Strange happenings in Hong Kong - grey market dealers

[GW44]

Originally Posted by texasmade

What do you expect them to say?

"Yes demand is softening and now we're calling more clients to make sales."

The SA is always going to say demand is strong to convince ppl to buy whatever becomes available.

A little cynicism creeping in there...

Some folks (even in customer facing roles) actually tell the truth. In my experience no SA here in the Uk needs to spin any angle, or yarn, to convert a sale at all…..not by a long chalk.

[messikens]

Originally Posted by texasmade

What do you expect them to say?

"Yes demand is softening and now we're calling more clients to make sales."

The SA is always going to say demand is strong to convince ppl to buy whatever becomes available.

I think Vogel based on his purchase history got some nice pieces already including some LE. So I’d assume he’s got a decent rapport with the SA and can get some brass tacks talk...

To me there's nothing wrong with asking, I'd assume most sales guys are going to give you a differentiated answer - like : still strong but not nuts like it used to be...

If appointment availability is any indication, I can tell you nothing has changed. The boutique is still crammed

[VogelPhoenix]

Originally Posted by texasmade

What do you expect them to say?

"Yes demand is softening and now we're calling more clients to make sales."

The SA is always going to say demand is strong to convince ppl to buy whatever becomes available.

They know I’m getting my watches from another boutique, so convincing me of anything had nothing to do with it. Furthermore, they agreed that the prior/current situation is not healthy or pleasant for anyone involved.

I have yet to hear stories about AP cold-calling customers to shift unwanted inventory, but maybe you know different? Just here to learn.


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[texasmade]

Originally Posted by VogelPhoenix

They know I’m getting my watches from another boutique, so convincing me of anything had nothing to do with it. Furthermore, they agreed that the prior/current situation is not healthy or pleasant for anyone involved.

I have yet to hear stories about AP cold-calling customers to shift unwanted inventory, but maybe you know different? Just here to learn.


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No, not cold calling but probably having to work the list a little more. Instead of just calling the first person and they say yes to buy, now maybe they’re calling 2nd or 3rd person.

[VogelPhoenix]

Originally Posted by texasmade

No, not cold calling but probably having to work the list a little more. Instead of just calling the first person and they say yes to buy, now maybe they’re calling 2nd or 3rd person.

This is based on info from a boutique or people who were told that they were the 2nd or 3rd choice for a particular watch or ...? Any particular models for which this is happening more often now than e.g., half a year ago?

[GB-man]

Originally Posted by VogelPhoenix

This is based on info from a boutique or people who were told that they were the 2nd or 3rd choice for a particular watch or ...? Any particular models for which this is happening more often now than e.g., half a year ago?

There’s no doubt ROO as many on the list are pure opportunists. You can’t flip them for a profit so those casual flippers aren’t doling out 50-75k for 1/200 offshore variations. Forget a code who the heck is buying those unless they really promise you something good.

[VogelPhoenix]

Originally Posted by GB-man

There’s no doubt ROO as many on the list are pure opportunists. You can’t flip them for a profit so those casual flippers aren’t doling out 50-75k for 1/200 offshore variations. Forget a code who the heck is buying those unless they really promise you something good.

For starters, there is no "list". Then, "There's no doubt" does not seem like a good replacement for evidence that business for the boutiques has noticeably changed.

What I have seen is that the appointment-only AP houses I visited recently had a constant stream of clients keeping the SAs occupied while I was there and that in July/August the two boutiques I have worked with for years were busier than at any of my numerous visits from 2018-2021.

What I have heard from various SAs is that so far they are as busy now as at any time prior, cannot keep up with demand, and that phones ring off the hook with any new release. Maybe things have gone from 200% to 150% oversubscribed, but demand/supply still seems wildly imbalanced.

I'm not making prognostications - maybe things will also fall off a cliff at the retail level, following the standstill at the secondary market. But the discussion would be more fruitful if based on some semblance of evidence/observation, rather than pure assertion.

[aa909]

Originally Posted by VogelPhoenix

This is based on info from a boutique or people who were told that they were the 2nd or 3rd choice for a particular watch or ...? Any particular models for which this is happening more often now than e.g., half a year ago?

white dial RO 15500...

[texasmade]

Originally Posted by VogelPhoenix

This is based on info from a boutique or people who were told that they were the 2nd or 3rd choice for a particular watch or ...? Any particular models for which this is happening more often now than e.g., half a year ago?

None of the above. This is just my suspicion. Interest rates are rising, inflation is high, money is drying up, and economic activity is slowing. Luxury watches aren't a necessity so makes sense that demand will slow.

