1) Getting More Watches to More People
In our ninth founder’s update in January 2024, we outlined our progress during the intense holiday sales season and the improved capabilities of our USA assembly and fulfillment teams (5,837 watches assembled in America in Q4 2023).
Six months later, we’ve proven that we can keep up this pace.
Since our last update, we’ve assembled another 4,570 new watches in the USA and shipped over 10,000 new orders from our Kansas City fulfillment center (led by our warehouse manager Denise). The execution of these two sides of the business has been a huge difference-maker for Vaer in 2024.
When it comes to processing and delivering new orders, we’ve turned a weakness into a strength.
At this time last year, we were beginning to encounter major issues with our third-party fulfillment team. Packing errors were becoming too common, shipping labels were being misprinted, and overall customer satisfaction was slipping. Between June and September of 2023, we had the highest return rate in the history of the business. We needed to make a change, and that’s why we opened our own warehouse in October 2023.
Today, we can firmly say that bringing our fulfillment in-house was one of the best business decisions we’ve ever made. Denise supervises a close-knit team of friends and family, with everyone involved in kitting and shipping Vaer watches being people who truly care about the business and the end customer experience.
Looking at the numbers, it’s fair to say that owner satisfaction is stronger than it’s ever been.
- In February, we surpassed 6,000 five-star reviews (and have since gained another 500+).
- Our customer satisfaction rate (as shown from our annual survey) is at 9.1/10.
- Return/exchange rates are at record lows, with most watches now under 7%.
2) Making More Watches That People Want
Logistics are critical, but ultimately great products are the backbone of any successful retail business. While we always try to prioritize the assembly of bestsellers over new releases, as product designers, we have a hard time saying no when it comes to trying something new. In the last six months, we released six new watch models and one new bracelet:
- C3 and C5 Dirty Dozen
- C3 Tactical Field
- DS4 Tactical Solar
- R1 Oceanracer
- R1 Rally
- R1 Tactical
- Our new premium Nodex Bracelet
Five of these six models are assembled in the USA, and each one represents something unique and complex in terms of the assembly process. The C3/C5 Dirty Dozen is just about the only 10ATM watch on the market with an American-built movement. The C3 Tactical is the smallest (36mm diameter) solar watch assembled in the USA, and the new R1 models are a rare combination of water-resistance, hybrid meca-quartz power, and American craftsmanship.
From a technical standpoint, building each of these designs is a puzzle, which starts with sketches and technical drawings, and ends with a specialized workflow and toolkit by our assembly teams.
One of the biggest hidden advantages of stateside assembly is communication.
Though we work closely with assembly teams in China (S-series) and in Switzerland (A12), talking with our US assembly teams is where most of the problem-solving happens.
For better or worse, Americans like to share their opinions.
No matter what state they are in (California, Arizona, or Rhode Island), our techs always share feedback on how to improve our assembly kits and make our watches as durable and reliable as possible.
It’s a great feedback loop because many of our technicians also help with servicing warranty claims. Because they make more from assembly than from service, there is a strong incentive to ensure our watches are built in a way that limits the amount of service required.
This cycle of assembly and repair simply does not exist with most watch businesses. Fashion brands typically just replace watches rather than repair them (incentivizing fast/cheap overseas assembly), and luxury Swiss brands often have extremely expensive servicing charges (which means they make more money the more problems the watch has over its lifetime).
3) What Watches Are Selling Well?
One of the interesting emerging trends we’ve noticed in 2024 is the impressive balance in our sales data. We’ve found significant success selling a wide variety of different watches at different price points.
Our bestseller in the lineup is the C5 Tactical Field, which has made up about 10% of total sales this year (a ratio that held steady since 2023). Climbing into second place has been our R1 Cream Racing Chrono with 5% of total sales. Beyond that, everything else flattens out considerably. Our 6th bestselling watch (the traditional A5 Field Black) earned 2% of total sales, and our 31st bestseller (the pink and mint D5 Malibu diver) earned around 1%.
In simple terms, what this means is that Vaer is proving it’s possible to deliver design diversity without diluting brand appeal.
This is not common in the watch industry. Most brands find a niche and stick to it.
