Sramana Mitra: Why watches?
OJ Whatley: I’ve always loved watches. Even going back to my days as a 10-year-old, I was always enamored of watches.
Sramana Mitra: It’s a passion.
OJ Whatley: Yes. The price points were $10 to $300. I was always obsessed with watches and I’ve been wearing a watch since I was about 12 years old. It evolved. It started with Star Wars R2-D2 and Darth Vader watches. I wear some of them on a chain around my neck. It progressed to Casio calculator-type of watches and watches that would play music. Then it progressed to the freestyle sports watches and Casio G-Shocks.
While a freshman at the University of Miami, I was representing my college on the Wheel of Fortune and won $16,900. Of this, $4,500 was a gift certificate to a jewelry store in Beverly Hills where I redeemed that gift certificate for two stainless steel Rolex Submariner watches – one for myself and one for my father. That was the first real luxury watch I ever bought.
Sramana Mitra: What were you doing to do with WatchUWant in 2000? What was the game plan?
OJ Whatley: The game plan was to make millions in the dot com world.
Sramana Mitra: I’m asking for more specifically what kind of watches were you going to sell? How much inventory were you going to buy? Where were you going to source these from?
OJ Whatley: I couldn’t afford watches I wanted to buy. I couldn’t afford to keep them but I could afford to buy them and sell them for more than what I paid for them. So I could take a passion and turn it into a profit opportunity. While working for this software company, we started getting notices that said something to the effect of, “Great news! For every dollar you don’t take in salary or payroll, we’ll give you a thousand stock options.” After not taking any compensation for about two months, suddenly the light went on that this company may not survive. That’s when I stepped up my efforts to buy and sell watches primarily focused on one particular brand, which by 2000 I had a keen interest in. It was a brand called Panerai.
Sramana Mitra: What drew you to that brand?
OJ Whatley: What I like about Panerai is it was the largest watch in terms of size. It was 44 mm and that was gargantuan in 1999. In fact, it was comically oversized. What I fell in love with about the watch was that it had a genuine and unique history. During World War I and World War II, it was involved in making military spec-type components for special force military groups. Panerai was making the watches and underwater compasses that the underwater ballistic guys would use when they were diffusing bombs underwater or when they were doing tactical warfare underwater. It was a real history. There are history books written about these various special force groups. There’s an Italian special force group. There’s an Egyptian special force group and they’re all outfitted with gears from Panerai.
Sramana Mitra: What was the price point of this watch?
OJ Whatley: One of the reasons I like Panerai so much was because it was half the price point of Rolex. I couldn’t afford to buy and sell Rolexes but I can afford to buy $1,500 watches and make $500 to $800 on every watch.
Sramana Mitra: Where were you buying these watches from?
OJ Whatley: I was buying these watches from collectors on a collector’s forum site and on a watch trading site.
Sramana Mitra: These were separate sites? You were buying from these collectors from other sites and then selling on eBay?
OJ Whatley: That is correct. In fact, one of the sites was called Paneristi.com, which is still in operation today. The other site is Timezone.com, which is a watch enthusiast community and one of its parts is the watch trading forum. What I found was that I could buy watches from enthusiasts who owned the watch and have grown tired of it or ready to buy something else. I could buy those watches from them and make a market to sell those watches to people who were just starting to learn about Panerai.
Sramana Mitra: How many of these transactions were you able to do?
OJ Whatley: In 2000, I probably sold 25 watches.
Sramana Mitra: You were by yourself, right? How about in 2001?
OJ Whatley: In 2001, I just stepped up the volume.
Sramana Mitra: Were you investing many to buy inventory?
OJ Whatley: I was reinvesting every dollar I was making back into my business.
Sramana Mitra: It was basically organically funded?
OJ Whatley: It was organically funded with a $3,500 credit card.
Sramana Mitra: In 2001, what kind of volume did you get to?
OJ Whatley: In 2001, I probably sold 25 watches at an average of $2,500 per watch. In 2002, I probably did 40% to 50% more. My business just grew exponentially from there. In 2006, I was doing $6 million in revenue out of my house with me, myself, and I.
Sramana Mitra: Just selling these watches?
OJ Whatley: Buying and selling watches.
Sramana Mitra: On eBay?
OJ Whatley: On eBay, that’s correct. My model became eBay-driven in 2003.