If your SA said like Messikens mentioned with something to the effect of "demand is still high but not as high as 6 months ago" I would believe him or her. When he or she is saying there's no change in demand, I just find that hard to believe unless they mean no change from last week/month. I guess it depends on the timeframe your SA is referencing.

As for which models I believe are slowing, anything that's not a RO so Codes and ROO.

If you want to call me an idiot and I have no idea what I'm talking about, that's fine. I don't have any inside knowledge of what's happening nor have I spoken to an AP SA in several years.

[texasmade]

Originally Posted by VogelPhoenix

Maybe things have gone from 200% to 150% oversubscribed, but demand/supply still seems wildly imbalanced.

I agree with you on this point. I don't think we're going to see RO's discounted sitting in window shops anytime soon.

[squall1]

Originally Posted by VogelPhoenix

For starters, there is no "list". Then, "There's no doubt" does not seem like a good replacement for evidence that business for the boutiques has noticeably changed.

What I have heard from various SAs is that so far they are as busy now as at any time prior, cannot keep up with demand, and that phones ring off the hook with any new release.

Same observations and discussions though I think we've visited similar locales recently. Taiwan is slammed with customers & NYC was crazy busy at 11am on a Monday. I'm surprised they even entertained a looky loo like me. I think Code is the canary in the coal mine. When they start popping up for sale for someone walking in off the street, that might be an indication things are cooling off.

[macrowatch]

FWIW, I appreciate the essence of OP’s original sharing - a nice anecdotal datapoint rather than the guessing game of demand level and future of the brand.

In the spirit of OP’s sharing, I will also note that lately some dealers I know won’t make offers on the super high end pieces, complication, concepts, etc. demand of balance sheet problems, who knows. But the market making support for those pieces is gone now at least for those pieces.

[Vince_76]

Originally Posted by aa909

white dial RO 15500...

Good news if so. Did this happen to you/someone you know? How did you know you/they weren’t the first call?

[GB-man]

Originally Posted by VogelPhoenix

For starters, there is no "list". Then, "There's no doubt" does not seem like a good replacement for evidence that business for the boutiques has noticeably changed.

What I have seen is that the appointment-only AP houses I visited recently had a constant stream of clients keeping the SAs occupied while I was there and that in July/August the two boutiques I have worked with for years were busier than at any of my numerous visits from 2018-2021.

What I have heard from various SAs is that so far they are as busy now as at any time prior, cannot keep up with demand, and that phones ring off the hook with any new release. Maybe things have gone from 200% to 150% oversubscribed, but demand/supply still seems wildly imbalanced.

I'm not making prognostications - maybe things will also fall off a cliff at the retail level, following the standstill at the secondary market. But the discussion would be more fruitful if based on some semblance of evidence/observation, rather than pure assertion.

They must have changed business practices since I left but I was able to register interest in pieces so there absolutely was a notation of what clients were seeking what.

It sounds like our disagreement is around the effects of the secondary market on primary market demand. I am of the belief that many new buyers will not be excited about buying APs when they are hurting in their equities and the watches no longer represent a no financial downside toy.

6-12 months ago you could buy a code and then an ROO to get a 15500 and feel ok about it. Today you are better off buying the 15500 secondary NIB.

[Mini2]

Originally Posted by GW44

I think it was one person maybe getting a Jumbo straight off…..I’d let that one go if I was you

A ROO is going to be a better “in” here in the Uk IMHO.

I want a 'in ' with something I want not a 'in' by buying something that is clearly too big for my wrist and not suit my lifestyle.

[aa909]

Originally Posted by Vince_76

Good news if so. Did this happen to you/someone you know? How did you know you/they weren’t the first call?

I meet with my SA last month to discuss my allocation(s) for 2023. Been working with her for a few years so I know her style and she knows my taste. she brought out a white dial 15500 and said "this would look great on you"... she knows I have zero interest in white dials... I'll leave it at that.

[Mini2]

Originally Posted by aa909

I meet with my SA last month to discuss my allocation(s) for 2023. Been working with her for a few years so I know her style and she knows my taste. she brought out a white dial 15500 and said "this would look great on you"... she knows I have zero interest in white dials... I'll leave it at that.

Allocation is freeing up
I have hope

[911AP]

Originally Posted by GB-man

They must have changed business practices since I left but I was able to register interest in pieces so there absolutely was a notation of what clients were seeking what.

It sounds like our disagreement is around the effects of the secondary market on primary market demand. I am of the belief that many new buyers will not be excited about buying APs when they are hurting in their equities and the watches no longer represent a no financial downside toy.

