Prices in anticipated 2023 recession ...

[ThatOtherGuy7]

Originally Posted by amh

Don't forget, the Daytona is an easy flip for 100% profit. Why would you turn it down? Stay on the list.

GMT is also seemingly immune to the purported "crash", easy 50% fat if it turns out you don't want it. Even horribly dented pieces going for 1.5x.

I don’t plan on flipping and would wear it everyday. $20K is a bit hard to stomach for a watch. If flipping, then yes, it makes sense.

[shaunylw]

Originally Posted by dauster

just went thru it hahahhahah love it thanks for sharing - was pepsi ever at 35k?

No. I mean someone for sure asked 35k for it, but they never held at 35 for a period of time.


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[Mathematoxic]

Originally Posted by Skabadi

That’s possible but it’s a very weak argument imho. Rolex craves exclusivity so will never want their products to be sold on the cheap. Look at Bucherer, they are already selling CPO way above market price. Once the CPO program solidifies its only a matter of time when greys will follow suit - probably slightly cheaper to be competitive

Greys will not follow CPO(high and crazy) prices, simply because no one is even buying at their current grey pricing. It’s only a matter of time CPO prices falls when the ad finally realised Rolex is no longer being “worshipped” because the watch market is dead. There are 0 investment pieces worth buying at grey prices given the current market conditions.

ADs are just businesses that hires salesman to sell you watches. They are not some entity that is immune to market conditions.

[GGGMT]

Originally Posted by Kirk Lazarus

I wouldn’t laugh too much. Your BLRO for sale thread in the classifieds with constant price adjustments wasn’t exactly pretty.

https://www.rolexforums.com/showthread.php?t=853768

Hilarious


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[GGGMT]

Originally Posted by Kirk Lazarus

I wouldn’t laugh too much. Your BLRO for sale thread in the classifieds with constant price adjustments wasn’t exactly pretty.

https://www.rolexforums.com/showthread.php?t=853768

One of the great threads of all times. Probly sold for $14.75075, and grateful to get it


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[Skabadi]

Originally Posted by Mathematoxic

Greys will not follow CPO(high and crazy) prices, simply because no one is even buying at their current grey pricing. It’s only a matter of time CPO prices falls when the ad finally realised Rolex is no longer being “worshipped” because the watch market is dead. There are 0 investment pieces worth buying at grey prices given the current market conditions.

ADs are just businesses that hires salesman to sell you watches. They are not some entity that is immune to market conditions.

Not if they control supply. Just like they can control the supply of new, there’s nothing stopping rolex to do the same for pre owned. In fact they can just control the supply of new and prices of pre owned will start spiking again - not saying that they currently do but they can.

Again goes back to my point that its not to Rolexes interest to sell its products on the cheap. CPO (once fully rolled out) has one main purpose imo and that’s to regulate the pre owned prices.

[jb335]

Originally Posted by dauster

just went thru it hahahhahah love it thanks for sharing - was pepsi ever at 35k?

No.

I think the high was 30-33k. I don’t recall ever seeing anyone even asking 35, but maybe. But as far as what people we’re paying, I’d say 32k bnib tops.


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[Mathematoxic]

Originally Posted by Skabadi

Not if they control supply. Just like they can control the supply of new, there’s nothing stopping rolex to do the same for pre owned. In fact they can just control the supply of new and prices of pre owned will start spiking again - not saying that they currently do but they can.

Again goes back to my point that its not to Rolexes interest to sell its products on the cheap. CPO (once fully rolled out) has one main purpose imo and that’s to regulate the pre owned prices.

I believe Rolex did not purposely restrict supply. It’s the ADs(Most but not all) that are selling back door because it’s simply too lucrative. But once the grey demand dries up, grey dealers will not and cannot buy from these ADs.

I want to reiterate that ADs are just normal businesses hiring salesman(most of the time you are more knowledgeable than them) to sell you watches. They are not immune to market changes nor economic conditions. So whether prices will rise or fall, refer to demand and supply. Also remember ADs are paying high monthly rent, so they don’t have the option to choose not to sell to create this false no stock impression(I mean when they grey dealers stop buying from them back door).

Cheers all and peace

[Skabadi]

Originally Posted by Mathematoxic

I believe Rolex did not purposely restrict supply. It’s the ADs(Most but not all) that are selling back door because it’s simply too lucrative. But once the grey demand dries up, grey dealers will not and cannot buy from these ADs.

I want to reiterate that ADs are just normal businesses hiring salesman(most of the time you are more knowledgeable than them) to sell you watches. They are not immune to market changes nor economic conditions. So whether prices will rise or fall, refer to demand and supply. Also remember ADs are paying high monthly rent, so they don’t have the option to choose not to sell to create this false no stock impression(I mean when they grey dealers stop buying from them back door).

