watches in the secondary market, that also suggests that the demand is largely organic. And finally, I think if you look at the bigger picture, um it's just a matter of you know the online platforms, sort of the familiarity |
| Charles Tian | of people with buying |
| Charles Tian | and selling online, with having better market transparency through platforms such as ours. I think people, especially speaking from an American perspective, are more comfortable with selling their watches and thinking of their watches as sort of this longer-term asset that can be transacted rather than maybe this more old school mentality where the watch is just something you buy and you keep for your whole life and maybe you just keep it in a drawer and you know leave it there for ten years and forget about it, right? If you're not wearing it anymore. Right. Um so I think that that's also helping to improve the liquidity of the market Aaron Powell |
| Andy Hoffman | And yeah, I mean, you know, clearly we're talking about the trend of the legitimization of the secondary market, you know, what some used to refer to as the gray market. and indeed, I suppose that, you know, your data collection and and output suggests that that trend continues even as we have record inventory levels uh but we also have levels of demand that are keeping up with those inventory levels across a greater spectrum of brands. |
| Charles Tian | Yeah, for sure. I would say demand is also basically at or near record highs. It's just that for the last couple of quarters, the supply has outpaced the demand. But both are at record highs. Aaron Powell |
| Andy Hoffman | and let's talk about um another uh metric that you use, which is value retention by brand and you and you track those those same big six brands and um use various methods and inputs to um give us a a sense of value retention for those brands. I mean talk about how there remains though a real split between you know those big three Patek Philippe uh Rolex and Odomar Pi and then sort of the rest of the market, um, when it comes to to value retention, I mean um uh very few brands still actually trade above retail for most of their models. |
| Hamza Masood | It's a proxy for brand desirability, I think. But the way that the calculation technically is done is um for these brands we look at which of their watches are currently in production and then um what is their current retail price and then relative to their retail price is the market price at which they're trading in pre-owned condition higher or lower and if it's higher then the value retention is a positive number if it's lower than the value retention is a negative number. And then when you aggregate that at the brand level, um, you know, we'll say something like, you know, Rolex value retention is uh, you know, 10% or 20% or whatever the actual number is. And then you can do that sort of across across multiple brands. I want to be careful to just sort of be specific about how we talk about this because I think there is the uh methodological approach that we take to defining these numbers and then analyzing them. And then there is kind of like, you know, uh the the point of the exercise. And the point of the exercise is to be able to to to make some claim about you know the actual desirability of the brand by saying they make a certain amount of watches and people want it so much that on the secondary market they are willing to pay a premium to be able to acquire them versus, you know, they're making so many that relative to their demand on the secondary market, people who are eventually trying to sell them, you know, are ending up having to sell them at a at a discount. So in that sense, yes, I think um there is definitely a clear split between Rolex Paddock and AP versus the rest of the market, where at a high level, if you look at just at the brand level, like I said, you know, we we do the analysis and compute the numbers, those are brands that in the aggregate trade above retail and have uh premiums over retail, whereas um all of the other brands for which we do this analysis trade trade below retail. But that is not to say that there are not individual references that that break that trend. |
| Charles Tian | Of course. There are precious metals, some |
| Hamza Masood | mariners, for example, that trade below retail. Equally there are some Cartier references or even some Tudor references, especially when they're new. Um Tudor references tend to tend to, you know, trade at a little bit of a premium over over retail prices. So that's really what that what that analysis is trying to do. And obviously once you do it once, then you can sort of track the evolution of those trends over time and you can say value retention is going up or value retention is going down. Um, and that lets you see something about both how desirable the brand is, how well received its product mix is, um, and then you know, sometimes um I mean the land dweller, for example, is uh is is a good example to talk about where the value retention for the land dweller collection has been falling since it was launched and showed up on the secondary market. That doesn't mean people don't like the land dweller. It just means that when it first