Official Rolex Certified Pre-Owned Announcement - 1st Dec

[RolexSimon]

Originally Posted by omar-rye

So you can either go on the list for a new Pepsi or purchase a preowned one right now for double it’s retail?

Pre-owned have to be at least 3 years old - therefore stops immediate flipping! Sort of Rolex accepting flipping but only after 3 years - actually pretty reasonable IMHO.

[Laostuh]

Originally Posted by Jsc37

This could add an entirely new layer to getting the chance at a watch. For example - offer to trade them a used black Daytona for a new white one. Buyer gets a new watch in different color for even swap and AD gets to sell the used watch for market, making significantly more profit. Same concept goes for Pepsi…trade a used BLNR for new Pespi.

Even swap? Wouldn't hold my breath on this one.. They are going to make their typical 30-40% profit on the new watch they sell and another 30-40% on the one you trade-in. Double whammy.

[QuelleHeureEstIl]

This initiative is currently mono-product: second-hand Rolex for the casual wearer who focuses on peace of mind.

I hope they will add a premium product focused on collectors (top condition, full set, etc). A little like Beyer Zurich is doing with pre-owned Patek.

I doubt they want/can focus on low price offerings with lower margin; many greys are already very good and experienced at it.

[alphadweller]

Originally Posted by rambo99

CPO prices should not depend on perceived dealer reputation, people buy CPO watches only because they are certified by Rolex.

Exactly, and that's the reason why Bucherer's certification of authenticity and two years warranty on their preowned Rolex stock has turned into Rolex CPO overnight. They haven't sent their watches to the RSC. They do their own authentication with on-site certified watchmaker's and pay Rolex a fee in exchange for the CPO which includes Rolex' own warranty.

[Mr Ben]

I’ve read through all the comments to date. Interesting discussion. I always buy my cars approved used so I like the theory but the prices listed just now on CPO wouldn’t tempt me.

Most comments in this thread though assume that market pricing stays well over retail. Not much debate on what happens if the market prices continue to drop. I guess we just get three price points - grey, CPO and new in ascending order which sounds ideal to me.

The crazy 2-3 years of prices over retail will look like the crazy brief period during covid where nearly new cars sold over list because you couldn’t get any stock at the dealers… nothing in a CPO announcement changes the fact that new supply is likely to remain fairly static and demand is likely to drop which will be the only thing that sorts this to all look sensible.

[alphadweller]

Originally Posted by SubMillennial

That's not how prices are set; demand dictates the prices, not the whims of sellers. If the non-CPO watches weren't selling at their current price, there won't be new demand by raising prices. The only way that occurs if the buy-price from Rolex for traders is higher than current grey sell prices, which is very doubtful

Originally Posted by Driver8

Correct.

I just wrote a post saying basically this, and then accidentally hit the wrong key and lost the whole post(!), but in essence it was saying exactly the same thing.

I know a couple of bricks and mortar pre-owned watch specialists near me (who also sell online) who always carry a ton of Rolex stock, and I can categorically say there are numerous professional pieces that have been in their display for months now. Yes their prices are typical grey prices, but they're not horrendous either (unlike the CPO prices), so I can't remotely see them (or any others) thinking that raising prices is a good idea just because Rolex AD's are now offering something that greys can't - the CPO guarantee. If pieces don't sell at current prices, they won't sell at higher prices without some additional value being added...... which they can't as they can't offer the CPO scheme. Pricing is driven by what sells.

At the risk of sounding like the economist I am, everything comes back to supply and demand, and I can't see how Rolex offering the CPO scheme is suddenly going to increase global demand for Rolexes as a whole.

IMO the Rolex CPO scheme is an industry outlier with a specific USP that will appeal to a certain type of buyer. It's nothing more than that.

What I'm saying is the intrinsic value of CPO is the cost of a service at the RSC. That's what CPO gives you, watch in good working order, authenticity and two years warranty.