Cheers all and peace

I don’t disagree with you about the AD, but my point is solely about rolex HQ. Nobody knows for sure if rolex hq restricts supply to ADs but my point is that they can, and once they start playing the supply card more rigorously then that’s a totally different ball game.

[sigma089]

Rolex is in the market of producing new watches and they are pushing out 1M+ pieces across all lines a year. That's a lot of watches in today's environment.

They will make their ADs buy everything they produce, of course, but most will be complaining that they are unable to get rid of PM and other less desirable pieces, like they have for ages in the past. Even for Rolex and PP this is going to be a challenging environment. They will fare better than less desirable brands, but they will also experience considerable less demand from customers.

Rolex as a company has absolutely no interest in stabilizing the market at the ridiculous level of the past two years just so everyone who bought a Daytona at 50k or a GMT at 25k can continue feeling like they did the right thing. They do not care about the secondary market, simply because their goal is to sell the new pieces that they are constantly producing.

Imo the CPO program is there to make it easier for customers to upgrade to more expensive pieces at ADs via trade-ins. Primarily it's a great way of facilitating sales of PM models.

ADs also do not care if they make 20 percent on your trade-in piece at 25k or 10k when they sell it to another customer. The difference is peanuts for them, especially if they make you buy a new watch in the process. The big money is in new watches. They make around 40 percent on each sale at MSRP and they will have an easier time selling if a customer believes that they made a great deal trading-in another piece.

CPO prices won't be stabilizing above retail. They will become a way of steering existing customers from lower brands to more expensive ones through a more affordable pricing - like pre-owned cars at your Mercedes dealer.

[Skabadi]

Originally Posted by sigma089

Rolex is in the market of producing new watches and they are pushing out 1M+ pieces across all lines a year. That's a lot of watches in today's environment.

They will make their ADs buy everything they produce, of course, but most will be complaining that they are unable to get rid of PM and other less desirable pieces, like they have for ages in the past. Even for Rolex and PP this is going to be a challenging environment. They will fare better than less desirable brands, but they will also experience considerable less demand from customers.

Rolex as a company has absolutely no interest in stabilizing the market at the ridiculous level of the past two years just so everyone who bought a Daytona at 50k or a GMT at 25k can continue feeling like they did the right thing. They do not care about the secondary market, simply because their goal is to sell the new pieces that they are constantly producing.

Imo the CPO program is there to make it easier for customers to upgrade to more expensive pieces at ADs via trade-ins. Primarily it's a great way of facilitating sales of PM models.

ADs also do not care if they make 20 percent on your trade-in piece at 25k or 10k when they sell it to another customer. The difference is peanuts for them, especially if they make you buy a new watch in the process. The big money is in new watches. They make around 40 percent on each sale at MSRP and they will have an easier time selling if a customer believes that they made a great deal trading-in another piece.

CPO prices won't be stabilizing above retail. They will become a way of steering existing customers from lower brands to more expensive ones through a more affordable pricing - like pre-owned cars at your Mercedes dealer.

I don’t disagree with you except for the last paragraph. My point is there’s absolutely nothing stopping rolex cutting supply to their ADs but half tomorrow.

[2loaded]

Originally Posted by amh

Rolex is historically recession-proof



The only question to be asked: Are the diamonds & Omegas connected to the Rolex recession-proof?

No, neither is Tudor.
Exciting times ahead for watch enthusiasts!

[2loaded]

Originally Posted by S.Explorer

The stall seems to be a last hurrah for Christmas, then I'd expect more price drops to come.

Exactly..buckle up for the ride folks!

[2loaded]

Originally Posted by Kirk Lazarus

I wouldn’t laugh too much. Your BLRO for sale thread in the classifieds with constant price adjustments wasn’t exactly pretty.

https://www.rolexforums.com/showthread.php?t=853768

That FS thread is brutal

[Andy0331]

Originally Posted by dwjez14

I bet prices still stay strong during recession. The smart people find ways to make money and continue to buy luxury items

The flaw in this logic is thinking that the recent market conditions occurred because "smart people" were driving the demand.

Yes, smart people will still have money; that doesn't make them more likely to buy more to make up for the lost "dumb people" volume. "Dumb people" who are over-leveraged in watches (or anything for that matter) will also want/need to start liquidating at some point, introducing more supply into the market, putting further pressure on prices.

I don't see any way for this to end well for those holding mass, current production models as "stock" purchased above MSRP (excluding some specific models). The solvent ones will eventually sell at a loss & write it off and go back to work (which "hurts", but that's how businesses survive) and the over-leveraged ones will go out of business.

