Chrono24 Review: Why you Shouldn’t use Chrono24.com

Chrono24 Review: Why you Shouldn’t use Chrono24.com

Chrono24.com is the world’s largest online marketplace for watches. Originally founded in 2003 in Karlsruhe, Germany and is, therefore, one of the oldest online marketplaces for the sale of watches as well. This also explains how Chrono24 has been able to grow to the size it has today.

But whilst Chrono24 is the largest platform for the purchase and sale of watches in the world, it is not short of issues, and it leaves a lot to be desired. Ahead of writing this article, we have interviewed hundreds of professional dealers about their experience on Chrono24 to gather data and their response has been surprisingly (or unsurprisingly) unanimous. Yes, Chrono24 is a great platform for reaching a larger audience and customer base (after all, it is the largest in the world). They are happy with the fact that it is an opportunity to reach a larger audience and more potential customers But none of them have been satisfied with the way Chrono24 is run, their policies, and most importantly, their commission fee structure.

Chrono24 is a marketplace where buyers and sellers can meet. And whilst private sellers are able to upload listings on the platform, it is professional dealers that are the lifeblood of the platform and are the ones who have contributed to building it into what it is today. Since it is a platform for both private sellers, professional dealers, and private buyers, we will therefore discuss the preconditions and user experiences for all of these types of users.

Chrono24 skews the watch market

In an email announcement sent out to dealers by Chrono24, they wrote the following:

“Dear Chrono24 Dealer,

We would like to inform you that we adjusted the fee structure for the dealer packages. The commission fee for the Pro package will increase to 4% starting on 10/01/2018. The monthly base price will remain unchanged. You Can find an overview of the different dealer packages here.

We are taking these measures to stay competitive in the growing world of online marketing and to meet the ever-increasing demand for services on our marketplace. Our total costs have already increased by over 50% in 2018 compared to last year. To remain a strong partner and profitable sales platform for you going forward, we must continually make large investments. Dealers are welcome to increase the prices of their watches on Chrono24 accordingly in order to maintain stable margins.

Kind regards from Karlsruhe,

Your Chrono24 Team”

The fact that they are stating something like this can be described as nothing less than an insult to anyone who is selling watches on their platform. It just goes to show just how little understanding Chrono24 really has about the watch market and the basic principles of the capitalistic market in general.

To think that a seller can just increase the prices and “it will all be fine” is ignorant at best, and insulting at worst. As all of you wise people reading this can conclude for yourself, it doesn’t just work in a market to increase prices just because of one single factor that doesn’t affect the rest of the market. After all, most buyers are looking for the best deal possible. And in this, it’s important to keep in mind that Chrono24 is just a small part of the watch market as a whole. And the rest of the watch market doesn’t have huge commission fees that eat into the profits and margins.

Ultimately, if people notice that the prices on Chrono24 are higher than anywhere else, they will go somewhere else. This is bad both for Chrono24, and for everyone who has helped build the site into what it is today – the sellers.

But whilst Chrono24 is just a small part of all the watches being sold, it’s the largest online platform. And with the world becoming become more and more digitalized, people more and more look at Chrono24 to get an understanding of prices. Many also have their watches in Chrono24’s “my collection” which gives them an estimated value. This, together with the fact that prices are automatically higher due to the high commission fees on the platform, causes the prices to be inflated. And this has proven to also be contagious to the rest of the watch market.

The result? Chrono24 prices ultimately skew the market and completely manipulate the pricing of watches. The issue is that because Chrono24 is such a large player in the watch industry online, it also becomes a reference point that people go to get an idea about what the market price is. It’s also important to keep in mind that the listed price is not always what something sells for.

In the terms and conditions, Chrono24 even writes “You may not discuss the commission fee or other fees associated with Chrono24 with customers.”

Why they may want to censor its users in this way, we are not quite sure. But most likely, it is because if more and more people find out just how much fees Chrono24 has, more people will understand that buying on Chrono24 is in most cases likely not the best way to get the best price possible for a watch.

One professional dealer we spoke to reported that they had been banned a few years ago from Chrono24 due to the fact that they had lower prices on their website than on Chrono24. But this is not strange when you have substantial sales fees that have to be taken into account on the platform.

Unfair commission fees for professional dealers and sellers

Chrono24 has increased its commission rates multiple times over the years. And many times, it has been substantial increases. In 2018, Chrono24 doubled its commission fees overnight, on top of a commission fee that many users thought was already high.

One user then wrote “This unfair move kills small businesses as most are pre-owned watch sellers. At the moment, I am paying EUR569 a month to list my watches. Chrono24 allows you to list your watches but does nothing about brand retention because ultimately consumers are looking for the cheapest watch, and all they’ll remember is their website. Many sellers make between 10~20% gross which is not a lot as there are other costs involved aside from just the listing fee, commission charges, currency exchange losses, and human resources needed.”