showed up and there was very limited inventory, it was trading at a very high premium. And then as more supply has become available relative to the amount of demand for that watch on the secondary market, it's its price is kind of its secondary market price is kind of stabilizing. Yeah. And you know, for for Tudor, it's the same thing. Like they'll they'll come out with the North flag, for example. If you want to buy one today on the secondary market, you would probably have to pay a premium for it, but if you just waited six months, that premium's probably gonna come down to uh end up being, you know, maybe even a little bit of a discount. so there are all of these dynamics that kind of play into what that metric is and how to understand it. But fundamentally it's it's trying to answer that question of brand desirability. And the reason we report on it is because I think it's one of the more concrete sort of uh metrics that you can use to to make claims about how does how desirable a brand or specific watches within a brand are are seen to be, whether people are willing to pay a premium over what they would pay if they could get it at retail or not. Aaron Powell |
| Charles Tian | If you think about it from a from sort of two perspectives. Um, the first is you know, this is an analysis that's going into the Morgan Assembly report, and so it's also an analysis that's meant to inform, you know, sort of investors about the state of the watch market in general. And value retention is this sort of thing where it's a function of both supply and demand, right? So even if demand is really, really strong but the c but the manufacturer overproduces, you're still not gonna have a particularly strong value retention. I would say there's like sort of this fair, you know, reason like healthy range of value retention. And it's also sort of representative of the pricing power that the |
| Charles Tian | individual brands have, right? If a brand |
| Charles Tian | has a lot of watches that trade above retail, um like a paddock, like a |
| Charles Tian | Rolex, then you know they probably can raise |
| Charles Tian | prices quite a bit, you know, without sort of uh seeing a a a drop in demand. At the same time, um I think that generally the number that we see for these uh more like middle level brands is around like 30%. If your rally tension is significantly below like negative 30%, meaning the average |
| Charles Tian | watch trades more than 30% below |
| Charles Tian | retail, then you really start to sort of have a more of a struggle with pricing power, right? Uh |
| Charles Tian | consumers are not going to stand, you know, |
| Charles Tian | if you have a brand which let's just say theoretically your watches trade for seventy percent below retail on average, well consumers are not gonna stand for that if, you know, they could get the watch for a third of the price buying pre-owned. Why would they pay triple the price, you know, at retail? So that's also one of the reasons from a consumer standpoint. I think what it helps you decide is, you know, what are the watches |
| Charles Tian | that um you're gonna get the best deal on |
| Charles Tian | if you buy pre-owned and then what are the watches that you should try to buy new, you know, if you can, right? |
| Andy Hoffman | Yeah. No, it's quite interesting. And obviously um uh you note in the report that IWC, among those brands you're tracking uh with retail prices uh at least in the in the third quarter, was the only brand to raise prices um uh significantly. What if I mean, you know, in a in a nutshell, what I mean, you know, prices at retail increasing has been a topic of discussion and of note for uh several years now. Um you know, what is your data telling you on that? And I presume that's an easier data set to track than all the um algorithms and and and special methods you have for secondary market prices. |
| Charles Tian | Yeah, for sure. I think third quarter was actually like one of the like most quiet quarters we've had in a while when it comes to these retail pricing treasures. So um in terms of you know how we track them, we track these uh eight brands, which is the six that you're talking about, plus uh Tudor and IWC. And then we look at the retail prices uh across a variety of uh countries and we also benchmark those against uh the regional prices. So the value retention is a reflection of not just the US market, but the global market. In terms of the retail price increases, as I said, third quarter is actually more a more of a quiet quarter. Uh IWC was the only brand that saw the retail price increase and thus also subsequently saw the decline in value retention. All the other brands, I think, were flat or improved. But it was definitely, you know, much more of a of a |
| Charles Tian | conversation um earlier this year and and uh |
| Charles Tian | even last year uh where um it |
| Charles Tian | just seemed like you know quarter after quarter |
| Charles Tian | brands were just raising prices, you know, almost across the board, across you know, all the references and across most or you know all of the brands. Um this was also further worsened by um the |
| Charles Tian | I think the inflation and the uh tariff situation. You know, I think last year, like the the Swiss |
