Cutting off Flippers... Good or Bad?

[thomaswentworth]

Cutting off those who buy Rolexes from ADs out the back door in order to flip them or buy them for less of a discount in the showroom in order to flip them... What would happen if these people no longer existed? If they were cut off, would it be good for Rolex? Would it be good for ADs? Would it be good for consumers? Or would it be bad? Could there be a certain segment of the market who would no longer buy the watches? Would waiting lists shrink? Would waiting lists grow?

So do you think shutting down the flippers would be good for the final end buyers or bad for them?

[Robbyman]

A lot come from the Italian market though in Europe for the grey market here and Rolex has little influence of the ‘family’ run businesses.

You think I am joking, think again.

They may stop the domestic markets but there will be certain ones in other countries that will keep a regular supply going.

[AK797]

We want a return to how markets were before where ADs and Greys and customers were all in harmony and only the Daytona was a hyped up special model. Demand has spiked this last year so either it calms down or supply and price changes are made to restore the market back to the usual equilibrium.

[locutus49]

Since I have been a member, ss Daytonas have always been high demand.

[AEC]

If by "buyers" you mean enthusiasts who enjoy wearing them, then my sense is these enthusiasts would benefit by simplification of the market.

[tbonesteak]

It's obviously good for the consumer, who knows how it impacts the rest of the ecosystem - I'd assume negatively, otherwise it would've already been handled.

If you think something selling over MSRP is bad for a brand, you need to retake marketing 101. The strategy Rolex is currently utilizing is 100% working for them. We can whine & ##### all day long, but at the end of the day, we're all Rolex consumers and most of us aren't going anywhere else.

[tyler1980]

Discounting and the need to get one is the root cause of everything. This all starts with getting discounts on the vast majority of watches and created the secondary market to begin with as you can get even better discounts there. Then the selling above retail happens and everyone is mad. Their bread and butter isnt the Daytonas, its heavy discount pieces.

IMO the price should be the price, period whatever it may be. Its a luxury good and should never be discounted one penny. Getting deals devalues the brand and quite frankly is the only reason ill never buy a PM Rolex. I dont want to pay more than everyone else, but i also think its completely stupid to negotiate on a luxury item. So i just dont buy in a lot of cases as its a weird limbo land for me of wanting everything on a level playing field and not being willing to play the biggest discount game.

Id buy more Rolex for sure if everyone paid retail. The above MSRP stuff isnt the problem, the underlying issue is discounts.

So, its good for the consumer i guess, most of them. Bad for the brand.

[Etschell]

this may upset some here but - terrible for buyers.

only a short sighted jv league AD, who doesnt deserve to be one, would sell a watch without warranty card for 12 months. not sure why they are doing it. the point of being in retail is to make sales not limit the buyer base. more power to someone if they can resell a watch for more than MSRP plus tax.

rolex is not scouring forums to figure out which watches are being flipped from which AD.

you may think it is a better world when trusted sellers dont exist but it is not. and having a policy of NEVER discounting jewelry is a sure fire way to go out of business. ADs aren't going to abide by it. people will still get discounts on slow selling models and less ADs will exist as a result.

i know people are upset because they can't get a daytona, sd43, skydweller, etc. you know who is to blame more than any AD or flipper? ROLEX SA.

[Rolex addict]

Originally Posted by Etschell

this may upset some here but - terrible for buyers.

only a short sighted jv league AD, who doesnt deserve to be one, would sell a watch without warranty card for 12 months. not sure why they are doing it. the point of being in retail is to make sales not limit the buyer base. more power to someone if they can resell a watch for more than MSRP plus tax.

rolex is not scouring forums to figure out which watches are being flipped from which AD.

you may think it is a better world when trusted sellers dont exist but it is not. and having a policy of NEVER discounting jewelry is a sure fire way to go out of business. ADs aren't going to abide by it. people will still get discounts on slow selling models and less ADs will exist as a result.

i know people are upset because they can't get a daytona, sd43, skydweller, etc. you know who is to blame more than any AD or flipper? ROLEX SA.

Funny because my local AD got pissed at me because I wouldn't pay full retail. With checkbook in hand, I walked out and haven't been back. I've also bought three watches since. All with a discount. My brother and I used to have them make custom jewelery pieces for Mom. She passed away last week, so I really have no reason at all to ever step foot back in there.