In 2020-2021, Chrono24 announced a new way of charging their commission fee for the sale of watches. Rather than having a flat percentage fee for all listings, they would adapt the commission rate based on the sales price.

They stated:

“Many dealers were reporting that our previous commission system sometimes made selling on Chrono24 a less profitable option. In response, we’ve introduced a new and fairer commission fee system. It is based on a watch’s average revenue so that every watch can sell for a profit on Chrono24. We understand that potential profits vary greatly from watch to watch, and we believe that this new system is a step in the right direction.”

In theory, that sounded great. 

But the result? The commission fees for the watches most commonly sold watches actually increased rather than decreased. Yes, they did reduce the commission fee compared to the previous rate on the most expensive watches. But only by a half or 1 percent roughly.

Today, Chrono24’s commission fees for professional sellers depend on which of the three packages you select:

• Light: EUR €69  4.5-8.5%
• Pro: €99 3.5-7.5%
• Premium: €209 2.5-6.5%

A professional dealer has to pay a monthly fee and then a commission for every sale made on the platform. The highest commission rate that Chrono24 charges is 8.5%.

Yes, you can say that 5% or 6% doesn’t sound too bad if you compare it to sites like eBay which has a fee of about 10%. But if you’re going to compare, you need to compare properly. The secondhand watch market (which Chrono24 targets) doesn’t work with huge margins. Chrono24 doesn’t seem to fully understand the market it is in.

Honza Hroch, founder of the watch platform Valueyourwatch – a competitor to Chrono24 that has no commission fees stated the following:

“I was at an interview with representatives that stated thousands of sales were tracked. The dealers were asked what the margin was on the sale. After compiling the data, Chrono24 scaled their rates based on brand and dollar amount. Higher dollar watches have lower margins. Certain brands such as Rolex have lower margins. Lower priced watches from cheaper brands supposedly have higher margins.

This is asinine. Different dealers have different margins. Fee structures such as this have no sense. I pay significant fees each month. Private sellers pay zero fees. Why should the final value fee be more for me, than for individuals? Individual sellers always pay 6.5%. I may have to pay up to 8.5% on top of a subscription. This killed my motivation for utilizing the platform.”

Yes, a 10% commission fee on eBay for the sale of an electric charger from China where the markup for the seller is 200% is nothing. But when a professional dealer has a 10-25% margin on a watch, 6% is a considerable amount. This does not include the monthly fee that professional sellers pay and other overheads that are related to the sale. As a result, Chrono24 has in many cases, a better margin than the seller of the watch. This certainly doesn’t sound like a fair deal to its partners. And it is the type of thing that makes people leave the platform.

And several of the dealers we have spoken with have actually decided not to use the platform, leave the platform, or are considering leaving the platform for this reason.

For private sellers, there is, in their own words, a “modest 6.5% commission fee.” But when you actually use their commission fee calculator, the fee turns out to be more than 7%.

What is probably Chrono24’s main issue is the fact that they are pressured to produce results for their investors. Chrono24 has so far raised 64M Euros and needs to make its investors happy. But we have seen time and time again how some companies sacrifice long-term profits for short-term gains.

And as the year has passed, Chrono24 has become more and more desperate to try to make as much money as possible. Chrono24 is a business and they need to make money. They have programmers, employees, and all of the other things that go into building a business. This is completely understandable. But it has come at the expense of its most valuable partners – the sellers.

In order to increase prices and keep users (sellers) happy, you need to add value as well. The issue that Chrono24 has had over the last couple of years is that they have increased the fees at a rapid pace, but added minimal value.

Chrono24 (seems to) have a poor understanding of the watch market

Something that a lot of professional dealers that we interviewed always came back to was that Chrono24 has a poor understanding of the watch market. Specifically how watch sellers operate, how the buy and sell of watches works, and evidently, the margins dealers actually have.

After the doubling of Chrono24’s sales fee in 2018, one user wrote:

“Just deleted their app. Maybe if they see their user base shrinking rapidly after this move they’ll get the message.“

With the ever-increasing commissions and fees that Chrono24 has applied since then, it certainly seems like Chrono24 doesn’t get the message.

One such example is when it comes to trade-ins (part exchanges).

In these instances, Chrono24 still changes a commission fee for the full sales price of the watch even if all or part of that sales price was paid for via trade-in. “The commission fee will not be reduced in such instances.”. Obviously, a trade-in can be valued in different ways. And the customer may also make a part payment. The dealer may have to calculate to give a discount on the watch they are selling in order to seal the deal. But if they add the fee on top, this may actually turn out to be an unprofitable deal.

