Buying New 5205R - Discount & Depreciation?

[dom007]

Originally Posted by willski

Interesting, and seen the same sentiment in other places. Why do you think that is?

Demand from Hongkong and China! See here...

http://www.bloomberg.com/news/articl...g-kong-decline

http://www.fhs.ch/file/59/Watchmaking_2014.pdf

The value of watches delivered to Hongkong alone was almost the double of the value what was delivered to the USA. If you add China to Hongkong and then look at their current economic problems, then you will certainly realize that the market will not considerably improve in the coming months...

[Racerdj]

I don't know about pricing nor depreciation but it is a very stunning PP!

[kaiserphoenix]

Originally Posted by KarlS

But it in UK and get someone to get the 20% VAT back for you.

Yep Patek can immediately take off 20% for you if you export the watch. You just pay the retail - 20%. My friend has done that. However note that if you live in the UK, you have to declare the watch upon entry.

[KarlS]

Originally Posted by kaiserphoenix

Yep Patek can immediately take off 20% for you if you export the watch. You just pay the retail - 20%. My friend has done that. However note that if you live in the UK, you have to declare the watch upon entry.

Actually you pay the full amount and then claim the VAT back at the airport. If above GBP 4000 they normally have to fax it through to the Money Exchange if you want cash or it gets credited to a card around 5-10 days later. Of course that is normally for people resident outside the UK and travelling to a non EU destination.

[kaiserphoenix]

Originally Posted by KarlS

Actually you pay the full amount and then claim the VAT back at the airport. If above GBP 4000 they normally have to fax it through to the Money Exchange if you want cash or it gets credited to a card around 5-10 days later. Of course that is normally for people resident outside the UK and travelling to a non EU destination.

Yes and No. You can do that, but Patek and many other shops also offer to send the watch directly out of the country. You only pay the amount before VAT so no faffing about with forms and security. you get home the watch will be there.

[KarlS]

Originally Posted by kaiserphoenix

Yes and No. You can do that, but Patek and many other shops also offer to send the watch directly out of the country. You only pay the amount before VAT so no faffing about with forms and security. you get home the watch will be there.

Yes that's correct...sorry misunderstood you...yes the downside to that as it hits your home country you have to pay import duty there and that normally kills the deal.

[kaiserphoenix]

Originally Posted by KarlS

Yes that's correct...sorry misunderstood you...yes the downside to that as it hits your home country you have to pay import duty there and that normally kills the deal.

Not if you live in HK :) No duties there.

[KarlS]

Originally Posted by kaiserphoenix

Not if you live in HK :) No duties there.

Always a catch...the will be a price differentiator...there is no duty where I live but the price is roughly 5% more than the after tax price in London. However as I will be going to HK in March I think i will be making a visit to a few AD there...

[kaiserphoenix]

Originally Posted by KarlS

Always a catch...the will be a price differentiator...there is no duty where I live but the price is roughly 5% more than the after tax price in London. However as I will be going to HK in March I think i will be making a visit to a few AD there...

No, you can buy your watches in London, take 20% off. You pay absolutely NO fees, no delivery charge nothing. The watch gets delivered to you in HK. It is the cheapest way to acquire new. You enjoy the best duty free price. The price is far far lower than a price you get in HK. You dont even have to GO to London. You order via email....

[KarlS]

Originally Posted by kaiserphoenix

No, you can buy your watches in London, take 20% off. You pay absolutely NO fees, no delivery charge nothing. The watch gets delivered to you in HK. It is the cheapest way to acquire new. You enjoy the best duty free price. The price is far far lower than a price you get in HK. You dont even have to GO to London. You order via email....

Still sounds wierd...PP would be bankrupt in Hong Kong!!! Why would anyone buy a watch in HK when its easier to buy one directly from the UK and save 20% - you would be an idiot not to!! There just has to be a global price stabiliser between all AD that recognises currencies and VAT and Duties - anyway happy to be proven wrong on this

[kaiserphoenix]

Originally Posted by KarlS

Still sounds wierd...PP would be bankrupt in Hong Kong!!! Why would anyone buy a watch in HK when its easier to buy one directly from the UK and save 20% - you would be an idiot not to!! There just has to be a global price stabiliser between all AD that recognises currencies and VAT and Duties - anyway happy to be proven wrong on this

yep you are wrong. No offence or anything, just telling you how it works, completely official. just call PP in London and order a watch and get it delivered to HK, simple as that.

patek does try to stabilise prices with FX adjustments which has been done this year. Uk had a 10% price drop, coupled with a 20% VAT off, its a no brainer. Consequently if you go to Patek in London, many of the popular models are on back order for over 3 years.....

