ADs selling preowned at market price...ethical dilemma?

[TswaneNguni]

Originally Posted by Marcjvr

What happens if they get a brand new AirKing in stock from Rolex and a buyer walks in looking for an AirKing... do they hide the new model in the back until they sell the preowned one for more than MSRP?

Most likely .

[fsprow]

[QUOTE=77T;10852761]AD’s are not, by definition, grey dealers when they sell pre-owner Rolex models.

Sellers don’t drive up prices. Instead, it is the buy side demand that drives up prices when inventory doesn’t meet demand volume.
.................................................. ........


Prices are set by agreement between a willing seller and a willing buyer. Not one or the other.

[eskiserkan]

When the customer gets a hot model, ADs selling it by considering the market premium. So, the first trade has already made on the market price. Its normal to keep trend going...

[Wingslogo]

Back when my local AD (Bell Jewelers- Murfreesboro Tn) was still an AD

They sold me a 2018 Sub Date $250 under retail since they were an authorized dealer at the time.

I’m still forever grateful. Not common.


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[vh2k]

Originally Posted by ChipotleBanana

Nasty practice and IMO highly unethical.

Rolex wants its dealers to be successful and fully supports dealers getting into the secondary market.

Some articles from last year re: Govberg/WatchBox:

https://finance.yahoo.com/news/spraw...193045399.html

https://www.nytimes.com/2019/11/22/f...tchfinder.html

https://usa.watchpro.com/exclusive-r...elers-in-2020/

[ThatSubGuy]

And here My AD won't allow me to pay marketprice for waitlist watches.

[pj1369]

One of my ADs sells BNIB as "used" to make extra profit. Not sure what can be done about it other than move onto the next AD.


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[MRPWRPATX21]

Originally Posted by BDII

Yup... when mine sold me my black dial Daytona, he mentioned several times he would buy it back from me if I decide to sell


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I've had ADs tell me flat out that they would buy almost any Rolex back from me, and wanted to be the first/only place I went when looking to acquire/sell/trade anything...and that's not even on new models- we were specifically discussing a few 5-digit references.

[MRPWRPATX21]

Originally Posted by brandrea

Interesting information Paul ... I didn’t know the bit about separate display cases, but makes total sense

My AD doesn't display anything used, but operates vintage/used completely out of the vault. He showed me some of his personal collection and told me about it- would have had no clue they dealt in anything used unless I asked/he told me.

[HogwldFLTR]

My AD paid me well when I traded in my collection. I was happy to have a much easier time then trying to sell pieces individually to individuals who are potentially less than reputable. I really see no reason they shouldn't resell at market pricing. If there are unethical ADs then it's time to move to a more reputable one.

[RyanJ]

What is really wrong, is this forum condemns flippers but then:

Praises Trusted Sellers who buy low and jack prices way up.
Praises ADs who also sell pre-owned at jacked up prices.

So why do we condemn individuals who flip watches for a profit but praise trusted sellers and ADs for doing the same thing?

[teck21]

Originally Posted by ThatSubGuy

And here My AD won't allow me to pay marketprice for waitlist watches.

What do you mean won’t allow you to pay market price? As in get dealers’ price?

They can’t just ‘sell’ you a Rolex above MSRP. Rolex won’t let them. What Rolex expressly allows on the other hand, is that ADs allocate watches based on relationship built on spending, or bundling.

Or if you’re lucky enough, a relationship built on rapport. Not sure how many of these ADs exist though.


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[ch3ckme0wt]

Should not be allowed in my opinion. If you want the benefit of being able to sell at “market price”, you shouldn’t be privy to stock from Rolex. They should also do a better job of tracking which ADs regularly drop stuff to grey’s and pull their AD status. It frustrates me that I find it so hard to find watches I like simply because of greed.

[s7horton]

This question would never have been asked if the used price (market value) was a discount from retail. Seems like a double standard.

Nothing wrong with it in my view.

[No SUBctitute]

Originally Posted by mykii

I don't get the latter part, re: intended and nasty, but this happens all the time. IMO, there is nothing wrong with it, and ADs operating at grays is fine with me. They can validate the product better than a gray seller, and offer the same service and availability. Win win to me. .

