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Old 11 November 2018, 09:13 AM   #121
peterpl
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The only way this could end badly for Rolex is if there was suddenly a huge dumping of merchandise causing prices to crash. There is almost zero chance the "allure" of owning a Rolex wristwatch collapsing. Right now exclusivity works in their favor.
It will end bad if these dodgy dealings continue. The news is spreading fast about all this rubbish and how ludacris its become. There is much talk already happening from guys not even on TRF or any watch forums about all this stuff.

Once fire spreads it spreads quick and fast.

Maybe wont be a crash but it will definitely mean less demand and a continual decline in gray pricing.
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Old 11 November 2018, 09:28 AM   #122
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The only way this could end badly for Rolex is if there was suddenly a huge dumping of merchandise causing prices to crash. There is almost zero chance the "allure" of owning a Rolex wristwatch collapsing. Right now exclusivity works in their favor.
disagree. on the margin, it is very bad. the VAST majority of watch wearers arent buying multiple Rolex watches. they prob buy one expensive watch in their lifetime. so let's say an upper-middle class guy is turning 35 and decides to buy that Submariner he has always been eyeing. he walks into his AD and ask to buy a black Sub and are told, 'sorry, there is a 2 year waiting list.' he walks to the next AD and is told the same thing. and the next, and the next. well, he always liked that Omega Speedmaster so he decides to check that out. the Omega AD greets him and offers him some champagne while he goes into the back to grab exactly what he's looking for.

this will happen at the margin. Submariners/GMTs/Explorers arent Daytonas. i see way more sport models on the wrists of younger (<50) upper middle class Americans than i do Datejusts. if they are being told to f off when they inquire about them at ADs, you better bet it is negative for the brand long term.
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Old 11 November 2018, 09:35 AM   #123
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Why is Rolex producing so many watches that no one is interested in?

Something needs to change and ADs shouldn't be feeling the pain. You see it too many industries. Companies keep producing and expect to grow every year. They expect the stores/dealers to follow, but there is a point that everyone has what it needs and in the current economy the end client isn't that easy to convince to buy something new or replace the older model they had (for example a car).
Back in the 70's I was responsible for Toyota USA production forecasts. Everybody wanted Corolla. They were inexpensive, reliable and stylish. They sold them cheap. The dealers only wanted to order Corolla's. But Toyota didn't make any money on Corolla's. So they limited production. They forced the dealers to take fully loaded Corona's, Celica's and Land Cruiser's, filled with features. Toyota made money on those models.

My guess is that Rolex doesn't make much margin on the basic SS models. Rolex makes margin is on the PM models and higher end SS models like GMT II. Likewise, dealers make big bucks on the all gold models and less on the SS models. So selling SS out the back for a premium makes sense for a dealer. But it is hurting Rolex in the long run.

Rolex must know this and is trying to figure out what to do. My guess is that sales are fine and they are hoping the problem goes away on its own.

BTW is came to this thread from another on the same subject that was filled with all gray dealers and buyers. Anyone that said anything negative about the gray market was attacked. It was bloody. I was the OP and had to shut down the thread.
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Old 11 November 2018, 11:13 AM   #124
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If the individual was a very good client and you knew him, how many watches did he own already and what models? Why would anyone need five more Rolexes with a six month period? Were they corporate gifts? Were they all the same model?


It’s human mindset and behavior and the desire to collect hard to find pieces in this “difficult” environment. Nothing wrong with that. Sometimes it is humorously called “a disease”.




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Old 11 November 2018, 01:01 PM   #125
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If you look at the big greys, they are really not selling many professional models that far over msrp +tax.

Davidsw has a 114060 listed for $8575. The watch retails for $7500. In California, a buyer would spend $437.50 over retail when you account for the tax you will spend at an ad. Not defending the practice, just a thought.





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Old 11 November 2018, 01:03 PM   #126
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If you look at the big greys, they are really not selling many professional models that far over msrp +tax.

