Let's start with some basics.
First, you have taxable income to report for 2019 regardless. Any time you sell something for more than you paid for it, that creates a taxable capital gain. If you held the property less than 1 year, the capital gains are taxed at ordinary income rates.
Suppose this is a hobby. Your income is the difference between the selling price and purchase price of the items. You can't deduct any expenses except that you can reduce the selling price by the costs of selling (listing fees and PayPal surcharges). It doesn't much affect your taxes if you report it as "other income" or hobby income, or as capital gains on schedule D, as long as you held the property less than 1 year. If you held items more than one year, it's a long term capital gain and taxed at a lower rate.
Suppose this is a business. A business means an "ongoing trade or business", where you intend to earn a profit, you advertise, buy and sell inventory, and do all the other things a business typically does. If you are a business, you can deduct expenses that are "reasonable" for your business, and that are "ordinary and necessary" for the kind of business you do. This can include tools, shipping costs and transaction fees, and so on. If you show a loss, you can carry that forward to the next year of the business. If you have a profit, you pay income tax AND 15% self-employment tax on the profit (SE tax is the self-employed version of social security and Medicare tax.) If your tools are more than $2500, you may need to depreciate them over time rather than expense them. If you stop the business before the tools are properly depreciated, you may have to repay some of that depreciation. You generally can't include as an expense, the cost of building a workshop in your home unless you meet all the rules for taking the "home office" deduction, more formally known as business use of your home. The watches you buy and sell are business inventory, not capital goods, and you don't get the lower capital gains tax rate if it takes you longer than a year to sell some of your inventory.
You report the business on Schedule C as part of your personal tax return. Schedule C reports your income and expenses and calculates the profit, which is then added to any other income from jobs or investments to determine your overall income tax. The profit also goes from schedule C to schedule SE to tack on the 15% SE tax.
You never take an expense or deduction for the value of your labor or time. You are paid for the value of your time by selling items for more than they cost. Your time is not something you can expense. (The 30,000 foot view is that, if you took a salary out of the business as an "expense", then you have to report that as taxable income, so it's a wash at best. If you create the business as an S corp, you may be required to take a salary and give yourself a W-2, but that is not something a typical sole proprietorship or side hustle will ever do, and it's something you should not do without extensive legal advice.)
The IRS takes an equally dim view of hobbies reported as businesses, and businesses reported as hobbies. Reporting a hobby as a business may allow you to deduct expenses that can't be deducted as a hobbyist, and also creates "earned income" which can be used to qualify for things like EIC and IRA deductions. Reporting a business as if it was a hobby may allow you to avoid the extra 15% SE tax.
Once you decide if you are a hobby or business, you will need to amend your 2019 return to report income received in 2019, no matter how small. Make sure you keep good records. The tax code presumes all income is taxable and you have to prove otherwise. If you sold watches totaling $5,000 but paid $,4000, for $1,000 net income, you need to be able to prove that if audited, otherwise the entire $5,000 may be taxed. Then plan on reporting your hobby or business income for 2020 as well.
