Grey Dealers beginning to break?

[BroncoOne]

Originally Posted by Kevin of Larchmont

This was my first thought exactly.

My second thought is it sounds like this guy is in over his head an should maybe look for another line of work.

Agreed. Every market has weak players and they generally get washed out.

[Frits1980]

Originally Posted by OrangeSport

Posted it before here, but as an example a bricks and mortar grey I spent a while talking to gave me a couple of examples. One was a brand new (as in 10 minutes out of the AD) SS Daytona.

Original buyer paid £11k, 10 minutes later sold it for £20k and
grey sells them (quickly) for £30k.

Thats not what i call razer thin:) Razer thin would be if he sold his daytona for 27/28K and the dealer resold it for 30K.

[daveswordfish]

Originally Posted by Explorer2polar

It was just one example to illustrate the high prices Greys are paying to stock shelves.

An interesting variable which we have not yet seen is what happens when the market dips and Greys which have a large amount of cash tied up in stock??

It’ll be a race to the bottom, the bottom being a 10-15% discount off retail prices. Just a matter of time.


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[macrowatch]

I know plenty of dealers which proclaim publicly low margins, but know none that actually operate on such low margins.

[BroncoOne]

Originally Posted by Calatrava r

I think I know the person you are referring to. To be fair to him, his point is that there is a lot of bang for the buck in brands other than Rolex at the moment. He also feels Rolex at MSRP is overpriced viewing the watch apart from resale value. The Breitling in house Chrono, BO1, Zenith El Primeo and Omega co axial chronos are outstanding values and every bit the same quality as the Daytona at a lesser price point.

He thinks Rolex MSRP is overpriced? He is clearly in the wrong business.

[Fleetlord]

Originally Posted by BroncoOne

He thinks Rolex MSRP is overpriced? He is clearly in the wrong business.

He’s just being a contrarian to attempt to push much, much softer brands that he can sell at much higher margins.

[SLWoodster]

Agreed.

People need to stop looking for Rolex globally. We are all part of the problem.

Originally Posted by htc8p

i hk grey dealers are the life blood of watches.

whether market prices are high or not. whether rolex or not.

before rolex blew up. they just buy up the preowned watches from people who need money then sell high.

some times it takes years some times days to turn over stock.

if people stop looking for rolex globally then they would just follow the market price.

Rolex MSRP, like most luxury goods, have long been noted as overpriced. Just not in comparison to market price or price of other luxury goods.

Originally Posted by BroncoOne

He thinks Rolex MSRP is overpriced? He is clearly in the wrong business.

[shwingus]

Originally Posted by OrangeSport

Why? Are new cars not easily available?

New cars virtually dont exist right now my guy. Ive been waiting a year on my new G63 and now there is another year delay because of the chip shortage and Mercedes cutting V8 production to North America for the year.

Between the car and the 2 Rolex's Im trying to get, my whole life is a waitlist lol.

[joli160]

Originally Posted by Fleetlord

He’s just being a contrarian to attempt to push much, much softer brands that he can sell at much higher margins.

I belief this is indeed the reasoning behind such statements

[RJM25R]

Originally Posted by daveswordfish

It’ll be a race to the bottom, the bottom being a 10-15% discount off retail prices. Just a matter of time.


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Quoted for posterity.

Never gonna happen

[RJM25R]

Originally Posted by shwingus

New cars virtually dont exist right now my guy. Ive been waiting a year on my new G63 and now there is another year delay because of the chip shortage and Mercedes cutting V8 production to North America for the year.

Between the car and the 2 Rolex's Im trying to get, my whole life is a waitlist lol.

I’m an AMG specialist for Mercedes-Benz here in the UK.

There was a facelift due for the G63 (inc change to MBUX) that’s been temporarily shelved, which is adding to your delay.

[OrangeSport]

Originally Posted by BroncoOne

He thinks Rolex MSRP is overpriced? He is clearly in the wrong business.

