Watch Market FUBAR

[GS93108]

No more Patek watches for retail sale...that's an interesting solution...albeit depicting a complete 'bury your head in the sand and wait for someone else to fix the problem' attitude.

https://www.ablogtowatch.com/patek-p...-value-salons/

An 'April fool', in particularly bad taste? Nevertheless it shines a light on the the watch industry being in a state of FUBAR. As such, someone BIG needs to try to fix it. AP has the bravery to clearly be radical, maybe they have a superhero that can fix the problem?

Here's my solution (naturally there are PROS and CONS):


SOLUTION
------------

1. Every watch sold by AP to be sold under a contract that gives AP the first right of purchase in the event that the customer wishes to EVER sell their watch.

2. AP’s right of buy back to be set at original purchase price plus inflation rate per annum (if AP declines to purchase, then customer is free to sell to whomever he choses).


PROS
------

1. In one fell swoop the flippers exist no more.

2. The grey markets ONLY get watches that AP have declined to buy.

3. AP controls the significant flow of its product, new and used.

4. AP’s CPO programme becomes THE secondary market for AP watches.

5. AP’s products make their way ONLY to owners that buy for the appreciation of the watch itself and not the appreciation of the watch's secondary value.

6. Theft/Robbery becomes less 'lucrative'.


CONS
------

1. AP has fewer customers as x% were flippers and investors (AP has 100 times more customers than it needs, and could spend decades servicing back orders from genuine existing customers).

2. AP's customers don’t have an ‘asset’ greater than their purchase price + inflation and thus AP loses customers, goto point 1.


-----------


Of course this 'solution' is more complex than I have described.

So, April fool or not, the problem exists, what's your solution? Maybe 'we' can fix the world.

[mnl]

theory sounds good but is that really enforceable? i vaguely remember ford having trouble enforcing the “no sale for x years” contract for the GT.

also, what’s this about patek? was this announced somewhere and i missed it?

[GS93108]

Originally Posted by mnl

theory sounds good but is that really enforceable? i vaguely remember ford having trouble enforcing the “no sale for x years” contract for the GT.

Anything can be accomplished with effort.

Stopping a customer selling something for 'x' years is troublesome, possibly unlawful, but contractually binding a customer to give first right of refusal is standard contract law, it would just take a little effort.

I'm not suggesting that it's easy, but it's not difficult either, it just takes bravery, commitment and effort.

[mnl]

Originally Posted by GS93108

Anything can be accomplished with effort.

Stopping a customer selling something for 'x' years is troublesome, possibly unlawful, but contractually binding a customer to give first right of refusal is standard contract law, it would just take a little effort.

I'm not suggesting that it's easy, but it's not difficult either, it just takes bravery, commitment and effort.

p.s.

https://www.ablogtowatch.com/patek-p...-value-salons/

If this is an 'April Fool' article, then it's in the poorest of taste.

thanks for the link, to me that seems like an april fools post from ablogtowatch tbh but who knows

didn’t know that was a standard thing from contract law. might be a bit more complicated if say i buy a watch as a gift for someone else, then they’re in a contract they didn’t really sign? idk just thinking out loud. like i said originally i do like the idea in general, would love to see something implemented that makes it so that people buy because they want the watch, not because they want to profit from a sale…

[GS93108]

Originally Posted by mnl

thanks for the link, to me that seems like an april fools post from ablogtowatch tbh but who knows

didn’t know that was a standard thing from contract law. might be a bit more complicated if say i buy a watch as a gift for someone else, then they’re in a contract they didn’t really sign? idk just thinking out loud. like i said originally i do like the idea in general, would love to see something implemented that makes it so that people buy because they want the watch, not because they want to profit from a sale…

It most likely is an April fool, but it still shines the light on the problem in the watch world.

As to your 'gifts' comment, indeed, there are many issues, so in my solution substitute 'sell' for 'transfer' and that takes care of gifts. I'm sure bigger brains than mine can figure those out. But your comment about "... not because they want to profit from a sale" is the key point to address and fixes the whole self perpetuating nonsense market.

I doubt anyone will ever fix the problem but apparently man went to the moon!

[mnl]

Originally Posted by GS93108

If it is an April fool, then it still shines the light on the problem in the watch world.

As to your 'gifts' comment, indeed, there are many issues, so in my solution substitute 'sell' for 'transfer' and that takes care of gifts. I'm sure bigger brains than mine can figure those out.

I doubt anyone will ever fix the problem but apparently man went to the moon!

yea it’s definitely not an easy one to solve but hopefully something can be done here to make things better

[macrowatch]

Beyond the details didn’t AP already try to do this and failed against market forces when they announced certified preowned but then backed away from it?