[BUZITO1974]

Originally Posted by Robbyman

A lot come from the Italian market though in Europe for the grey market here and Rolex has little influence of the ‘family’ run businesses.

You think I am joking, think again.

They may stop the domestic markets but there will be certain ones in other countries that will keep a regular supply going.

Right, i live in spain and european market is full of italian rolex...


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[Etschell]

Originally Posted by Rolex addict

Funny because my local AD got pissed at me because I wouldn't pay full retail. With checkbook in hand, I walked out and haven't been back. I've also bought three watches since. All with a discount. My brother and I used to have them make custom jewelery pieces for Mom. She passed away last week, so I really have no reason at all to ever step foot back in there.

sorry to hear that about your mom. my condolences.

[Rolex addict]

Originally Posted by Etschell

sorry to hear that about your mom. my condolences.

Thank you. That's why I haven't been on here much the past two weeks. We got her ashes back yesterday and the memorial service is tomorrow. Been spending a good bit of time with Dad. This coming August would have been their 50th anniversary.

[Bigblu10]

Originally Posted by thomaswentworth

Cutting off those who buy Rolexes from ADs out the back door in order to flip them or buy them for less of a discount in the showroom in order to flip them... What would happen if these people no longer existed? If they were cut off, would it be good for Rolex? Would it be good for ADs? Would it be good for consumers? Or would it be bad? Could there be a certain segment of the market who would no longer buy the watches? Would waiting lists shrink? Would waiting lists grow?

So do you think shutting down the flippers would be good for the final end buyers or bad for them?

It is a hypothetical question in which there is no correct answer because there is no way to "shut down" CAPITALISM. People in the world buy many things to flip for profit. Everyone needs to make a living one way or another. If you consider the forum trusted sellers here "flippers" they provide many of us here and out in the real world opportunities to buy certain pieces at a nice discount and buy other pieces which AD's currently have in extremely short supply.

[Jim Smyth]

Haters gunna hate. Dont hate the players...............hate the game!

[Mystro]

Control, control, etc... Let the free market do its thing. Much like government, the more rules, the more everything gets fouled up.

[sensui]

It's not going to be a pretty picture when the grey market makes an exit. Definitely not good for the buyers/collectors in the long run. There is a reason why capitalism works and this involves resellers in this example.

[Ballzzz]

Problem is the greys are buying say 50-60% of AD inventories and creating a "demand" that technically doesn't exist but is serviced by there inflated prices (currently, at one point discounted). Rolex is spot on with there production other than the daytona by design. The greys are disrupting the ecosystem. At the end of the day Rolex SA don't care they get the same $$ for all watches sold, its the AD's who suffer to a degree. We the sheep don't matter at the end of the day. We buy at grey markup or markdown or wait on AD lists simply. If you lose the greys you give rolex/AD's more control but you also almost guarantee there to be stock in stores. One good thing you can almost guantee is that higher demand pieces will always have a max sales price of MSRP. I think its a win to lose greys but good luck. When there is money to be made you will have a hard time curtailing said practices.

[HL65]

Originally Posted by sensui

It's not going to be a pretty picture when the grey market makes an exit. Definitely not good for the buyers/collectors in the long run. There is a reason why capitalism works and this involves resellers in this example.

Agree 100% and anything contrary is plain silly IMHO. The thought of trying to restrict and control a free market is scary.

Originally Posted by Ballzzz

Problem is the greys are buying say 50-60% of AD inventories and creating a "demand" that technically doesn't exist but is serviced by there inflated prices (currently, at one point discounted). Rolex is spot on with there production other than the daytona by design. The greys are disrupting the ecosystem. At the end of the day Rolex SA don't care they get the same $$ for all watches sold, its the AD's who suffer to a degree. We the sheep don't matter at the end of the day. We buy at grey markup or markdown or wait on AD lists simply. If you lose the greys you give rolex/AD's more control but you also almost guarantee there to be stock in stores. One good thing you can almost guantee is that higher demand pieces will always have a max sales price of MSRP. I think its a win to lose greys but good luck. When there is money to be made you will have a hard time curtailing said practices.