Not really. Apart from resale values, Rolex have been overpriced for years. Better watches can be had for less in most categories. PM models even more so, which is why they used to drop in value. The same, rather basic, movements wrapped in a more expensive metal.

But none of that really affects appeal, does it?

[boogiebot]

Originally Posted by Tensai

The number of dumbasses with designer backpacks calling themselves watch dealers is at new heights. Like the day traders and house flippers of past eras (and crypto fan boys of present day). In an up market everyone is a genius. In a down market (which always comes), bye bye…

. This made me laugh for sure. I can totally picture what you’re saying. People who have managed to play arbitrage and make a few bucks. Kind of reminds me of the drug dealer that sells drugs to support his own hobby. Smoke and mirrors


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[bod42zx]

One tell-tale sign of any asset bubble is when very few believe it will ever end.

[gerry100]

Originally Posted by bod42zx

One tell-tale sign of any asset bubble is when very few believe it will ever end.

Yes

[gerry100]

Originally Posted by bswizzle2552

I think when this eventually ends and the market corrects

A good amount of “grey dealers” are going to get smoked

The bigger and smarter ones will see the end coming and
Reposition

[bob sims]

50 pounds per watch?
Not a chance in hell.

[shwingus]

Originally Posted by RJM25R

I’m an AMG specialist for Mercedes-Benz here in the UK.

There was a facelift due for the G63 (inc change to MBUX) that’s been temporarily shelved, which is adding to your delay.

MBUX would be a nice surprise if its implemented by the time my allocation comes around but Id be ok without it too.
The thing that concerns me the most are the rumours of a hybrid before the electric G's come out. My SA says they haven't heard anything. Can you verify?
I sincerely hope they keep it the same until it goes electric since Im only looking for the current pure ICE variant.

[RJM25R]

Originally Posted by shwingus

MBUX would be a nice surprise if its implemented by the time my allocation comes around but Id be ok without it too.
The thing that concerns me the most are the rumours of a hybrid before the electric G's come out. My SA says they haven't heard anything. Can you verify?
I sincerely hope they keep it the same until it goes electric since Im only looking for the current pure ICE variant.

The electric G will be sold alongside ICE to begin with, but hybrid tech (whilst mooted) is a couple of years away at best, likely longer

[RTG]

Originally Posted by Explorer2polar

I had an interesting conversation today with a UK Grey Dealer owner, some of his comments and business worries may indicate that change may be coming.
I will summarise the main conversation points.

1. He states he is now forced to massively over pay for all Rolex's even by todays rampant standards, just to fill his displays and web site such is the buying frenzy. The pressure on his business finances is not sustainable, he cannot restock at affordable prices and has extended credit with his bank.

2. Flippers are asking/demanding massive premiums to seal the deal, often pitting competing Greys against each other for the best price.

3. The amount of capital invested in stock vs return/profit is at critical level and some deals go through with a £ 50 profit margin on a Rolex worth between £ 10K to £15K.

4. He has told me that some Flippers are now at professional level, they operate between AD's and Greys and are cashing in on a large number of Rolexes which are days old, unused and have just come from a EU or UK AD's directly. Some of these Flippers are highly organised and have access to any Rolex watch.

5. The UK Tax man has realised the profit potential and money passing thru and demanded his share.

I got the honest and distinct impression from him that All the effort and financial risk was starting to become to much for little reward.

Who knows maybe the Grey market will eventually weaken and disappear?

Souns like he is justifying his pricing. Just a sales pitch IMO.

[grimps]

Originally Posted by Tensai

The number of dumbasses with designer backpacks calling themselves watch dealers is at new heights. Like the day traders and house flippers of past eras (and crypto fan boys of present day). In an up market everyone is a genius. In a down market (which always comes), bye bye…

I expect there are still plenty of established grey dealers that have long relationships the ADs that can get lots of supply at retail prices.
The Jonny come latelys will be the ones struggling to keep up

[Mendota]

Originally Posted by OrangeSport

Why? Are new cars not easily available?

