7 ms·
A few years back I talked to someone involved in the business of international sales and procurement of luxury watches. Although there are a few genuine collect
by pluma 9y ago
A few years back I talked to someone involved in the business of international sales and procurement of luxury watches. Although there are a few genuine collectors, most of the business seems to be in aiding money laundry and dubious financial transactions (a $50k watch is easier to smuggle than a bag of $50k in cash, especially when the price is sufficiently stable).
EDIT: To be clear, what he was doing was perfectly legal but he had no illusions about who his customers actually were.
- saiya-jin 9y agoOne of the primary markets for all luxury watches is plain simple bribery of government officials. One/set of Rolex which don't lose much value over time is perceived better than wad of cash slipped in envelope. Liquidity is quite good too. If bribery somehow magically stopped worldwide overnight, quite a few watchmakers (definitely not only Swiss) would go bankrupt.
- digi_owl 9y agoGets me thinking of how a detergent ended up being a medium of exchange in drug transactions.
- dageshi 9y agoThe other user who replied on this thread saiya-jin is [dead] and has been so for over a month. Their comments appear to be entirely reasonable to me, can we un-dead them? EDIT: User is visible again, thanks.
- M_Bakhtiari 9y agoEver since I've turned on 'show dead' most of what I've seen as [dead] has been perfectly reasonable, go figure.
- deleted 9y ago[deleted]
- GFischer 9y agoSometimes people go on a rant and are shadowbanned, but are otherwise reasonable.
- mkl 9y agoYou can un-dead individual comments yourself by clicking the time of the comment, then clicking "vouch". I think the mods see that and can choose to do more significant un-deading (what a fun verb!).
- dageshi 9y agoOh, thank you, I knew it was possible to do that for some people but I assumed I wasn't high enough comment score to do so.
- darkerside 9y agoSo does that make luxury watches a competitor of cryptocurrency?
- hndamien 9y agoCryptocurrency by comparison is too easy to trace at an exchange. As long as everybody is happy to stay off exchanges.
- dsacco 9y ago> Although there are a few genuine collectors I don't dispute that very high end watches can be used for money laundering, but there are quite a bit more than a "few" collectors for watches, even in the $50k range. Blogs like Hodinkee have a large readership of collectors at this level, and relatively speaking a $50k watch is not uncommon among collectors at, say, a watch conference. $50k buys you access to the second tier (right above entry level) for brands such as Patek Philippe, A. Lange & Sohne, Vacheron Constantin or Audemars Piguet (and even smaller "independent" watch houses like F.P. Journe). If you go to the /r/watches subreddit, you can reliably see collectors posting watches well beyond this price, even if the day to day items are <$20k. Based on my experience with watches and collectors, I'm (weakly) doubtful that your friend's perspective is indicative of the industry overall. Again to be clear, luxury items in general can be used for laundering, but I can't see any basis for calling "most of the business" an effort to frustrate money traceability. For one thing, off the top of my head, there is a clear awareness of disrepute among watch collectors, and savvy collectors (particularly those spending five figures on a watch) engage in due diligence and transparency for most of their purchases that would make laundering pretty difficult and inefficient. Obviously a complicit buyer and seller would have no reason to do this, which implies a bit of a sampling bias to what we can see. That said, these practices are widely and reliably enough used (even on, say, eBay, or among jewelers) that it's clear a very large volume of watches change hands "in the light", so to speak. There's also a question of valuation. For most of the brands I mentioned above, purchasing them new results in a reliable 30% reduction in worth, though you can stymie that a bit by keeping the watch in excellent condition with its box and papers. The watches which retain their valuation the most are brands like Rolex. A Rolex Submariner can actually appreciate in value over time, even past inflation, because the brand is so recognizable. These would be a good target for money laundering because of their liquidity. On the other hand, brands that retain such value tend to be the most visible, which means they are the most imitated and faked. In 2018, I don't think I'd feel comfortable purchasing a Rolex unless it was new and directly from an authorized dealer. It's become extremely feasible to create fraudulent Rolexes that cannot be distinguished from a real Rolex by anyone, save for an extensive review at a Rolex inspection center.
- pluma 9y agoDon't get too hung up on the $50k number, I just picked that at random because $50k in currency is a large enough stack of cash to be considerably harder to conceal and transport than a watch. This was a few years back and he (understandably) didn't go into much detail. This is of course just a single data point, so I can't tell whether it's representative for the entire industry.
- rbcgerard 9y agoI was told that a while back Bulgari (and probably some other high-end jewelers) operated one of the largest illicit money transfer networks - primarily for bribery. Want to bribe a public official? Give his wife a $100k bracelet, and mention that it can be returned anywhere in the world for CASH (less a 10% “restocking fee” of course). Then you might mention how nice it would be to spend a weekend in Geneva - and coincidentally there is a branch of that jeweler just down the street from some very discreet Swiss bankers (back when they were discreet)...
- scottlocklin 9y agoReminds me of why the Rosewood Inn has all them jewelry stores...
- aaronblohowiak 9y agofor those who don't know, this is the rumor for how VCs and such pay for prostitution in silicon valley.
- biztos 9y agoFunny, I have a friend who sells luxury watches in downtown San Francisco and he says there's a strong correlation between purchases above $10K and startup funding events.