Are the grey dealers the culprit?

[DGB]

I have read that watch dealers, grey and vintage, sell mostly to traders rather than end consumers.
So the same watch moves from a dealer to another with obviously, each time the dealers takes their margin. So the price is artificially inflated, due to watch moving from hand to hand and every time a little bit more expensive.
If the watch isn’t sold within few month to an end consumer, the dealer will move it to another dealer etc....

This may not be the only reason for the incredible price inflation of watches we have seen lately but I am sure this participates greatly to where we are actually with watches at stupid price.

Any thoughts?



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[mmaggi]

I've always maintained that it's simple economics: Supply & demand. The demand is just too high for many watches and the supply just isn't there.

[Brew]

Is it more likely that these pieces move around "dealers" as these "dealers" source pieces they've sold, despite not having any inventory? Perhaps each interim "dealer" takes some sort of finders fee . . . .

[Goin2drt]

If the masses would stop buying from gray, there would be more in the stores. The biggest issue is Rolex won’t let a dealer sell for over MSRP. Money breeds greed so they then sell them to gray, make a profit because they are “bundling” with other slower movers and voila, the ADM gets a little cut.

Stop buying from gray or shut the heck up and pay the piper whatever the watch is worth to you. I am a huge Rolex fan but the inflated prices aren’t worth it to me so therefore I have not purchased a Rolex in a couple of years. Paying $25k for a SS Daytona is just plain stupid in my mind so I will spend my money elsewhere. I don’t need or want anything that bad.

[Oxfordian]

Originally Posted by mmaggi

I've always maintained that it's simple economics: Supply & demand. The demand is just too high for many watches and the supply just isn't there.

True, oh so true, more buyers than watches, simple, popular brand, well marketed, known the world over, iconic watches, demand is outstripping supply.

[HogwldFLTR]

No culprits other than those who are willing to pay insane prices.

[mml4]

If it were as simple as supply and demand how come there is no shortage on the grey market? It is more like foolishness and greed.

We need to remember these watches are not produced in small numbers.What we have is a mass produced product masquerading as limited production.

[HORNBLOWER]

The non AD price reflects what the consumer is willing to pay.

[playford]

Its huge demand from the far east with an economy in US and EUR that's been decent for a while, so increased demand in luxury goods.

I don't think its less watches are going out, just more are getting bought. Greys are a symptom, not the problem.

[Goin2drt]

Originally Posted by mml4

If it were as simple as supply and demand how come there is no shortage on the grey market? It is more like foolishness and greed.

We need to remember these watches are not produced in small numbers.What we have is a mass produced product masquerading as limited production.

Exactly. Maybe an economic pricing discussion but not supply and demand. There is plenty of supply. Richard Mille maybe a S&D issue, not Rolex. They have a pricing architecture and a business model (rules for ADs) that create the demand for circumventing the rules and making sure everyone gets their piece of the profit with the poor sap consumer willing to pay these stupid prices paying for a multi-tiered distribution model.

You want simple economics, cut out one layer of the distribution model and the consumer will pay less.

[joli160]

Originally Posted by Goin2drt

Paying $25k for a SS Daytona is just plain stupid in my mind so I will spend my money elsewhere. I don’t need or want anything that bad.

Not stupid, you are short of money is the problem imo

[Mystro]

No. Grey dealers are selling to end consumer. Free market fueled by supply and demand.

[Chester01]

Originally Posted by DGB

I have read that watch dealers, grey and vintage, sell mostly to traders rather than end consumers.
So the same watch moves from a dealer to another with obviously, each time the dealers takes their margin. So the price is artificially inflated, due to watch moving from hand to hand and every time a little bit more expensive.
If the watch isn’t sold within few month to an end consumer, the dealer will move it to another dealer etc....

This may not be the only reason for the incredible price inflation of watches we have seen lately but I am sure this participates greatly to where we are actually with watches at stupid price.

Any thoughts?



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It’s the gray market pure and simple. Literally hundreds of gray market dealers and you and I can have any watch on the planet we desire in our wrists by days end. I have been in into watches since the 80’s and things exploded when the gray market exploded. Plenty of supply.

Now, gray market has capitalized on tools like Instagram created a market that is willing to pay way over asking. Secondly, AD’s which also sell jewelry have seen a decline in people buying jewelry (this is well documented especially among the millennial generation) so AD have reason to do business with gray market because they keep the profit rolling in. Lastly, while there is plenty of SS to go around, there has been a shift since the early 2000 of folks being more interested in ss models. This can been seen in the wedding ring trend as well, people getting titanium, ss, tungsten, people more uncomfortable with the loud appearance of yellow gold. Now, Rolex has not and won’t increase production to this.

[WatchLurv]

@OP: Late to the game? Grays have been around way before the tightening of supply. Remember when you could get discount on a Hulk? Probably not. Were they culprits back then when you could get discount on a Hulk from them, but not from the AD? The AD still supplied the gray with their stock. Funny how it is reversed and now they're the culprits.

