Recently I have been asked what I think is going to happen to watch prices in the next 3, 6, 9 months. I don’t think you need to be a psychic to know that if watches are being taxed 39% then the prices must rise. What we are seeing now is hoarding by dealers to get stock in before the tariffs are imposed, but what does that mean for the buyer? (I’ll answer that at the end of this blog)
Exports of Swiss watches to the United States, the world’s largest consumer, surged by 45% in July in anticipation of a 39% tariff that took hold August 7. In May, however, exports to all the main markets for Swiss watches experienced a sharp decline. In the U.S., they tanked by -25.3%. China was down -17.4%; Japan by -10.5%; Hong Kong by -12.6%; and the UK by 14%. In June, exports to the U.S. were down -18%.
The Federation of the Swiss Watch Industry Exports (FHS) acknowledged that without the tariff-related increase in US sales, overall exports for the month would have fallen by about 1%. “In reality, this was a move to build up local stocks and provides little insight into the actual state of the market,” it said.
Having been dealing in watches for the last 20 years, I can tell you that the dealers who are stockpiling watches in anticipation of the tariff hike will NOT be passing along their pre tariff pricing to you. As a consumer, you will be told that the reason the prices are much higher is due to the tariffs, even if the watch you are looking to purchase wasn’t taxed at 39%.
This is why there has been an increase in demand for pre owned watches, because there is still value in letting the first time buyer pay the sales tax and get hit with the depreciation while you, as a second or third buyer, can take advantage of purchasing an often times identical timepiece for a fraction of what it costs new. The catch? Finding a preowned watch that hasn’t been abused, beaten to hell or refurbished to look like new.
As a dealer, it is my job and responsibility to vet any watch I purchase before offering it to a client. That’s why you pay a premium for buying a watch from a dealer, you are paying for the knowledge and experience in determining a great watch from a beater. I often find preowned watches that were purchased by collectors and worn perhaps 2 or 3 times and could pass as brand new. Those are the watches you need to look for when seeking out a preowned timepiece and what I provide to all my clients.