ADs starting Buy Back Programs to take control of secondary pre-owned watch market!

[BNA/LION]

Very interesting report tonight on Nightly Business Report. Big brands taking serious moves to slow the grey market for pre-owned luxury watch sales.

I wonder what Rolex is gonna do? They would not comment!

Watch it here:
http://nbr.com/2019/09/20/nightly-bu...ember-20-2019/

The report starts at 23:25

[Rad22]

This is really interesting. My AD told me that Rolex reps are purchasing grey market watches that are offered as new or with stickers and all the extra goodies, no matter the price. And tracking them back to the AD that made the initial sale. Then forcing them to pay for the watch (aftermarket price), plus a suspension from receiving sports models....


I don’t know how true it is. Probably not at all, but I guess it’s possible.


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[T-Bag]

Originally Posted by BNA/LION

Very interesting report tonight on Nightly Business Report. Big brands taking serious moves to slow the grey market for pre-owned luxury watch sales.

I wonder what Rolex is gonna do? They would not comment!

Watch it here:
http://nbr.com/2019/09/20/nightly-bu...ember-20-2019/

The report starts at 23:25

I bought a certified pre-owned Daytona at Hamra in Scottsdale years ago. And a certified pre-owned Sub from Ben Bridge as my first entry into the Rolex brand. It is a great practice and I hope that it expands

[BNA/LION]

Originally Posted by Rad22

This is really interesting. My AD told me that Rolex reps are purchasing grey market watches that are offered as new or with stickers and all the extra goodies, no matter the price. And tracking them back to the AD that made the initial sale. Then forcing them to pay for the watch (aftermarket price), plus a suspension from receiving sports models....


I don’t know how true it is. Probably not at all, but I guess it’s possible.

Yup! I think ALL the major watch manufacturers are going to be working together to try and control the secondary or pre-owned luxury watch market. It is their best interest to do so. I'm not quite sure how it will benefit collectors and true WIS.

[brigadoonb]

Interesting....curious if this will really happen or at least a version of the report.

[brmeyers]

Interesting report Larry, thanks for sharing.

[David5807]

Cool, I wouldn't mind this happening with Rolex.

[BillA]

Wait, I listened to the report. Are they trying to push the grey market out, or are they trying to capture the pre-owned grey market so they can now make the profit that the grey market has? If a watch has an MSRP of $10,000 and the grey market sells it for $15,000, then the dealers want to make that money instead, so they buy the watch and mark it up to sell to the public. Hasn't Tourneau been doing this for a while?

[StackLexus17]

This is REALLY interesting.
Great post.

Of course Rolex no comment.
Shrouded in secrecy...I like to think of it as the Wonka Chocolate factory, except for watches.

[vicsdca]

If certified pre-owned means the watch went back to the factory before being put up for sale again, I'm all for it. It would definitely be a step in the right direction.

[robrtx]

Sounds like BS. How would an AD know for certain that a watch that they are selling is not going to a grey dealer?

So if an AD inadvertently sells a popular watch at retail and it ends up on the grey market, Rolex will punish them?

[brandrea]

Interesting Larry. AP seems to be leading the charge. It will be interesting to see what Rolex and other do.

[Laszlo]

Rolex will do nothing IMHO. Why would they even consider cannibalizing their MSRP with pre-owned that’s either at or above retail? And yes they could and push prices down on pre-owned to quash the grey dealers but it’ll still eat into their new Rolex sales. As for other brands they lose so much appreciation it makes sense for them.

[locutus49]

I guess I am the only one who thinks greys serve a useful purpose in the supply and demand environment.

[steve099]

Sounds like AD's trying to get in on the re sale profit lines as there is good money to be made if they buy at the right prices.

Pre loved watch dealers will never go away, they are a important part of the market which is why Rolex and co tolerate them.

[Rado63]

The manufacturers limit supply, reduce the number of retail outlets, will no longer allow sale of spare parts for repairs to independents, and now Swiss watch makers will sell all the used/pre owned pieces. Delightfully, we have TRF members applauding this. Congratulations Swiss watch industry, What else would you want other than to control every channel of the business. From now on, A buyer looking on the pre owned market will pay a premium for a certified pre owned piece from the AD. You and I will only be able to sell our pre owned watches for pennies.

[007timer]

Originally Posted by robrtx

Sounds like BS. How would an AD know for certain that a watch that they are selling is not going to a grey dealer?

So if an AD inadvertently sells a popular watch at retail and it ends up on the grey market, Rolex will punish them?

It’s not that hard. If one or two watches a year are traced back to the same AD then it’s probably a coincidence. But if you have multiple hot pieces being traced back to the same AD, the. You have a pattern. Where there is smoke, there is fire.