You can see that this is creating an issue as you say in HK where watch sales are super down because prices are too high. And as you correctly pointed it out, HK Patek sales are far lower than before, up to 10% lower volumes. People are buying in Europe. Simple as that.

[jon_jon]

Originally Posted by kaiserphoenix

yep you are wrong. No offence or anything, just telling you how it works, completely official. just call PP in London and order a watch and get it delivered to HK, simple as that.

patek does try to stabilise prices with FX adjustments which has been done this year. Uk had a 10% price drop, coupled with a 20% VAT off, its a no brainer. Consequently if you go to Patek in London, many of the popular models are on back order for over 3 years.....

You can see that this is creating an issue as you say in HK where watch sales are super down because prices are too high. And as you correctly pointed it out, HK Patek sales are far lower than before, up to 10% lower volumes. People are buying in Europe. Simple as that.

I agree that purchasing luxury goods in the EU and getting the VAT refund would cost less than purchasing directly in HK. It would be interesting to see how the shipping of luxury goods from EU to HK would work. I suppose if you have a permanent residence in HK, it would work as long as the AD in the EU is willing to ship a high priced watch internationally.

I think the HK watch market has suffered recently because their main customer base is the mainland Chinese and their purchase of luxury watches have diminished recently. It is a lot easier for the mainland Chinese to hop on a short 1-3 hour flight to HK to purchase a watch, than to travel to Europe. Also there is the language barrier. I assume most HK SAs can speak "Mandarin" to communicate with mainland Chinese buyers, whereas the English language skills of mainland Chinese are often limited.

[dera]

Originally Posted by kaiserphoenix

No, you can buy your watches in London, take 20% off. You pay absolutely NO fees, no delivery charge nothing. The watch gets delivered to you in HK. It is the cheapest way to acquire new. You enjoy the best duty free price. The price is far far lower than a price you get in HK. You dont even have to GO to London. You order via email....

Not accurate, that is not how VAT works.
With 20pct VAT you dont take 20pct off, you divide by 1,2.

[kaiserphoenix]

Originally Posted by dera

Not accurate, that is not how VAT works.

With 20pct VAT you dont take 20pct off, you divide by 1,2.

correct.


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[justdate]

Yes, the whole 'VAT evasion' tactic does work to be cheaper. But I am not going anywhere with 0% VAT anytime soon - and the effort & cost of a flight to HK just to get the watch... probably not worth it.

I fly to the USA semi-frequently, from Heathrow, but I don't think any of the terminals have Patek there - and not sure quite how cheap they are in the airport anyway.

So that leaves me looking at what AD discount I should be able to get? It'd be good if anyone has bought this / similar ref recently in the UK from an AD to recommend what is achievable as I wouldn't know where to begin.

[KarlS]

Originally Posted by kaiserphoenix

yep you are wrong. No offence or anything, just telling you how it works, completely official. just call PP in London and order a watch and get it delivered to HK, simple as that.

patek does try to stabilise prices with FX adjustments which has been done this year. Uk had a 10% price drop, coupled with a 20% VAT off, its a no brainer. Consequently if you go to Patek in London, many of the popular models are on back order for over 3 years.....

You can see that this is creating an issue as you say in HK where watch sales are super down because prices are too high. And as you correctly pointed it out, HK Patek sales are far lower than before, up to 10% lower volumes. People are buying in Europe. Simple as that.

So took your advice and had my UK AD send me the 5167A straight to HK. I paid the net amount and didn't have the hassle of having to claim back the VAT. He paid for the FedEx and it took 3 days and no extra costs. Worked like a dream. So I am now hooked!!! and you were correct!! In honesty I don't know how the PP dealers stay in business in HK, all watch prices I think are horrendously expensive compared to the UK. I mean HKD 359000 for a 5205!

[kaiserphoenix]

Nice one plus Pound is so weak vs HKD now u bagged a bargain for sure we'll done!!!!


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[Vaxe]

I’m in the market for a 5205, now it’s 42300chf pre 8%VAT, so $39k.

Originally Posted by kilyung

If I'm not mistaken, retail is $46,000 USD. 20% off would be $36,800 - well below used prices. Not impossible to get from an AD but you'd have to have a solid relationship.

[Chiboy]

That moment when you read a thread about now soft the watch market is, and then realize it's a two year old thread with one post tacked on from today....