Davidsw has a 114060 listed for $8575. The watch retails for $7500. In California, a buyer would spend $437.50 over retail when you account for the tax you will spend at an ad. Not defending the practice, just a thought.





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Good information!
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Old 11 November 2018, 08:58 PM   #127
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Originally Posted by seabreeze60 View Post
My guess is that Rolex doesn't make much margin on the basic SS models. Rolex makes margin is on the PM models and higher end SS models like GMT II. Likewise, dealers make big bucks on the all gold models and less on the SS models. So selling SS out the back for a premium makes sense for a dealer. But it is hurting Rolex in the long run.
So why not produce more GMTs/Subs?

With the current strategy they know the sales will be there and buyers are lined up for a whole decade. If they produce all the needed GMTs/Daytona's it's possible everyone gets the watch they want within the next year and sales slow down and it will affect Rolex and the ADs the following years?
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Old 11 November 2018, 10:23 PM   #128
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Originally Posted by Exploradori View Post
The only solution to this mess is for Rolex to start selling directly to consumers online.

The AD system is now defunct, greys are impossible to curtail, and the Rolex brand is suffering a lot among regular and young people (ie the future for the brand).

Time's up Rolex. Fix this mess.
What mess?

You are making an assumption that Rolex, or even the ADs, think it is broken. Rolex is selling every watch they chose to manufacture at a set price that they dictate. To a business, that is not a problem in need of a solution.


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Old 12 November 2018, 02:33 AM   #129
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What mess?

You are making an assumption that Rolex, or even the ADs, think it is broken. Rolex is selling every watch they chose to manufacture at a set price that they dictate. To a business, that is not a problem in need of a solution.


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Correct, except for one issue, the customer. ADs were set up to service customers at prices listed in the Rolex website. Not some internet seller.

Second you can purchase a nice Omega or TAG diver watch at list or below. Rolex can be several thousand more than list and way more than either brand. Sometimes a buyer starts off wanting one product and ends up with what they can afford.

Customers are starting to get nervous about the expensive nature of entry level Rolex.

I believe Rolex and the ADs agree with you!
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Old 12 November 2018, 02:38 AM   #130
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Grey deal stocks

Quote:
Originally Posted by Wahlberg View Post
So why not produce more GMTs/Subs?

With the current strategy they know the sales will be there and buyers are lined up for a whole decade. If they produce all the needed GMTs/Daytona's it's possible everyone gets the watch they want within the next year and sales slow down and it will affect Rolex and the ADs the following years?


I agree. Raise production 10%+ on GMTs/Subs for 2 years. Problem solved.
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Old 12 November 2018, 03:12 AM   #131
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High end brands are benefitting as well, now that some Rolex SS models are going for close to $20k on the market, it just makes more sense to get an AP or PP.

Look at how prices of Royal Oaks have shot up, same for Aquanauts.

Would you rather have a Daytona or a ROC for roughly the same price?
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Old 12 November 2018, 03:21 AM   #132
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I’m very loyal to Rolex and love my two watches. However both were purchased at what I considered a good price. Below market.

Loyalty at any price is a failed strategy.

In business school they call it ‘price inelasticity of demand’. Rolex should double check that.
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Old 12 November 2018, 03:29 AM   #133
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2 ways a gray can get SS sport models in bulk.

A. From Rolex
B. From AD

I’m leaning B

Why would ADs sell to grays?

A. They have an established relationship.
B. Grays purchase less desirable models, in bulk, along with the SS sport models at MSRP.
C. Grays pay a premium over MSRP in bulk for the SS models.

I’m leaning C

Why does this work for the grays? Because people are willing to pay 20k for a white dial Daytona, 17k for a BLRO, 12k for a hulk Batman, 19k for a SS SkyD.

Where do we go from here?

Demand at the aforementioned price point will fall. Rolex will keep supplying SS models year after year. More supply + less demand = decrease in market price.

Eventually, grays will find it harder to move these models at the current price point.


