The market has peaked

[rolex16]

Originally Posted by 4rnold

I think 'entitled' is not the good word at all. But I get your point.

I see that people are making fun of your post but I quite understand you.

I think that the feeling is more that its normal to think that you are able to buy a mass produced product that is being presented as for sale.

I think it's kinda weird that you walk into a Rolex AD and you say:
Okay I want to buy this watch (read: mass produced object) that you are advertising for. And the salesperson says that you can't buy it. (okay, in a way, they phrase it otherwise, I know).

But then why is there a boutique??? why advertising? Why say that its for sale??

Precisely. I used the word entitled sarcastically because of the prior poster who mocked me, but you understood the point. Not only do they not have it for sale, they won't give you a place in a queue or realistic timeline to receive. Give me a number like at the deli and I will decide whether to wait.

[Calatrava r]

Demand is what it is and that is what drives used prices. We do not call home buyers such things as "greedy" even though prices are through the roof. If someone wants a Rolex so much, they are willing to pay three times retail for a used one that is really their concern and right. When Rolex is no longer cool and passe, you will be able to buy all the watches you want from ADs, but will you want them then?

[rolex16]

Originally Posted by S``

Unless you think the 116508 is a Patek? Isn't it a Rolex as well?

That's not an everyday watch though. I'm sure they'd buy a Platona too. But we saw them refuse more typical models in the video. I think that was what the poster meant. All I intended was that perhaps those more typical model refusals might slow down purchases at ADs for those models from flippers as they start to see they will not have an easy place to unload for quick cash.

[brandrea]

Originally Posted by rolex16

I get it, but Ferrari is a relatively low volume manufacturer in its market, while Rolex is a high volume manufacturer in its market. Ferrari's availability exclusivity seems natural because of this, while Rolex's seems contrived.

I suppose it seems that way to people with the means to buy a Rolex in the the same way it does to people who have the money to buy an F-car.

[S``]

Originally Posted by amh

I could be wrong, but based on various TRF posts I break down Rolex shopper like this:

Arbitrage trading has always existed since the dawn of mankind and isn't limited to just watches.

Prior to the premium trading, arbitrage in watches were mostly based on FX fluctuations (the collapse of the JPY in Dec 2012, The EURCHF peg removal in Jan 2015 by the SNB, the Indonesian Rupiah devaluation in 2020). This doesn't include all of the crisis of the world, but just to put out a picture of events where even Roman Sharf (luxurybazaar) has openly stated to purchase from ADs directly

Since US Tarriff code breaks down the import of watches into 3 parts (movement being a flat fee, case and bracelet)... Importing the watches by these dealers either via HKG (tax free entity) or directly to the US could be done very cheaply via these ADs that were located in the original region.

Do note that back in the day, most DJ, OP and PM were discounted, therefore a purchase means wholesale prices and more than a single watch... Everything is done as a package...

Therefore, it is really naive to think that an arbitrage model only relies on the premium sticking around for a longer term... Longer term dealers have both survived the slowdown in 2014-2015 due to the Chinese anti corruption crackdown, Covid-19 debacle... I'm sure they are aware of the market and what needs to be done...

[S``]

Originally Posted by Calatrava r

Demand is what it is and that is what drives used prices. We do not call home buyers such things as "greedy" even though prices are through the roof. If someone wants a Rolex so much, they are willing to pay three times retail for a used one that is really their concern and right. When Rolex is no longer cool and passe, you will be able to buy all the watches you want from ADs, but will you want them then?

Is anyone from the Hyundai forum whining about paying 35k premium on Palisades in 2021-2022?

[teck21]

Originally Posted by rolex16

Actually, not $100M mansions per se, but in FL there are corporations and investor groups buying up residential properties in chunks (entire neighborhoods) and driving up prices so locals can no longer afford real estate. That is plain wrong too, and will ultimately upset the local economies. Same concept.

My point is all of that is capitalism at work.

We cannot choose to enjoy just the benefits when it suits us, and not when it benefits other instead of ourselves.

As I see it, Rolex is a non-essential luxury good that is being correctly distributed in a capitalist economy:

According to who is able and willing to pay the most. Either via the grey market, or bundling, whatever.

Being able to get one purely at msrp without prior purchase or bundling is actually a bonus, and not the norm at all in a system where the AD is trying to make as much money as they can within whatever restrictions are imposed upon them by Rolex, consumer laws etc.


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[4rnold]

Originally Posted by teck21

My point is all of that is capitalism at work.

We cannot choose to enjoy just the benefits when it suits us, and not when it benefits other instead of ourselves.

As I see it, Rolex is a non-essential luxury good that is being correctly distributed in a capitalist economy:

According to who is able and willing to pay the most. Either via the grey market, or bundling, whatever.