Fashion-oriented brands like MVMT, Fossil, and Timex have a hard time selling anything other than Asian-built quartz watches (if you want proof of this, compare the number of Amazon reviews for their quartz vs. automatic models). Alternatively, Swiss luxury brands rarely sell quartz watches. And if they do, they charge an absurdly high price for them, like Tag Heuer’s $3,000 Solar Quartz Aquaracer.
While USA assembly is our core niche—with seven of our top ten watch models assembled in America—of these seven models, three are solar quartz, two are meca-quartz, and two are automatic.
These results reinforce our instinct to keep trying new things and testing new combinations of assembly origin, movement type, and price point.
Our $999 Swiss-Made A12 Dirty Dozen has been a top seller for years, but that didn’t stop us from releasing a more affordable alternative (the C3/C5 Ameriquartz version) for $299. Our goal is to find success selling both and always listening to our customers on what we should build next.
4) What New Watches Are We Currently Working On?
Following a winter and spring full of new releases, our product launch calendar will ease up over the summer months, before picking back up again in the fall.
Our current US assembly schedule is focused on re-supplying our most popular models and keeping everything in stock. Taking a break from new releases will also allow us to further improve our onsite shopping experience and do a better job explaining how our watches work and what makes them great.
A few months ago, we published a comprehensive case sizing guide, which has become one of the most visited pages on our website. We’ve also started adding new “Why We Love It” explainers to some of our watch product pages to help new customers understand the essential appeal of each design. In the coming months, we’re looking to provide more clarity around our strap selection process, and we’re also working on a new “Find Your Watch Quiz.”
That said, we ARE still working on a long list of new designs, with several exciting new releases scheduled for the fall. Thus far, 2024 has been very focused on Field and Chronographs, so we’re going to be shifting focus back to our Dive and GMT lineups to close out the year.
We’re also working on our first-ever product collaboration with a major brand partner and our first collaboration with a US military squadron. We look forward to sharing more details about both projects in the coming months.
5) What Are We Most Excited About for the Remainder of the Year?
We’re happy to report that Vaer’s current business health is strong. We never took out massive lines of credit from a bank, we never over-borrowed on high-interest short-term loans, and we never gave up our equity (our control) in exchange for venture capital.
While the broader retail industry is fairly stagnant this year (due to high interest rates and lukewarm consumer confidence), Vaer is growing at a healthy pace and seeing almost all sides of the business work as intended.
We will always have pain points as a business—something our three customer support team members Evan-Austen, Justin, and Henry can attest to. But in the past six months, we’ve seen a noticeable shift in our mindset from continuously playing catch-up to getting a bit more ahead of the issues and being able to implement more coherent long-term strategies.
Though we don’t do much wholesale, our partnership with Huckberry has proven to be a great fit for both companies, and we’re looking to grow that relationship and find more great wholesale partners in the second half of the year.
Similarly, we’re cautiously optimistic about what we’re seeing on Amazon. Though there are plenty of challenges with selling on the world’s largest marketplace, our revenue on Amazon is up 87% from last year, and we’re optimistic that with a few further tweaks, we can make it a solid alternative option for folks shopping our most affordable watches.
Currently, our strongest alternative channel is our Pre-Owned Watch business which has grown by 200% from this time last year and has become an important part of our overall business strategy. In the past few months, we started testing out selective buy-back offers upon customer request, and while it’s not quite ready for prime time (mostly due to service, assembly, and QC resources), it is something that we would like to formalize in the second half of 2024.
What Watches Are We Wearing?
Reagan: Summer’s here, which for me means plenty of surfing and golfing. I’ve always preferred our single-pass watch straps for time in the water, and in terms of watches, I’ve been keeping things compact and simple, rotating between the S3 Calendar Field and C3 Dirty Dozen. When I’m going out, I typically like putting a watch on our jubilee bracelet, and the R1 Cream Racing Chrono continues to be a favorite go-to option for more formal situations.
Ryan: For the last year or so, our D4 Meridian Black was cemented to my wrist, but our new 36mm C3 Dirty Dozen has become my favorite by a long shot. The 36mm is low-profile enough to easily fit under a wetsuit, and the upgraded BGW9 lume glows well into the early morning hours. Ultimately, it is a watch design that I’m really proud of, and I get excited every time I look down to check the time.
Last Words
Thanks for taking the time to read this email! As usual, feel free to respond with any thoughts or feedback, and we’ll try our best to respond in a timely manner.
All the best,
Reagan Cook & Ryan Torres
