It has become a term as familiar to the watch industry today as it was to real estate investors a decade ago. Flipping is the act of buying a hot watch from an authorised dealer and selling it immediately on the secondary market for a huge profit.
Steel sport watches from the likes of Rolex, Patek Philippe, Audemars Piguet are never on display today and can only be bought by customers loyal for years to their local retailers, but that has not stopped an army of flippers combing the world for any opportunity to buy them.
If procured, these unicorn watches sell for mark-ups of 100% or more.
A 2016 pre-owned Patek Philippe Nautilus 5711/1A-010, which has a recommended retail price in the UK of £23,440 is for sale on Watchbox with box, papers and a two year warranty, for £54,000.
An identical watch, sold initially in 2017, can be bought on Watchfinder for £67,500.
A debate at Dubai Watch Week this morning, entitled “Making the Watch List”, gave a rare insight into how the industry is responding to an issue that some think is undermining the luxury watch industry.
Mohammed Seddiqi, chief commercial officer for Ahmed Seddiqi & Sons (pictured top), one of the most prestigious luxury watch retailers in the world and an authorized dealer for virtually every major watch brand in the business, let an audience of several hundred customers and journalists behind the curtain of how the industry is tackling the issue of waiting lists.
“It is a big challenge. People get upset. But you need to be loyal to your retailer,” he began in answer to the question of how to get on a waiting list for watches such as Patek Philippe’s Nautilus and Aquanaut; Rolex’s Daytona, Submariner or GMT Master, or Audemar Piguet’s Royal Oak.
“Some reference — quite a few — have a 12 year waiting list. We do not even know if those watches will still be in production after that amount of time,” Mr Seddiqi conceded.
Convincing an authorised dealer to sell these watches is a full time profession for an army of flippers, but retailers and brands are working hard to stamp out the problem.
In the UK, it is common practice for Rolex dealers to hold back warranty cards for two years. WatchPro has seen highly secure safes dedicated to storing these warranties, such is their value.
Mr Seddiqi says that Ahmed Seddiqi & Sons considered holding back warranties, but decided against because it works hard to pre-qualify customers before they can buy the hottest watches.
For the first time, he also disclosed that some watch brands, which he did not name, police secondary market in search of people flipping watches and reporting the activity back to the dealer that originally sold the pieces.
“From the brand perspective, if they find a watch has been flipped, they inform us. If we find out, we black list them. They will never be able to buy a watch from us again,” Mr Seddiqi revealed.
No brand is ever likely to confirm the practice of compiling these black lists, but the revelation by the chief commercial officer of such a prestigious partner as Ahmed Seddiqi and Sons is as startling as it is reliable.