Investing In Rolex Watches

[questions]

I have the opportunity to buy a number of Rolex watches at a deep discount through a friend. He is offering them to me at the price that a local pawn shop would pay for them. Since a pawn shop purchases these things to resell, I think they would be worth more than what I am paying for them. Even if I need to sell them, I could go to the same pawn shop and sell them fro the same price. It seems like investing in Rolex watches in this case would make a great investment with little risk. Am I missing something?

[disneysteve]

Originally Posted by questions

I have the opportunity to buy a number of Rolex watches at a deep discount through a friend. He is offering them to me at the price that a local pawn shop would pay for them. Since a pawn shop purchases these things to resell, I think they would be worth more than what I am paying for them. Even if I need to sell them, I could go to the same pawn shop and sell them fro the same price. It seems like investing in Rolex watches in this case would make a great investment with little risk. Am I missing something?

Do you know anything about these watches? Do you have experience reselling items like this? I'd do some searching online and see what similiar items are selling for. Just because a pawn shop thinks it can make a profit on them doesn't mean you can, or at least not so easily. The pawn shop probably has a list of customers to call when these items come in. Those same customers may not deal with a stranger on the internet so easily, especially if that is not your typical business.

After doing the research, perhaps buy one watch and see if you are able to sell it well. If so, then consider getting the others.

[NetSkyBlue]

If the watches are genuine, you'd probably be better off selling to a jeweler that is a Rolex retailer if they sell estate jewelry/watches. Sometimes they will buy one directly from you, and sometimes they may sell one for you on consignment, but if they are a legitimate Rolex dealer, you're likely going to get a better price than selling to a pawn shop or to a consumer (who probably has no idea how to spot a fake and isn't going to assume a random internet person can, either).

[jadet]

Sounds like a bad idea I'd think twice about it

[photo]

This is just my own prejudice, but whenever I hear the word "pawnshop," something just feels illegal or wrong.

[snafu]

One problem is fluidity. When you buy stock or bonds individually or MF, you can sell them any business day. The issue of provenance is huge. There are so many fakes/replicas, you need to be an expert to differentiate between real and replica. The level if RISK is larger with consumer goods. How long will you hold goods? How secure, safe from theft? Will these be desirable in 20 years? Will watches be obsolete like pay phones?

[jteezie]

I think these items have liquidity issues, aka the guy cannot sell them so they are pretty much worthless.

The value in these types of items usually aren't related to their actual material value. It's usually emotional like Gold, heirlooms, wedding rings, etc. Once you detached the sentimental value, they're worth significantly less. A great way to lose that value is via a Pawn shop...

[disneysteve]

Originally Posted by photo

This is just my own prejudice, but whenever I hear the word "pawnshop," something just feels illegal or wrong.

Pawn shops have always had somewhat of a negative image but that's been greatly improved by a couple of things like the popular TV show Pawn Stars and the growth of some big chains of pawn shops rather than it being all mom and pop operations.

Originally Posted by jteezie

Once you detached the sentimental value, they're worth significantly less.

I think that is true of many items but top name watches like Rolex don't really fit that description. There is a robust secondary market for genuine Rolex watches and I don't believe the recession really had a whole lot of impact either. So if these watches are real, they are likely worth a substantial amount. The challenge is connecting with the buyers if you are unfamiliar with the whole area.

[bjl584]

I would ask your friend where the watches are coming from. The black market for fake Rolex's is pretty big. I would be sure to check the authenticity of the product before doing anything.

[disneysteve]

I also wonder if the offer from the pawn shop really exists. Why would he sell them to you for the same price? Why not just go through the pawn shop?

Unless you can get these professionally verified as genuine and appraised, I'd stay away from this "deal".

[fdr]

I am the original person that asked the question. Thank you for all the opinions.

The friend had the value of the watches taken at pawn shop a couple of years ago, but wasn;t willing to sell them at that price at that time. He now has financial difficulties and needs the money, but would rather a friend reap the benefits rather than a pawn shop. I have no reason to doubt that the Rolex watches are real as we have been good friends for a long time.

[bjl584]

Originally Posted by fdr

I am the original person that asked the question. Thank you for all the opinions.