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[just1time]

Originally Posted by locutus49

I guess I am the only one who thinks greys serve a useful purpose in the supply and demand environment.

They do in fact. But the problem is they should be filling a gap. Not replacing the source. When members start considering Grey dealers for simple pieces that should be readily available at ADs, a Supply problem exists.

[007timer]

Originally Posted by Rado63

The manufacturers limit supply, reduce the number of retail outlets, will no longer allow sale of spare parts for repairs to independents, and now Swiss watch makers will sell all the used/pre owned pieces. Delightfully, we have TRF members applauding this. Congratulations Swiss watch industry, What else would you want other than to control every channel of the business. From now on, A buyer looking on the pre owned market will pay a premium for a certified pre owned piece from the AD. You and I will only be able to sell our pre owned watches for pennies.

IMO I don’t agree that selling your watch will bring pennies. There will still be P2P sales conducted. I can sell my watch privately for an agreed upon price. Getting a CPO is not a new idea. BMW sells their used cars at their dealerships and have both “used” and “CPO” and they are both priced accordingly. You want the warranty and peace of mind or do you want to pay for repairs.

If they offered a CPO Rolex that is fully serviced and brought back to factory specs, providing the certificate of authenticity/new warranty card, renewed warranty (maybe 2 years?) and charge a premium for that, I think a lot of sane people would do it.

Can you still buy it from a jeweler or online from eBay or some other place? Sure, but it all comes with risk.


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[Halifax Daytona UK]

Some AD’s over here will give you two choices
1- a pre owned watch at a mark up
2- put your name on a list

[Laszlo]

Originally Posted by locutus49

I guess I am the only one who thinks greys serve a useful purpose in the supply and demand environment.

You're not the only one. I stopped buying from ADs a long, long time ago. I don't like the atmosphere and rather just make a call, send an email, and get the watch I'm interested in, BNIB or pre-owned, next day delivery. I could care less about a the bag and in-store experience. Two days after wearing the watch it's used. And the bag is in the recycle bin.

[exador]

I don’t see how AP is going to compete with the Greys by doing this. A Grey buys a watch from a flipper and immediately resells it with let’s say a 30% markup. AP is going to purchase a watch, factory refurbish it and offer a warranty for the same price? And that price will be more expensive than a new watch

[rockdrock]

Check Bucherer jeweler in Europe. They just got in the pre owned game.so interesting. Great pieces at market price. Strange how you can get a brand new Rolex, sell it to the back to get profit and upgrade to better pieces.


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[Harry-57]

Originally Posted by locutus49

I guess I am the only one who thinks greys serve a useful purpose in the supply and demand environment.

No. I do too. Right now, the Rolex SS market is favouring them. So what? Nothing stays the same and the situation isn't their fault. They are just an easy target. Besides, they can't all that bad if AP are now looking to join/carve up the grey market.

[Freelance]

The only AD's that could get busted/punished is if darn near every popular sports model ended up at a single Grey dealer or sister store affiliated with the AD.

[GeoffS]

Originally Posted by Rad22

My AD told me that Rolex reps are purchasing grey market watches that are offered as new or with stickers and all the extra goodies, no matter the price. And tracking them back to the AD that made the initial sale. Then forcing them to pay for the watch (aftermarket price), plus a suspension from receiving sports models....


I don’t know how true it is. Probably not at all, but I guess it’s possible.


Sent from my iPhone using Tapatalk

Can't see Rolex doing this systematically, all over the world (if at all). My AD told me that Rolex does pay attention to the grey market and will trace a watch back to the original AD, but only if the grey seller includes the serial number in the photos (and some do). They would need to throw a lot of money at the problem if they had to purchase all the grey stock to get at the serial numbers, to trace back to the originating AD.

Besides, the grey market ultimately fuels significant demand for AD supplied stock and so plays into the Rolex strategy.

[Rolexatlast]

Originally Posted by locutus49

I guess I am the only one who thinks greys serve a useful purpose in the supply and demand environment.

Yes

Unless other people believe that inflating cost of watches to consumers serves a useful purpose

[ocN55]

Awesome video, thanks for posting

[Rolexsd4000]

Great thread but what about all those Rolexes in Hong Kong? And down at the Diamond district in NYC. Just to mention a few .
We are talking BIG MONEY here .


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[FHFinster]

Rolex’s solution to the grey market is simple (albeit not great for us).

Continue to restrict supply and raise retail prices to market (grey) levels.

No margin for the grey means no more grey.

- Or -

Reduce production of the slow moving models that are force fed to ADs. If the ADs are not overstocked with two tone ladies diamond bezel DJ, ADs would be less incentivized to bundle them out with some Subs to the greys.