| Charles Tian | franc was very strong. Um, and so |
| Charles Tian | they, you know, they that sort of put this pressure to raise prices |
| Charles Tian | on the rest of the market. But it seemed like a situation that's sort of cooling down, I would say, in the past quarter |
| Charles Tian | or two. Um and I would say was a was a more uh |
| Charles Tian | central focus for our analysis at the beginning of this year or sort of uh last year. |
| Hamza Masood | From a personal standpoint, right? As a collector, if I was interested in buying an IWC Mark 20 and I see that I could buy a brand new one for X or I could buy let's say the Mark 20 is a current production reference that is um you, know, without having looked it up I, don't know exactly what the number is, but let's say it trades on the secondary market for a 20% discount. or worse, just that specific reference. And that's the particular watch I want to buy. And as a collector, I know that I buy and keep watches and wear them for maybe two or three years and then I cycle out of it and then go buy something else. Do I want to lose 20 cents on the dollar or would I rather just buy something that's pre-owned? Um, and if I'm lucky, maybe I'll find a listing that's in excellent condition, which means maybe I pay a little bit more, but I still pay less than I would have paid at retail. And I'm able to basically get that same experience that I wanted for you know 20% less. And then I keep the watch for three years, then eventually I I move on from it and I sell it. And you know, I maybe I'm almost certainly will lose money on a watch like that. And then I'm on to something else. I think if you just take that sort of like collector logic and then generalize it to the extent that it is generalizable. I think there's a lot of people that are probably thinking the same way about any number of brands that they may be interested in experiencing watches from. I think this is one of the things that watch collectors and watch enthusiasts have been known to do for forever, right? It's not just that you buy the things that you like and then that's what you buy and then that's what you keep, and then those are the only watches you ever hold on to. Um, you're you're over time, you're you're buying and selling. |
| Andy Hoffman | Yes. Um and as |
| Hamza Masood | you're buying and selling, right? Nobody is operating, or very few people are operating with unlimited budgets or effectively unlimited budgets. And so cost is going to be a consideration. And so as I'm kind of going through that process, right, do I want to buy an IWC at retail and immediately lose 20, 30% out the as I go out the door? Maybe yes. Maybe the answer to that is yes, because the price is not everything. I want to be able to say the papers have my name on it. Maybe I want to buy it as a gift for somebody or you know it's something that I'm buying as a as something that's eventually going to get passed on to a second generation, any number of other circumstances where, you know, that's not a consideration. But I think there is definitely a portion of the market where the dynamic is the is is of what we see play out, which is if I know I'm not going to hold on to this watch forever, why would I buy it at retail when the the gap for these watches between what they trade for in the secondary market and the primary market is so vast. |
| Andy Hoffman | No doubt. No doubt. And I wanted I wanna circle back quickly to to you know, you mentioned before that there's obviously some um gold Rolex submariners that trade below retail, which is an outlier in many ways for that brand. Obviously we've seen the price of gold hit record levels above five thousand dollars an ounce uh earlier this year. Um gold has been on a tear. To sum it up in a nutshell, how has this been reflected in the secondary market? I think it's fair to say that um secondary market gold watches have not reflected the increase in the price of gold one-to-one. |
| Hamza Masood | Yeah, we we have not done that analysis recently, but the last time we did spend some time digging into that question in some detail, I think the answer was that there's really not much of an impact unless you are talking about really old gold watches where the market value is so close to the melt value that potentially you may see either an uptick in prices for those watches because the price of the gold is just the floor for for those references, or that those watches are simply being taken off the market, unfortunately, and being melted. But it's very hard to say whether that ever was, you know, um I I certainly don't think it was ever like a widespread phenomenon that that that that that that was happening. I think by and large, the vast majority of the value of a watch on the secondary market comes not from the fact that it's made from steel, titanium, gold, or platinum, but from the name on the dial and how desirable it seemed to be. So, you know, just because the price of gold goes up 50% does not suddenly mean that you're going to see the price of a precious metal nautilus also go up by fifty percent. The relationship there is tenuous at best. Yeah, and |