Please tell us where you got your number of 50-60%? I’d love to see and know your source to derive that number. My guess would be more like 5% at least here in USA knowing many of the top dealers here as well as I do. Most AD’s don’t want the risk of selling to flippers as they don’t want to risk their franchise. Many of the top sellers get their watches from members here and elsewhere and pay premiums for 116500’s and other hot watches and mark up from there. That is the bulk of their new watches and many are used of course as well. They make a market for us so if you need to sell a watch you can at least go to them and get a pretty fair price vs selling back to retailer. They also support the market which help keep prices strong. The fact is Rolex can make more of the hotter watches and up their allocations on those pieces so dealers see more. Of course that would also hurt price retention. So at the end of the day there is no better option than a free market driven by supply and demand. Rolex knows what they are doing and right now I think they are better managed than at any other point I can remember. The moves they have been making in last year have been spot on and why the market is as strong as it is today.

[AK797]

Originally Posted by Rolex addict

Funny because my local AD got pissed at me because I wouldn't pay full retail. With checkbook in hand, I walked out and haven't been back. I've also bought three watches since. All with a discount. My brother and I used to have them make custom jewelery pieces for Mom. She passed away last week, so I really have no reason at all to ever step foot back in there.

Very sorry to hear that, mate, my condolences.

[locutus49]

I think Europeans aren't as pro-capitalism as we Americans as I see many Brits wanting controls on prices. Just different perspectives.

Originally Posted by sensui

It's not going to be a pretty picture when the grey market makes an exit. Definitely not good for the buyers/collectors in the long run. There is a reason why capitalism works and this involves resellers in this example.

[HL65]

Originally Posted by Rolex addict

Funny because my local AD got pissed at me because I wouldn't pay full retail. With checkbook in hand, I walked out and haven't been back. I've also bought three watches since. All with a discount. My brother and I used to have them make custom jewelery pieces for Mom. She passed away last week, so I really have no reason at all to ever step foot back in there.

Sorry to hear that as well...My condolences.

[joli160]

Originally Posted by locutus49

I think Europeans aren't as pro-capitalism as we Americans as I see many Brits wanting controls on prices. Just different perspectives.

Noticed that as well, funny

[mailman]

Originally Posted by Rolex addict

Funny because my local AD got pissed at me because I wouldn't pay full retail. With checkbook in hand, I walked out and haven't been back. I've also bought three watches since. All with a discount. My brother and I used to have them make custom jewelery pieces for Mom. She passed away last week, so I really have no reason at all to ever step foot back in there.

Very sorry about your mom Chad.

[Ballzzz]

Originally Posted by HL65

Please tell us where you got your number of 50-60%? I’d love to see and know your source to derive that number. My guess would be more like 5% at least here in USA knowing many of the top dealers here as well as I do. Most AD’s don’t want the risk of selling to flippers as they don’t want to risk their franchise. Many of the top sellers get their watches from members here and elsewhere and pay premiums for 116500’s and other hot watches and mark up from there. That is the bulk of their new watches and many are used of course as well. They make a market for us so if you need to sell a watch you can at least go to them and get a pretty fair price vs selling back to retailer. They also support the market which help keep prices strong. The fact is Rolex can make more of the hotter watches and up their allocations on those pieces so dealers see more. Of course that would also hurt price retention. So at the end of the day there is no better option than a free market driven by supply and demand. Rolex knows what they are doing and right now I think they are better managed than at any other point I can remember. The moves they have been making in last year have been spot on and why the market is as strong as it is today.

My numbers are pure speculation, my personal opinion. I don’t mind greys but I would love to see a space without them for better or worse. There will always be a free market with jewlers etc who buy/sell second hand pieces. You make a good point that greys offer a better price for trades but they have also been artificially inflating asking prices also so that’s a wash unless you purchased before the reversal. I can be wrong but, I think many AD’s don’t feel threathrened by losing there franchise. They know a trustworthy grey will buy 2/3 hot pieces and sprinkle in 6/10 slow movers and they are happy. Again my understanding can be wrong but that’s what I believe. If we used your 5% number I don’t believe the overall market would have as large an effect. AD’s have quotas to meet and the path of less resistance sometimes seems better. They know who to hold for because they will sell other higher marked up products. I have two friends who own high end jewelry stores that have always despised the though of being an AD. Just my 2 cents,

[Ballzzz]

Originally Posted by Rolex addict

Funny because my local AD got pissed at me because I wouldn't pay full retail. With checkbook in hand, I walked out and haven't been back. I've also bought three watches since. All with a discount. My brother and I used to have them make custom jewelery pieces for Mom. She passed away last week, so I really have no reason at all to ever step foot back in there.

