It may come as a surprise given that nearly every adult owns a smartphone that displays the time, but the watch industry is still alive and well. Indeed, the global luxury watch market is expected to grow annually by 2.49% (CAGR 2023-2027) over the next few years. Wristwatches can be used to make a fashion statement, as great conversation pieces, or as part of a collection.
To capitalize on this growth, you could start your own watch business, design your own watches, and build your brand. Getting your watches custom manufactured can give you the most freedom and flexibility in how your watches look and function, plus you usually also get the best profit margin earning potential because you get your products straight from the source.
By manufacturing your products, you have complete control over how they look, what functions they include and exclude, and how you brand them. You can create a completely unique product that performs exactly as you desire, which is ideal for helping you stand out in this crowded market.
However, before you begin designing your new timepieces, you must first understand how to launch, market, and grow a business. Fortunately, our step-by-step guide in manufacturing your own watch products is listed below to get your new watch business off to a good start.
Outline
- Why Should You Start a Watch Business?
- Is This Watch Business Right For You?
- 09 Steps to Start a Watch Business
- Create a Business Plan
- Brainstorm Watch Business Name Ideas
- Structure the Enterprise
- Get the Right Equipments
- Purchase and Setup the Software
- Marketing Strategies
- Form a Team
- Start Making Profits
- Examples of Successful Watch Business Stories
- Useful Tips to Create a Successful Watch Business
- Conclusion
Why Should You Start a Watch Business?
Despite the prevalence of smartphones that display the time easily, watches remain popular. High-end, luxury watches, in particular, continue to be in high demand. Online watch and jewelry sales in the United States alone totaled $8 billion in 2017, with the segment experiencing 12.3 percent annual growth over the last five years. Even smartphone manufacturers, most notably Apple, can't ignore the demand for watches and are producing smart versions of luxury timepieces.
A watch business sells watches to people who want to wear their timepieces. This is an industry that is ripe with opportunity due to sustained demand and a large market.
Is This Watch Business Right For You?
Before deciding if starting a watch business is right for you, weigh the pros and cons.
Pros:
- Flexibility – Sell watches online from the comfort of your own home
- Creative Outlet – Design your own unique watch line
- Good Money – Healthy profit margins on watch business
Cons:
- Partner Search – Finding a reliable manufacturer can be difficult
- Prestige Market – Compete with respected, established brands
Watch industry trends
Industry size and growth
- Industry size and past growth – The global luxury watch market increased at an 11.7% compound annual growth rate (CAGR) from $30.58 billion in 2022 to $34.17 billion in 2023.
- Growth forecast – By 2025, the global luxury watch market is expected to grow by 24%.
Trends and challenges
Trends in the watch business include:
- High-end luxury watches are the fastest growing segment of the watch industry, and are seen as status symbols.
Challenges in the watch business include:
- Pre-owned and vintage watches are becoming increasingly popular, increasing competition for new watch brands.Many people still prefer to buy watches in stores rather than online, posing a challenge for an online watch brand retailer.
How much does it cost to start a watch business?
The costs of starting a watch business range from $17,000 to $36,000. The costs include a computer, watch design software such as 3Design, and a watch inventory.
How much can you earn from a watch business?
The cost of a watch varies greatly. Luxury watches cost $1,000 or more, while more affordable watches cost $30 to $40. These calculations assume you'll sell for $300 somewhere in the middle. Your profit margin should be approximately 40%.
Related Business Ideas
If you're still unsure whether this business idea is right for you, here are some related business opportunities to help you on your entrepreneurial journey.
- How to Start a Chocolate Business with 8 Important Steps
- Starting Your Own Candle Making Business (Guide and Examples)
09 Steps to Start a Watch Business
1. Create a Business Plan
Creating a business plan is one of the most important steps in starting a watch business. The process of developing your plan ensures that you have a thorough understanding of your market and business strategy.
Your business plan should include the following sections:
- Executive Summary – This section should summarize your entire business plan so that readers can quickly grasp the key aspects of your own brand.
- Company Overview – This section informs the reader about your watch company's history and the type of watch business you run. For example, are you a high-end watch company, a mid-range watch business, or a low-cost watch business?
- Industry Analysis – You will monitor important information about the watch industry in this section. Conduct market research to determine the size of the industry and the trends affecting it.
- Customer Analysis – This section will detail who your ideal or target customers are, as well as their demographics.
- Competitive Analysis – You will document the key direct and indirect competitors you will face, as well as how you will gain a competitive advantage, in this section.
- Marketing Plan – Your marketing strategy should address the 4Ps:
- Product: Decide on and document the products/services you will provide.
- Prices: Keep track of the prices of your products/services.
- Place: Where will your business be located, and how will that location aid in sales growth?
- Promotions: How will you attract customers to your watch company through promotional methods?
- Operations Plan – The key processes required to run your day-to-day operations will be determined here.
- Management Team – This section provides information about your company's management team's background.
- Financial Plan – Finally, the financial plan provides answers to the following questions:
- What will your startup costs be?