| Andy Hoffman | the price of gold has been sort of flat or |
| Charles Tian | even like I think year to date, it's been like slightly down a bit. So it's definitely more of a narrative last year. And I also think it coincided with, you know, sort of the bottoming out of the market, which happened early in the middle of last year as well. So, like Hamza said, maybe there was sort of this brief moment in time where the gold prices are rising very quickly and the watch market was still depressed. Um where, you know, there there could have been, you know, some situations where the prices of the gold watches sort of uh were they they would the gold watches represented good value for money because the price of the watch did not yet reflect |
| Charles Tian | the new price of the gold. Right. |
| Charles Tian | Right. But I think that given the trend of gold sort of going down in the past year or the past earliest year to date, and then also the price of watches going up, you know, that really no longer exists. And like Hamza said, maybe it really only existed for a small handful of like like with the we were analyzing uh vintage day dates right for any sort of |
| Andy Hoffman | watch to be thinking about here for sure. Right. Right. |
| Charles Tian | Because you have the gold case and the gold bracelet, you know more value of gold there. But in terms of like modern watches, we know or we've estimated, you know, at retail, right, the premium that a brand like Rolex charges for, let's say, the Samariner in steel versus uh in gold only reflects uh you know it's only a very, very small portion, maybe like 20% or so of the of the value of that that is reflected um in the cost of the gold itself. Right. So really the takeaway is especially for modern watches, like when you're buying the gold watch, you know, you're really still paying for the watch, not the gold. |
| Andy Hoffman | Yes. No doubt. No doubt. And we should touch on before we go, and we should touch on um uh Rolex CPO we've seen more brands move into the CPO area but you guys do some pretty in-depth analysis of uh Rolex's certified pre-own program. And you know that it is as far as your data goes, I mean, that is something that continues to grow as an as a part of the Rolex market and certainly is the number of Rolex authorized dealers who are participating in that market. I mean, what can we say broadly about um about CPO at this point? |
| Hamza Masood | Yeah, so I'm personally like very |
| Charles Tian | bullish on CPO. Like Hamza and I were both uh very excited, you know, for the future of the secondary watch market long-term. Uh when Rolex CPO was first announced. I know that like from the collector standpoint, a lot of collectors think the prices are ridiculous. And you know, that's |
| Charles Tian | uh arguably justified. |
| Charles Tian | But I think that really it helps to bring a lot of legitimacy to the secondary market. And beyond legitimacy, it also helps to bring a |
| Charles Tian | lot of the, you know, because most people who buy |
| Charles Tian | watches don't buy them used, right? They buy from the authorized dealer |
| Charles Tian | or, you know, at the lower price point they go to the mall, |
| Charles Tian | right? And it gets people thinking like more in this sort of uh cyclical manner of, you know, I can buy and sell watches and sort of move in and out of of collection uh very easily, right? And that's always been a point of friction um that's existed in watches, which, you know, for a market of this size really I think just shows, you know, sort of how traditional and how old school uh the industry is, because, you know, I feel like |
| Charles Tian | any other market like this would have been this would have matured, you know, much |
| Charles Tian | earlier on, right? But now we're seeing um more and more retailers join the program. We're estimating |
| Charles Tian | that, you know, the the size |
| Charles Tian | of the Rolex certified pre-on market is maybe close to approaching something like 10% of the um overall Rolex secondary market, which is you know still very small, but um but still you know becoming quite substantial. And again, it's bringing in a different type of audience. It's bringing in an audience that otherwise would have never considered to buy a used Rolex. But because they are at the Rolex store anyways and they see the CTO section, you know, now it gets them more comfortable uh with buying pre-owned. And I think that's going to be, you know, that's going to help the growth and the health of the secondary market in general, even for brands beyond Rolex in the long term. And we do hope that other brands follow sort of direction that that Rolex has set. |
