The global luxury watch market was worth about $7.2 billion in 2019, and it's forecasted to reach $9.3 billion by 2025. Although China is the largest watch producer worldwide, Swiss products remain the go-to choice for high-end consumers. The Swiss brand Rolex, for example, was valued at $8 billion in 2019. Starting a watch company can be challenging for newcomers, but there are a couple of things you can do to raise brand awareness and stand out from the competition.
TL;DR (Too Long; Didn't Read)
Depending on your business goals, you can sell brand-name watches or start a custom watch company and create exclusive pieces. Choose a niche, such as pilot watches, luxury watches or smart watches, to increase your chances of success and set yourself apart from competitors.
Overview of the Watch Market
Whether you're planning to start a watch manufacturing company or sell brand-name watches, research the market before taking the plunge. An in-depth market analysis can reveal key insights about your competitors, consumer behavior and industry trends.
The watch industry is expected to have a 9.9% compound annual growth rate between 2019 and 2024. Digital watches are in high demand among younger consumers, with popular brands like Timex, G-Shock and Casio leading the market. The advent of wearable gadgets is fueling the demand for smart watches. However, luxury pieces are still perceived as a status symbol, especially among business professionals.
A growing number of brands are offering limited-edition watches with unique designs and cutting-edge features. Audemars Piguet Royal Oak Chronograph, Bovet 1822, Panerai Luminor Chrono and IWC Portuguese Perpetual Calendar are just a few examples. Furthermore, the demand for diamond and gold watches is steadily increasing, as many women now prefer to wear these pieces rather than jewelry. Mechanical watches hold the largest market share (75%) and are often used as a style statement.
Find Your Niche
From luxury watches to fashion watches and smart watches, these products come in all shapes and styles. Although you can sell different models for every taste, it's better to choose a niche and fill a gap in the market. Define your target customers, what they need and want and how you can meet their expectations. Assess your budget and startup costs. Starting a luxury watch brand, for example, requires more money than selling fashion watches.
If you narrow down your choices, you'll find it easier to tell which models are worth the price. Furthermore, you'll be able to better target your audience and promote your business. Research the different types of watches and how they work; consider their design and features, including the display, style, movement, power source, functionality and price range. Use the following examples as a starting point:
- Analog watches
- Digital watches
- Touchscreen watches
- Luxury, fashion, dress or casual watches
- Quartz, solar, kinetic or mechanical automatic watches
- Solar watches
- Smart watches
- Chronograph, monophase, GMT or diving watches
- Military watches
- Pilot watches
- Racing watches
Quartz watches, for example, are very accurate due to their high oscillation frequency. Field or military watches can withstand sand, water and debris without losing their functionality. Pilot watches, on the other hand, feature compasses, altimeters and other advanced features that are not available on regular models. Chronograph watches are more accurate than automatic models but not as accurate as a quartz watch.
Starting a Watch Company
The next step is to determine what kind of watch company you wish to start. Do you plan to create custom watches and build your own brand or sell existing models from popular brands? If you choose to design your own models, learn about the manufacturing process and hire a team of experts to handle this job. Consider taking an online course, such as Watches: How to Design, Manufacture and Build a Brand, which is available on Udemy.
Another option is to purchase private-label watches and sell them as your own. Watch Branding, for instance, offers over 25 types of watches that can be customized with your logo and brand name. These models are ideal for promotional and corporate events. For example, if you have a watch store, you can offer these products for free or at discounted prices to loyal customers, potential partners and prospective clients to raise brand awareness.
Decide whether you'll sell watches online or in a physical store. Again, you have the option to work as a watch distributor, reseller or manufacturer. It all comes down to your budget and business goals. Regardless of what you choose, starting a watch company that operates exclusively online is the cheapest option; in this case, you won't need to rent or purchase commercial space, hire salespeople or apply for zoning and signage permits.
Plan Your Business
Once you've decided on a business model and niche, put everything together and make a plan. Start with market analysis, list your competitors and then describe your company, its products and what makes them stand out. Provide an overview of the company's ownership, mentioning who is responsible for what. Your business plan should also include a pricing strategy, objectives, financial considerations and legal requirements for starting a watch company.
Consider your target market, business model and marketing strategy. Also, it's important to estimate the startup costs as well as any ongoing costs, such as the monthly rent, shipping fees, employee salaries and utilities. Make a list of suppliers and purchase inventory to sell. Include everything in your business plan.
Brainstorm ideas to grow your business and increase its profits. For example, you could design personalized watches on request, even if you're not a custom watch company. Many clients want to have their watches engraved with their initials, so you may offer this service and use it as a selling point. Another aspect to consider is how you will build your distribution network, what threats and challenges you might face and whether or not you need external funding.
Cover the Legal Aspects
Any business plan should include the company's name, legal structure, licenses and permits, insurance requirements and other legal matters. Decide what type of legal entity you want to use for your business, such as a limited liability company or a general partnership. As your company grows, you can form a corporation and compete with established brands.
After you register your business with the state, access the IRS website and apply for a tax ID number online. Once this step is completed, you may hire employees, file your annual tax returns, apply for loans and open a business bank account.
What licenses and permits you will need depends on the state where your company operates, and most states require a general business license at the very least. If you're planning to start a custom watch company, consider registering your trademark to protect your designs, labels and other intellectual property. Head over to the United States Patent and Trademark Office website, sign up for an account and submit your application. Trademark fees vary between $225 and $400 depending on the filing option and number of trademarks.
Develop a Marketing Strategy
The watch industry is highly competitive. If you're starting a luxury watch brand, be prepared to compete against Richemont, Seiko, Fossil, Rolex and other key industry players. As a distributor or retailer, you're competing against chain stores, jewelry shops and even supermarkets. Therefore, it's crucial to have a solid marketing plan.
From online advertising and influencer marketing to local events and trade shows, there are endless ways to promote a watch company. The key is to show customers how your brand provides value and what makes it stand out. Create a story around your business and how everything began. Share behind-the-scenes photos and videos on Instagram, YouTube, Facebook and other social networks.
Seek ways to tap into the interests of your prospects. Write engaging stories and blog posts about the different types of watches, their history and what makes them popular. Reach out to fashion bloggers and social media influencers, tell them about your products and offer them free watches or special offers in exchange for promotion. Luxury goods manufacturers like OMEGA, Bulgari and Cartier use omnichannel marketing, mobile display advertising and other digital technologies to create personalized experiences for their customers; you may use them for inspiration, but try to come up with a unique approach that sets your brand apart.
- Statista: Luxury Watch Market Value Worldwide From 2018 to 2025 (in Billion U.S. Dollars)
- Statista: Brand Value of Rolex Worldwide From 2016 to 2019 (in Million U.S. Dollars)
- Statista: Luxury Watch Industry - Statistics & Facts
- Mordor Intelligence: Watch Market Growth, Trends and Forecasts (2019 - 2024)
- Grand View Research: Luxury Watch Market Size, Share & Trends Analysis Report by Product (Mechanical, Electronic), by Distribution Channel (Online, Offline), by Region, and Segment Forecasts, 2019 - 2025
- U.S. Small Business Administration: Apply for Licenses and Permits
- United States Patent and Trademark Office: Trademark Fee Information
- United States Patent and Trademark Office: Apply Online
- Simply Written: 9 Marketing Secrets of Luxury Watch Brands
- IRS: Apply for an Employer Identification Number (EIN) Online