Trading in Passion, Inc. Sale Signals That Online Auction Drives the Luxury Watch Market

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Trading in Passion, Inc. Sale Signals That Online
Auction Drives the Luxury Watch Market
By Stuart Wiengarten Trading in Passion, Inc. a
California corporation dba Klockchain
(www.klockchain.com), is an online watch auction
house that sold last week to TF Klockchain, Inc.
for an undisclosed amount The transaction
culminated in Florida and marks the watch
industrys return to normalcy, observes, Edvin
Ovasapyan, director at Trading in Passion,
Inc. According to Bain Companys 2022 Luxury
Goods Worldwide Market Study, the global
secondhand market for luxury goods grew to 30
billion in recent years, with watches and jewelry
accounting for over 75 of all purchases.
The recently published Fondation de la Haute
Horlogeries Watchmaking Trend Report predicts
that pre-owned watch sales will equal or exceed
the market for new watches in the near future.
This is
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especially impressive given that the market for
secondhand luxury watches is relatively new and
showed exponential growth due mostly to
e-commerce and growing acceptance that
horological instruments are collectible,
portable, and are a worthy allocation in an
investment portfolio that accounts for
alternative assets. The auction house model
developed by Trading in Passion, Inc. makes
secondary market watch trading efficient and
safer than other conventional and internet models
familiar to watch aficionados. Here is are some
examples
Resale exchange companies like Bobs Watches and
Crown Caliber buy watches directly from people
looking to sell unwanted watches and then list
them for sale on their websites for potential
buyers to browse. They do offer authenticity
protections with in-house watch inspections.
However, these businesses require large
operational teams, substantial inventory to pay
for, and hefty advertising budgets. As a result,
their margins have to be substantial to pay for
high overhead so they can only pass on limited
savings to the end consumer. They are also
incentivized to always steer customer to their
own inventory regardless of where the best deals
exist. Gray Market players like JomaShop account
for as much as 20 of luxury watch sales. They
support Authorized Dealers by filling their
inventory with slow-moving watch models purchased
under the table at bulk discounts (without
consent from brands) which they can then sell at
marginally lower prices to end consumers.
However, the result of Authorized Dealers
breaking the manufactures Minimum Authorized
Price agreement is that factory warranties are
lost.
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The success of the gray market has prompted
brands to further restrict stock to maintain
brand reputation and employ technology to try and
track offenders. Omega famously bought out gray
market reseller Watchfinder in an attempt to
avoid their products reaching the gray market.
Some brands are responding by offering in house
re-sale services or opening rebuying gray market
inventory. Yet others like Rolex and AP are
vastly reducing their network of ADs or bringing
all sales in house with self-branded
boutiques. Some watches are sold via classified
ads, whether on general websites like Facebook
and Craigslist or watch forums like Rolex Forums
or WatchUSeek. Although occasionally there are
deals to be had if you are well-versed in
watches, the lack of protection for buyers and
sellers poses high risk for novice buyers to get
caught up in scams. Even more dangerous is the
possibility of physical harm if meeting with
strangers while conducting high-priced
transactions. The growing popularity of luxury
watches has increased cases of violent attacks
worldwide to the point that cities like London
are posting public signs cautioning people to the
presence of watch thieves in certain areas. Many
people in Los Angeles and New York have stopped
wearing luxury watches to avoid becoming targets.
While formerly niche brands such as Patek
Philippe are now flagged in rap videos.
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Michael Torino, a board member at TF Klockchain,
observed that the transaction was complicated due
to changing market conditions, taking nearly 10
months to close. Torino and Ovasapyan are
experienced in the luxury goods and collectibles
industries. Both believe that more acquisitions
in the watch space are coming, and the watch
market will benefit from AI and blockchain
technological advancement. Technology will enable
buyers and sellers to authenticate watches and
mitigate fraudulent transactions, as the industry
continues to move into the online space, soon to
supplant scroll menus of eBay and chrono24 by
metaverse and multidimensional buying experiences
points out, Ovasapyan. Parting ways with
Klockchain was both sentimental and gratifying.
Our journey to create a sanctuary for watch
collectors has reached new heights with Tom Ford
at the helm. We believe that this venture will
leave an indelible mark on the watch world, just
as he did in the fashion and beauty industry,
Louis Guillot, a principle at Klockchain. The
sale of Klockchain shows that traditional
investors recognize the value of buying and
trading horological instruments as an alternative
asset class. We feel an immense sense of pride
passing the torch and knowing that Klockchains
positive impact will reach far beyond its
creation, points out Shery Zarnegin, one of the
principals on the seller side.
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ignals-that-online-auction-drives-the-luxury-watch
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