| Hamza Masood | I also want to underscore something Charles said, which is that the customer promise with a certified pre-owned program, and this is true not just for Rolex, but but generally for any brand, results in a product that is fundamentally different, in my opinion, from a watch that you buy on the open secondary market. Sure. Because the brand itself is willing to stand behind the watch that, you know, whoever the dealer might be is selling is is you know putting in front of you. And so in that sense, what Rolex offers is they are the ones guaranteeing that the watch is authentic, and then they are the ones providing the warranty. And in that sense, the the customer promise is no different from what you get on the primary market. And that really, I think, is the differentiating factor for certified pre-owned. And why I think it makes it in some ways a fundamentally different offering than the general secondary market. To the extent that we refer to it as a part of the secondary market or talk about the supply dynamics because obviously these watches some of these watches that are being sold as part of CPO are coming from the general secondary market. I think it's okay to make the comparisons around how big the CPO market has become relative to the overall secondary market, but really from a customer standpoint, I think it's best seen as a third new category where previously you could buy a watch new from an authorized dealer, you could buy it pre-owned from a secondary market dealer. And now there is this third new category of of customer experience and and offering for the customer that that really did not exist before. |
| Andy Hoffman | And quickly from you know what you've learned from your analysis of the Rolex CPO market, how difficult will it be for other brands who um aren't Rolex to um mirror or to replicate the Rolex CPO program. Obviously, we're seeing others others do it, but is it a case of Rolex standing alone because of its size and because of its network of dealers and all these things, or or have they created the blueprint for others? Aaron Powell |
| Hamza Masood | So there's a few problems that you have to solve to build up a CPO program. I think you have to solve sourcing. So you have to find the watches that you're going to sell and that you're going to certify. You have to service them and authenticate them. And so you need uh you know watchmakers who have the spare capacity to to do that. And then you have to, you know, decide which watches to buy based on your understanding or assumptions around what you think will actually sell. And then lastly, you have to know how to price these watches both on the buy and on the sell side. And I think the way that Rolex has set up its program where it says authorized dealers are the only people that we will, at least for now, I don't know if they would change this in the future. Um, my guess would be probably not. But right now they say only Rolex authorized dealers are allowed to sell Rolex certified pre-owned. What they're basically solving at the very least with that structure for their program is the is a servicing problem. Because obviously to be a Rolex authorized dealer means that you can get Rolex certified watchmakers on staff. And those are the only people that Rolex will trust once they have been certified to authenticate the watch, to certify that it is actually 100% authentic, and then to service it up to the level that they expect their product to be at uh before they're willing to to you know put it in a case and and sell it to somebody. And that standard is the same standard to which any watch that goes in for service is being held. So in that sense, I think they were able to lean on a lot of these different ways in which they have already set up their business to be run that make the CPO offering a particularly strong one for diff aerent brand, I think it would there's all of these variables really would have to be accounted for in the way that you know that brand decides to to to set it up. If you're a high horology brand that is producing, let's say f,ewer than 100,000 watches a year, there's going to be only a certain amount of supply that's available on the secondary market. There's going to be a lot of emphasis perhaps on your vintage and neo-vintage catalog, whereas for Rolex certified pre-owned, the inventory that's available is overwhelmingly modern, 2000 and newer. |
| Andy Hoffman | With two-year-old minimum, yeah. Minimum |
| Hamza Masood | two-year-old, but but you know, going back, I mean, we see watches being sold that were made in the 1950s and 1960s from from the Rolex catalog, but they are you know few and far between. They're the exceptions. Whereas for uh a brand hypothetically like like Paddock or AP or Show Part, if they were to do it, they would probably like or the way JLC does their capsule collections today, right? When they sell pre-owned certified watches, they're going into their back catalog and looking up the most desirable references from the 60s and 70s. And then that's what they make available in a small fashion. And then of course, you know, Rolex makes uh now over a million watches a year, just in terms of volume and in the price segment at which they operate, they're one of the largest producers of watches and and have been for some time. And they've been doing that for long enough that now when you think about just acquiring supply, there's a lot of it out there on the market, which again is not necessarily a problem that you know they were faced with, but but other brands might be. I think there is a lot that brands could learn from how they have done it, but I don't think every brand's solution for CPO is going to end up looking exactly like Rolex is |
