Quote:
Originally Posted by JodyHighroller
The margins are tight especially on popular references. Typical markup is only $1-2k. They don’t have enough liquidity to purchase all the timepieces being offered to them, so have to balance paying off a sold unit or purchasing more stock.
The margins are much slimmer than I would’ve thought.
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It’s very true and that’s where
some of these guys get in trouble. Not saying TG will, but one or two bad deals can really hurt when you’re floating funds.
It’s really tough margins with the hot references as the sellers want top dollar to come off them, so 10% to 15% tops is most you can make on those. If you pay less you won’t get inventory. Charge more and you won’t sell them.
Mixing some higher margin brands in there helps. Breitling, Cartier, Panerai..etc. something they can buy very low and try to sell @ 30% plus.
That’s why you see some greys not loaded up with Rolex. They need more margin.
The Problem, however, is the market is so laser focused on the hottest brands that its tough to move anything else....especially when the main promotional vehicle is social media, such as the gram.
Less collectors on there who will buy less popular but high margin stuff...but way more status centric buyers who demand fresh, hot Rolex and have absolutely no interest in anything else.