Half prices on Big Bangs? Is this the beginning of the off-brand Swiss watch price implosion? Warning: wandering topics ahead.
One of the aspects of modern industrial life that I find most interesting is the idea of the unreal showroom price. What I mean by that is this: there are many products which have a price in the secondary market that is closely related to their new price. Take a Honda Civic as an example. A used Honda Civic is worth a certain fraction of the price of a new Honda Civic and that fraction is determined by age and the depreciation curve is very easy to comprehend. The same is true for most products that have a known commercial function. A 3/4-ton van depreciates in an easy to predict fashion, because there is some enterprise of some sort that can use it right up to the time when it goes to the junkyard and has a scrap value.
If you buy a new Rolex of a certain type, like a Milgauss, you can have a fair idea of what it will be worth in the years to come. If you go to sell it, you can deduct the dealer profit margin from the typical used price and there you go. In that respect, it’s like a Civic. There is a market for used Civics, and it is strong.
On the other hand, there was a guy on reddit recently who had paid about four grand for a Cartier Tank Francaise at a Cartier shop and then found himself in a position where he needed to sell it. The highest price he was offered at a dealer was… wait for it… eight hundred dollars. Given that there’s one on eBay that was a no-sale at $1,750 — under half of retail for a like-new product — I think that eight Benjis was, in fact, probably all the money.
Think about this for a moment. If eight hundred bucks is all you can get for a Cartier Tank, that’s the true value of a Cartier Tank. A used one in like-new condition, anyway. So why would anybody pay the extra thirty-two hundred dollars for one?
There are some reasons — the primary one being that you’re unlikely to accidentally buy a fake Cartier if you walk into a Cartier store and buy one there — but I’d suggest that what’s really happening is that there are simply two kinds of people in this world: people who will buy product X used or new and people who will only buy it new.
That varies by what product X is, of course. Nobody will pay anything for a used condom and very few people would buy a new condom from anywhere besides a pharmacy/grocery store/other reputable source. On the far side of that, people will buy “Crocs” from street vendors. The market for used Rolls-Royces is problematic because the majority of potential Rolls-Royce buyers can afford to buy them new and would rather do without the trouble. The market for used Toyota Corollas is white-hot because it’s a known reliable transportation item and as a consequence I’m personally aware of people who paid more for a year-old Corolla than they would have paid for a new one were they willing to do a bit of negotiation.
I stopped buying new guitars in any quantity a while ago. I realized that I was competent to determine whether a used guitar was in acceptable condition and also that I had no interest in paying the new-guitar premium for something that I might not play that much before reselling to someone else. As a child, however, I very specifically did not want a used guitar and most of my reasons for my stance on the matter were emotional. I’d suggest that a lot of purchases that take place at a Cartier store are entirely emotional in nature, which is why there’s one near every major casino.
Had there been a really great Les Paul Custom like Jimmy Page’s Black Beauty available at a rock-bottom price, however, I might have changed my mind. If the used price of like-new stock drops far enough, there will be consequences in the market, even if most of the purchases of that item are highly emotional.
And now we come to the part where I admit that I bought my first (and only) wife’s engagement ring at a pawnshop. We were flat broke and we wanted a ring and I had read extensively on the actual (which is to say, secondary-market) value of diamonds and I was disinclined to go into debt for something that was effectively worthless. So we paid $249 for a quarter-carat diamond ring set with small-chip diamond surrounds. The same thing was going for $1200 or so at the big jewelry stores. With the money we saved, we significantly improved our honeymoon trip.
Amazingly enough, nobody ever asked us if we got the ring at a pawnshop. (And my wife eventually asked me to stop telling people.) It turns out that the circumstances under which you buy something are utterly meaningless to your long-term utility with that “something”, no matter what it is. That single lesson has saved me hundreds of thousands of dollars in my life. It stuck with us. A decade after that ring, my wife saw an amazingly expensive diamond and rainbow sapphire bracelet at a jewelry store.
“I want it,” she breathed.
“You can have it,” I replied, because it was a time in my life where I had more money than I knew what to do with. (See also: owning two Phaetons for no reason.)
“Okay,” she said. And she turned and walked out the door, and a month later a rainbow sapphire bracelet appeared in the mail that looked identical to the one she’d originally liked. It cost us half as much. I think she still has it, which cheers me. She valued the money saved, which was substantial, over the rush of buying something the minute you see it.