Chrono24 of course understands that trade-ins are not like regular sales, which is why they write “Please keep this in mind when calculating trade-ins.”. On the same token, they are unwilling to do anything to support the sellers and accommodate a better commission solution for these occasions.

False advertising

One of the most, perhaps shocking, thing about Chrono24 is how they deceive their users. The purpose? To make more money of course.

So what do they do?

Well, if a user makes an inquiry for a watch on Chrono24, Chrono24 will, after a while, send out this notification to them:

And they will continue to spam the user with it, both via email and on its profile, until the user answers.

If a user clicks in “I did buy this watch” even if they didn’t, Chrono24 will add this as a sale to the seller’s account and then charge them a commission unless the seller disputes it. We have heard many reports from professional dealers who, on a regular basis, get watches added to their “sold” list even though the watch has never been sold. This is an issue, especially for professional dealers on Chrono24 that sell a lot of watches and may not always have the opportunity to go through every single transaction and check that they are correct. But it’s an effective way for Chrono24 to milk its sellers.

So where is the false advertising?

Well, one of the purposes of this notification is to get a cut from the sale if a user writes an inquiry on Chrono24 but then buys the watch from the seller off-platform. And since Chrono24 states that even sales outside of the platform that they have contributed to will be charged a fee, that is fine. But the major thing is that in Chrono24’s message, they write:

But if a buyer has bought the watch off-platform, Chrono24 will still charge a fee.

And they tempt the buyers to “activate their guarantee” which offers numerous benefits.

But the fact of the matter is that since the transaction has taken place outside of the platform, they are not able to offer any guarantee whatsoever. If a transaction takes place off the platform, the transaction is between the buyer and the seller and Chrono24 has no part in it. Shall a problem arise, they will not, nor are able to offer any guarantees whatsoever.

The notification is just a way to get commissions for watches that are sold outside the platform. After all, Chrono24 has full control over the watches that are sold on the platform. Therefore, they wouldn’t even need to ask the question if the watch has been sold.

And that is what makes it such a fishy tactic. They trick the customer into believing that they get some sort of guarantee from Chrono24 that they don’t, in fact, get.

Chrono24 repeatedly contradicts themselves

Something that Chrono24 repeats constantly is that they want everyone to play on an even playing field. Or, in their own words:

“These guidelines serve to standardize listings and keep things on an even playing field.”

This is why it is so surprising when Chrono24 does things that make it seem like this only applies to its users and not themselves.

One such example is the fact that Chrono24 has started selling watches on the platform and how they go about doing this.

Firstly, since they own the platform, they don’t pay any commission fees for the watches they advertise on the platform. Since the luxury watch market works with considerably small margins, just a few percent makes a huge difference for any watch seller. In particular on high-ticket items. So if the fact that Chrono24 isn’t paying a commission fee for their own listings, thus allowing them to undercut all other competitors for this sole reason isn’t unfair practice, I don’t know what is.

Of course, you could argue that it is a common business sense for Chrono24 to use its own platform to sell its watches. And we would agree. But the issue is that their communication is the complete opposite of what they are doing. “Watch what they are doing, not what they are saying” is a famous quote that certainly fits in well here.

Another thing is the way they promote their listings.

In 2020, Chrono24 wrote: “This test will add around 30 watches to the almost 470,000 other listings on our marketplace. Thanks to our ongoing price analyses, we will list watches at their common market prices.” This was to emphasize the fact that they didn’t compete with its valued dealers due to the low number of watches that it would advertise. 

But at the moment of writing this, in 2022, they have a total of 3,675 watches listed and have sold 5157 watches.

First and foremost, Chrono24 makes every single one of its ads stand out by adding a “Sold by Chrono24” badge below each of its listings. This helps them stand out from all of the other listings as they have hidden the information for all of the other sellers. Which of these listings do you think people are more likely to click on?

Furthermore, they have also added a whole section in the listing of their own watches where they explain the benefits of buying directly from Chrono24. This is of course a section that none of the other sellers on the platform gets to benefit from:

 

Sellers are reluctant to negotiate prices

Because of the fact that Chrono24 has so high commission fees, it is natural that sellers are very reluctant to negotiate the price on Chrono24. Sellers on Chrono24 oftentimes have poor margins as it is after Chrono24’s commissions, and to then have to negotiate the price further may mean that there is no margin left.

For example, if a watch sells on Chrono24 for 10.000 EUR with a commission fee of  6%, it would mean around 400 USD just in fees. If the buyer then wants to negotiate the price, and the dealer still needs to have some room for margin and associated costs, it’s easy to see that the margin quickly gets eaten up.

