Apple Watch series 3 factory reset

What do you see on screen? If it is asking for a passcode or showing the time it MUST be erased before you can begin pairing to your phone. The document I linked gives you two different methods to erase.

Also see Set up your Apple Watch - Apple Support, and if you bought a used/pre-owned watch take a look at About Activation Lock on your Apple Watch - Apple Support and What to do before you sell, give away, or trade in your Apple Watch, or buy one from someone else - Apple Support because it is unfortunately a common problem that many second hand devices are still Activation Locked and can’t be setup by the new owner.

You need to use the Watch app on the paired iPhone.

Go to General>Reset>Erase Watch content and settings.

ASC - Late 2012 Mac mini, macOS 10.14.5; Watch, series 3 cellular, watchOS 5.2.1; iPad Air 2 & iPhone 8+, iOS 12.3.2; TV 4th Gen, tvOS 12.3;  HomePods, audioOS 12.3 and Airport Express w/ Airplay 2

Please see If you forgot your Apple Watch passcode - Apple Support which describes the exact steps. Note particularly the requirement for charger power, or the Erase option does not appear.

Is the activation lock disabled?

That's the issue of buying 2nd hand. Many folks end up with sculptures or paperweights.