Being able to get one purely at msrp without prior purchase or bundling is actually a bonus, and not the norm at all in a system where the AD is trying to make as much money as they can within whatever restrictions are imposed upon them by Rolex, consumer laws etc.


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That is 100Procent correct only there is this feeling I have, and many others I guess, and I' think due to the hype rolex changed from what it should be:

[4rnold]

and what its now

[S``]

Originally Posted by rolex16

That's not an everyday watch though. I'm sure they'd buy a Platona too. But we saw them refuse more typical models in the video. I think that was what the poster meant. All I intended was that perhaps those more typical model refusals might slow down purchases at ADs for those models from flippers as they start to see they will not have an easy place to unload for quick cash.

Is a TT sub an everyday watch? I mean this gets very confusing when goal posts are being moved to what could be considered as a daily watch...

The confirmed offers from flippers that was refused were a DD in PM at 49k (not a daily watch per your STD), a SD43 (which is clearly not as popular as a sub, but could be considered as a daily per price range), and TT DJs (also not a first option for many)...

In this case, doesn't the market work as intended? As demand gets shaken up, the first hit that came was from what dealers consider the "secondary" models, and dealers correctly adjusted to not carry as much of those stock... At the end when a customer was looking for a TT DJ, CRM seem to insinuate an existing inventory for a wimbledon at 17.5k, I believe this was much lower than the prices in March (pre W&W2022).. Again back to the TT sub to picture on a "core" lineup with a "secondary" material, it wasn't mentioned how much was paid for it, but it looks like a new entry to inventory and is a 6 digit sub... Therefore, it could be a one-off purchase due to a great offering price by the seller

[rolex16]

Originally Posted by S``

Is a TT sub an everyday watch? I mean this gets very confusing when goal posts are being moved to what could be considered as a daily watch...

The confirmed offers from flippers that was refused were a DD in PM at 49k (not a daily watch per your STD), a SD43 (which is clearly not as popular as a sub, but could be considered as a daily per price range), and TT DJs (also not a first option for many)...

In this case, doesn't the market work as intended? As demand gets shaken up, the first hit that came was from what dealers consider the "secondary" models, and dealers correctly adjusted to not carry as much of those stock... At the end when a customer was looking for a TT DJ, CRM seem to insinuate an existing inventory for a wimbledon at 17.5k, I believe this was much lower than the prices in March (pre W&W2022).. Again back to the TT sub to picture on a "core" lineup with a "secondary" material, it wasn't mentioned how much was paid for it, but it looks like a new entry to inventory and is a 6 digit sub... Therefore, it could be a one-off purchase due to a great offering price by the seller

Sorry, I didn't mean everyday as in daily wearer, meant that it is a more unique/special piece (aka collectable). I don't think they are making as many JM Daytonas as TT Subs. Maybe I'm wrong.

[S``]

Originally Posted by rolex16

Sorry, I didn't mean everyday as in daily wearer, meant that it is a more unique/special piece (aka collectable). I don't think they are making as many JM Daytonas as TT Subs. Maybe I'm wrong.

But they did add one to the inventory at 13:15-13:30 of the video...

Again, as I stated in the long summary, selective buying is going on either based on prices or "core models"... So to conclude that things weren't moving is embellishing more than a little detail. Also this was confirmed by more than one posters that purchases are happening for select models at select prices...

[edisonstar23]

The prices have dropped a bit- nothing too crazy maybe at most 5-7% on most watches from what I’ve seen. Time will tell how much of a correction.


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[rolex16]

Originally Posted by S``

But they did add one to the inventory at 13:15-13:30 of the video...

Again, as I stated in the long summary, selective buying is going on either based on prices or "core models"... So to conclude that things weren't moving is embellishing more than a little detail. Also this was confirmed by more than one posters that purchases are happening for select models at select prices...

He did appear to indicate making an offer on that watch. However, right after that at 13:30-14:00 he also clearly says 15 people have come in saying they want to sell and he is not buying anything. So it's not like people are just making this stuff up.

I'm not sure why some get so defensive when any talk of the market dropping comes up. It's almost like many don't want the market to return to what it was before. For me, as a watch lover, the pre-2016 market was way better than today, and I would think all watch lovers would like a return to that.

[huncho]

we had all the same threads last summer when things cooled off, especially due to crypto crashing, and then in the fall/winter prices went parabolic again. people here always overreact lol and when the daytona went from like 38 to 35 last summer there were threads daily. worst case prices dip and we can afford to get into some watches we've wanted

[Kube]

Originally Posted by Xtralarg

As soon as someone quotes chrono24 as a market indicator I know they are clueless. The end.

[Bmats]

I do think things have cooled. But who knows what happens next.