- How will your watch company profit?
- What are your sales and expense projections for the next five years?
- Do you need to raise money to start your watch business?
2. Brainstorm Watch Business Name Ideas
This is a critical decision because your company name is your brand and will last the life of your business. Ideally, you should select a name that is both meaningful and memorable. Here are some suggestions for naming your own watch brand:
- Use online tools like the PageFly's Business Name Generator. Just select your type of industry and hit “generate” and you’ll have dozens of suggestions at your fingertips.
- Make sure the name is available. Once you've compiled a list of potential names, check the US Patent and Trademark Office's website to see if they're available for registration and use our Domain Name Search tool to see if related domain names are available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Create a name that reflects your watch company's desired brand and/or focus.
It is difficult to change the business name once you have chosen your company name and begun with the branding. As a result, it is critical to carefully consider your options before establishing a business entity.
3. Structure the Enterprise
Form a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most common business structure types.
Establishing a legal business entity, such as an LLC or corporation, shields you from personal liability if your watch company is sued.
Register your Watch Business
The location of your business is significant because it affects taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you plan to expand, you should look elsewhere, as some states may offer significant advantages to watch businesses.
Register for taxes
Obtaining an Employer Identification Number, or EIN, is the final step before you can pay taxes. You can apply for your EIN online, by mail, or by fax; for more information, go to the IRS website. Remember that if you choose to be a sole proprietorship, your EIN can simply be your social security number.
Open a business bank account & credit card
Keeping your business finances separate from your personal account makes it easier to file taxes and track your company's income, so it's worthwhile even if you run your watch company as a sole proprietorship.
It is critical to open a business bank account in the name of your watch company.
To help you separate personal and business expenses, you should obtain a business credit card for your watch company.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
Set up business accounting
Recording your various expenses and sources of income is critical to understanding your company's financial performance. Keeping accurate and detailed accounts also makes annual tax filing much easier.
Apply for permits and licenses
Starting a watch business necessitates the acquisition of several licenses and permits from local, state, and federal governments.
Doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits, are all federal regulations, licenses, and permits associated with starting a business.
A business license and a manufacturer's license are required to start a watch company. Depending on where you live, you may also need a permit to sell your own watches. In addition, you must follow all federal and state regulations governing the manufacture and sale of watches.
Get business insurance
Business insurance is an area that is frequently overlooked, despite the fact that it can be critical to your success as an entrepreneur. Insurance protects you from unanticipated events that can be disastrous to your business.
Some business insurance policies you should consider for your watch company include:
- General liability insurance: This covers injuries and accidents that occur on your property. It also includes coverage for damages caused by your employees or products.
- Auto insurance: If you use a vehicle in your business, this insurance will cover you if it is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this policy works in conjunction with your general liability policy to protect you from workplace injuries and accidents. It also pays for medical bills and lost wages.
- Commercial property insurance: This covers property damage caused by fire, theft, or vandalism.
- Business interruption insurance: This policy compensates you for lost income and expenses if your company is forced to close due to a covered event.
- Professional liability insurance: This safeguards your company against claims of professional negligence.
4. Get the Right Equipment
You will need some basic equipment to run a watch company, such as a computer, internet access, and a printer. You will also need to purchase a watch design program and have a manufacturing partner ready to produce the watches.
5. Purchase and Setup the Software
To begin a watch brand, you will need to purchase watchmaking computer-aided design (CAD) software. This software will assist you in designing your watches. You should also consider purchasing accounting software to manage your finances, customer relationship management (CRM) software to keep track of your customers, and inventory management software.
6. Marketing strategies
When your website is ready, connect it to your social media accounts and vice versa. Because you can create engaging posts that advertise your products on social media, it is an excellent tool for business promotion:
- Facebook: A great paid advertising platform that allows you to target specific demographics, such as men under the age of 50 in the Cleveland area.
- Instagram: Offers the same advantages as Facebook, but with a different target audience.
- Website: SEO will help your website appear near the top of relevant search results, which is critical for increasing sales. Make sure your website's calls to action are optimized. Experiment with the text, color, size, and placement of calls to action such as "Buy Now," which can significantly increase sales. You can build your own website using platforms such as Shopify.
Use your website, social media presence, and in-person activities to raise awareness of your offerings and build your brand. Some ideas are as follows:
- Limited edition – Offer a limited-edition version of your watches.
- Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal.
- Start a blog – Create a blog and post on a regular basis. Change up your content and distribute it across multiple platforms.
- Press releases – Do press releases about new watch designs.
- Paid ads on social media – Select sites that will reach your target market and run targeted advertisements.
- Pay–per-click marketing – Use Google AdWords to perform better in searches.
- Influencer marketing – People with large social media followings can be paid to promote your watches.
The key marketing materials you will need are as follows:
- Logo: Spend some time creating a suitable logo for your watch company. Your logo will appear on company stationery, business cards, marketing materials, and other materials. The right logo can boost customer trust and brand awareness.
