This is a very important video with a full breakdown on the consignment subject.
In fact I suggest you do not consider consignment until you watch the whole video. I am about to breakdown things that most of the public are not aware of.
1. Is selling on consignment safe?
You’re not actually selling your handing over your watch without payment and your watch is practically held hostage.
So the real question is, is it safe to hand over your watch without payment and a guarantee of sale nor the guarantee of possibly getting your watch back?
Sounds like rhetorical questions but just incase the answer is of course no.
What do I mean by not getting your watch back?
There are several scenarios:
- You give your watch to someone not trust worthy and they steal it! Less common but happens
- Watch gets lost, insurance doesn’t pay and dealer cannot afford to pay. More common
- Ponzi scheme taking a watch from Pete to pay Paul and when its your turn to get paid, they might have run out of Petes to get money from to pay you (Paul)
- As you have willingly handed over your watch, it becomes a civil matter when things go wrong and you will face to words from the dealer (sue me!)
2. Why do dealers want your watch on consignment?
There are multiple reasons but here the main ones:
- No capital required run the business (referred to as other peoples money).
- No risk to the dealer involved, the risk stays from start to finish with the owner of the watch. (Dealer doesn’t need to pay if the company folds, separate entity (Limited Liability).
- Simply cannot afford to buy your watch. After all its in my interest to buy your watch for the correct money and make more money than take it on consignment with an overpriced price tag. Hence why I am always a buyer and not a consigner.
- Use your watch as leverage to sell their own.
- Build provenance and looking like a much bigger business than they actually are using your money.
- Not believing in the watches they sell due to price fluctuations so not wanting to take the risk on the price and leaving that risk on you. (Very Common)
- Hoping the watches will appreciate while they are in their possession and still paying you the lower price.
3. What do I find a problem with these so called dealers that operate mainly on consignment?
- I find it to be the most hypocritical way to operate as you are selling goods to the public that you do not believe in yourself to put in your own money.
- Majority of dealers that operate on consignment flex a fake lifestyle using other peoples money to gain your false trust ie. you have seen what happened in the US recently.
- Promising prices beyond belief and inflating the prices on the market which are not true.
- Locking peoples watches in contracts that have penalties for early termination when they know they would not be able to achieve prices asked.
- They have the sense of entitlement to your watches when they have done nothing or paid nothing to deserve your watch in their inventory.
- Sadly a cover up for money laundering business.
- Always claim to consign in order to help the customer achieve a better price. I can promise, there isn’t a watch business out there that charitable to run a business to help customers. We are all in it to make living and what we do in our own time to help people has nothing to do with the business.
- Plain and simple, most consignment based dealers that I have met and I cannot say all for obvious reasons are not honest and have not done enough to gain anyones trust and tend to disappear fairly quick, you’ve heard the saying, easy come easy go and it can’t be more true in this manner.
I have to be fair and clarify, there is a difference between buying and selling watches and consigning the odd watch here and there and running a business mainly on consignment.
We sometimes take the odd watch on consignment as a favour for a customer we know very well or if we are trying to close a part ex-hchange deal and keep a customer with us. I repeat, After all its in my interest to buy your watch for the correct money and make more money than take it on consignment with an overpriced price tag. Hence why I am always a buyer and not a consigner.
The way I see things is, if you were to ask a bank for a loan they will do a risk assessment and see if you are worthy of that loan. They will do that by looking at your assets, affordability and financial history.
Most these dealers would not be considered for a £500 overdraft yet the public hand their watches over like it was nothing totalling millions in the dealers inventory based on false advertising and the promise that they have insurance which most of them actually don’t although even then if they do, you are putting your faith in an insurance company that doesn’t care about you which may or may not pay if the dealer broke the smallest insurance protocol.
4. So we ask again, is it safe to sell your watches on consignment?
Rarely safe, should only be done with non consignment based business that have enough money or assets to liquidate in order to pay people if things go wrong and insurance doesn’t pay and you should definitely not give your watches to companies that sell you a promise and have no money or assets or even have some money but are over leveraged with consignment stock that they can afford.
5. How can you check if you are dealing with a company that have assets and money?
Simple, in the UK, use companies house as a free tool for your advantage. The information is public and its a legal requirement for companies to file every year so you should be able to check a companies real financial state and not an online portrayed image.
Link to companies house: https://find-and-update.company-information.service.gov.uk/?_ga=2.236862529.1374847474.1699450101-156632945.1699450101