Yet on Rolex producing a million watches a year, that’s probably not the right number to focus on. The number Daytonas, GMT IIs, etc. in SS is a much smaller proportion. Or the “desired” dial combination with certain configurations. I expect most of the million is date justs and a lot is two toned. But in the things that are hyped it probably smaller.

[S``]

Originally Posted by rolex16

He did appear to indicate making an offer on that watch. However, right after that at 13:30-14:00 he also clearly says 15 people have come in saying they want to sell and he is not buying anything. So it's not like people are just making this stuff up.

I'm not sure why some get so defensive when any talk of the market dropping comes up. It's almost like many don't want the market to return to what it was before. For me, as a watch lover, the pre-2016 market was way better than today, and I would think all watch lovers would like a return to that.

1.) I did list an entire video worth of rejected models. I stated specifically about someone dropping in and was outright rejected of an unknown model, likely a 6 digit.

2.) If the best rebuttal you could come up with is that I am getting "defensive" re-read my entire summary. Show me where I had embellished any details of the exact video you quoted. I even went further to show You that one month ago CRM went on a patek purchasing spree worth $2m (their own words, not mine)... So financially they might be in a different spot than other dealers.

3.) I could say the same of you, why are you getting defensive and moving goal posts to what models should be a barometer to a "healthy market"... If things aren't moving, shouldn't one expect a 100k JM Daytona to drop in price 50% and for CRM to tell that particular client to "fly a kite" without quoting a range of outcome??? While no one knows what might happen in their life next week... I'd take your other side of the trade if you are looking for a 50% haircut...

4.) Instead of 2016, why not quote 2014? 2015? Things were more dire then, Chinese was cracking down on watches as "gifts" and prices were dropping like a rock...

5.) I love the price appreciation, I am not some whale unlike 99% of the folks here... I am fine and content with not being able to add watches or be buying lower end brands like Oris for my daily wear... Does that not make me a watch lover???

[Onikage]

Originally Posted by amh

I could be wrong, but based on various TRF posts I break down Rolex shopper like this:

1) The very wealthy. They probably don't wear Rolex and certainly don't care what's going on in the Rolex market.
2) Whales. They're in this just for fun. The buying/flipping is entertaining but they'll likely quit when it becomes boring or difficult. Normal market conditions are boring, the current speculative period is exciting!
3) Greys. They overlap with Whales except this is their business. They buy from ADs and individual Flippers. They're in for the long haul and can make money under all market conditions.
4) Flippers. People who can afford to play and are granted supply by the AD but quit when the tide turns. They're merely opportunistic.
5) Collectors and Enthusiasts. They buy intentionally and flipping is just part of the process, a means to an end. They're not in this to make money.
6) The Unwashed Masses. Regular people who in normal times would buy a Rolex at retail. Watches are kept for a long time or they are purchased as gifts. Flipping seldom occurs.

On TRF I'd say we are mostly from group [5] - otherwise why even bother registering on a forum and discussing this stuff? The Greys are not the problem, it's groups [2] and [4]. When prices begin to tumble the Whales will stop because flipping becomes an inconvenience and the Flippers will stop because now they might now make money.

This is when the music stops:
R = Retail cost of piece
T = Tax (eg. 8%)
C = Transaction cost imposed by Grey (eg. 20%)
P = Profit remaining to Flipper

Imagine a long rectangle, this is how the pieces fit:
[ R ][T][ P ][ C ]

Retail cost and Tax are fixed. Transaction cost from Grey depends on market price but is likely a percentage under any conditions. When the profit seen by the Flipper approaches zero we will see stock return. Today one must sell the Flipped piece for about 30% profit just to break even because Greys aren't handing out free money. (Try it for yourself when selling a watch.)

Those unwashed used to even buy them to mark achievements. Thank goodness that's over and they all went to the Breitling forum.

[Awaken]

Originally Posted by Onikage

Those unwashed used to even buy them to mark achievements. Thank goodness that's over and they all went to the Breitling forum.

#5 is spot on. Sad part mostly everyone on the forum is buying grey market now without having the true Rolex Experience..


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[Onikage]

Originally Posted by Awaken

#5 is spot on. Sad part mostly everyone on the forum is buying grey market now without having the true Rolex Experience..


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I wonder how many Peter (padi) has bought this year.

[walkman2727]

I just contacted my SA yesterday, was told the Rolex shortage is getting worse...lol

[Calatrava r]

Another reason demand is high is we now have 'collectors" in the market. I suspect this is a relatively new phenomenon in the history of Rolex. For years virtually all folks bought one watch and that was it. Now we have buyers in the market that have to every model available and then multiples from there. Naturally, the ADs are inclined to cater to these enthusiasts, especially if they tend to keep what they buy. As these collectors load up on watches there are fewer to sell to the casual walk-in buyer with no purchase history. I still believe only a small fraction of Rolex watches end up being resold quickly but to the extent they do, they create a pathway for the everyday person to buy a watch. Not at retail at the moment, but at least at some price. In effect the market will return to normal where watches are in stock when the hoarding ends. I do not see that happening anytime soon. ADs tell me they do their best to spread the product around and pace the collectors as best they can, but it's a tough job to balance distribution where their long term best customers are involved.

