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13 February 2020, 01:25 AM | #31 |
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Maybe it's dependent on the specific watch but I went to two ADs in the last three months and the best they would do is 10%. Occasionally they offer a "friends and family" weekend at the end of the year for 15% but that's the biggest discount I was ever offered on an Omega.
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13 February 2020, 01:47 AM | #32 | |
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My Omega boutique treats me very well. I can set up an appointment if I want the red carpet treatment. They will dedicate a salesman to me that will let me try on any model as well as answer any of my questions. If I want a model that is being released, I call them up and tell them to get one for me. No list. No being laughed at. No attitude of "I am doing YOU a favor". As far as a soft MSRP: I do not buy my watches as an investment, I buy them because I like them. I have owned 5 Omegas and now own 4, the one I sold was a vintage piece and it no longer appealed to me. I will certainly be adding more to my collection. |
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13 February 2020, 02:25 AM | #33 | |
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I just cannot pay 20% more for an item that costs thousands ...
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13 February 2020, 02:33 AM | #34 |
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The only reason that Omega has created boutiques is to maintain the illusion of exclusivity, class and to zero discounts because they know all ADs discount Omegas deeply. It has always been the case.
The problems with ADs is that Omega/Swatch Groups are moving towards a business models where they do more and more limited editions to sell online or via boutique only to keep 100% of the profit themselves while they make ADs stock the generic stuff, ergo no discounts on highly coveted models. |
13 February 2020, 04:02 AM | #35 | |
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As for as LE's... Omega.. please, just stop. |
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13 February 2020, 04:04 AM | #36 |
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13 February 2020, 04:07 AM | #37 | |
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Sent from my SM-G975U1 using Tapatalk |
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13 February 2020, 06:15 AM | #38 |
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I get 15-17% of most with my AD. The only one I haven’t is my Apollo 11 understandably.
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13 February 2020, 07:32 AM | #39 |
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Not looking to argue at all
But I go to boutiques for events and to look, but I am likely to buy from an AD at 20% off. I get treated nicely at both places.
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13 February 2020, 07:38 AM | #40 |
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13 February 2020, 08:26 AM | #41 |
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13 February 2020, 08:45 AM | #42 | |
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13 February 2020, 10:13 AM | #43 | |
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Yep. Had my FOIS that I bought for $3700. Retail is $5900. Loved it. Was never going to sell it. But someone wanted it worse than I did and I looked around and can replace it for $3200 if I get the itch again. But I have liquidated a bunch lately so this was just one of a few. Sent from my iPhone using Tapatalk Pro |
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13 February 2020, 10:30 PM | #44 | |
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I enjoyed visiting the boutique immensely. I don’t buy my watches as an investment either, I was just shocked realizing how much value they lose in such a short amount of time if you pay retail. I do love the idea that you can get anything that has been released. No waiting list. Sent from my iPad using Tapatalk |
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13 February 2020, 10:32 PM | #45 | |
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I used to own that watch. My wife borrowed it constantly, so I gave it to her. She loves it. It’s her daily wear. Sent from my iPad using Tapatalk |
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13 February 2020, 10:39 PM | #46 |
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Rolex are a lot more common than a Prius.
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14 February 2020, 12:06 AM | #47 | |
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14 February 2020, 09:42 AM | #48 |
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That is one of my favorite watches. Yes, I purchased it at a boutique. I'm in there all the time and they are always super nice and offering me drinks and showing me watches that aren't in the case. They take really good care of me. They have been able to get LE watches that were supposed to be sold out. I don't know how they do this, but I think because it's OB and and AD they can look at inventory and maybe pull from other stores. This happened with Ultraman and Hodinkee.
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14 February 2020, 11:00 AM | #49 |
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14 February 2020, 12:27 PM | #50 |
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In the Rolex section people complain about not being able to buy steel sports models at ADs. In the Omega section people complain about anyone being able to walk in and buy any steel sports model they want!
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14 February 2020, 09:54 PM | #51 | |
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I'm guessing yacht master oyster 'something'
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14 February 2020, 09:56 PM | #52 |
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14 February 2020, 09:57 PM | #53 | |
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I wouldn't complain about any company meeting customer demand. Getting 18% off and LE can only be a good thing
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14 February 2020, 09:58 PM | #54 | |
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Wow. I'm now quite impressed I actually got most of it. I'm not a Rolex guy
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14 February 2020, 10:13 PM | #55 |
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15 February 2020, 05:20 AM | #56 |
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but the YMOF is gold, Gold, GOLD!