Originally Posted by Brew

Is it more likely that these pieces move around "dealers" as these "dealers" source pieces they've sold, despite not having any inventory? Perhaps each interim "dealer" takes some sort of finders fee . . . .

Correct. Each dealer who sells on will take a 50-200 USD profit. You do that to 10 watches a day, few times a week, you're suddenly better off than most people.

[HogwldFLTR]

Originally Posted by WatchLurv

@OP: Late to the game? Grays have been around way before the tightening of supply. Remember when you could get discount on a Hulk? Probably not. Were they culprits back then when you could get discount on a Hulk from them, but not from the AD? The AD still supplied the gray with their stock. Funny how it is reversed and now they're the culprits.



Correct. Each dealer who sells on will take a 50-200 USD profit. You do that to 10 watches a day, few times a week, you're suddenly better off than most people.

I believe supply didn't tighten but demand increased. Just saying.

[locutus49]

Greys perform a service for the community. They seek equilibrium between supply and demand. Love or hate them (Odi et amo in Latin, apologies to Cattulus), greys are here to stay.

[djgallo]

Originally Posted by mmaggi

I've always maintained that it's simple economics: Supply & demand. The demand is just too high for many watches and the supply just isn't there.

This^^^^^

I have to laugh about a few of those out there that believe the shortage is a conspiracy involving the Greys and AD’s.

Some can’t get the « high demand » watches from the AD at retail so they cry

We are all dealing with the same issue...

[Rosex]

and when there is a surplus the same greys sell us the easy to get watches at better discount, supply and demand, basic economics 101! Suck it up people.

[Cloudchaser]

FWIW, I am a rather small potatoes "grey," but I sell well more than 80% of the watches I sell to end customers.

Also, someone up thread mentioned the "masses" buying from greys. I don't see that as accurate at all. The "masses" buy a DJ at an AD.

[Bizcut1]

Originally Posted by HogwldFLTR

No culprits other than those who are willing to pay insane prices.

Paid 15% over retail for my Sub C - how is that crazy? No tax either - crazy?

Watch is on my wrist.

End of story.

Ben

[locutus49]

The grey market is simple: pay for time. You pay a bit more to save time and get to own your watch immediately rather than waiting for a year or more and playing AD games.

Originally Posted by Bizcut1

Paid 15% over retail for my Sub C - how is that crazy? No tax either - crazy?

Watch is on my wrist.

End of story.

Ben

[othertbone]

Originally Posted by DGB

I have read that watch dealers, grey and vintage, sell mostly to traders rather than end consumers.
So the same watch moves from a dealer to another with obviously, each time the dealers takes their margin. So the price is artificially inflated, due to watch moving from hand to hand and every time a little bit more expensive.
If the watch isn’t sold within few month to an end consumer, the dealer will move it to another dealer etc....

This may not be the only reason for the incredible price inflation of watches we have seen lately but I am sure this participates greatly to where we are actually with watches at stupid price.

Any thoughts?


Sent from my iPhone using Tapatalk

Yep Roman Sharf at Luxury Bazaar, through his Youtube channel, always says that a large percentage of his business is B2B.

That doesn't necessarily mean that pushes up the price 5% every time. Dealers could also lose money if prices are going down and they want to get out.

There is a whole other market out there for business to business, and dealers are always trading among themselves. There are shows every week around the world for dealers to get together to trade, and of course they do it online and over the phone too.

[Jim Smyth]

Originally Posted by HogwldFLTR

No culprits other than those who are willing to pay insane prices.

There's the true problem!

[Cooper33]

This again

[2nastie]

No idea why people consistently blame the grey dealers for the shortage. One day they are your best friend cause they can get you a deal on a watch and the next day they are blamed for having a watch you want buy cheaper but listed higher.

They don't control Rolex inventory numbers. They purchase a piece at $X (and more often than not either in a bundle or straight purchase for a cost higher than MSRP) and they resale for hopefully higher. They are a business like any "non-authorised" retail goods store.

The prices you see at grey dealers I would actually say is the equilibrium between supply and demand. The current market demand will dictate where the price is set and a steady flow of goods. Yes, it is unfortunate that it is not via an AD (but no one ever said MSRP at an AD was actually market value anyways).

Don't hate the player, hate the game. If you are not prepared pay the high prices, simply don't. It doesn't mean there is anything wrong with it.

[jpsmoove]

there are probably supply issues too, according to the ADs I’ve talked to

[The1019]

Anyone who feeds the greed is responsible as it is purely greed fed

[Seibei]

There is nothing artificial about the price. It is dictated by the realities of supply and demand. The price is not stupid if people are willing to pay it.

[Token74]

Can’t blame the greys. Everyone loved them when they were selling Subs at under retail. Now they’re selling them above retail, they’re the problem!?

Funny how those that didn’t go to greys to get easy discounts back in the day, and paid a premium at their AD, now get what they want from AD’s with no complaints. But those that went to greys, now get frustrated by ADs having other customers they’d rather sell to! Genuinely amazes me.




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[superdog]

Originally Posted by HogwldFLTR

No culprits other than those who are willing to pay insane prices.

Guilty as charged.

Just call me culprit.