| Andy Hoffman | notable. I think you know you to you talk about um uh sales in the in in the third quarter, like uh for Rolex CPO two hundred and twenty nine million dollars. I mean that this is this is a segment or a br or a brand if we want to think about it that way. And full disclosure obviously watches of Switzerland is the parent company of Hodicki, uh which is uh very much a participant in the Rolex CPO program. But at 229 million in sales in a quarter, I mean this is a brand that's on the way to being a billion dollar brand, uh annual brand. I mean there are that is very rarefied air. There are very there are I think six or seven brands that uh are at that level. |
| Hamza Masood | Absolutely. Yeah. I mean, you know, I |
| Charles Tian | think so this is definitely, you know, Rolex CTO, if you think about it, like you said, as its own brand, is definitely going to move up even more. But we already estimated, you know, based on the Morgan Stanley Lux Consult uh primary market uh report for the uh twenty twenty five year that you, know, if Rolex CPO were its own brand, it would already rank something like in the mid twenties in terms of, you know, placement among brands by, you know, annual turnover. And no doubt, you know, this year it's going to be even higher. And so this does, you know, put sort of real pressure on these other you know billion dollar brands to you know maybe take some action, right? Because if if Rolex's certified pre-own program is already as big or you know approaching your annual turnover on the primary market, you know, that is uh potentially you know a a threat um to your business because it's just attracting more and more people to go buy Rolex. You know, now there's a second option. If I can't, you know, get on the wait list or whatever, you know, I can't get the watch at retail. Well, I can always go buy it uh CPO. and again, you know, a lot of consumers I think are happy to do that. Um there's sort of two problems, I think, to think to think about if you want to implement the program um at Rolex's scale. The first is that um you need the program to have the same sort of magnitude or sort of collector uh cachet, right? It can't be a a CPO program where you only have a handful of watches in stock. Because you know, CPO programs before Rolexes that we saw, you know, there were a few brands that tried them, uh, never such a big you know big brand, but it was only ever maybe a relatively small number of pieces, maybe a few dozen, maybe a few hundred maximum. You know, Rolex now across because it's being able to leverage its entire AD network and it still has, you know, this largely wholesale model, you know, it's it's been able to roll out to um 160 something retailers, I think, by our latest count um across the world. And, you know, total amount of inventory is in excess of 10,000 you know Rolex CPO |
| Andy Hoffman | watches that are a little |
| Hamza Masood | over one in every five Rolex authorized locations now carries certified pre-owned worldwide. |
| Charles Tian | Right. so you need you know that sort of ability that The other problem that other brands, you know, if we think about brands at the scale of Rolex in terms of volumes that are maybe, you know, uh most feasible to uh try to you know uh copy or you know take inspiration from the Rolex model, in my opinion would be like the the biggest one maybe would be Cartier um and then maybe Omega, right? These are all brands that have you know similarly large volumes, but the problem that these brands are going to face is the one of the pricing power, right? Because the average Rolex watch trades above retail. There's a CPO premium as well that retailers charge, that the Rolex Ahorutized dealers charge when they're selling CPOs. They're selling the CPO watches, you know, even quite a quite a bit above the standard secondary market price. And it's very common that the same watch being sold uh certified pre-owned is going to be more expensive than the brand new one you know at MSRP. And you know again that's that's a a a problem maybe for the consumer, but what we've seen so far is that the consumers have been willing to tolerate that, right? Consumers ha are used to paying premiums on the secondary market already. Um now they're paying bit of a |
| Charles Tian | bigger premium to buy the watch |
| Charles Tian | CPO, you know, with all the benefits, like Hamza said. But if you have a brand which doesn't necessarily have that pricing power, I mean Omega and Cardi are are in decent situations in terms of their value retention. But if you were of a brand, for example, that traded maybe 40 or 50% below retail on average, it could take away from your primary market business, from your retail business, right? Because if the consumer sees the same watch in the same store and the new one is um, you know, let's say uh X and then the the pre-owned one is, you know, 40% less than X, then then they're gonna, you know, ask, like, why would I ever buy the new one? Right. And so that's a problem that other brands um are going to have to address. You know, and and maybe it goes back to going, you know, through their vintage catalog and really only offering, you know, maybe uh more more neo-vintage or vintage or discontinued pieces uh rather than uh the overwhelmingly modern catalog that Rolex CTO inventory is. But they're going to have to, you know, address that pricing power problem. |
