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Old 19 January 2021, 02:41 PM   #31
teck21
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Quote:
Originally Posted by EEpro View Post
If AD price = grey price a huge amount of demand would evaporate (at the AD).

That is true.

Take away the mystery of how to obtain one (certain references) and a lot of people will lose interest.


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Old 19 January 2021, 02:42 PM   #32
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I think of this as brainstorming. Problem: 1) is is excessively hard to get a stainless steel sports model at a dealer 2) if you go on Chrono24 there are substantial numbers of flipped sports models 3) customers want the security and experience of buying at an AD. Solve.

This is one potential solution, even if not realistic. It can lead to more ideas and perhaps get us to a better place.

Personally, I know I have that problem, not only am I paying more, I’m also taking a risk the watch is as represented.


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Old 19 January 2021, 03:19 PM   #33
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Would that really make them easier to get? If people are willing to pay $X for a Sub, then they're willing to pay $X for a Sub. I don't think many of them care who they're paying it to, they just want the watch.
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Old 19 January 2021, 03:26 PM   #34
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Originally Posted by horseShu View Post
it's highly likely that dealers are colluding on a massive scale.
but since *luxury* watches are non-essential goods, we can't exactly report this to the authorities or something.
just vote with your wallet.
Collusion is a strong word. They watch how their peers are pricing their goods and continually test higher and higher prices to determine elasticity of demand.

The big ones use their market presence to create artificial interest in brands. Have you noticed the same dealers pushing Lange or Moser over and over again. It’s not a coincidence.
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Old 19 January 2021, 03:34 PM   #35
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Quote:
Originally Posted by dimag333 View Post
I think a sub would be 20k then from a grey in the current market

steve

This


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Old 19 January 2021, 03:56 PM   #36
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Rolex is basically a charity company, they will continue giving people money by selling their product below market value. Bless Rolex lol.
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Old 19 January 2021, 04:13 PM   #37
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Youtuber offers solution to Rolex AD sports model scarcity.

Ultimately I don’t understand the use of the word ‘problem’ when it comes to Rolex scarcity.

It is not fresh water, access to sanitation or a dwelling. It is a piece of jewellery and I find it hard to describe it as being a problem, or even an issue that needs to be addressed.

Discuss, certainly. Address? I’m not sure at all. Is there actually something to solve here?


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Old 19 January 2021, 04:46 PM   #38
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I can’t see a scenario where any party would benefit from this. Rolex, the AD, the customer, the grey market would all “lose” if this were to happen.


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Old 19 January 2021, 04:54 PM   #39
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If you look at the price increaes that rolex have rolled out over the past couple of years world wide then I think it's fair to say they are already doing what the OP suggests.
Give it another 5 years and I think you'll see some equilibrium in the market place.

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Old 19 January 2021, 05:20 PM   #40
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Why are these "experts" making home videos instead of running sales and marketing departments of top brand watchmakers the world over?
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Old 19 January 2021, 05:24 PM   #41
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Honestly I’m excited that Rolex don’t take financial advice from YouTubers with eccentric and stupid ideas to just fuel the click bait to their channel.
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Old 19 January 2021, 05:30 PM   #42
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I dont think the greys are a concern to rolex anyway....why would rolex care if they sell every single watch they produce....i think its a position all businesses would love to be in
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Old 19 January 2021, 07:23 PM   #43
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Honestly I’m excited that Rolex don’t take financial advice from YouTubers with eccentric and stupid ideas to just fuel the click bait to their channel.
I don’t think it was intended that way, it was just a suggestion for discussion just like we are all doing now. No need to take it seriously
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Old 19 January 2021, 10:31 PM   #44
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I simply refuse to play the game and that is the best option as there is no scarcity. If the AD raised the price, so would the gray. The Robb report detailed the false scarcity issue and as I have been saying for years it’s all a game.
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Old 19 January 2021, 10:33 PM   #45
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I do not agree with the raise the price logic. If the intent is to undercut the Grey market and AD's selling out the back door then the prices should be lowered by half and Rolex should sell directly on the internet and ensure that AD's have supply that is placed into cases to be sold to the first come first serve. Increase manufacturing to just the hot Models for a time frame until you can get the market leveled out. This would cause the Grey's to push inventory into the market at much lower prices as they could be financially destroyed based on what they paid vs what they can get. The owners that paid way over on the watches they own would try to dump them and the prices would crash as there would be a glut of watches on the market. In the end prices would stabilize and Rolex could return to more realistic prices. Not going to happen as it appears that a perfect storm is occurring between Rolex, AD's and the Grey to profit and drive the market. Just my thoughts
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Old 19 January 2021, 10:52 PM   #46
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The US and Europe allocation went down during the pandemic gentlemen. they shipped more watches to China. this only increased the supply problem in those markets. we will see what happens post W&W in April. I would not hold my breath about meaningful allocation bumps in the US or Europe anytime in the near future.