[Mathematoxic]

Originally Posted by Skabadi

I don’t disagree with you about the AD, but my point is solely about rolex HQ. Nobody knows for sure if rolex hq restricts supply to ADs but my point is that they can, and once they start playing the supply card more rigorously then that’s a totally different ball game.

Agree that Rolex holds the most control over supply of watches. But they are very unlikely to cut supply as doing so will decrease their profit when their “customers” are supposed to buy anything supplied to them.
We definitely won’t hit a stage where everyone no longer want a Rolex anymore. So it’s the ADs’ problem on how they want to sell the watches they receive and not so much of a problem for Rolex.
Just like pre-hyped era, they sell to greys wholesale, and greys sells to us. Of course there are many other ways ADs can choose to sell their inventory, it all depends on their creative minds

[Vince_76]

Originally Posted by Kirk Lazarus

I wouldn’t laugh too much. Your BLRO for sale thread in the classifieds with constant price adjustments wasn’t exactly pretty.

https://www.rolexforums.com/showthread.php?t=853768

that dude can never recover from this

[doyall]

Originally Posted by Andy0331

... "Dumb people" who are over-leveraged in watches (or anything for that matter) will also want/need to start liquidating at some point, introducing more supply into the market, putting further pressure on prices. ...

à la:

Here's Why Crypto Investors Are Offloading Their Luxury Cars

By Adina Achim Published 2 hours ago

The bankruptcy of two cryptocurrency exchanges saw a sharp decline in the market, resulting in the sale of no longer affordable luxury sports cars.

https://www.hotcars.com/crypto-inves...g-luxury-cars/

[Skabadi]

Originally Posted by Mathematoxic

Agree that Rolex holds the most control over supply of watches. But they are very unlikely to cut supply as doing so will decrease their profit when their “customers” are supposed to buy anything supplied to them.
We definitely won’t hit a stage where everyone no longer want a Rolex anymore. So it’s the ADs’ problem on how they want to sell the watches they receive and not so much of a problem for Rolex.
Just like pre-hyped era, they sell to greys wholesale, and greys sells to us. Of course there are many other ways ADs can choose to sell their inventory, it all depends on their creative minds

Using your logic Rolex hq can cut supply, hike rmsp and achieve the same profitability results. In fact doing this will make them even more exclusive.

[mountainjogger]

Originally Posted by Skabadi

Not if they control supply. Just like they can control the supply of new, [/B]there’s nothing stopping rolex to do the same for pre owned.[/B] In fact they can just control the supply of new and prices of pre owned will start spiking again - not saying that they currently do but they can.

Again goes back to my point that its not to Rolexes interest to sell its products on the cheap. CPO (once fully rolled out) has one main purpose imo and that’s to regulate the pre owned prices.

In my opinion, the days of demand for hyped prices for used Rolex watches is passing further in the collective memory every day. And it is not coming back.

There is currently a glut of used Rolex, and prices continue to decline. Why? Because demand has evaporated.

Market will dictate the price of CPO, not the other way around. And it will be set by demand against two factors, price availability of new watches, and price of non CPO. Rolex will not tinker with slow increases for new. And Rolex has no ability to affect the price of non CPO.

It would take a massive investment to control the price of used Rolex. Where would the money come from?

Rolex? Nope.

AD's. Nope.

Grey's. Nope, they are already over stocked.

[Mathematoxic]

Originally Posted by mountainjogger

In my opinion, the days of demand for hyped prices for used Rolex watches is passing further in the collective memory every day. And it is not coming back.

There is currently a glut of used Rolex, and prices continue to decline. Why? Because demand has evaporated.

Market will dictate the price of CPO, not the other way around. And it will be set by demand against two factors, price availability of new watches, and price of non CPO. Rolex will not tinker with slow increases for new. And Rolex has no ability to affect the price of non COP.

It would take a massive investment to control the price of used Rolex. Where would the money come from?

Rolex? Nope.

AD's. Nope.

Grey's. Nope, they are already over stocked.

Same sentiments. No way Rolex is able to single-handedly influence the whole secondary market. I also note that there comes a price point when consumers gets turned off and will either choose not to buy a luxury non essential item or go to other brands. We all know prices/costs of living will increase with time. But! The rate of increase actually matters a great deal. So if Rolex cuts their supply and comes in with a huge sudden increase in price, it could backfire badly. Also why Rolex has such a huge market share is because they have very good watches at entry level luxury price points(prices of sub/gmt are a very good example where most people could afford 1 if they do some savings over a relatively short span of time).
Just think 10k sub VS a 40k 5712/1A. If there is no hyped up market, where profits(whether realised or not) just comes along with the purchase, I guess most people that truly want a watch will think twice putting 40k into them.