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Old 12 November 2018, 03:41 AM   #134
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I am noticing the grey market inventory levels of brands other than Rolex is declining and that non-Rolex inventory is quite slow to sell, if at all.

It's essentially ROLEX or bust at this point (with Patek and AP mixed in too). The market speaks and it's yelling ROLEX! as loud as possible. WE WANT ROLEX!!!!

Other brands such as IWC,Breitling, Panerai...they better figure things out fast...
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Old 12 November 2018, 04:34 AM   #135
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Could be worse, my Breitlings have taken a beating on resale. Of course I got a nice discount when I purchased new but I can barely sell them for what I have into them. Not that I am complaining, I love the watches and don't really want to sell them anyway. I did see a nice Rolex at Costco yesterday but I do not want a silver/gold watch. I would like to pick up a Rolex but I cannot stand to pay retail for anything, guess I will wait. At some point the hype will wear off and I will pick one up.
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Old 12 November 2018, 04:47 AM   #136
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my Breitlings have taken a beating on resale.
Did Breitling ever have good resale value.

Just look at the discounts available from ADs. I saw 30% a while ago, in the window. They were never near Rolex resale value because of that and lack of popularity.

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I am noticing the grey market inventory levels of brands other than Rolex is declining and that non-Rolex inventory is quite slow to sell, if at all.
There are a lot of grey dealers out there. Not everyone has deep pockets and not everyone is able to get these Rolex models. Some don't want to do Rolex because it's hard to get and difficult to make money on them so they focus on other brands.
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Old 12 November 2018, 06:05 AM   #137
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Makes me laugh as to why dealers are holding onto the warranty cards. Buy from a Grey and receive the warranty card instantly as depicted in the OP's picture.
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Old 15 November 2018, 10:39 AM   #138
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This grey dealer post their watches on FB all the times....But looking at their Daytona C just make me wonder why everybody accepted it's ok that we can never buy it from AD but these grey dealer can get limitless supply...

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The honesty of AD salespersons is grossly questionable. They maybe flipping these watches through their friends and ended up in grey market.
Well, if the demand is still strong despite higher price, this cycle works.
If the cycle ends, these sales guys would easily call up those innocent folks in the wait list. This will go on and on as long as the economy is doing fine.

Guess we are all victims being a fan of Rolex watches.


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Old 15 November 2018, 10:43 AM   #139
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Did Breitling ever have good resale value.

Just look at the discounts available from ADs. I saw 30% a while ago, in the window. They were never near Rolex resale value because of that and lack of popularity.


There are a lot of grey dealers out there. Not everyone has deep pockets and not everyone is able to get these Rolex models. Some don't want to do Rolex because it's hard to get and difficult to make money on them so they focus on other brands.


These grey dealers probably are using Bankers facility to finance their stock. Their loan rates varies between 3-5% per annum, thus need a cut above that, it’s highly profitable.


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Old 15 November 2018, 02:48 PM   #140
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The answer to this is simple: Grays don't proclaim themselves as grays to their AD's. They simply seem like really good clients to the dealer, so they get top priority.

Most AD's have waiting lists on watches... who gets to be atop those lists? Those that have spent the most with the store.



As an AD myself, I can tell you that we've severed relationships with established "clients" after learning... sometimes months or years later... that they are flipping their purchases. But this can be difficult to police, unless in the OP's case, they share it all over social media.

You may be one of the honest ADs, but come on. Greys get watches with coffins, stickers and no names on warranty cards. ADs punish instead honest people parting with a good quantity of money to purchase a watch to wear or gift to a family member.

For “us” non-VIP (people who can only afford to purchase one or two every few years), the AD makes us get on a completely made up list (all on the list are behind every VIP they call) for years, make us deposit interest-free loans, and once we get the OMG call, the AD strips the stickers, pulls the coffin, Size the watch, and often (we hear on here) hold the warranty card or other accessories so we don’t flip them. All while knowing the Greys are just moving merchandise for the AD at huge markups without all these “inconveniences” we normal buyers are suffering.