I think raising prices that drastically would only induce current sellers and the 2ndary market to increase prices along side with it. increasing the price is not going to increase the supply from Rolex. people will still by certain models at double the price if it were so (at the AD) because they do so on the 2ndary as it is now.

1 company makes Rolex watches. There is no true substitute good for the Rolex brand.

As a value proposition it is dead unless you want an Airking or something. Even the PM gold and platinum models are no longer a value buy. Platona for 50k is now 80k. White gold sub is 40k at the AD when it was 25k and the 2ndary has it at 48-50k. Even yellow gold is selling through. No value other than buying at an AD (if you can).

I walked into a B&M 2ndary this weekend and they had every single sports model, gold subs, dd40s, etc. their prices were high and the message was clear. we arent selling for anything other than our ask. bear in mind their cost is pretty close to the ask. the ones making major money are those getting it from the AD. most 2ndary sellers don't have the big AD relationships. this is how it works.

a "collector" can buy a hot model and sit on it for a year, flip it for double and no problem. but if someone else does it they are awful (sarcasm intended).

it does suck for the little guy who is just getting into Rolex. that is the way it goes sometimes. if you like the watch you wait and hope, you pay market or you move to another watch.
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Old 19 January 2021, 11:16 PM   #47
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Rolex sells every watch that they make, every year. It is a bulletproof business model. There is zero need for Rolex to change anything. They export all of the costs and risks associated with retail to the ADs and force ship them anything that they want to send.

They have a predictable and stable cash flow. If Rolex wanted more cash today it could just securitize that future income stream.

Why would anyone want to change that?
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Old 19 January 2021, 11:25 PM   #48
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Paying attention to what amateurs have to say on social media is the cause of many of our modern problems.
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Old 19 January 2021, 11:28 PM   #49
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Originally Posted by BroncoOne View Post
Rolex sells every watch that they make, every year. It is a bulletproof business model. There is zero need for Rolex to change anything. They export all of the costs and risks associated with retail to the ADs and force ship them anything that they want to send.

They have a predictable and stable cash flow. If Rolex wanted more cash today it could just securitize that future income stream.

Why would anyone want to change that?

Exactly this!


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Old 19 January 2021, 11:41 PM   #50
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I think a sub would be 20k then from a grey in the current market

steve

Yep, i agree. Look what happened when Patek applied a big price increase to the Nautilus to level up with great prices, the great prices went into super overdrive!!

And it’s a moot point because Rolex won’t hike up the prices significantly because if there were to suddenly be a dip, they would find themselves needing to reduce prices, and whilst this isn’t unheard of with big watch companies, it’s very bad for a luxury brands generally.

Also worth remembering that most watch buyers are probably unaware of the shortages in supply, so not really an issue. This is especially true of Rolex buyers, who seem to want a Rolex rather than a specific model, such is the power of the brand.

And surely the original point of the YouTube fella is flawed anyway. There is no problem with availability, there is just a problem with availability at current retail price. Most people don’t give a stuff about buying from an AD, what they care about is price. If they are prepared to spend 16k then they can do that right now.

And anyone that is prepared to spend 16k on a watch but won’t because that’s not the retail price, well, it blows my mind!!


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Old 19 January 2021, 11:49 PM   #51
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Interested to hear opinions...

Is the stainless steel AP Royal Oak a $20K watch? The MSRP would dictate so but it is much simpler than either a Submariner or a GMT...leaps and bounds simpler than a Sky-Dweller. Has Rolex just been underpricing themselves and is just now swimming up market?
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Old 20 January 2021, 12:20 AM   #52
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That's the silliest idea I've heard in a long time.
In summary, this.
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Old 20 January 2021, 12:40 AM   #53
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It would crash the market. There are so many people who buy Rolex as an investment that they can wear to flex. When you remove all of those people from the market, then you'd be in the same position as pre-2017, and there would be significant discounts to be found. Does anyone think Rolex wants to go back to seeing people haggling over subs, getting 20-30% discounts, etc?

Rolex is in for the long haul. They know their product is priced correctly due to historical demand, and they'll just outlast the bubble. No sense in putting the next 100 years of the company at risk to pump profits in 2021.
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Old 20 January 2021, 12:58 AM   #54
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Youtuber offers solution to Rolex AD sports model scarcity.