[Skabadi]

Originally Posted by mountainjogger

In my opinion, the days of demand for hyped prices for used Rolex watches is passing further in the collective memory every day. And it is not coming back.

There is currently a glut of used Rolex, and prices continue to decline. Why? Because demand has evaporated.

Market will dictate the price of CPO, not the other way around. And it will be set by demand against two factors, price availability of new watches, and price of non CPO. Rolex will not tinker with slow increases for new. And Rolex has no ability to affect the price of non CPO.

It would take a massive investment to control the price of used Rolex. Where would the money come from?

Rolex? Nope.

AD's. Nope.

Grey's. Nope, they are already over stocked.

Ok let’s say hypothetically rolex decides tomorrow to cut production by 50% (which personally I think it’s not unrealistic in the long term given that i feel rolex wants to imitate patek) what do you think will happen to prices in pre owned?

[Swiftneck]

Originally Posted by Skabadi

Ok let’s say hypothetically rolex decides tomorrow to cut production by 50% (which personally I think it’s not unrealistic in the long term given that i feel rolex wants to imitate patek) what do you think will happen to prices in pre owned?

Building a new factory, and cutting production by 50% do not seem realistic.

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[onyourbikes]

Originally Posted by Skabadi

Ok let’s say hypothetically rolex decides tomorrow to cut production by 50% (which personally I think it’s not unrealistic in the long term given that i feel rolex wants to imitate patek) what do you think will happen to prices in pre owned?

Why would they be building a new factory to cut production?

I personally think Rolex were quite happy pre 2019, every watch they made got sold, whether instantly or after a small spell in the dealer window.
Sure they liked the hype and sell out nature of the last 3 years, but now it is just pissing people off and the bubble has firmly burst.

The hype of the last few years has done its job; the name Rolex is firmly established in a whole new generation's mind. So now I'm sure they'd be happy to actually have supply because right now they are very close to permanently alienating their customers, including some very long standing ones.
Now they just need to keep the supply flowing to keep customers happy.

I think we are only weeks/months away from walk in watches being normal again, grey market below msrp, as it should be.

[Skabadi]

Originally Posted by Swiftneck

Building a new factory, and cutting production by 50% do not seem realistic.

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Nobody knows what the new ‘factory’ is for. Rolex have never announced what it will be used for. Could equally be for servicing, marketing, admin, research or a combination of all the above.

[Swiftneck]

Originally Posted by Skabadi

Nobody knows what the new ‘factory’ is for. Rolex have never announced what it will be used for. Could equally be for servicing, marketing, admin, research or a combination of all the above.

They did come with a statement for Yahoo Finance that scarity was not a strategi for Rolex, and that they CURRENTLY just wasn't able to meet demand though.

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[Skabadi]

Originally Posted by Swiftneck

They did come with a statement for Yahoo Finance that scarity was not a strategi for Rolex, and that they CURRENTLY just wasn't able to meet demand though.

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Yes but did they mention anything about what the new factory will be used for? Truth is we don’t know. For me it’s extremely naive for Rolex not to control supply and hike exclusivity levels of its brand to patek levels (which is what I think they are aspiring to reach)

[Swiftneck]

Originally Posted by Skabadi

Yes but did they mention anything about what the new factory will be used for? Truth is we don’t know. For me it’s extremely naive for Rolex not to control supply and hike exclusivity levels of its brand to patek levels (which is what I think they are aspiring to reach)

The production cost of a Rolex is properly less than 10% of the msrp. Cutting production by 50% will require a price increase of nearly 100% to keep the same earning. Which would bring there prices on patek level with 5 times the sale and less quality. I don't think that's realistic especially in the long run.

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[Swiftneck]

Originally Posted by Skabadi

Yes but did they mention anything about what the new factory will be used for? Truth is we don’t know. For me it’s extremely naive for Rolex not to control supply and hike exclusivity levels of its brand to patek levels (which is what I think they are aspiring to reach)

Even you call it a factory, which are a odd name for a marketing or administration building.

And this artickel calls it a production cite. If Rolex them self have said that i don't know.

https://www.swissinfo.ch/eng/busines...rland/48076474



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[Skabadi]

Originally Posted by Swiftneck

The production cost of a Rolex is properly less than 10% of the msrp. Cutting production by 50% will require a price increase of nearly 100% to keep the same earning. Which would bring there prices on patek level with 5 times the sale and less quality. I don't think that's realistic especially in the long run.

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Rolex is not a publicly listed company so again nobody knows about their true financials but irrespective my point was about supply. Reducing supply and upping msrp by at least 10% each year is not entirely unrealistic imo.