[Jay (Eire)]

Originally Posted by Chiboy

That moment when you read a thread about now soft the watch market is, and then realize it's a two year old thread with one post tacked on from today....

Well it seems the 5205 is not so popular so at least w.r.t. to the watch which was the subject of the tread the comments are probably still valid.

[tng11]

Originally Posted by Chiboy

That moment when you read a thread about now soft the watch market is, and then realize it's a two year old thread with one post tacked on from today....

The tulip mania seems to only have affected SS, limited edition and certain new release Pateks, a few APs, RMs and SS Rolexes. Everything else is still pretty tepid.

5205R second hand values are still pretty weak, appear even to be down in price from 2015 and sell very slowly.

[AK797]

Yes, the 5205 was quite the rage a couple of years ago but very few incomings or talk of it on the forums for a while now.

[tng11]

Originally Posted by AK797

Yes, the 5205 was quite the rage a couple of years ago but very few incomings or talk of it on the forums for a while now.

To me it's a little puzzling that PP seems to overproduce most of its watches, such that much of its lineup seems to languish in stock at ADs with a few exceptions (e.g. the 5930, 5230 and Nautilus/Aquanaut.) 5960s and 5235s were hot at one point in time and it's almost like you can't give them away these days. Numerous reports of 5170Ps sitting at ADs unsold. And yet, they refuse to shift production capacity over to pieces that sell (i.e. the Nautilus and Aquanaut.)

Yes, I get that TS doesn't want Patek to be a "one watch" company and defined by the Nautilus or Aquanaut, and that the rarity of the sports models drives their demand. But at the same time, I get the impression that people who can't get their hands on a Nautilus or Aquanaut aren't the ones rushing to buy a 5205 or 5235 - instead, they're going to AP and getting a Royal Oak.

[kneedeep]

IMO PPs more recent strategies are driving it toward being a "one or two watch" and LEs company. Most "regular" Calatravas and ACs that I see at ADs are just sitting there. What's hot is red hot in today's watch market and what's not is just dead in the water.

[Vaxe]

Do you think now's a good time to pick up a 5205 ($30k preowned),
or should I wait? Looks like supply is plenty, and if they are only $39k list, seems awfully close.

Originally Posted by AK797

Yes, the 5205 was quite the rage a couple of years ago but very few incomings or talk of it on the forums for a while now.

[AK797]

Originally Posted by tng11

To me it's a little puzzling that PP seems to overproduce most of its watches, such that much of its lineup seems to languish in stock at ADs with a few exceptions (e.g. the 5930, 5230 and Nautilus/Aquanaut.) 5960s and 5235s were hot at one point in time and it's almost like you can't give them away these days. Numerous reports of 5170Ps sitting at ADs unsold. And yet, they refuse to shift production capacity over to pieces that sell (i.e. the Nautilus and Aquanaut.)

Yes, I get that TS doesn't want Patek to be a "one watch" company and defined by the Nautilus or Aquanaut, and that the rarity of the sports models drives their demand. But at the same time, I get the impression that people who can't get their hands on a Nautilus or Aquanaut aren't the ones rushing to buy a 5205 or 5235 - instead, they're going to AP and getting a Royal Oak.

Originally Posted by Vaxe

Do you think now's a good time to pick up a 5205 ($30k preowned),
or should I wait? Looks like supply is plenty, and if they are only $39k list, seems awfully close.

Yes I think the scarcity principle has been shown to be very persuasive, even here with seasoned members and where we always preach to buy the watch and your desire not the price, but human nature will out, alas, and demand is still strong even at these inflated resales. And so the Nautilus and the D500 markets either get stronger or do not fall even after a year and a half now. With dress watches piling up in ADs, and DJs for Rolex, you would think PP would just bite the bullet and accept the market for those is not going to be significantly boosted by withholding the popular models so they should just go back to producing them at a normal rate as before and more importantly announce publicly that they will, to negate the skyrocketing resale and demand.

It is probably a good time to buy models like the 5205, but I think you can push for a better discount than that, I'd want more like $25K.

[HorologyK]

Originally Posted by tng11

To me it's a little puzzling that PP seems to overproduce most of its watches, such that much of its lineup seems to languish in stock at ADs with a few exceptions (e.g. the 5930, 5230 and Nautilus/Aquanaut.) 5960s and 5235s were hot at one point in time and it's almost like you can't give them away these days. Numerous reports of 5170Ps sitting at ADs unsold. And yet, they refuse to shift production capacity over to pieces that sell (i.e. the Nautilus and Aquanaut.)