Quote:
Originally Posted by turkeysub93 View Post
Interested to hear opinions...

Is the stainless steel AP Royal Oak a $20K watch? The MSRP would dictate so but it is much simpler than either a Submariner or a GMT...leaps and bounds simpler than a Sky-Dweller. Has Rolex just been underpricing themselves and is just now swimming up market?

Just because a watch has less complications, doesn’t mean it’s should be priced less than one that has more, there are so many counter examples to this.

How a watch company dictates prices is based on cost to make it, and an AP RO costs a lot more to make than a Sub, hence the higher MSRP. If you ever compare the finishing of a RO v Sub case and movement, you will understand why.

Rolex price themselves so they are happy with the margins they make and also take into account other market factors and of course in the future. If they were to suddenly increase Daytona MSRP prices 100%, of course they would reap some benefit in short term but may crash and burn a few years down the line. They haven’t been in business 100+ years by making stupid decisions like this.


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Old 20 January 2021, 01:07 AM   #55
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Honestly I’m excited that Rolex don’t take financial advice from YouTubers with eccentric and stupid ideas to just fuel the click bait to their channel.
Have to agree but many have lost the use of there own brain as today they need the likes of YouTube and so called social media to to the thinking for them. And if its on Youtube or social media it must be true to those that have forgot to use the own bit of grey matter called the brain.
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Old 20 January 2021, 01:16 AM   #56
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I have a couple of questions about the whole Rolex-Grey Market dynamic that i'd like some help with.

1. Does the grey market really hurt Rolex's ability to meet their own financial goals?

if no, I'm not convinced they really care much about the grey market other than to make sure product being sold is legitimate.

2. What really is the primary driver of the bottleneck that creates a market opportunity for the greys? Is it production? Is it ADs taking advantage of demand and turning down potential customers who can only afford 1 or 2 purchases a year in favor of those who can spend more? Is it something else?

3. Does Rolex want to serve the most number of customers or do they want to sell the most number of watches each year?
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Old 20 January 2021, 04:12 AM   #57
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I have a couple of questions about the whole Rolex-Grey Market dynamic that i'd like some help with.

1. Does the grey market really hurt Rolex's ability to meet their own financial goals?

if no, I'm not convinced they really care much about the grey market other than to make sure product being sold is legitimate.

2. What really is the primary driver of the bottleneck that creates a market opportunity for the greys? Is it production? Is it ADs taking advantage of demand and turning down potential customers who can only afford 1 or 2 purchases a year in favor of those who can spend more? Is it something else?

3. Does Rolex want to serve the most number of customers or do they want to sell the most number of watches each year?
1) No.

2) Hyped up models with limited productions. It's not that they "can't" produce more, it's the that they won't. Maintaining limited availability keep these models exclusive. Instead of just doing it with the Daytona they have expanded this strategy throughout their entire SS line.

3) Neither.
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Old 20 January 2021, 04:58 AM   #58
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Have to agree but many have lost the use of there own brain as today they need the likes of YouTube and so called social media to to the thinking for them. And if its on Youtube or social media it must be true to those that have forgot to use the own bit of grey matter called the brain.
True, yet why not have prices go to street value to see who is the real deal and who is just 'smoke and mirrors'. Would be reeeeally fun to watch. i say sure, let the games begin. Of course if the world's central banks ever allow the market crash, it'll be even more interesting.

Kinda like politics, always a fun circus to watch... and i heard someone calculate that right now the 'bread' (free currency) is flowing at a rate of ~$2.4B ($2,400,000,000) or more each hour. It's gotta go somewhere.

"Central Banks Buying $2.4 Billion In Financial Assets Every Hour To Support Markets - BofA Report"
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Old 20 January 2021, 05:07 AM   #59
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1) No.

2) Hyped up models with limited productions. It's not that they "can't" produce more, it's the that they won't. Maintaining limited availability keep these models exclusive. Instead of just doing it with the Daytona they have expanded this strategy throughout their entire SS line.

3) Neither.
That's what i was thinking. Rolex probably has no vested interest in seeing anything different than what currently exists.

On third question, sorry should have been more clear - Does Rolex want to increase the # of people who have bought one of their watches (their penetration) or increase the # of watches it sells each year? My guess it is the latter and not the former and so the current business model ADs employ works to Rolex's favor.
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Old 20 January 2021, 05:41 AM   #60
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Except when the party ends and realize that the sub isn’t a 16k watch and they have to lower the price back down to 9k and wipe the egg of their proverbial face. I don’t think Rolex cares about the grey market
Exactly.
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