When I got my Hour Vision, I did the same thing: saw it in a Vegas boutique, decided to get it, started shopping for one, saved a couple thousand dollars by being able to wait ten days for it. And it’s the same watch I’d have gotten from Miss Ling Huang, the beautiful Chinese woman at the Omega boutique whom I’d recommend to anyone with enough disposable income to buy stuff like that on a whim. By the way, I wore it for my races this weekend and really enjoyed it:
Anyway. Back to Hublot. (This blog has no editor besides me. Can you tell?) The Big Bang has been overpriced from the jump. It’s been a fashion watch selling on fashion. The mechanicals of it are close to worthless and the brand is iffy and the design of the watch has Star Wars 1977 Quartz LED Of The Future written all over it. Unlike a Rolex or Omega or even an IWC, there is little intrinsic value to the thing.
As a consequence, eBay is full of no-sales at half retail price. Which means that eventually the massive weight of the thousands of unsellable Big Bangs will start to drag on the new-watch market. Thus the TouchOfModern half-price sale. Plenty of Big Bangs left at half price, even after a long sale period. Do you think that Omega Speedmasters or Rolex Daytonas would stay unsold at half price for a week or two? Of course not.
If you want a Big Bang, now is still not the time to buy. Wait another two or three years. There’s probably no floor to the value of them. The 20% of retained value experienced by our Redditor with the Tank Francaise is probably about right for transaction prices of 2018 and beyond. The question is: does this mean that the era of the quick-bake Swiss-watch reboot is over? Or has the Big Bang just fallen too far out of fashion?
I’d say it’s a little of both. As the economy continues to not recover, more and more people will think twice about buying a twelve thousand dollar status statement. Even at half price. Or less. Nobody tell this guy, though. (Or this dude, with his quartz-ticking Fublot.) It’s bad enough to brag about having a fake watch that people want, right?
“It turns out that the circumstances under which you buy something are utterly meaningless to your long-term utility with that “something”, no matter what it is. That single lesson has saved me hundreds of thousands of dollars in my life. It stuck with us.”
True. We have yet to fully internalize it.
However, the $400 ebay table (~$3K new) looks lovely in our dining room (and has served us well).
I started looking at watches in stores now. Is SEIKO any good?
The Seiko5 is a $75 mechanical watch that is much better than any $75 mechanical watch has a right to be. Completely Chinese, however.
The Kinetic watches are fascinating and I have two of them, including the Auto Relay.
I got into Seiko Kinetic after cheaping out on the battery replacement for my Tag Heuer (not sending it to Switzerland to be worked on high in the Alps by skilled artisan monks) and then watching condensation appear behind the glass after a scuba diving trip.
The scuba condensation experience taught me that I need “Two Phaetons for no good reason” levels of income to be OK with the inevitable scuffs dings and general oops that I inflict on monstrously expensive articles of personal jewelry. Now that Jack has my bargain hunter heart thinking about the used market, it’s off to eBay to spot the pricing on Hublot Big Bangs …
For anyone first catching the classic car disease, research, research, research. Then network. Find a local club. Hang out. Make friends. Find an independent repair facility that specializes. Ask about their pre-purchase inspection rates. Do not go out and buy the first beautiful car in your price range. You may get lucky. You will probably live to regret it.
Likewise, if you’re catching the Swiss watch bug, slow down. Like classic or exotic cars, there’s a steep learning curve, and mistakes are expensive. Start reading. Plenty of websites and magazines to get you started. Find someone who collects the brand you’re most interested in (and learn which brands are worth collecting in the first place). Learn who the reputable resellers are in your area. Do not jump all over the first cheap eBay luxury watch you find; disappointments abound.
As for Hublot Big Bang. It’s an H2 Hummer with an 8″ lift, running yard-wide donks sporting rubber band tires, a blacked-out murder treatment, and $10k in video games and stereo equipment installed. Tasteless, gauche.
Does anyone have thoughts on if/when the classic muscle car market will start to decline?
I’d very much like to buy a nice, late-60’s B-Body Mopar but the prices seem completely out of line with reality every where I look. Other than nostalgia and 401K/house cash-outs I can’t quite understand what is propping up that market and keeping the Dana Mecums of the world rolling in dough.
Some cars like Superbirds and real 427 Cobras will always be special, but when your average restored 383 Charger is selling in the 40’s or 50’s it seems like something is really off.