6-12 months ago you could buy a code and then an ROO to get a 15500 and feel ok about it. Today you are better off buying the 15500 secondary NIB.

It's still a no downside toy. The Code more or less I think (someone can correct me if I am wrong) never sold at retail secondary. Or if it did, it was for a short time because I personally never saw it. The ROO pretty much is selling for retail or fairly close to it still. So it kinda is a no down side toy. You lose may what...5k? But then you can get a RO, that you make 50%-100% on?

When I was buying offshores at 30% off I saw it then as a no downside toy. Granted there are no ADs anymore to give deals like that, but still the downside is extremely limited. Unless you buy a code. But even when I saw it in person I was as underwhelmed as I was by the videos/pictures, so I don't blame people on those.

[GB-man]

Originally Posted by 911AP

It's still a no downside toy. The Code more or less I think (someone can correct me if I am wrong) never sold at retail secondary. Or if it did, it was for a short time because I personally never saw it. The ROO pretty much is selling for retail or fairly close to it still. So it kinda is a no down side toy. You lose may what...5k? But then you can get a RO, that you make 50%-100% on?

When I was buying offshores at 30% off I saw it then as a no downside toy. Granted there are no ADs anymore to give deals like that, but still the downside is extremely limited. Unless you buy a code. But even when I saw it in person I was as underwhelmed as I was by the videos/pictures, so I don't blame people on those.

You will get bent over on any code for tens of thousands, most ROO you’ll need to skirt taxes and then keep it LNIB in hopes of losing 5k and that’s if you sell it yourself. No dealer is giving finance bro msrp for his ROO. They will likely get no offer at all.

Regardless I think AP will manage the situation fine. I think a buyer should be able to walk in and buy some ROO bare minimum. These don’t have to be financial instruments because let’s be honest they are investments big picture.

[VogelPhoenix]

Originally Posted by aa909

I meet with my SA last month to discuss my allocation(s) for 2023. Been working with her for a few years so I know her style and she knows my taste. she brought out a white dial 15500 and said "this would look great on you"... she knows I have zero interest in white dials... I'll leave it at that.

Interesting. Maybe a sign of things to come.

[TheDude]

Originally Posted by psm11

I think my favorite thing about grays right now is that they crush you on price if you are selling them a piece and they tell you the market has changed but refuse to drop the price of the 15500 they bought 4 months ago for 60k. You can’t have it both ways.

Yeah, but they’re insulating the market from a pure free fall.

Their actions aren’t even remotely altruistic, but their role is important… holding the line is keeping values up for owners everywhere.


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[dmash]

Originally Posted by TheDude

Yeah, but they’re insulating the market from a pure free fall.

Their actions aren’t even remotely altruistic, but their role is important… holding the line is keeping values up for owners everywhere.


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Exhibit A:

Grey asks $85k for Chrono ROC

Offers you only $40k if you want to sell (IF they'll even offer to buy it)

Would sell for $45k if you sell privately



There's not 'value' being propped up whatsoever, it's just leading some amateurs into a false sense of what their timepiece is worth. If a bunch of grey are asking XX amount but in no way shape or form can you obtain said value, how is that its actual worth? The only line being held is their desperate hope that some day the market spikes like it did at the beginning of the year so they don't lose their pants. This type of prop up would have worked before smartphones and such easy access to knowledge, but transparency for prices is now a thing. You can't fool people into stuff like this anymore, at least not easily.

Another reason this watch market is such an anomaly.

[sigma089]

I wholeheartedly agree with dmash. A thing is only worth what someone is actually willing to pay for it. Asking price has nothing to do with the actual value.

Greys and everyone who bought into the idea that watches - especially in-production models - are some kind of investment are in for a rude awakening.

[INC]

One thing that hasn't been discussed yet. The grays finance their inventory with debt. If interest rates go up, their costs could double or even go higher, so right now it's in their best interest to sell as much as they can because it cuts their losses. For example, on Chrono24 you can find a Daytona below €20k, as it was not sold immediately. No customers, but the costs are high, therefore the business stalls.

IMHO that's why they only buy something very cheaply, since that's the only way it's worth keeping it in stock until nowadays a buyer comes for it.