However, what we are seeing is the asking price from Bucherer has been bumped way above grey market price, beyond the cost of a service at the RSC. How do they justify charging more for CPO than what an service would cost the buyer if he was inclined to take his watch to the RSC? Same Rolex guarantee whether it's CPO or RSC. So why CPO dealers set the asking price so high? That will allow grey non-CPO dealers to bump their prices for no other reason that CPO dealers are doing it too beyond the cost of an RSC service. It's the exact same mechanism as when Rolex hike their retail price, it gives preowned dealers the justification for increasing their asking price too. That doesn't mean that the market will accept this new asking price, but that doesn't stop dealers from testing the market with stupid high prices.

Rolex have not only legitimised grey market prices. They've also endorsed a supply price hike in the preowned market well beyond the reasonable cost of a RSC service.

[QuelleHeureEstIl]

Originally Posted by Mr Ben

I’ve read through all the comments to date. Interesting discussion. I always buy my cars approved used so I like the theory but the prices listed just now on CPO wouldn’t tempt me.

Most comments in this thread though assume that market pricing stays well over retail. Not much debate on what happens if the market prices continue to drop. I guess we just get three price points - grey, CPO and new in ascending order which sounds ideal to me.

The crazy 2-3 years of prices over retail will look like the crazy brief period during covid where nearly new cars sold over list because you couldn’t get any stock at the dealers… nothing in a CPO announcement changes the fact that new supply is likely to remain fairly static and demand is likely to drop which will be the only thing that sorts this to all look sensible.

Exact, second hand traded objects have dynamic prices. It would not be surprising if they also adapt the prices at a low frequency but regularly (vs on spot like on Moda).

But more importantly.... What if... What if the CPO is only one step of a bigger program.

They know that the COVID period was a statistical anomaly but a lot has been learned.

My theory: once CPO is running widely and smoothly. They will change radically the price structure of the current collection which is too low if you compare with other brands or other luxury items (have you seen the prices of bags?).
If you see through time, it is obvious that the quality, durability, etc of the watches increased. For sure they will continue to improve that which will justify price increases.
One "simple" improvement that would change everything: all Rolex bracelets to have ceramic inserts to enhance its flexibility and longevity like the President bracelet.

[Driver8]

Originally Posted by alphadweller

What I'm saying is the intrinsic value of CPO is the cost of a service at the RSC. That's what CPO gives you, watch in good working order, authenticity and two years warranty.

However, what we are seeing is the asking price from Bucherer has been bumped way above grey market price, beyond the cost of a service at the RSC. How do they justify charging more for CPO than what an service would cost the buyer if he was inclined to take his watch to the RSC? Same Rolex guarantee whether it's CPO or RSC. So why CPO dealers set the asking price so high? That will allow grey non-CPO dealers to bump their prices for no other reason that CPO dealers are doing it too beyond the cost of an RSC service. It's the exact same mechanism as when Rolex hike their retail price, it gives preowned dealers the justification for increasing their asking price too. That doesn't mean that the market will accept this new asking price, but that doesn't stop dealers from testing the market with stupid high prices.

Rolex have not only legitimised grey market prices. They've also endorsed a supply price hike in the preowned market well beyond the reasonable cost of a RSC service.

OK, I see what you’re saying. Yes I guess pre-owned/grey dealers could see it as an excuse to increases prices, but as you quite rightly say (and as I agree) it doesn’t mean they’ll sell. Like I said, the pre-owned/grey dealer can’t offer anything additional to the package (i.e. they can’t offer CPO so it’d be just a price rise for price rises sake), so I can’t see the market accepting it. Especially not in the current global economic environment.

[amh]

Originally Posted by Mr Ben

I’ve read through all the comments to date. Interesting discussion. I always buy my cars approved used so I like the theory but the prices listed just now on CPO wouldn’t tempt me.

Most comments in this thread though assume that market pricing stays well over retail. Not much debate on what happens if the market prices continue to drop. I guess we just get three price points - grey, CPO and new in ascending order which sounds ideal to me.

