Quote:
Originally Posted by AK797
And also if grey prices start to fall. Rolex should be watching closely too.
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Agreed. It should be interesting to see how this plays out.
In "theory" I don't see why a MSRP increase would change the prices on the grey market. Why? Run with the assumption that grey market prices are a barometer for current demand, i.e., the "value" of the 5711 is set by grey dealers and affirmed by people who transact at those prices. If MSRP increases, that shouldn't really have any impact on the value put in place by grey dealers and validated by purchasers since those prices are well above the new MSRP. Introducing a new, higher MSRP shouldn't have any impact on what the market currently thinks the value of the watch is. The only way I see grey market prices changing drastically is if 1) you change supply and/or the perceived rate of watches being delivered or 2) all this "craze" and popularity for these pieces starts to die down. For 1) what I am essentially saying is the price increase itself may not change grey prices, but it may thin the herd a bit on waitlists of credible buyers. If potential buyers start sensing/believing the wait for a new piece isn't as bad as it was before with the new MSRP, demand could start weakening in the grey market. For 2) I really don't know how that happens. I haven't been around long enough (both as a watch enthusiast and human being) to see how these "fads" rise and fall. In my humble opinion, I do believe this craze is not the same as the ongoing Daytona issues with limited supply and grey market premiums. The current premiums on this watch is significantly larger and frankly, unsustainable, from everything I've seen. I do believe this is a temporary craze, to some extent.
What do I think the price increase means in the near term? You may have a few more people moving up quicker than expected on the waitlists. I say this because there are inherently some people on these lists who aren't caught up in all this craze over the watch, price increases, and grey market dynamics. They may get a call for the watch and when they hear of the new price for the first time, may simply pass on the opportunity. Call me crazy, but I think this is very possible. On the flip side, I really have no clue who the buyers are that fuel the grey market today. Maybe they are the types that are completely insensitive to price and think "I want this watch now. It's hot and all the craze. 30K, 45K, 55K...it makes no difference to me"