[TheDude]

Originally Posted by dmash

Exhibit A:

Grey asks $85k for Chrono ROC

Offers you only $40k if you want to sell (IF they'll even offer to buy it)

Would sell for $45k if you sell privately



There's not 'value' being propped up whatsoever, it's just leading some amateurs into a false sense of what their timepiece is worth. If a bunch of grey are asking XX amount but in no way shape or form can you obtain said value, how is that its actual worth? The only line being held is their desperate hope that some day the market spikes like it did at the beginning of the year so they don't lose their pants. This type of prop up would have worked before smartphones and such easy access to knowledge, but transparency for prices is now a thing. You can't fool people into stuff like this anymore, at least not easily.

Another reason this watch market is such an anomaly.

Originally Posted by dmash

Exhibit A:

Grey asks $85k for Chrono ROC

Offers you only $40k if you want to sell (IF they'll even offer to buy it)

Would sell for $45k if you sell privately



There's not 'value' being propped up whatsoever, it's just leading some amateurs into a false sense of what their timepiece is worth. If a bunch of grey are asking XX amount but in no way shape or form can you obtain said value, how is that its actual worth? The only line being held is their desperate hope that some day the market spikes like it did at the beginning of the year so they don't lose their pants. This type of prop up would have worked before smartphones and such easy access to knowledge, but transparency for prices is now a thing. You can't fool people into stuff like this anymore, at least not easily.

Another reason this watch market is such an anomaly.

Obviously I’m using value interchangeably with price. That distinction was a waste of text.

We don’t disagree - I’m not suggesting it’s working perfectly and that prices have not eroded at all… I never said that. They obviously have, but it can also be true that they could (and should) be lower.

I said they’re “keeping values up”… and I truly believe that is true - and that prices would be much lower if not for grey brokers’ presence and relative control of large pools of inventory.


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[dmash]

Originally Posted by TheDude

I said they’re “keeping values up”… and I truly believe that is true - and that prices would be much lower if not for grey brokers’ presence and relative control of large pools of inventory.


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One could also interpret this as….….. ‘they’re clearly exerting all possible effort to manipulate the market in their favor’.

I just don’t understand it though. The only logical answer is some of these greys made such an unfathomable amount of money in the recent run up that they can blow money on interest for months in hopes of a run up. It still doesn’t make sense to me though as all signs point towards things getting even worse. That seems incredibly risky though for an entire business model to be hinging on speculation like this. It’s almost like betting your business on black. Wild.

But hey, maybe they know something I don’t.

[911AP]

Originally Posted by GB-man

You will get bent over on any code for tens of thousands, most ROO you’ll need to skirt taxes and then keep it LNIB in hopes of losing 5k and that’s if you sell it yourself. No dealer is giving finance bro msrp for his ROO. They will likely get no offer at all.

Regardless I think AP will manage the situation fine. I think a buyer should be able to walk in and buy some ROO bare minimum. These don’t have to be financial instruments because let’s be honest they are investments big picture.

I don't know.....I had 3 ROOs. Sold 2 of them for more than I paid to dealers who had them on consignment. No issues. Both sold in less than 2 weeks. Still have 1 left. Made space for the bigger pieces I'm trying to get now.

You can't really get out of the taxes anymore. I was able to do that with the first 2, but not the third one.

[GW44]

Originally Posted by Mini2

I want a 'in ' with something I want not a 'in' by buying something that is clearly too big for my wrist and not suit my lifestyle.

Probably no chance of a new 15510 this year then.

Good luck for 2023

[dmash]

Originally Posted by 911AP

I don't know.....I had 3 ROOs. Sold 2 of them for more than I paid to dealers who had them on consignment. No issues. Both sold in less than 2 weeks. Still have 1 left. Made space for the bigger pieces I'm trying to get now.

You can't really get out of the taxes anymore. I was able to do that with the first 2, but not the third one.

Just to clarify. In summation, you’ve:

- flipped 2 (possibly soon to be 3) ROO
- flipped a 15500 recently

Yet your House/Boutique has zero issue with you churning their allocations and gave you a 15202st/you have hopes of a 15407st too.

Very, very interesting data point here.

[SMD]

Originally Posted by GB-man

They must have changed business practices since I left but I was able to register interest in pieces so there absolutely was a notation of what clients were seeking what.

It sounds like our disagreement is around the effects of the secondary market on primary market demand. I am of the belief that many new buyers will not be excited about buying APs when they are hurting in their equities and the watches no longer represent a no financial downside toy.

6-12 months ago you could buy a code and then an ROO to get a 15500 and feel ok about it. Today you are better off buying the 15500 secondary NIB.

This is my view as well. And yes, they still keep a list of the pieces you have registered an interest in. At least in NYC they do.

FWIW, the NYC boutique offered my a 50th anniversary piece I was not seeking nor did I express any interest in it. Things have definitely changed.