Business banking and payments for watch dealers

A watch dealer moves large sums, often to and from people they've never met. Banks and payment processors notice that pattern, and a dealer whose account is frozen at the wrong moment can't buy or pay. Setting up the money side properly at the start avoids most of the trouble.

Start with a separate account

Open a business account and run everything through it: purchases, sales, fees, shipping, and anything else. Mixing business and personal money makes your records unreliable, your tax return harder, and, for an LLC or corporation, undermines the separation the structure is supposed to provide. The bookkeeping article covers the habits that follow from it.

Have the account in the name you actually trade under, matching your registrations, as the naming article explains.

Be accurate about what you do

When you open accounts, describe the business honestly: buying and selling pre-owned watches, the typical transaction size, and where your customers are. It's tempting to keep it vague, but an account opened on a vague description is the one that gets closed when the activity doesn't match.

Some banks are more comfortable with high-value secondhand goods than others. It's worth asking directly before you commit.

The payment methods dealers use

• Bank transfers for larger sales and trade purchases: fast, final, and cheap, with no chargeback risk. Verify details directly with the other party, since changed bank details in an email are a common fraud.
• Card payments and platform checkout for smaller sales and cautious buyers, at the cost of fees and the risk of a dispute. The chargeback article covers what that involves.
• Escrow where neither side knows the other, as the escrow article describes.
• Cash, with care. Take in over $10,000 of it, either at once or across linked payments, and your business generally owes the IRS a Form 8300 filing.^[1] The federal cash reporting guide covers how it works.

The payment article compares the methods from a safety point of view.

Marketplace payouts

If you sell on marketplaces, understand how and when they pay out, whether funds can be held, and what triggers a hold. New sellers and high-value items often see longer holds, which affects your cash flow more than the fees do. Plan for the gap between selling and being paid, as the cash flow article covers.

Keep accounts healthy

• Document everything. If a bank or processor asks about a transaction, you want the invoice, the shipping record, and the counterparty's details to hand. That's what your recordkeeping is for.
• Avoid patterns that look evasive, such as splitting payments to stay under reporting thresholds. Structuring transactions to avoid a reporting requirement is itself a serious offense.
• Don't run business money through personal payment apps, which is a common way to get an account limited.
• Keep a second banking relationship, so a hold on one account doesn't stop the business.

Keep the paperwork close to the money

Banks and processors ask questions in their own time, often months after a transaction. What makes those questions easy to answer is having the paperwork filed against each deal as it happens: the invoice or purchase receipt, the counterparty's details, and the shipping record. A dealer who can produce all three within a few minutes rarely has a problem escalate.

The same file answers your accountant's questions at year end, so it's worth building the habit once rather than twice.

Put the costs in your pricing

Processing fees, wire charges, currency conversion, and payout delays are all real costs of a sale. Include them when you work out what you can pay, using the max buy calculator, rather than treating them as overhead you notice at year end.