Five Important Business Lessons from Anthony Farrer of The Timepiece Gentleman

I’m back again with another blog post, hoping to share five business lessons that we can learn from the challenges faced by Anthony Farrer of The Timepiece Gentleman.

Love him or hate him, running a business is tough. If you’ve been there, you know what I’m talking about. And when you put your business on YouTube, you’ll naturally have people talking about you, and your business..

In this video, I’ll apply my experience as a small business owner to derive five important lessons that we can learn from the Timepiece Gentleman’s business.

If you didn’t know, Anthony Farrer of the Timepiece Gentleman runs a grey market, luxury watch business. He’s a controversial figure who’s had his ups and downs. And more recently more downs than ups.

The first business lesson I think we can learn from Anthony Farrer is in the area of:

1. Cash Flow Management:

High-spending businesses often get into trouble because of cash flow issues. Cash flow is the lifeblood of a business. It must be managed well. Spending large amounts on marketing, for exotic cars, expensive dinners, and a luxury penthouse, can create a flashy image, but if sales don't keep pace with a businesses expenses, it will quickly lead to the business running out of money.

For example the Timepiece Gentleman rented a $95,000 per month… let me say that again, $95,000 per month - luxury penthouse in downtown LA. This was the most expensive penthouse in California. Anthony Farrer, said they were trying to “change the way the west coast shops” for luxury watches. He even trademarked this. 

Well, as you may have guessed, this didn’t work out for them, and they were out of there in about three months. Now, maybe he really didn’t pay the full asking price, but I’m sure whatever the real cost was, it was still very expensive, and a huge hit to their cash flows.

Not to mention a Ferrari, Lamborghini, and Mercedes Benz G-Wagon, which was supposedly being used for marketing purposes. These were probably leased, but it’s still a huge expense and completely unnecessary in my opinion.

If I were in the market to buy a luxury watch. Images of the owner driving expensive exotic cars would maybe suggest to me that they’re making too much money off of their customers. That’s just me. Let me know what you think.

The business lesson here is: Regularly monitor and manage your business cash flow to ensure sustainability. You can’t spend more than you generate in sales. If you do, you’re eventually going to run out of money and have to close.

2. Brand Image and Perception:

Let’s look at their logo. I personally think it’s very well designed. You’ve got a guy dressed up in a tux, showing off a gold watch. He clearly looks like a gentleman to me. And the name, The Timepiece Gentleman, it’s a very catchy, strong brand name. They get a 100% on the branding from me.

But the problem that I and others have is that this branding doesn’t match their actual brand image.They dress in ripped jeans and t-shirts. You’re selling six figure luxury watches. It’s not that hard to put on some nicer clothes. At least a shirt with a collar and slacks.

When you walk into a jewelry store or a Rolex boutique. Everyone’s dressed nicely. Why do you think that is?

Of course. They want to embody the brand's image of sophistication and high-quality, this helps with the customer experience and fosters trust. This also aligns with customer expectations in my opinion, and it’s the industry norm for luxury goods and services.

Let me take it a step further. When Anthony started out, he was down to earth and relatable. As underdogs in the grey market luxury watch business, people rooted for him and wanted to see him do well. I know I did.

Fast forward to today. He’s cocky, arrogant. He acts like he’s better than everyone and is constantly being ridiculed on sites like Reddit. He has gotten better about not letting the negative comments get to him, but he still reacts to them.

Let’s talk about trust or building trust. You want yourself and your brand to establish trust. After all, people do business with people they know, like, and Trust. 

Brand image and perception is extremely important in business. Every interaction you have with the public, and that includes comments on social media, affect your brand’s image. You don’t want to cheapen your brand with improper behavior.

Also, being flashy can get you attention and likes on Instagram, but it may also create a sense of fakeness or even mistrust among customers, and potential customers. In my opinion, authenticity and transparency are often more appreciated by customers.

The business lesson here is: Build a brand image that aligns with your target audience's values and perceptions. And whatever you do, protect that image and realize that everything you do as a person reflects back on your business and brand.

3. Sustainability vs. Short-Term Growth:

In business, you need to have a plan to have sustainable and consistent growth. A high spending approach can generate growth very quickly, but it’s really not sustainable in the long term.

Looking at the Timepiece Gentleman, they clearly focus on short term growth with their extravagant lifestyle and excessive spending, which I’ve already talked about. In my opinion, this is a mistake.

In business, employees, or labor costs, are usually the number one expense. In my opinion, you want no more employees than you actually need. It’s a big expense, and if they don’t work out, they can be difficult and expensive to get rid of.

For a small operation, they have a lot of employees. If you don’t need them all, you need to let them go.

It's critical to have a business model that balances growth with profitability.

The business lesson here is: Prioritize long-term sustainability over short-term growth. Like I always like to say… slow and steady wins the race.

4. Customer Service and Reputation:

In the grey market luxury watch business, trust is crucial. Any lapses in service or product quality can severely damage your reputation, leading to business losses.

You want to treat each and every customer or potential customer, they way you would treat your best customer.

This is my mindset and it works. For example, someone called me at 8 in the morning on 4th of July. He left a nice message, and I could already tell he wasn’t a good fit for the services that I offer. Some people would just ignore the call or get upset for calling on holiday.

But I called him back anyway, listened to what he needed help with. It was for a City of Chicago Taxi driver tax form. I told him that I haven’t done those, and it would probably be too expensive for me to do the work for him. But I did suggest that he go online, look up the form and see if he could figure it out himself, or talk to one of his taxi driver friends to see who they use. He was happy, and the call only took a couple minutes.

I’m not always on top of things like this, but I try to be.

Regarding the Timepiece Gentleman, I think their customer service is mostly okay, but they need to do more to protect their reputation. I mean, you have a whole Reddit community of almost 4 thousand people criticizing and making fun of them.

Whether it’s deserved or not, it hurts their business. If you do a google search on Anthony Farrer or The Timepiece Gentleman, the Reddit results are right there on top.

The lesson here is: Prioritize high-quality customer service and protect your reputation at all costs. For Anthony Farrer, cut the nonsense, and just keep it real.

5. Risk Management:

Operating in the grey luxury watch market can be lucrative, but it also can be kind of risky. The watch market is very soft right now and still declining. People aren’t buying watches like they used to.

It seems Anthony Farrer is heavy on the consignment model, meaning he’s not buying watches outright, he’s offering an arrangement to consign your watches for you, and he collects a commission. This approach is good since you don’t have to commit large sums of cash to acquire inventory.

As I think about it: You still have to pay sales tax when you sell consignment goods to the end consumer.

His consignment rates went from 10% to 5%. That is a big reduction. And maybe not surprising since business is probably slow for them.

And let’s not forget about security risks. They were robbed twice with losses in excess of a million dollars.

They’ve also got risk of being underinsured.

Anthony’s plans to travel this summer via a summer tour, which is full of risks and that goes without saying. I mean, any bad actor could easily track them down in one of the big cities, and well… you know robbery #3.

The business lesson here is: Have a risk management plan in place to anticipate and mitigate potential challenges, and in the luxury watch business, there are a lot of them.

Running a business is tough, and if you’ve been there, you know what I mean.

Thanks for reading and see you in the blog post!