It has reached insane levels here in the US. The chip shortage combined with supply chain issues preventing manufacturing for new cars. Any cars the dealers do receive don't even go on the lot. They were already sold months ago so when they do arrive they are picked up and leave right away.

I bought a new used car in August and you have to act immediately. Multiple buyers are all fighting for the same vehicles so the instant you see one that meets your criteria and has low mileage with no accidents you have to pull the trigger, otherwise the good ones will be gone literally within hours or a couple of days max.

New car dealers have changed their business model to used cars right now. Huge dealerships all over my state told me that they have zero new cars to sell, so they are all buying and shipping used cars all across the country. Buyers are calling from all 50 states looking for cars and they are shipping everywhere. They might only have 1-4 new cars in the showroom but these are not for sale, they are just for people to see so they still look like a new car dealer. The largest Toyota dealership here had 0 on their lot but over 500 used cars. They had multiple parking lots all filled with used cars. They were even storing used cars for other dealerships. The VW, Alfa, Fiat dealer said it was crazy. They didn't have any on their lot and had no idea when they would even receive any.

And the prices... holy sh#t. My wife's Audi Q7 is now selling for $5k MORE than what she paid for it 3 years ago. The Audi I bought in August is selling for more than what I paid for it just two months ago. It's just ridiculous.





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[RJM25R]

Cars are the new Rolex.


Desirability+shortage of stock x easy credit = bubble.

Difference is that the car shortage isn’t deliberately done by the manufacturer like Rolex, it’s a byproduct of Covid19

[grimps]

Originally Posted by RJM25R

Cars are the new Rolex.


Desirability+shortage of stock x easy credit = bubble.

Difference is that the car shortage isn’t deliberately done by the manufacturer like Rolex, it’s a byproduct of Covid19

Rolex have mad a similar amount of watches for many years , it's not entirely their fault that lots more people want them these days

[daveswordfish]

Originally Posted by RJM25R

Quoted for posterity.

Never gonna happen

That’s the way it always was until around 6-7 years ago. Gray dealers were where you went for discounts….that’s the model. To think that that’s not going to be where this ultimately ends is incredibly naive. It’s just a matter of when.


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[Calatrava r]

Originally Posted by grimps

Rolex have mad a similar amount of watches for many years , it's not entirely their fault that lots more people want them these days

Rolex production numbers are not officially disclosed anywhere. Nobody really knows what number of watches are supplied each year. All the ADs I know say their shipments are down this year which to me suggests production is less at the moment.

[Crown & Shield]

Originally Posted by boogiebot

. This made me laugh for sure. I can totally picture what you’re saying. People who have managed to play arbitrage and make a few bucks. Kind of reminds me of the drug dealer that sells drugs to support his own hobby. Smoke and mirrors


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[Drpepper]

Good. Hope prices do fall back to equilibrium and some grey dealers get “smoked”. Also once there is no profit in flipping rolexes a lot of the “demand”
Will disappear from people who thought they wanted a steel sports watch but all of a sudden dont when it isn “worth” twice msrp leaving the shop anymore. Things go in cycles and this hyper Rolex cycle will eventually correct. Is it fun to to go to rolex store in Las Vegas and have to wait to be buzzed in and then they don’t have anything or you have to play the game? No. Topic is well discussed already but if we are closer to gettign back where you could walk in and get a Rolex to celebrate a milestone or check out newest models that’s preferable to the cluster situation we have now. Why would I care to insert a flipper and grey into my transaction with Rolex and AD? If we are talking about change I would love to see the ADs disappear and have factory operated boutiques only. One can dream

[Brny11]

Interesting and not surprising. They are at huge risk if markets collapse considering the prices they are paying for trade ins. Grey won’t ever disappear but may return to pre 2016 model.

[Harry-57]

Originally Posted by RTG

Souns like he is justifying his pricing. Just a sales pitch IMO.

He's running a business and he's just realised that he needs to make provision for tax? Impossible to take seriously.