Sorry for your loss.

[VicLeChic]

Good in the long run. One of the problem for Rolex is not people selling their preowned and used watches, but those who buy to flip as "BNIB" with stickers, which is too close to what an AD offers.

[brandrea]

I honestly get all twisted around in my thinking on this one. I see both sides of the argument and after hearing compelling cases on both sides ... I’ll say I have NO Clue

[HL65]

Originally Posted by Ballzzz

My numbers are pure speculation, my personal opinion. I don’t mind greys but I would love to see a space without them for better or worse. There will always be a free market with jewlers etc who buy/sell second hand pieces. You make a good point that greys offer a better price for trades but they have also been artificially inflating asking prices also so that’s a wash unless you purchased before the reversal. I can be wrong but, I think many AD’s don’t feel threathrened by losing there franchise. They know a trustworthy grey will buy 2/3 hot pieces and sprinkle in 6/10 slow movers and they are happy. Again my understanding can be wrong but that’s what I believe. If we used your 5% number I don’t believe the overall market would have as large an effect. AD’s have quotas to meet and the path of less resistance sometimes seems better. They know who to hold for because they will sell other higher marked up products. I have two friends who own high end jewelry stores that have always despised the though of being an AD. Just my 2 cents,

I have 3 friends who are AD’s and they are all always worried about Rolex and risking their line. I have one also who lost his line a few years ago and it always worried him as well. They run tight stores and abide by the Rolex way. Rolex uses mystery shoppers and test their franchises to see if they do abide by the rules and one slip and they know the ramifications. Rolex like AP and Patek have actually done a great job recrently in tightening it up with SS sports watches or professional type watches. No different for them with 5711, 5712’s, 5990’s etc or AP 15202, 15407 etc all selling for massive premiums. The fact is the companies have cut back allocations in a big way for those watches that appeal to many of their enthusiasts. That coupled with tighter controls for the last 3 months or so have pushed prices way higher. I have heard that they also told them allocations for those watches will be tight again in 2018. So as owners we should be happy that our watches are worth more and the whole market has moved up for all the sought after SS watches by the top brands. If the market was flooded and watches didn’t hold their values and sank 35% like the PM ones than people would be whining about that trust me on that. The market has worked well for many years and will continue to. Again I am speaking purely about the US market and Rolex USA. I can’t speak for other parts of the world. What I can say is I have had great relationships with my AD’s for years. My suggestion always is to build a solid relationship with an AD and then you will have access to the best pieces when they get them. For those who are buying 1 or 2 watches find a great trusted seller and get what you want if you can’t from an AD. Again a market predicated upon supply and demand is a good thing. People must remember that it would definitely work both ways so you can’t have it all. Just my thoughts for what they are worth.

[HogwldFLTR]

Rolex Addict, very sorry to hear; it's a tough time.

I'm not really all that certain why Rolex cares how their watches make it into circulation. Nor am I certain why the ADs care all that much. It takes ADs to make the sales to gray resellers. ADs are making their sales. Rolex is making their sales. What difference does it make. There's always someone who's willing to discount. If Rolex doesn't want discounts then the only way to control that is eliminate the middle men and sell directly. They can then control the market as they see fit. Cutting flippers is neither good nor bad as far as I can tell.

[Raza_actual]

Originally Posted by tyler1980

Discounting and the need to get one is the root cause of everything. This all starts with getting discounts on the vast majority of watches and created the secondary market to begin with as you can get even better discounts there. Then the selling above retail happens and everyone is mad. Their bread and butter isnt the Daytonas, its heavy discount pieces.

IMO the price should be the price, period whatever it may be. Its a luxury good and should never be discounted one penny. Getting deals devalues the brand and quite frankly is the only reason ill never buy a PM Rolex. I dont want to pay more than everyone else, but i also think its completely stupid to negotiate on a luxury item. So i just dont buy in a lot of cases as its a weird limbo land for me of wanting everything on a level playing field and not being willing to play the biggest discount game.

Id buy more Rolex for sure if everyone paid retail. The above MSRP stuff isnt the problem, the underlying issue is discounts.

So, its good for the consumer i guess, most of them. Bad for the brand.

Do you pay sticker for your cars, too?

Every transaction in life is a negotiation. If you choose not to negotiate, that’s your choice. That other people choose differently doesn’t devalue the brand one bit.