[Oxfordian]

Prices on the grey market are way way way above the AD prices, no surprise there when you consider the hype that surrounds Rolex.

I have no idea who pays these grey market prices, to be honest I don’t care what people do with their money as it is their choice what they decide to buy and how much they want to pay for something.

All I do know is that getting a Rolex watch out of the AD is very difficult especially the ‘Professional’ models, if the bubble has sprung a leak and there has been a bit of deflation then in reality it is only a tiny bit of levelling out, the overall grey prices remain exceptionally high and well above AD prices and will remain so for the foreseeable future.

[Awaken]

Originally Posted by Onikage

I wonder how many Peter (padi) has bought this year.

What’s a Peter (padi).??? Lol


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[rolex16]

Originally Posted by S``

1.) I did list an entire video worth of rejected models. I stated specifically about someone dropping in and was outright rejected of an unknown model, likely a 6 digit.

2.) If the best rebuttal you could come up with is that I am getting "defensive" re-read my entire summary. Show me where I had embellished any details of the exact video you quoted. I even went further to show You that one month ago CRM went on a patek purchasing spree worth $2m (their own words, not mine)... So financially they might be in a different spot than other dealers.

3.) I could say the same of you, why are you getting defensive and moving goal posts to what models should be a barometer to a "healthy market"... If things aren't moving, shouldn't one expect a 100k JM Daytona to drop in price 50% and for CRM to tell that particular client to "fly a kite" without quoting a range of outcome??? While no one knows what might happen in their life next week... I'd take your other side of the trade if you are looking for a 50% haircut...

4.) Instead of 2016, why not quote 2014? 2015? Things were more dire then, Chinese was cracking down on watches as "gifts" and prices were dropping like a rock...

5.) I love the price appreciation, I am not some whale unlike 99% of the folks here... I am fine and content with not being able to add watches or be buying lower end brands like Oris for my daily wear... Does that not make me a watch lover???

Dude, you need to go back and re-read the two posts you quoted that started this argument. You have me confused with the other poster. My original post was simply this, and it was purely speculative:

"And in that same episode, you see people calling who have not even received the watch from the AD yet and already looking to flip it. Maybe some of those will pass when they get the call..."

The other poster said greys weren't buying anymore, not me. Having said that, I do see evidence in the video to support his argument. You clearly disagree. All good, no need for us to keep debating it, we can agree to disagree and see what happens over time.

[ChrisLB1]

Originally Posted by Calatrava r

Another reason demand is high is we now have 'collectors" in the market. I suspect this is a relatively new phenomenon in the history of Rolex. For years virtually all folks bought one watch and that was it. Now we have buyers in the market that have to every model available and then multiples from there. Naturally, the ADs are inclined to cater to these enthusiasts, especially if they tend to keep what they buy. As these collectors load up on watches there are fewer to sell to the casual walk-in buyer with no purchase history. I still believe only a small fraction of Rolex watches end up being resold quickly but to the extent they do, they create a pathway for the everyday person to buy a watch. Not at retail at the moment, but at least at some price. In effect the market will return to normal where watches are in stock when the hoarding ends. I do not see that happening anytime soon. ADs tell me they do their best to spread the product around and pace the collectors as best they can, but it's a tough job to balance distribution where their long term best customers are involved.

Agree with all this, MOST AD’s doing a better job getting the watches to people that buy to wear….. why would an AD risk selling to a re-seller and lose their franchise which generates more revenue from people having to buy additional jewellery?

[Wahlberg]

Originally Posted by rmwill

You think being an enthusiast entitles you to an MSRP watch? It is very simple, you are unwilling to pay market price for an in demand luxury good. No need to be salty about it. I would love to buy a 911 at MSRP, but I recognize I am not ENTITLED to one.

How can you belittle yourself like this? Looks like you can't get it done.

Oh my bad, I'm glad this worked out for you. How are you enjoying that coral OP?

Originally Posted by rmwill

and I have an OP41 Coral on order (next in line, no ETA). They work on an order system, and they know only a few days before the shipment arrives what they are getting.

Bottom line: Don't be a douche and you will get farther.

[Divingdeep87]

Originally Posted by walkman2727

I just contacted my SA yesterday, was told the Rolex shortage is getting worse...lol

My AD said he will get 20% less this year and I trust him soo.. yeah lol

[DK7]

Tomorrow you can get a SS Daytona without waitlist at MSRP at your AD.
Wake up, thats dreaming. Dont see a crash, demand is very high.