- Website: Similarly, a professional watch company website informs potential customers about the products and/or services you offer, the history of your company, and contact information. Remember that the appearance and feel of your website will influence how customers perceive you.
- Social Media Accounts: Create social media accounts in the name of your company. Customers and others will be able to find and interact with your watch company if you have accounts on Facebook, Twitter, LinkedIn, and/or other social media networks.
8. Form a Team
If you're starting small from home, you might not need any employees. However, as your company grows, you may want to open a store and hire employees to fill various roles. Potential positions in the watch industry include:
- Shop Clerks – make sales, customer service
- General Manager – scheduling, ordering, accounting
- Marketing Lead – SEO strategies, social media
9. Start Making Profits
Watches continue to be popular with people of all ages, from quartz to vintage, and smartwatches to collectibles. People want to show off their status and make an impression, so luxury watches are a rapidly growing industry. If you love watches and have an eye for design, you could make your own watch brand a household name!
You've completed your business research, so it's time to start designing and building a successful watch company.
Examples of Successful Watch Business Stories
MVMT Watches
MVMT Watches, also known as Movement Watches, sells high-quality minimalist timepieces. They are unquestionably at the forefront of their industry and are the most popular choice for most people looking for a clean watch.
These watches are designed and manufactured specifically for their brand. They have their headquarters at Los Angeles where they produced their watches by themselves.
What they’re doing well:
Traffic:
MVMT Watches relies heavily on influencer traffic to bring customers to their store. As an affiliate, these influencers promote their watches on Instagram and YouTube using custom discount codes.
Influencer marketing is great because you can use other people's followings to direct traffic to your business.
Store design:
Their store is spotless, just like their watches. They have many different product collections with a male and female watch organization system with such a large catalog.
Every product has a nice, clean image with a simple description that carries their branding throughout the store.
NOVO Watch
NOVO designs and manufactures watches from physical materials rich in history. They can infuse meaningful materials into every timepiece being crafted, ensuring it has individuality and tells stories for generations, whether it's cleats an athlete wore while earning their spot in the MLB or a branding iron used for 50 years on a family ranch.
What they’re doing well:
Newsletter:
They launched and sent out newsletter emails and got surprised when their friends and family and other people they didn't know even signed up for their newsletters.
Online Presence:
They work online, with retailers (Brick & mortar + Online) and flash sale sites. All these channels have significantly helped them grow and gain visibility. They use Shopify to build their online store.
TIKKER
TIKKER is famous for their death watch that counts down your life, just so you can make every second count, and have the time of your life. Instead of ‘smart watches’ that will keep you connected to your work email 24 / 7. Their USP is making a watch that is designed to actually make you happier, and help you to better enjoy life. In other words, a happiness watch. The wearer simply fills out a questionnaire, deducts his/her current age from the results, and Tikker is ready to begin the statistical life expectancy countdown, from years to seconds..
What they’re doing well:
Online Store:
They get most sales through their Shopify website.
Media Exposure:
Tikker has been featured in Time Magazine, CNN, NPR Morning Edition, Colbert Nation, NBC, Mashable, BBC, and many more both national and international media.
Instant Order Update:
They have a fulfillment center that does the actual shipping, and they will connect their system to shopify for instant order updates.
Useful Tips to Create a Successful Watch Business
- Define and Communicate Your USP: What distinguishes your watch brand from the competition? Have a strong unique selling point and communicate it to your target audience. Maybe you hand-make your watches, maybe you only sell vintage watches, maybe your watches are high-quality but affordable, maybe you offer a variety of styles or colors, or maybe your watches are certified by the Controle Officiel Suisse des Chronometres (COSC), a Swiss regulatory body that tests and certifies the quality of watches.
- Create Limited-Edition Watches: This is a scarcity marketing strategy that encourages customers to buy quickly because they know there is only a limited amount of stock made and once it's gone, it's gone.
- Offer Low & High Priced Watches: This can help you attract customers at both ends of the pricing spectrum. It may not be possible to cater to all price points when you first launch your watch brand, but as you grow, develop collections that cater to both types of customers so you can attract a diverse range of customers.
- Create More than Just Watches: Watches can be easily layered with other items such as bracelets and cuffs, so create full collections to give customers more options and increase your average order value.
- Offer Personalization: Since watches are frequently purchased as an heirloom piece to be passed down from generation to generation, as a gift, or to commemorate a significant event in someone's life, offer personalization services such as engraving on the back of the watch case or on the watch band to make your watches even more special.
- Get on Social Media: Instagram has grown in popularity as a platform for this, with many Instagram influencers eager to promote new fashion brands in exchange for products. Upload behind-the-scenes photos and videos to Instagram, YouTube, Facebook, and other social media platforms.
Conclusion
Today, the majority of watch businesses are conducted online. While setting up a stand in a high-traffic area may be appealing, even a small physical retail space invites more risk and offers limited potential.
Ecommerce watch businesses are less risky, more adaptable, and have greater potential. As a result, efforts are better directed toward an online watch business rather than a brick-and-mortar one.