If you want to get the best price possible, always contact the seller outside of Chrono24. In most cases, the seller has a lower price on the website, plus, they’ll be much more open to negotiating with you.

Poor mediation process

Chrono24 frequently promotes its mediation process which is where a representative from Chrono24 comes in and mediates between the seller and the buyer when the buyer is dissatisfied with the watch they have received.

But Chrono24’s mediation process has some major flaws to it that can cause serious headaches for sellers, regardless if you are a private seller or a professional dealer.

In practice, how the mediation process works is that Chrono24 locks the seller out of the funds whilst the case is in mediation, and they repeatedly ask if the buyer is satisfied.

Honza Hroch from Valueyourwach shared an experience that he (and many other sellers) have experienced when a buyer requests mediation from Chrono24. He said the following:

“As a dealer, I have never given my customers two months to inspect a watch. Keeping my funds and my watch away from me is a dirty maneuver. Chrono24 must have a deadline for mediation. Indefinitely holding funds is no way to do business. Mismanaged is the best way to describe the process, and it should be dealer focused as that is where 100% of revenue comes from.”

The biggest issue is that chrono24 can hold the money in escrow essentially indefinitely, whilst the buyer has the watch in their possession. This leaves the seller without the watch and without the payment.

Chrono24 keeps its sellers tightly leashed

Chrono24 does everything it can to prevent its sellers and professional dealers to build their own names and brand on the platform. It’s evident that Chrono24 wants full control and full power in every way possible.

In fact, Chrono24 one time introduced an update to the site which eliminated the information about who you purchased the watch from. Chrono24 did not disclose the seller, logo, or any other details about the seller. Furthermore, they banned the use of logos in the listings and will deactivate any listings that contain logos, watermarks, or any other reference to the seller. They have even gone so far to develop a program that automatically detects this.

The purpose was of course to prevent its users from contacting the seller outside of the platform. But the fact that Chrono24 didn’t understand something so basic that people want to know who the seller is – in particular when it comes to items for possibly tens of thousands, even hundreds of thousands of dollars, is a further example of Chrono24’s lack of understanding of the market.

So what did they do? They quickly realized that the update was a huge mistake and went back to displaying the information about the sellers again.

As the years have passed, Chrono24 has introduced a bunch of enforcements, rules, and terms with the purpose of getting the sellers on the platform to pay up and keeping its dealers on a leash. Two such are, as mentioned, eliminating the possibility to include logos in listings and banning linking to websites in listings.

Limited to no seller security

Chrono24 heavily promotes its buyer’s security. Of course, this is Chrono24’s main value proposition to the buyers on its platform. But something that Chrono24 speaks very little about is the seller’s security. What securities do the sellers on the platform have? The answer is very limited. And in the case of an issue, Chrono24 will likely side with the buyer in order to live up to its heavy promotion of buyer’s security.

The sellers on Chrono24 have limited security which obviously may put them at risk if they are dealing with a customer with fraudulent or dishonest intent.

A few professional dealers reported that there have been occasions when an order has been delivered and signed for, and then the buyer claims that it has not been delivered or, for example, signed by the courtier. In these cases, Chrono24 did not pay out the amount to the seller but instead refunded the buyer. Of course, these are complex issues when the evidence is not there (for example that the delivery of the item wasn’t caught on video), and even if it would, the seller could just say that it wasn’t and make a claim. So this is something you need to be mindful of.

Conclusion

With all of the above in mind, Chrono24 is the largest online watch platform in the world. Or, as they say, “The World’s Leading Watch Market”. But it is also a platform that has a lot to improve. And one that leaves a lot to be desired.

There’s great dissatisfaction among watch sellers and professional dealers about the way Chrono24 operates. At the same time, because it is the largest, many feel like they need to be there because that’s where most people who shop for luxury watches online go to.

But the fact that Chrono24 isn’t living up to the expectations and the wishes of its most important users – the sellers leaves room for other actors to enter this space and compete. Chrono24’s advantage is that they are the first and the oldest platform of this type. But that’s a merit you cannot rely on forever. 

You either have to adapt, evolve, or slowly but surely get beaten by those who do. And that’s exactly what we think will ultimately happen with Chrono24. Chrono24’s desperate attempts of maximizing its short-term profits to satisfy its investors will likely, in the long run, make them become less relevant. In an ever-changing watch market,  people will turn to platforms that truly understand their needs and wants, and value their contribution to building a great platform.

Note: some of these analyses are our own observations of the platform and others are information and thoughts that we have received from professional dealers when we interviewed them about their experience on Chrono24. As far as possible, we have tried to remain factually correct and only discuss facts, not thoughts. We always encourage everyone to try for themselves and then draw their own conclusions.