| Andy Hoffman | Absolutely. Yeah. No, it's um uh Rolex uh remains in a class of its own, no doubt. So last thing we've been chatting for uh over an hour now, so let's um I think we need to wrap it up. But let's talk about um Watch Charts and and we you know, the the company itself. You're both based in the United States. I think you have about six employees now at Watch Charts. You've been around since twenty nineteen, so more than half a decade. And um, you know, what are your goals and and and what are you trying to accomplish, I suppose, for you know, the rest of this fiscal year for you and and and where you're trying to move and grow the business uh in the near term. Yeah. So um we really want to, |
| Charles Tian | you know, sort of uh be a consumer advocate. You know, I think that we were relatively uh sort of unique in that you know we we weren't people sort of that came from the industry and then tried to start a business in the industry or or or you know came from watches. We were people that came from tech and then really |
| Charles Tian | took a very sort of consumer centric |
| Charles Tian | approach. So, you know, the first problem that we really wanted to solve was just price transparency, right? We wanted to know as consumers what we could expect to pay for a watch uh without having to |
| Charles Tian | ask the opinion of a specific |
| Charles Tian | individual. We wanted a more sort of data-driven, uh, you know, methodical way of doing that. And I think that you know, maybe it's safe to say that you know we've sort of cemented our our reputation at at being able to do that well. In terms of you |
| Charles Tian | know continuing to advocate for the consumer, |
| Charles Tian | I think that you know our core philosophy is that we want to help facilitate everything that's around the transactional side of watches, right? And so that's pricing and that's also maybe the buying and selling of the watches themselves. And so um looking forward, you know, one of the other major focuses um that we have is a further investment into the Watch Charts marketplace, which uh launched a couple of years ago, but really has been sort of this more like grassroots area where we haven't really done a ton to promote it, but we have sort of this organic um user base that uses it to buy and sell as well as to discover listings from around the web. Right. Um we think that, you know, we we have a a different idea of how transactions could sort of take place on a on a marketplace platform. And we see sort of this option |
| Charles Tian | where yes, you have platforms, |
| Charles Tian | you know, the lot of big marketplace platforms like eBay, um like Chrono 24 that offer some sort of buyer protection, but you know, at the at the flip side, they charge commissions and you know there's a lot of other trade-offs that come with that. We want to build a more transparent marketplace, first of all, where the data is a first-party integration, is a first class integration, but also give buyers and sellers the freedom to, you know, sort of make the transaction and negotiate that and figure that out, you know, completely independently. So we really sort of want to play a more of a matchmaker role where we'll bring the buyers and sellers together, but you know, we're not going to try to uh influence the transaction or take a cut of the transaction beyond that. And this also, I think, is very much in the line of our philosophy as sort of a tech first company. There are certain trade-offs. I mean, obviously it's not a platform that's for everybody. You know, certain a lot of people are going to want the buyer protection. But also in especially in the US, we've seen a huge growth in um a lot of these sort of more grassroots platforms, these um uh private party platforms like Reddit is a huge one, uh which has really seen almost this like exponential explosion of uh you know activity um on this on on this platform, right? And so we really believe, especially for these uh more you know hardcore collectors, hardcore enthusiasts, there are lots of people that are you know willing to do their dilig due diligence, are, you know, want to buy and sell privately that are going to benefit from a platform like this. So, you know, that's sort of our longer term picture is to first, you know, put out the best in class analytics that exist and then second make them relevant for you at the point of transaction. |
| Andy Hoffman | Very good Charles. Well Charles Tien Hamza Massoud from Watch Charts, thank you very much to both of you for joining us on the business of watches. Our |
| Hamza Masood | pleasure. Thanks for having us. Yeah, thanks Andy. It |
| Charles Tian | was a pleasure. And |
| Andy Hoffman | that's the business of watches for this episode. We hope you enjoyed. Please head on over to Hodinkee.com where you can join the discussion and leave any comments or questions about this episode or the business of watches in general. Who knows? We might even answer your question on a future episode. Thanks for listening and see you next time. |