Rolex CPO - Second Take, Apocalypse?

[inadeje]

We all know that the CPO program has yet to commence in North America, arguably the world’s largest market for Rolex.

Taking a cursory look at two of our US mega AD chains, Mayors (Watches of Switzerland) & Bucherer (Tourneau) we already know that on paper these two Goliaths have very, very deep pockets. Spending 40 million monthly each, or more, on used Rolex’s would probably look like a mere rounding error on their annual financial statements.

Now, lets say the average price paid (for arguments sake) is 15k per watch. That’s 2,666 watches for each nationwide AD chain per month. Based on all their nationwide stores, that would still leave just a handful of CPO watches available at each store. However, perhaps they aspire to have more in each store? Perhaps they decide their monthly spend should be 80 million? There should be no doubt, corporations of that magnitude could plough into the secondary market with substantial budgets that I suspect no current US grey dealer could dream to muster spending to acquire used inventory. Follow me?

Are we about to experience a seismic event in the used Rolex sphere when these two commence buying-up and drying-up all the used Rolex availability?

Are we about to witness an epic battle between Greys and the two enormous watch retail Goliaths, all vying for essentially the same used watch inventory? It would seem on a purely financial standpoint, few (if any?) greys could approach the buying power or sheer financial might of their new nemeses?

If we are to witness this upcoming showdown, the old supply/demand equation could make for interesting times ahead where used Rolex prices are concerned.

What do you all think? Upcoming armageddon for greys? Apocalyptic demise of the Rolex Grey dealer? Or, are my thoughts outlandish, unlikely, misplaced or sound insane? Anyone have a second opinion I may have overlooked?

[Jessiecopeland]

I keep thinking about the current amount of new watches in AD’s.
I see a future where there are more CPO watches in stores than new.

[inadeje]

Originally Posted by Jessiecopeland

I keep thinking about the current amount of new watches in AD’s.
I see a future where there are more CPO watches in stores than new.

I agree

[GGGMT]

I think this’ll all be fine.


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[mountainjogger]

Originally Posted by GGGMT

I think this’ll all be fine.


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Agree. Grey's will still have a market. Just more competition. Grey's cannot meet some terms that buying a certified watch from an AD offers, but they will probably be able to offer a larger stock and lower overhead and hence a lower price.

There is also the question of how AD's will treat this stock. First come first serve, or lists? if AD's start requiring purchase "relationships" for used watches, Grey's will still offer an alternative to buying 100k of over priced jewelry to get on a list.

[train-time]

Originally Posted by Jessiecopeland

I keep thinking about the current amount of new watches in AD’s.
I see a future where there are more CPO watches in stores than new.

Originally Posted by mountainjogger

Agree. Grey's will still have a market. Just more competition. Grey's cannot meet some terms that buying a certified watch from an AD offers, but they will probably be able to offer a larger stock and lower overhead and hence a lower price.

There is also the question of how AD's will treat this stock. First come first serve, or lists? if AD's start requiring purchase "relationships" for used watches, Grey's will still offer an alternative to buying 100k of over priced jewelry to get on a list.

I agree totally with your assessments! The CPO will have a market of its own. Probably displayed in one of the empty Rolex cases at each participating AD. The targeted consumer will most likely not be a WIS.

Because of the AD overhead and cost to service a CPO watch the resale price will more than likely be higher than a Trusted Seller and the buy price will be less for the same reasons. I believe that they will be targeting their own luxury market retail consumers who have a need for a certified authentic piece that has been serviced and comes with a manufacturer's warranty when a new piece isn't immediately available.

[beshannon]

Originally Posted by mountainjogger

Agree. Grey's will still have a market. Just more competition. Grey's cannot meet some terms that buying a certified watch from an AD offers, but they will probably be able to offer a larger stock and lower overhead and hence a lower price.

There is also the question of how AD's will treat this stock. First come first serve, or lists? if AD's start requiring purchase "relationships" for used watches, Grey's will still offer an alternative to buying 100k of over priced jewelry to get on a list.

I wonder how many people that recoil at the horror of visiting a car dealership to negotiate the price of a trade-in in order to negotiate the price of a new car?

Are they really embracing what Rolex is doing?

[train-time]

Originally Posted by beshannon

I wonder how many people that recoil at the horror of visiting a car dealership to negotiate the price of a trade-in in order to negotiate the price of a new car?

Are they really embracing what Rolex is doing?

I completely agree Brian. Having traded (or sold outright) dozens of pieces over the years, a Rolex AD that dealt with "pre-owned" pieces never came close to Trusted Seller's buy price.

AD's have all the overhead that most internet resellers don't and add any costs associated (such as full service) with reselling under the CPO will even make it worse.

Unless you are leveraging the trade to acquire some sort of highly desirable piece near MSRP at an AD then the CPO may not be the way to go for the average WIS.