The crazy 2-3 years of prices over retail will look like the crazy brief period during covid where nearly new cars sold over list because you couldn’t get any stock at the dealers… nothing in a CPO announcement changes the fact that new supply is likely to remain fairly static and demand is likely to drop which will be the only thing that sorts this to all look sensible.

If market price drops below MSRP then the CPO price will also drop accordingly. Just as Greys were able to undercut ADs by at least 10% in the "good old days", the ADs will adjust CPO to become attractive.

They'll just offer relatively little on trades. You'll get $3k for that datejust, they certify it and sell it for 8k. Just as with greys, their margin is what matters, not the absolute price.

[QuelleHeureEstIl]

Originally Posted by amh

If market price drops below MSRP then the CPO price will also drop accordingly. Just as Greys were able to undercut ADs by at least 10% in the "good old days", the ADs will adjust CPO to become attractive.

They'll just offer relatively little on trades. You'll get $3k for that datejust, they certify it and sell it for 8k. Just as with greys, their margin is what matters, not the absolute price.

Like in many industries and for many obvious reasons, I can bet that at one point Rolex with exclude watches (from CPO) if they have parts of non Rolex provenance... or worse: if they have undocumented services (outside the network). Not tomorrow or next week, but in the long term for sure.

[RolexSimon]

Originally Posted by QuelleHeureEstIl

Like in many industries and for many obvious reasons, I can bet that at one point Rolex with exclude watches (from CPO) if they have parts of non Rolex provenance... or worse: if they have undocumented services (outside the network). Not tomorrow or next week, but in the long term for sure.

I'd imagine that will be 100% true from the start - otherwise they can't be "certified". Just like a certified pre-owned car has to have full porsche service history for example.

[gyang333]

Originally Posted by amh

If market price drops below MSRP then the CPO price will also drop accordingly. Just as Greys were able to undercut ADs by at least 10% in the "good old days", the ADs will adjust CPO to become attractive.

They'll just offer relatively little on trades. You'll get $3k for that datejust, they certify it and sell it for 8k. Just as with greys, their margin is what matters, not the absolute price.

Absolute price will matter... to Rolex. An above retail market price for CPO will ensure the perception of desirability for retail pieces.

[Mr. K]

It'll be nice for people who don't want to take the risk of going grey.

Not everyone feels comfortable wiring thousands of dollars based upon a picture and a reputation.

[Trailboss516]

Originally Posted by Mr. K

It'll be nice for people who don't want to take the risk of going grey.

Not everyone feels comfortable wiring thousands of dollars based upon a picture and a reputation.

And not everyone buys just the absolute cheapest priced model they can find.

[Gab27]

If the prices being reported are legit, this is clearly NOT any sort of attempt to impact the secondary market and, if anything, will benefit secondary market dealers.

[Lol-x]

Its an interesting development for sure.
I don't think it will have any radical change on the secondary market and will not make any difference to the vintage Rolex market.

[francoamerican]

Originally Posted by RolexSimon

I'd imagine that will be 100% true from the start - otherwise they can't be "certified". Just like a certified pre-owned car has to have full porsche service history for example.

There is many tens of thousands of dollars of parts and labor at stake with a Porsche. A Rolex is infinitely more simple and inexpensive to get up to snuff so I expect the cpo program just is going to be a polish and a service and nearly all watches that still have the original serial number corresponding movement will make the cut.

I really don’t see this hurting anything and there’s something about Rolex official cpo photos that make me lustful

[matPORTS]

Having digested all the information and opinions on this Rolex CPO Program...

I don't see how any of this changes the current situation as it stands?

Basically the AD game is up. They are probably now starting to struggle with moving less desirable stock. Customers are coming in wanting Rolex and they aren't hanging around for further conversations when they realise they can't buy one there and then.