It’s all the guys who were in high school/college/Vietnam when the muscle car era was big, and couldn’t afford them at the time. They are retiring, maybe selling their businesses or cashing in retirements, and they have the money to buy their dream cars.
Often, a significant chunk of their retirement is tied up in that two-ton chunk of Detroit steel in the garage.
Either they die young, leaving their wives/estate to dispose of the car, or they outlive the rest of their cash, leading to a quick, depressed sale. Third option-they keep the car, but at 80 they are driving it to work at McDonalds’.
I’d say we have about 5-7 years before muscle car values tumble. Which means B-J auctions will become either more diverse, or extinct.
Either way, I’ll welcome the day when some muscle car writer no longer is telling me on Speedvision (RIP) why this particular ’68 QuadHemiScat-eating2girls1carb that was once dry humped by Richard Petty’s second cousin Cooter is worth more than the seventeen other identical cars at the auction.
Appreciated…I’m guessing it’s about the same time frame.
When I told my dad (who was born in 1950) that I wanted to buy a silver ’69 Road Runner like the one he had in college he said “yeah, they were fast cars but they were crap…why would you waste your money on something like that?” I think he views his old Road Runner much like JB views the Big Bang…gaudy style over substance, mass produced, and not worth holding onto or passing down.
I’ve always been more of a nostalgic romantic than my dad, though, so I can’t wait for the inevitable flood of beautifully restored muscle to hit the internet and the auctions. I’ll be a buyer.
I can be a bit cynical, to be certain.
One way to truly value a watch or a car is by simple utility. That ’68 Hemiwhatever may have more utility than a 10-year-old Corolla, only because you can get more dead bodies in the trunk..but as far as actual usefulness as a car, there is no way it’s worth 100 times as much. Same as the Seiko 5 (which I wear when I remember to put a watch on in the morning). It may not work as a dive watch like a Seamaster would, but on a daily basis it has the same basic utility.
So the values of the items we are discussing are not completely tied to utility-they stem from nostalgia, ego, and prestige. My Seiko 5 and my Town & Country aren’t pulling, but they get me to work and soccer practice.
Agreed.
I’d like to know what percentage of Rolex owners actually take their watches diving, or for that matter out of climate controlled rooms.
Nice spiel. Like how you were asked to stop telling the pawnshop story.
My take is always to find what works for me and then drive the best price I can in the global marketplace.
The Internet has increased my buying power immeasurably since the advent of Netscape Navigator 1.1a.
But with the exception of antiques, or items long out of production, I don’t buy previously enjoyed.
“The question is: does this mean that the era of the quick-bake Swiss-watch reboot is over? Or has the Big Bang just fallen too far out of fashion? ”
I just took a look at an old WatchTime from Feb06 which has an extensive article about Hublot and felt the same way I felt then. What a POS! The early to mid 2000s were crazy times for watches. Looking though a watch guide back then is like walking the aisles of a liquor store trying to pick out a 6 pack today. Where did all of these brands come from? I guess to answer the question you posed, we’ll need to wait to see if the price of Panerai(s) plummet. Until then I’ll continue to lust after things I can’t afford (AP, VC, Patek) and watch my IWCs spin in their winders while a Seiko Samurai takes residence on my wrist.
Pannys are already losing steam, based on what I’m seeing. Not as much steam as the Hublots… but any watch where the sales pitch is YO SLY STALLONE WEARS IT is surely doomed.
The prices for the more “average” Panerais are dropping quite nicely, which is why I’ve ended up with 3 of them in the past 3 months (111, 372, 380). I don’t understand the universal disgust over Pannys. I’ve got some big wrists and they just seem to work. They also go nicely with my generally casual and rustic style of dress.
The showroom prices on them are out of control, but they are nice deals on the secondary market. And I can’t explain it, but I think they look very cool.
You know, I agree with you. A non-ornamented Panerai is a nice-looking watch .
Star Wars 1977 Quartz LED Of The Future
There are collectors for just about everything. First generation LED watches from name brand watch companies have Buy It Now prices of $100-$500 depending on brand. That calculator watch from HP is a lot more.
In 2054, there will be people who collect 2014 Camry LEs. They’ll find super low mileage examples owned by people who are now in their 70s, 80s and 90s, like that AMC Hornet I saw at a show with less than 9,000 miles.
When it comes to collectibles, intrinsic value is just a part of it.