An AD selling a pre-owned watch is not a grey dealer. In fact, anyone selling a pre-owned watch is not a grey dealer.

Also, if a business gets a new Rolex from an AD within their own country and then sells it within their own country, they are not operating as a grey dealer.

A grey dealer obtains new watches from outside their country through something other than official channels to sell as a new watch in their country.

[Andad]

Originally Posted by No SUBctitute

An AD selling a pre-owned watch is not a grey dealer. In fact, anyone selling a pre-owned watch is not a grey dealer.

Also, if a business gets a new Rolex from an AD within their own country and then sells it within their own country, they are not operating as a grey dealer.

A grey dealer obtains new watches from outside their country through something other than official channels to sell as a new watch in their country.

Aren’t Rolex watches only available from AD’s?

What are the ‘other channels’?

I though grey dealers could only access second hand Rolex watches?

How do they access new Rolex watches?

I am sure a Rolex is spoiling ownership for many.

[WhiteRhino]

How about AD’s who actually purchase their new inventory and then immediately move the new watch into the used case and list it well over retail? Do y’all think that’s still ethical?

[fskywalker]

Originally Posted by Marcjvr

Thanks all so the crux is then if I am an AD and I am selling a BLRO to a name on the list, or putting it in my display case I would be a complete fool.

My better option is to try and bundle it with some PM pieces to maximize my profit. Or ask my uncle to buy it and return it immediately so I can flip it for market price. Or contact a Gray and sell it out the back door to them at some spread between MSRP and market price

Rolex being no fools must recognize this opportunity for the ADs and thus must at least set some rules/advice for ADs to follow

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[pj1369]

Originally Posted by WhiteRhino

How about AD’s who actually purchase their new inventory and then immediately move the new watch into the used case and list it well over retail? Do y’all think that’s still ethical?

I've seen this happen often at our area ADs


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[1William]

Many times we get bogged down in some type of ethical questions that do not appear to have anything to do with ethics. It seems that the underlying issue in this thread and many others is money. Specifically what someone is being charged for a watch and the ability to buy it from an AD. AD's are in business to make money and sell products and they have a contract with Rolex, PP, Omega etc. about how they represent products and terms and conditions of sale. Operate outside that and the companies may pull your ability sell products. No modern production watch from Rolex is difficult to source if you are willing to pay market prices and a possible premium on top of that. But we are back to the money and it lights some people up. Then don't buy and find another model or brand which will sale to you for a discount. There are many out there but that is not what many want to do. They want the watch for retail from an AD, yeah me too, but that is not the reality. Pay to play, one way or another, or be a good observer from the sidelines. Either way just enjoy, we are living in interesting times.

[Tools]

Originally Posted by Andad

Aren’t Rolex watches only available from AD’s?
What are the ‘other channels’?
I though grey dealers could only access second hand Rolex watches?
How do they access new Rolex watches?
I am sure a Rolex is spoiling ownership for many.

Rolex SA doesn't send watches to AD's, they send watches to Market Distributors of which there are a couple of hundred - see Market Codes.

These Distributors provide watches to their Dealers, but whatever doesn't immediately sell, or whatever can make a quicker profit, can be bundled and sold to a big import/export buyer in another market, or shipped overseas.

Most true Grey Market products have never seen the inside of an AD. Some may come from AD's closing shop or dumping to the same import/export buyers - but they are new and have never been sold to a retail customer.

If an AD sells to his friend, or your friend, or the guy with the shop down the street in the normal course of business, and it is re-sold or put on the Internet, it isn't the Grey market, it's the secondary market.

Grey Market business are legit and need a business license, re-sellers and Internet pages could be anything, even black market.

[emtee]

Originally Posted by mykii

But the AD doesn't know what the client would do, or if they would buy it, nor was it the client's only course to "return it" to the AD.

+1.

Unless of course they do

[emtee]

Originally Posted by Tools

These Distributors provide watches to their Dealers, but whatever doesn't immediately sell, or whatever can make a quicker profit, can be bundled and sold to a big import/export buyer in another market, or shipped overseas.

Most true Grey Market products have never seen the inside of an AD. Some may come from AD's closing shop or dumping to the same import/export buyers - but they are new and have never been sold to a retail customer.

.

