“The Luxury Watch Bubble" - Roman Sharf Reveals Luxury Watch Lies, Market Crash & Watches To Own | PBD Podcast | Ep. 507
PBD Podcast
Key Insights
Why do luxury watch prices often exceed their retail value?
Luxury watch prices often exceed their retail value due to limited availability, brand exclusivity, and high demand from collectors and investors. The secondary market for luxury watches is driven by scarcity and the desire for status symbols.
What are the different profiles of luxury watch buyers?
Luxury watch buyers include those who buy for status (flex), collectors seeking complications and vintage pieces, investors looking for value appreciation, impulse buyers, and seasonal collectors building a portfolio. Each profile has different motivations and behaviors.
How does Roman Sharf recommend choosing a watch based on lifestyle and profession?
Roman Sharf advises choosing a watch based on practicality and daily activities. For example, a plumber should avoid a large dive watch, and an active lifestyle may require a durable, waterproof watch. The first question is always the budget, followed by understanding the client's needs and preferences.
Why is there no grading service for luxury watches like there is for baseball cards?
Creating a grading service for luxury watches is challenging due to privacy concerns and the complexity of verifying the authenticity and condition of vintage pieces. The watch industry relies more on reputation and expertise, with professionals like Roman Sharf building trust through years of experience.
What are the risks of buying luxury watches from unauthorized dealers?
Buying from unauthorized dealers carries risks such as potential fraud, counterfeit products, and lack of warranty or after-sales service. Roman Sharf emphasizes the importance of buying from reputable dealers with a proven track record to ensure authenticity and value.
Why do some luxury watch brands not offer custom watches for individual clients?
Luxury watch brands like Rolex and Patek Philippe avoid custom watches to maintain exclusivity and control over their brand image. Custom pieces could dilute the brand's prestige and lead to overproduction, affecting the value of their limited editions.
What makes a luxury watch a good investment?
A luxury watch can be a good investment if it is a limited edition, has historical significance, or is made by a highly reputable brand. Watches with complications and those that are part of a prestigious collection often appreciate in value over time.
Why do some people criticize Rolex for their distribution practices?
Criticism of Rolex's distribution practices stems from the brand's allocation system, which requires dealers to buy unsold inventory to secure popular models. This practice can lead to inflated prices and exclusivity tactics that some find frustrating.
How does social media influence the luxury watch market?
Social media has revolutionized the luxury watch market by creating trends and influencing buying decisions based on celebrity endorsements and viral content. Platforms like Instagram and YouTube showcase watches to a global audience, driving demand and creating new markets.
What is the significance of Swiss-made watches in the luxury market?
Swiss-made watches are highly regarded for their craftsmanship, precision, and heritage. Switzerland has a long history of watchmaking excellence, and the 'Swiss Made' label is a mark of quality and prestige in the luxury watch industry.
Chapters
- Roman's business started with his wife's encouragement.
- His first significant sale was a $9,600 watch, which he sold for $16,000.
- He worked 70-80 hours a week, balancing his bank job and his watch business.
Shownotes Transcript