“It turns out that the circumstances under which you buy something are utterly meaningless to your long-term utility with that “something”, no matter what it is.”
Hmm I think for most people this true, but if I buy something secondhand, and it is a bargain, or at the very least good value, the “emotional utility” I derive from that product is even better than paying full retail.
With the user name of Patrick Bateman there is no way that you would ever consider even thinking about purchasing something used. Perhaps your brother Sean would, but not you.
Well, if it weren’t clear before, it is now: This blog is for men several tax brackets above me. Good on you guys. Perhaps I’ll join your ranks someday.
I think I’ll be meandering over to some other blog where I don’t feel like such a damned loser with my 11-year-old Honda Accord and my zero opinions (or experience) with high-end watches, German cars, etc.
Good blog, though, for the right audience. And well written.
Cheerio, mates.
I don’t own most of the watches discussed on these pages. I’m interested in what they mean societally, which is a field of discussion with no financial barrier to entry.
The Seiko 5, as noted, is a great way to spend $75 and get a mechanical watch. I have and wear one.
A perhaps-unnecessary clarification, if I may.
Dear Jack,
You wrote:
“On the other hand, there was a guy on reddit recently who had paid about four grand for a Cartier Tank Francaise at a Cartier shop and then found himself in a position where he needed to sell it. The highest price he was offered at a dealer was… wait for it… eight hundred dollars. Given that there’s one on eBay that was a no-sale at $1,750 — under half of retail for a like-new product — I think that eight Benjis was, in fact, probably all the money.”
Not that I want to devote a lot of mental energy defending brick & mortar watch dealers, but, I think that a hasty reader of the above paragraph might be misled to an unfair conclusion.
I don’t think that you intended to imply that because there was a no-sale on eBay at $1750 that the transaction price for that watch was $800; I assume that, seeing as you are a man of the world and are aware of the difference between wholesale and retail, that you meant that $800 was “probably all the money” from a brick & mortar watch dealer. That’s because the brick & mortar watch dealer has to mark items up to provide a gross profit, out of which he will pay rent, utilities, insurance, and his employees.
To look at it in exploded detail, $4000 was the retail price at a Cartier store.
Seeing as it was a brand store, it is likely that the gross profit was even greater than the typical 50 points in luxury goods like furs and aspirational pianos.
The Reddit poster wore the watch; that makes it a used watch. The only industry I have ongoing experience with pricing is consumer electronics, but it seems clear to me that if you buy a $10,000 pair of loudspeakers that cost the selling dealer $6000, a smart shopper might pay you $6000 and thank his lucky stars, but an authorized dealer of that line might not offer more than $5000 (because his customers in theory can afford to buy new) and an audio dealer who is not an authorized dealer for that line might offer only $4000, because he is not a natural place to shop for those speakers.
So, as Charles Goren always said, let’s review the bidding.
The selling Cartier dealer apparently did not want the Cartier watch back because he’s rather sell a new one. And (I assume) a non-Cartier dealer offered $800, which to me says that the non-Cartier dealer planned to put it in his display case for (drum roll, please): $1,600.
My guess is, if Mr. Reddit put his watch up on eBay, depending on a lot of factors such as, does Mr. Reddit have unblemished 100% positive feedback from some substantial sales transactions, and not just from buying stuff, his watch will surely fetch more than $800, just as surely as it will fetch less than $1750.
When people sometimes whine to me over a 20-year old, “fully depreciated” piece of audio gear, “That’s insulting! It’s from a legendary maker! I paid $3000 for it, and now they are offering $500!,” as placidly as I can, I observe, “You have gotten a lot of enjoyment out of it-I think it has paid for itself and owes you very little at this point.”
Sad to say, that cannot be said about Mr. Reddit and his Cartier.
All the best,
johnny puddles
Johnny,
The problem is that Mr. Reddit would have seen a much greater return from almost any other luxury watch. An Omega Speedmaster would have returned 70% or better of the original price; a Milgauss would simply be worth MSRP to someone since you have to wait for them new.
The Tank, like most Cartier watches, has zero secondary market. It’s far worse than most luxury watches in that regard.
As bizarre as it seems, there are several watches out there which simply don’t depreciate. This state of affairs is created, to some extent, by the rapid climb of CHF vs USD, the same way the “bulletproof resale” of Eighties Mercedes-Benzes was the product of the climbing West German Mark.