All this CPO does is give the authorised dealers an opportunity to obtain more stock, to which they will then use as leverage to get customers through the door, building relationships with those 'leads', and then having those 'leads' buy more of their less desirable stock, be it other branded watches or jewellery, in the hope that one day they might get the coveted call for a shiny brand new Pepsi or precious metal Daytona.

This is the way that Rolex are going to help their authorised dealer network. Not by increasing production (this is never going to happen in any mass sort of way no matter what we read about Rolex building new production facilities etc), but by giving them a means to be able to sell pre-owned stock... appropriate marketing materials, training for the sales associates, shop fixtures and fittings, watch makers to service & certify, the hang tags, warranty cards and pouches (and you can bet that this will be done at the lowest cost basis possible by Rolex HQ).

Customer (who is misinformed & naive to the flipping and grey market) asks "why are the pre-owned models more expensive than the new models"?

AD reply "this is what we have available in the Rolex range right now - if you would like a new Rolex (insert GMT or Daytona) at the RRP you will need to wait 5-10 years. In the meantime, if you are interested in buying a shiny brand new watch, let's go have a look at these wonderful watches from (insert Tudor, Breitling, Zenith, Tag, GP, etc)

The flipping also won't stop. Yes, the fly-by-nighters are gone due to the recent downturn in the market. But the heavy duty ones will still find a way to get hold of this stock, flip it through to the grey market and still make a reasonable profit margin. Grey market dealers will also happily take these CPO watches (in fact you could argue that obtaining CPO stock is even better & more marketable for the grey market).

What has Rolex done with all those dials and parts they took out of watches during service and replaced with service dials and parts (someone tried to tell me oh Rolex replaced those parts because they were considered 'failed' - hmmm I'm not totally convinced about that)? Have recovered pieces which ended up on the lost and stolen register been returned to their rightful owners? Have Rolex, or more specifically the ADs, been stockpiling pieces (i.e. flipper to flipper to end user who just so happens to be 'associated' with the AD) to trickle back into the CPO market?

[jingerman]

Originally Posted by hello93

Imagine requiring a purchase history and a waitlist for CPO....

Hahaha good point.. that will probably end up the same...

[rambo99]

rose gold daytona Arabic numeral markers 116515 listing at $57,800.
that's 70% premium over grey market price, what a joke!

https://www.bucherer.com/uk/en/rolex...364-002-7.html

[BigPilot5002]

When will we see the first watches on sale? I am interested to see the prices.

[BigPilot5002]

Originally Posted by rambo99

rose gold daytona Arabic numeral markers 116515 listing at $57,800.
that's 70% premium over grey market price, what a joke!

Okay, I got my answer. What a joke!!! Bye bye Rolex.

[Toproll85]

Some people and merchants are going to be annoyed now....
You resell the same watch for the same price, but is it certified pre-owned Rolex ? 2 year international warranty ?? Controlled and authenticated ?

Oh no ??? Gladly a good discount then or keep it.

[RFC]

This is Rolex facilitating AD’s entry in a growing secondary market. Both Rolex and AD’s want a piece of that cake.

[Tavli3]

Originally Posted by Auric Goldfinger

That’s G14 classified.

I debated about posting it a couple weeks back, but held off because I knew it’d cause a frenzy of doubters and probably get locked, so I decided to wait till the evening prior.

So what is Rolex’s thought process here? If that’s not classified info!
How do they expect to scale this to critical mass?
How long before new unworn watch can go into CPO status?
Are ADs going to discount their buy prices off original msrp and not market price?
If so why do they think people will sell them their watches as opposed to selling to greys?
As a good AD customer I would be put off seeing my watch in the showcase for double+ what I was paid!

I don’t think the promise that trading your watch in moves you up the list is enough of an incentive since they can’t get enough watches to go around. So big deal you go from 10 year wait to 5 year wait.

The big established greys will follow Rolex’s lead and raise their buy prices and slightly under cut AD prices. They can and do offer their own warranties and or send watches to RSC and get factory warranty since margins are so fat at CPO prices.