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Old 15 November 2018, 02:49 PM   #141
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These grey dealers probably are using Bankers facility to finance their stock. Their loan rates varies between 3-5% per annum, thus need a cut above that, it’s highly profitable.

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Sorry, but very few can qualify for unsecured loans in that range ... those are dream rates.


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Old 15 November 2018, 02:50 PM   #142
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To any AD on this forum, what stops a AD salesperson from just buying every “hot” SS Rolex that comes through before offering anything to a customer? Then, just go on TRF and sell them for huge profits? Can a AD salesperson NOT purchase a Rolex?


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Old 15 November 2018, 03:11 PM   #143
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To any AD on this forum, what stops a AD salesperson from just buying every “hot” SS Rolex that comes through before offering anything to a customer? Then, just go on TRF and sell them for huge profits? Can a AD salesperson NOT purchase a Rolex?
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Doesnt need to be an AD salesperson at all. Nothing stopping them from getting a friend to purchase it on their behalf or a family member. Its common practice actually when I was still buying from an AD the salesperson themselves told me he had to hold a particular reference for a good friend of his.

Its actually very very easy money to be made for ADs backdooring to grays and then selling at ridiculous premiums.

ADs make money
Grays make money
End user (us schmucks) pays a hugely inflated price for a watch that isnt worth anywhere near asking

win win for all.
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Old 16 November 2018, 02:18 PM   #144
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The only way this could end badly for Rolex is if there was suddenly a huge dumping of merchandise causing prices to crash. There is almost zero chance the "allure" of owning a Rolex wristwatch collapsing. Right now exclusivity works in their favor.
Or people rightly see this situation as Rolex’s creation and collectively say they’d rather spend their hard-earned money with a company that does more to protect its product and its customers than removing stickers.
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Old 16 November 2018, 07:02 PM   #145
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Not sure about other cities but in HK my understanding is that greys get them from ADs.....

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Old 16 November 2018, 07:37 PM   #146
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Folks, i started a new tread on this with the title 'What can Rolex do?'

Tread was meant to be constructive on getting some honest feedback on what we as a community think Rolex SA can help with all this shenanigans...

It appears my post have been deleted/blocked. Any idea if I've broken any rules???

anyway my questions were:

Do you think Rolex SA should be concern?

if yes, what are your thoughts / ideas of how Rolex can help stop the scalpers and flippers?

What impact do you think if this practice continues to the Rolex brand in the long term?

As Rolex owners (present and future) should you care?
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Old 7 January 2019, 12:40 AM   #147
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Not sure about other cities but in HK my understanding is that greys get them from ADs.....

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Correct.
I got in touch with greys able to provide me with Batman, Pepsi and Subs from HK ADs Dec 2018 at ridiculous premiums.
I would say with HK rent pressure, ADs have no choice but to go through greys to survive.
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Old 7 January 2019, 03:23 AM   #148
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demand is fading hard and the balance will shift sooner than later. trust me on this one, be patient.
"In the long term we will all be dead" paraphrased from John Maynard Keynes
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Old 7 January 2019, 03:27 AM   #149
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Simple. They have a network of connections with multiple AD's across the globe. They get first dibs on any new shipments of SS watches. Part of the deal is they buy up the undesirable pieces from the AD as well.

AD's like this deal because it doesn't matter who they sell the watch to. A sale is a sale. Sure they're pissing off average customers like us. And one day, the tide will turn when the Rolex bubble has burst, and you'll be able to get discounts off Rolex professional SS watches on the grey market. AD's will feel the pain.
Just like corporate sales and profits, all that matters is the next quarter's results. What happens a year or two down the road in immaterial.
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Old 7 January 2019, 04:48 AM   #150
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demand is fading hard and the balance will shift sooner than later. trust me on this one, be patient.
It faded for me, I went with an AP. I'll wait it out with Rolex, if I come back.
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