Yes, I get that TS doesn't want Patek to be a "one watch" company and defined by the Nautilus or Aquanaut, and that the rarity of the sports models drives their demand. But at the same time, I get the impression that people who can't get their hands on a Nautilus or Aquanaut aren't the ones rushing to buy a 5205 or 5235 - instead, they're going to AP and getting a Royal Oak.

Bingo

[tng11]

Originally Posted by AK797

Yes I think the scarcity principle has been shown to be very persuasive, even here with seasoned members and where we always preach to buy the watch and your desire not the price, but human nature will out, alas, and demand is still strong even at these inflated resales. And so the Nautilus and the D500 markets either get stronger or do not fall even after a year and a half now. With dress watches piling up in ADs, and DJs for Rolex, you would think PP would just bite the bullet and accept the market for those is not going to be significantly boosted by withholding the popular models so they should just go back to producing them at a normal rate as before and more importantly announce publicly that they will, to negate the skyrocketing resale and demand.

It is probably a good time to buy models like the 5205, but I think you can push for a better discount than that, I'd want more like $25K.

It seems somewhat ironic that in Thierry Stern's vision of not wanting to become a one watch company, it has been thrust on them whether they like it or not. And in doing so, they're probably missing out on a ton of sales.

As I said earlier, I've seen quite a few anecdotes of people walking over to AP when they can't get a Nautilus or Aquanaut. It's a bad move IMO, because these customers would be ones who would be potential buyers for the 5205/5235 etc, but won't anymore because they've been soured by their experiences trying to get the first one. Maybe not flood the market and still keep them desirable, but the grey market has a large portion of the market cornered and that can't be good.

And now instead of being a "first Patek", the SS models are becoming like incentive awards for VIP/repeat Patek Philippe clients which seems completely counterintuitive.

[tyler1980]

Originally Posted by tng11

It seems somewhat ironic that in Thierry Stern's vision of not wanting to become a one watch company, it has been thrust on them whether they like it or not. And in doing so, they're probably missing out on a ton of sales.

As I said earlier, I've seen quite a few anecdotes of people walking over to AP when they can't get a Nautilus or Aquanaut. It's a bad move IMO, because these customers would be ones who would be potential buyers for the 5205/5235 etc, but won't anymore because they've been soured by their experiences trying to get the first one. Maybe not flood the market and still keep them desirable, but the grey market has a large portion of the market cornered and that can't be good.

And now instead of being a "first Patek", the SS models are becoming like incentive awards for VIP/repeat Patek Philippe clients which seems completely counterintuitive.

the same could be said of rolex. They could be the daytona watch company and would still sell at least as many watches as they do now with one product line, but probably more. AP produces watches no one buys in large numbers (by AP standards), yet the ones people do want you can't get. I don't think its unique to Patek and i do think having some unicorns in the portfolio makes sense as scarcity adds demand and interest... to a point.

I bought a 5712 and a 5164 because I couldn't get the AP's i wanted as those were easier for me to get. It works both ways as i have moved on from AP to Patek, probably for good. I prefer Patek now but if the AP's I wanted were easier to source I might not have ever known.

[tng11]

Originally Posted by tyler1980

the same could be said of rolex. They could be the daytona watch company and would still sell at least as many watches as they do now with one product line, but probably more. AP produces watches no one buys in large numbers (by AP standards), yet the ones people do want you can't get. I don't think its unique to Patek and i do think having some unicorns in the portfolio makes sense as scarcity adds demand and interest... to a point.

I bought a 5712 and a 5164 because I couldn't get the AP's i wanted as those were easier for me to get. It works both ways as i have moved on from AP to Patek, probably for good. I prefer Patek now but if the AP's I wanted were easier to source I might not have ever known.

Well, I'm not so sure Rolex is the right analogy here, as it's really only the Daytona that is unobtainium, while plenty of other models that fly off the shelves are still attainable and in-stock at ADs (maybe not in the UK, but you can get many models with a short wait or a reasonable search.)

My experience with AP is a lot different. I inquired about a 15407 with the Hong Kong boutique back in July (after I bought my 15202) and I was informed I could have it with about a year's wait. Along with the ceramic perpetual, those only seem to be the two real unicorns. The 15400 is still pretty readily available and in-demand, as the "entry level" piece. This is not the case with the 5711, 5712, etc.

In Canada I've been told the waitlists for the 5711, 5712, 5167, 5164 are exceeding 10 years as they only get 1/2 pieces per year and there are dozens on the list, all of whom are VIPs/existing clients. No one was willing to take me down for one.