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We all like to know where we are in life, so fixed prices feel right, secure, and familiar – but are auctions better at finding true value?

If a watch is more desirable than its RRP suggests, you get shortages, waiting lists, and flippers. If you have a watch where the buying audience doesn’t bite, you have overstocks, discounts, and discrete sales via the grey market.

A hypothetical solution, suggested by @Brendan Cunningham, Professor of Economics at Eastern Connecticut State University, and author of the fascinating blog www.horolonomics.com, is to offer all watches for sale at auction, reserved at the factory cost price. The manufacturer is not selling at a loss and the price rises (or not) to meet demand so that the market clears. The manufacturer receives ‘true market’ value and there are no waiting lists or flippers. In the real world, the logistics of this arrangement would be excruciating, but it does demonstrate the power of the auction process.

The biggest watch re-sale platforms on the web currently favour the fixed price model, but those who think these watch marketplaces are not auctions are wrong. Line up all the Rolex ‘Hulks’ on site, filter by age, location, box & papers, etc. and you will have a range of values. This is simply a range of ‘bids’ for your cash, but a reverse auction – a race to the bottom. This is further complicated by ‘fixed’ not being as solid as it seems, with prices open to negotiation, and the final figure kept hidden.

Watches

Watch Collecting is rapidly being seen as a barometer for true market values. With a wide selection of brands, models, and price points, the daily turnover of auctions tracks the rise and fall of the market closely. The results tab is there for all the world to see and is the (sometimes brutal) truth.

Although all auctions start at £0, the seller has the option to set a reserve price, which is, essentially, the value of the watch to them, below which they would forego the cash and keep it. In addition, the low and transparent fee structure means there is as small a difference as possible between the price paid and the price returned.

Many factors affect how much a buyer might pay a seller for a watch, including great service, reputation, warranty, familiarity, or even laziness. For an insightful and transparent look at real-world watch values, based on sales data and not overinflated asking prices, talk to us here at Watch Collecting.

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