The friend had the value of the watches taken at pawn shop a couple of years ago, but wasn;t willing to sell them at that price at that time. He now has financial difficulties and needs the money, but would rather a friend reap the benefits rather than a pawn shop. I have no reason to doubt that the Rolex watches are real as we have been good friends for a long time.

Just check to make sure that the watches are still worth what they were a few years ago.

[disneysteve]

Originally Posted by fdr

The friend had the value of the watches taken at pawn shop a couple of years ago, but wasn;t willing to sell them at that price at that time.

Originally Posted by bjl584

Just check to make sure that the watches are still worth what they were a few years ago.

I agree. Get them reappraised before considering this. Just because they were worth a certain amount 2 years ago doesn't mean they are still worth that amount. Also, one offer from a pawn shop does not constitute a legitimate appraisal no matter what.

Once you do have them appraised, research the actual resale value which may be dramatically different than the appraised value. Ultimately, they are only worth what someone else will pay for them.

There is a large jewelry store in this area that guarantees their items will appraise for double what they sell them for, which obviously makes the appraisals pretty worthless. If the item was truly worth twice as much, they'd be charging a lot more for them.

[jpg7n16]

As part of determining what they're really worth right now, I'd also check on eBay by searching for a similar watch and looking at the "completed listings." Make sure if it was a 'Buy it now' auction, check that someone actually 'bought it now'

This will be indicated by a box that says "Sold." If it doesn't say sold, no one bought it.


Along with other strategies listed above, that will give you some indication of what people are willing to pay in reality.

rolex | eBay

[delvin]

Rolex watches are one of the best collectibles to invest in if you know what you are doing. This is because there is a solid aftermarket where they can be sold quickly (unlike many other collectibles) and a big enough aftermarket that prices stay pretty stable (it isn't a fad market that won't exist next year).

As many have mentioned, the most important thing is to make sure that they are real. because there is a solid aftermarket and people are willing to pay a lot for them, Rolex watches are counterfeited quite a bit.

If what you say is true and you can confirm they are real, I see very little risk for you. Jewelry stores will pay more than pawn shops for a real Rolex and if you sell it on your own you could get even more.

[greenskeeper]

Pawnbroker: Burnt my fingers, man.

Louis: I beg your pardon?

Pawnbroker: Man, that watch is so hot, it's smokin'.

Louis: Hot? Do you mean to imply stolen?

Pawnbroker: I'll give you 50 bucks for it.

Louis: Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is the sports watch of the '80s. Six thousand, nine hundred and fifty five dollars retail!

Pawnbroker: You got a receipt?

Louis: Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad.

Pawnbroker: In Philadelphia, it's worth 50 bucks.

Louis Winthorpe III: Just give me the money.

Pawnbroker takes watch and gives Winthorpe a $50 bill

Pawnbroker: A pleasure doing business with you.

Winthorpe takes money, then looks at display case for another potential business transaction

Louis Winthorpe III: How much for the gun?

[ecoadapt]

Originally Posted by disneysteve

Do you know anything about these watches? Do you have experience reselling items like this? I'd do some searching online and see what similiar items are selling for. Just because a pawn shop thinks it can make a profit on them doesn't mean you can, or at least not so easily. The pawn shop probably has a list of customers to call when these items come in. Those same customers may not deal with a stranger on the internet so easily, especially if that is not your typical business.

After doing the research, perhaps buy one watch and see if you are able to sell it well. If so, then consider getting the others.

This is a well given advice! Anyone shouldn't jump into something just because others said they'll profit on it. It would be best to have a 'experiment' on what you are trying to do. And if you can seriously see a profitable business in this particular item then go for it!

[97guns]

one thing i do know about rolex and all the high end watches is they hold their value very well, just make sure its not counterfeit. do your research and if you can buy it cheap its a no brainer.

[Cassius King]

My main concern would be, how much money are we talking, and what percentage of your EF is it?

[red92s]

Just because your buddy thinks they are real, does not mean they are. There are good fakes of nearly every rolex model, including the packaging. Unless he has receipts from an authorized seller, you can't be certain they are genuine.

Are they serviced and in good running order? A service on a Rolex can run WELL above $500. Even getting one cleaned will set you back $200+.

There are plenty of places to resell used Rolexs and other watches. But the money is made on the front end, when YOU buy them. You've got to know what you are buying, down to the exact model numbers and years, before you can get any sense of valve.