How Watch Dealers Protect Margins When Buying Stock Abroad
Buying watches in CHF, USD, HKD or AED? How exchange rates eat into dealer margins, and five practical ways to keep more of every deal.
Globe FX team · · 6 min read
In short
- A 3% bank margin can take a large share of the profit on a Swiss buy.
- Most dealers really only need to watch two rates: GBP/CHF and GBP/USD.
- Be set up before the deal, and always confirm payee bank details by phone.
In this guide
In the pre-owned watch trade, margins on a piece can be thin and deals move fast. If you're buying stock overseas, the exchange rate can be the biggest cost you're not tracking.
Where the margin goes
A dealer buys a piece for CHF 185,000, planning to sell it in the UK for a 6% margin. If the bank's rate carries a 3% margin, around 40% of that profit has gone before the watch is in the post.
| Bank (3% margin) | Specialist (0.6% margin) | |
|---|---|---|
| Cost of CHF 185,000 | ~£173,400 | ~£169,200 |
Illustrative figures at a mid-market rate of about 1.10.
1. Know your currencies
- CHF. Swiss dealers and brands. The franc can strengthen sharply when markets get nervous.
- USD. The world's trading currency, and plenty of stock is priced in it.
- HKD. Held in a tight band against the dollar, so it follows GBP/USD.
- AED. Pegged to the dollar, so it also follows GBP/USD.
In practice, most dealers are watching two rates: GBP/CHF and GBP/USD. See today's figures on our exchange rates page.
This article is general information, not financial, legal or tax advice. Exchange rate examples are illustrative. Speak to a qualified professional about your own situation.