Sorry are you saying that it's Rolex's distributors that instead of selling these watches to Rolex's AD's (which no doubt they are required to do by Rolex, in fact I would assume Rolex is the distributor or at least directly control what they do) are selling them direct to grey market dealers?

Maybe I misread your post but Really?

[Tools]

Originally Posted by emtee

Sorry are you saying that it's Rolex's distributors that instead of selling these watches to Rolex's AD's (which no doubt they are required to do by Rolex, in fact I would assume Rolex is the distributor or at least directly control what they do) are selling them direct to grey market dealers?

Maybe I misread your post but Really?

Rolex only has "Rolex Distributors" in a handful of markets. In many markets, all imports/distributions are controlled by the government, or have designated import/export bureaus. The world is not free-market everywhere, China is the biggest example. You have no say for your product once it is received by their designated agent if you want to sell in these markets.

[emtee]

Originally Posted by Tools

Rolex only has "Rolex Distributors" in a handful of markets. In many markets, all imports/distributions are controlled by the government, or have designated import/export bureaus. The world is not free-market everywhere, China is the biggest example. You have no say for your product once it is received by their designated agent if you want to sell in these markets.

Interesting. So the distributors in these markets which Rolex doesn’t control may as well sell all the Daytona’s/GMT’s/LV’s to the secondary dealers for a fatter profit and leave all the datejusts for the poor AD’s. Or charge the AD’s more than Rolex say they should for the models that sell for above MSRP on the secondary market?

Seems strange to me but what do I know....

Edit - when you think about it how can Rolex even have AD’s in countries where they can’t guarantee that those AD’s will be distributed their products?

[Tools]

Originally Posted by emtee

Interesting. So the distributors in these markets which Rolex doesn’t control may as well sell all the Daytona’s/GMT’s/LV’s to the secondary dealers for a fatter profit and leave all the datejusts for the poor AD’s. Or charge the AD’s more than Rolex say they should for the models that sell for above MSRP on the secondary market?

Seems strange to me but what do I know....

Now you are conflating the secondary market - which are used products, with uncontrolled market distributors, who do sell new Daytonas/GMTs/LVs and Datejusts, to favored clients and import/export agents all the time.

A market distributor in China/Caribbean can make huge profits by selling large lots of watches specifically for export to the US or another market by volume alone. Much more volume and profit than they could ever sell within their own market. There is no law prohibiting this in these countries.

[emtee]

Originally Posted by Tools

Now you are conflating the secondary market - which are used products, with uncontrolled market distributors, who do sell new Daytonas/GMTs/LVs and Datejusts, to favored clients and import/export agents all the time.

A market distributor in China/Caribbean can make huge profits by selling large lots of watches specifically for export to the US or another market by volume alone. Much more volume and profit than they could ever sell within their own market. There is no law prohibiting this in these countries.

Who are they selling these watches to exactly? If not AD’s (who should be getting their product from the Rolex distributor in their country) then secondary market dealers which we generally refer to as grey dealers?

What about customs/import taxes?

How does the warranty work exactly? My understanding is most of the time a secondary market watch has already been swiped by an AD to activate it.

In my experience in the UK almost every BNIB watch has come directly from an AD in the EU

[Xenon]

Since when do market prices reflect a moral compass?

[pj1369]

Originally Posted by Xenon

Since when do market prices reflect a moral compass?

For me the dilemma is when ADs mark brand new inventory as "used" and then sell it at a premium, against Rolex guidance. They do this while pretending to have "a list" - I find it not transparent or ethical. I had an AD offer me a very specific Daytona last year if I traded in a watch that I would get $0 for and result in a $6k premium. I decided not to proceed. 2hrs later that Daytona was offer as "used" with the $6k premium in the price - which was market. It all just felt a little dishonest to me...no regrets on my part.


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[train-time]

It's not only pre-owned. The only way to get any "in demand" piece, new or otherwise, at the major AD in my area is to pay market prices for any watch such as a Pepsi, Batman, Sub, SS Daytona, etc. They will leverage the sale with a trade or something else and then amazingly they have the watch in the back. They also have a pre-owned section and a website. Unfortunately there are very few other AD choices without going out of state as Rolex has pulled the line out of most other ADs in the area.