I mean they could have run it business wise like Ferrari does, but in the end I think decided it was easier for existing gray ecosystem to provide liquidity fir them or they deemed better to have clients that never unload watches for liquidity (which then keeps the brand more exclusive since hard to find watches to buy at all without secondary options).

[3 Putt]

I do not agree with the FUBAR description. Why does a profitable and thriving industry/company needs to be "fixed"? Why would AP or any other manufacturer limit themselves? They will adjust strategies as market forces dictate moving forward.

I see the current environment as a positive for the industry as a whole. With tthe lack of availability by the top brands, many independent watch companies are getting noticed (Moser, FPJ, etc). This is good for the industry as a whole.

[GS93108]

Originally Posted by macrowatch

Beyond the details didn’t AP already try to do this and failed against market forces when they announced certified preowned but then backed away from it?

I mean they could have run it business wise like Ferrari does, but in the end I think decided it was easier for existing gray ecosystem to provide liquidity fir them or they deemed better to have clients that never unload watches for liquidity (which then keeps the brand more exclusive since hard to find watches to buy at all without secondary options).

AP's CPO programme is alive and well according to the 'Social Club' event.

Nevertheless, your comments regarding the 'easy option' are probably spot on.

[GS93108]

Originally Posted by 3 Putt

I do not agree with the FUBAR description. Why does a profitable and thriving industry/company needs to be "fixed"? Why would AP or any other manufacturer limit themselves? They will adjust strategies as market forces dictate moving forward.

I see the current environment as a positive for the industry as a whole. With tthe lack of availability by the top brands, many independent watch companies are getting noticed (Moser, FPJ, etc). This is good for the industry as a whole.

As this is the Internet then I of course respect your opinion whilst telling you in no uncertain terms that you are wrong.

[macrowatch]

Originally Posted by GS93108

AP's CPO programme is alive and well according to the 'Social Club' event.

Nevertheless, your comments regarding the 'easy option' are probably spot on.

Oh man, what an insult then! I must not be qualified for both being able to purchase ceramic open worked PQ AND don't qualify joining the CPO program!

Seriously though, when I ask any boutique SA what the deal is after the big announcement, most tell me program on hold.

[GS93108]

Originally Posted by macrowatch

Oh man, what an insult then! I must not be qualified for both being able to purchase ceramic open worked PQ AND don't qualify joining the CPO program!

Seriously though, when I ask any boutique SA what the deal is after the big announcement, most tell me program on hold.

I'm not really aware of the CPO programme at all first hand, it doesn't exist in the UK as far as I'm aware, but in the Social Club live event there was discussion about it being tested in Switzerland and somewhere else (I can't remember), but I believe that the sentiment was that it was being expanded further afield.

[VogelPhoenix]

Originally Posted by macrowatch

Oh man, what an insult then! I must not be qualified for both being able to purchase ceramic open worked PQ AND don't qualify joining the CPO program!

Seriously though, when I ask any boutique SA what the deal is after the big announcement, most tell me program on hold.

I understood that they are piloting or planning to pilot the CPO program in a few markets first, before rolling it out broadly.

Is anyone part of that pilot? I'm really curious how they are going to set this up. I.e., like a grey dealer, with "market price" when selling and market - huge spread when buying? Can someone collect their 15202 and then walk over to the used counter and sell it for $30k premium (assuming they're not planning to get any pieces from AP ever again)?

[chiscott_29]

These are fun conversations...

However, my take is if AP were to take this type of position, they'd be signing their death warrant.

We underestimate how much the "status quo" benefits the big watch brands like AP, Patek, and Rolex. Given a choice, I can't rationalize why they'd want to go back 6+ years.

We like to tell ourselves "if they do X, only the true collectors will be left and will finally be able to buy the watches". It's pure fantasy to think that these brands are going to prioritize "genuine collectors" at the cost of losing all of the benefits they get from the status quo.

I admit there's a little bit of dancing with the devil going on, and the current state of play has it's frustrations for sure. But I personally don't support any type of control over the watches they sell. Whether we like it or not, I'd argue that "investment" or "store of value" is a justification for a majority of luxury watch sales. Mess with that, and I think the impacts to all parties is going to be negative on the whole...

[GS93108]

Originally Posted by chiscott_29

These are fun conversations...

That is indeed all they are.

The reality is of course that nothing will ever change, whatever the 'solution' it would take far too much effort and risk.

But we now live in superhero times, so perhaps Marvel have a 'megalomania' character that wants to take on the challenge...

[Burlington]

I imagine in Le Brassus it’s described as a ‘good problem to have’