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15 February 2020, 05:36 AM | #57 | |
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Rolex lets the gray market resell at stupid markups and everyone's pissed at Rolex, saying they're purposefully restricting supply to drive up the reputation and pricing and that they should do something about flippers and grays. And Omega is producing an amazing watch, in sufficient numbers to meet demand (or slightly exceed, since there are discounts) and people are pissed off that the watch depreciates. In the end, they're just commodities. The Rolex bubble will burst, at some point and a lot of people will be left holding expensive pieces they can't dump any anything resembling a reasonable price. It's funny to watch the hand wringing about resale value. I'll buy a watch to wear. If I need or want to sell it, bonus if it's worth more, but I fully expect it to not fetch a profit. |
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15 February 2020, 06:27 AM | #58 |
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First, to address the question, "Why does Omega allow this to happen?" The answer is simple, because they make more money this way. It is business school 101 that profit is maximized when marginal revenue and the marginal cost of production are equal. As long as Omega can sell another unit for a price above the marginal cost to produce that unit (inclusive of all overhead, transportation costs, etc.) then they should if their interest is maximizing profitability and share holder value. As Omega the brand is owned by the publicly traded Swatch Group, their interest is undoubtedly the maximization of profit / shareholder value, and the time horizon for that maximization is likely on the order of quarters or a small number of years at the longest.
It is no different for ADs. As long as the "after discounts" revenue associated with the marginal sale is greater than the marginal cost of the watch to the AD, then they should make the sale. Obviously there is some art to determining what the minimum discount is that will get the deal done. However, as long as the sale contributes margin then the profit maximizing decision is to make the sale. Secondly, there are two reasons a buyer normally sees the value of a watch, whatever the brand, drop when they walk out of an AD. The first reason is that the price they paid is greater than the prevailing market price in their chosen sales channel. Said another way, the buyer failed to negotiate their best price within their preferred channel. Say they received only a 5% discount at the AD when average buyer receives a 15% discount. In this case the buyer will see a immediate 10% drop in value associated with their below average negotiation ability. The second reason is that the level of trust is higher in the AD channel then in either the grey market or private party channels. Perceived risk on the part of the buyer is lower in the AD channel. Lower perceived risk on the part of the buyer is associated with a higher willingness to pay. For this reason market prices tend to be highest in the lowest risk channels. For watches this means AD market price is normally greater than grey market price, and grey market price is higher than private party sales price. Even among grey market and private party sales, some sellers with long track records of reliable transactions can command higher prices than other sellers in the same channel. How all of that relates to value retention of Omegas is simple. MSRP in the AD channel is normally higher than the market clearing price because Omega is setting its production at the level that it believes will maximize profitability in the short to medium run. They know that there is still much profit to be realized when selling watches at a discount to MSRP, so they make more. Consumers who buy their watch in the AD channel (or grey market channel) are then faced with selling it in higher risk / lower price private party channel. The loss associate with having to move to a higher risk channel when selling are compounded by losses associated with any discount "left on the table" during the negotiation at the time of purchase in the AD channel. The current situation with Rolex's SS watches is the result of a market inefficiency in the AD channel. For whatever reason, be it intentional or not, Rolex has set production of SS watches at a level below the profit maximizing level. Because Rolex has simultaneously artificially capped pricing in the AD channel at MSRP, it has created an arbitrage opportunity for those buyers able to secure a SS watch through an AD. If Rolex decided to either a) increase production to the profit maximizing level, or b) allow ADs to sell at the actual market clearing price within the channel, then you would see the same value retention behavior for Rolex watches as for Omega watches - only at a higher average price level across the various sales channels. Sorry for the novel of a post. I hope folks find it interesting. |
15 February 2020, 09:34 AM | #59 |
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Nicely put!
Using marginal pricing/production strategies, for luxury goods, may not be such a good long-term strategy and, unfortunately, public companies get blindsided by the shareholder value prime directive. In fact, much (most?) of the value here is based on luxury perception so Omega needs to heed this concept. Given the recent Speedmaster 321 release, it seems they are becoming more aggressive on this front. Also, their "limited edition" strategy might be another method to create scarcity. However since they seem to release multitudes of LE's every year it gets lost in the minds of wristwatch enthusiasts, maybe not to the general consumer. |
15 February 2020, 09:34 AM | #60 | |
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People are never happy. People complain Rolex watches are unavailable and they can't find any at retail making them too hard and expensive to buy. Omega watches are readily available and due to this can be bought for a discount new and used. People complain about value.
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