On the surface I think it’s a very shrewd move by Rolex it’s just some of the little details that I can’t string together to keep me from thinking the smart greys with spotless reputations won’t be eating Rolex’s and their ADs lunch in short order.

If Rolex does pull this off it’s a genius move which will shore up resale values which will increase demand for new watches due to the implied value retention and or increasing value. Competition for used products between ADs and greys will keep prices high and higher.


Sent from my iPhone using Tapatalk

[Tavli3]

One more question why would you need and or why would an AD CPO let’s say a 2 year old watch with original full set? Where’s-the added value?

Also I don’t see how Rolex doesn’t raise US prices in January. They raised EU prices due to strong dollar but now that dollar is weakening and will weaken further if Fed pivots to less hawkish at next meeting as expected. This will widen the price gap between prices in EURO/GBP vs USD to about 10%. 5% factory increase plus 5% appreciation in gbp and euro.


Sent from my iPhone using Tapatalk

[Diamondgal]

Tulips, anyone?

[HiBoost]

Originally Posted by alphadweller

What I'm saying is the intrinsic value of CPO is the cost of a service at the RSC. That's what CPO gives you, watch in good working order, authenticity and two years warranty.

However, what we are seeing is the asking price from Bucherer has been bumped way above grey market price, beyond the cost of a service at the RSC. How do they justify charging more for CPO than what an service would cost the buyer if he was inclined to take his watch to the RSC? Same Rolex guarantee whether it's CPO or RSC. So why CPO dealers set the asking price so high? That will allow grey non-CPO dealers to bump their prices for no other reason that CPO dealers are doing it too beyond the cost of an RSC service. It's the exact same mechanism as when Rolex hike their retail price, it gives preowned dealers the justification for increasing their asking price too. That doesn't mean that the market will accept this new asking price, but that doesn't stop dealers from testing the market with stupid high prices.

Rolex have not only legitimised grey market prices. They've also endorsed a supply price hike in the preowned market well beyond the reasonable cost of a RSC service.

This is a great, though unfortunate, point. As I think about this a bit more the whole program seems like a gimmick. Many have commented that this program is desirable for the assurances it provides and they'd be happy to pay more for it. But what does it actually provide beyond an RSC service? Do we have any evidence of RSC servicing a watch and the owner later finding out that it was a fake which slipped through? I've only heard of that nonsense with Panerai

So what additional guarantee does this give a buyer? Seemingly none. And as you say, if it just legitimizes and even "stakes" the pricing at a higher point (as I mentioned earlier I highly doubt ADs will drop prices quickly with market fluctuations and if they do not, then other sellers will be less likely to as well), it's a net loss for enthusiasts.

[GADGET-MAN]

My AD just called me and explained why they would not be participating in the Rolex CPO program. Interesting take on the new program. He said that he feels this is really nothing new except the CPO packaging part. He feels that Rolex is pushing the risk off to the ADs. As they are only providing the packaging and the AD is responsible for buying, servicing and providing a separate area to sell the CPO watches. Risk on for ADs.

Interesting perspective.

M

[brandrea]

Originally Posted by HiBoost

This is a great, though unfortunate, point. As I think about this a bit more the whole program seems like a gimmick. Many have commented that this program is desirable for the assurances it provides and they'd be happy to pay more for it. But what does it actually provide beyond an RSC service? Do we have any evidence of RSC servicing a watch and the owner later finding out that it was a fake which slipped through? I've only heard of that nonsense with Panerai

So what additional guarantee does this give a buyer? Seemingly none. And as you say, if it just legitimizes and even "stakes" the pricing at a higher point (as I mentioned earlier I highly doubt ADs will drop prices quickly with market fluctuations and if they do not, then other sellers will be less likely to as well), it's a net loss for enthusiasts.

Maybe you’re right but when looking at it through the lense of Joe public who don’t understand the intricacies of the secondary watch market, buying used CPO from an “authorized dealer” has a lot of appeal IMHO.