The shooting happened around 5:11 p.m. in the 500 block of West Queen Lane.
Investigators say one of the victims, 30-year-old Tyree Ware, had recently advertised the Rolex for sale online.
Police say Ware had driven to the location to meet 16-year-old Qua'Neef Lee and an unidentified male.
There was also an unidentified man with Ware who was reportedly seen entering a nearby store while the transaction occurred.
While in the car, an altercation erupts as police believe Lee and the man attempted to rob Ware of the watch.
At some point after that, a shootout erupted, and police say three guns were used to fire 11 shots near Ware's car.
Surveillance video from a nearby store captured part of the incident. The video shows Ware falling to the ground near his Nissan Maxima. A man then approached Ware and shot him twice in the chest as he lay in the street.
Police said 16-year-old Qua'Neef Lee was also shot in the chest during the incident and found near the rear of the car.
Both males were taken to the hospital, where they died.
"He didn't hurt nobody. I just don't know what to say, I'm so lost," a relative of Lee, who asked to remain anonymous, told Action News.
She said Lee would have turned 17 next week. "To all the young folks, put the guns down. Put them down. It's not necessary. Nobody can do something to you that bad that you have to kill them."
Cornelio Mezquita, who owns the Queen La Mini Mart across the street, said he was devastated to learn Lee was one of the victims.
"I've been here for 21 years. That boy feel like he's family," Mezquita said. "I find out around 8:30 when I get out the store. I receive a phone call from his grandma, and it destroyed my heart."
Police recovered a 9mm handgun from the roadway next to Ware. Police say he had a permit to carry.
A search is still ongoing for the two other weapons.
Police are also looking for the man who was part of the attempted robbery, and also the man who arrived with Ware.
Anyone with information can call or text Philadelphia police at 215-686-TIPS (8477) or submit an anonymous tip online.