5711 Corruption

[Ichiran]

Originally Posted by hideki4

Where?

I think he was referring to the Rolex main forum, on a thread which is also about the values of watch/profit/conflict of interest, and this time, the BLNR jubilee.

[GB-man]

Typically you have the owner or manager controlling allocations. Does it happen? Sure but they know the risk involved and have everything to lose.

[GreenLantern]

Originally Posted by GB-man

Typically you have the owner or manager controlling allocations. Does it happen? Sure but they know the risk involved and have everything to lose.

+1

And the chance of ever getting a Patek account back is next to impossible once Patek cuts you.

[cascavel]

Originally Posted by Russell996

You are conflating two things, the issue you mention was nothing to do with selling pieces out the back door.



You are suggesting the owner of a successful Patek AD can’t afford a Porsche without selling pieces direct to greys for a cut?

Nope. What I'm suggesting is that selling to greys for a cut makes the Porsche more affordable.

[Russell996]

Originally Posted by cascavel

Nope. What I'm suggesting is that selling to greys for a cut makes the Porsche more affordable.

Only until Patek cuts the AD lose and they lose everything!

[Ichiran]

Taking average MSRP of 54k and multiply by 180 watches allocated per year, that's a $10m business with a $3m gross margin before all other overheads. If managed strategically with other brands to share the overheads, the dealer could be losing $1-2m per year if he/she loses that Patek dealership.

And some customers will stop the relationships if they fail to get any Nautilus or Aquanauts over a period of time despite their spending. The dealer who can't get his/her customers the watches they want will not be able to sustain their business in the long run.

Is this worth it?

[Fat_ninja]

Originally Posted by Ichiran

Taking average MSRP of 54k and multiply by 180 watches allocated per year, that's a $10m business with a $3m gross margin before all other overheads. If managed strategically with other brands to share the overheads, the dealer could be losing $1-2m per year if he/she loses that Patek dealership.

Is this worth it?

Nope not worth it...

[brandrea]

Originally Posted by martinr

I don’t know whether PP cares about they grey market or not but I do know they read this forum. I know from experience. When my AD invited me as part of a group to tour the manufacture I mentioned it on here. I posted a copy of the invitation and itinerary with names etc. redacted. A couple days later my AD called and said he heard from PP about it and they wanted it removed. So I contacted a mod and they deleted the post. Same AD told me about a customer that had spent four million USD over the years. He got an application piece and promptly sold it at auction. PP cut him off I was told. I don’t know how they do that because he could always buy from another AD or use another name. But the point is they do have this Big Brother is watching attitude. I personally don’t like it.

According to the CEO they care about flippers ... who are often lumped in with grays

https://www.nytimes.com/2020/01/12/s...rry-stern.html

[Patton250]

Originally Posted by brandrea

According to the CEO they care about flippers ... who are often lumped in with grays

https://www.nytimes.com/2020/01/12/s...rry-stern.html

Wow!!!! What a great article. Thanks.

“Maybe sometimes the retailers are part of it,” he said, but he does not lay all the blame at their doors. “We buy back a lot of watches every year from the secondary market, because we want to know why a watch is for sale.”

However, he said that if the company learned that a retailer is selling watches to customers involved in such resales, and the retailer did not prevent such activity, the company would end the retailer’s Patek account. “If I have the proof, then I act,” Mr. Stern said.

Think about the time we spend speculating with the Rolex brand as to what corporate Rolex knows and thinks and what their rules are. 200 different opinions by forum members here that causes some folks to even get angry about it sometimes. Now from Patek we hear from the highest authority that they are 100% against flipping, aware of it and actively seeking to stop it. Wow!!!!!!! I don’t know why we would think the senior people at Rolex are any different.

[brandrea]

Originally Posted by Patton250

Wow!!!! What a great article. Thanks.

“Maybe sometimes the retailers are part of it,” he said, but he does not lay all the blame at their doors. “We buy back a lot of watches every year from the secondary market, because we want to know why a watch is for sale.”

However, he said that if the company learned that a retailer is selling watches to customers involved in such resales, and the retailer did not prevent such activity, the company would end the retailer’s Patek account. “If I have the proof, then I act,” Mr. Stern said.

Think about the time we spend speculating with the Rolex brand as to what corporate Rolex knows and thinks and what their rules are. 200 different opinions by forum members here that causes some folks to even get angry about it sometimes. Now from Patek we hear from the highest authority that they are 100% against flipping, aware of it and actively seeking to stop it. Wow!!!!!!! I don’t know why we would think the senior people at Rolex are any different.

Food for thought isn't it.

[italiafan]

I remember talking to a builder during the real estate boom here...he said he hated building a house for someone at $1M and then the owner flips it at $2M, making more profit than he did despite all the hassles of building it....of course...when the music stops playing.....

[Fat_ninja]

Originally Posted by italiafan

I remember talking to a builder during the real estate boom here...he said he hated building a house for someone at $1M and then the owner flips it at $2M, making more profit than he did despite all the hassles of building it....of course...when the music stops playing.....

The point of this story is that money makes money...? If the builder had the capital. He could have made that extra 1mil...but he didn’t. Capital isn’t free.

[Calatrava r]

Originally Posted by Ichiran

Taking average MSRP of 54k and multiply by 180 watches allocated per year, that's a $10m business with a $3m gross margin before all other overheads. If managed strategically with other brands to share the overheads, the dealer could be losing $1-2m per year if he/she loses that Patek dealership.

And some customers will stop the relationships if they fail to get any Nautilus or Aquanauts over a period of time despite their spending. The dealer who can't get his/her customers the watches they want will not be able to sustain their business in the long run.

Is this worth it?

You make a key point which so many seem to miss, which is all watch dealers to maintain their elite big money loyal customer base must be able to deliver hard to get pieces to them whether it be Rolex, AP, Patek or whatever. There is absolutely no upside to selling their rare watches out the back door.

[Commonproject]

Originally Posted by locutus49

IMO it is basically speculation as we don't have solid evidence of ADs selling coveted Pateks to greys.

There are plenty of solid evidence of AD selling to greys. Just look at some of the dealer groups on FB. There are dealers promising direct ship to buyers from an AD, but the buyer will pay the dealer instead of the AD.

I mean why wouldn't AD sell to greys? Greys are the only ones buying the watches that nobody wants (at least at retail) but Rolex forces ADs to buy to get their allocation of the popular models. It all starts with Rolex playing the ADs and then ADs playing the customers.

[GreenLantern]

You know an easy way to figure out which ADs are selling to greys? :)

Buy up a bunch of the hot (practically brand new) inventory items at greys and look at the warranty card / cert. :)

That'll be your evidence.

[Russell996]

Originally Posted by GreenLantern

You know an easy way to figure out which ADs are selling to greys? :)

Buy up a bunch of the hot (practically brand new) inventory items at greys and look at the warranty card / cert. :)

That'll be your evidence.

You mean just as Patek does according to both TS and my AD.

[GreenLantern]

Originally Posted by Russell996

You mean just as Patek does according to both TS and my AD.

Exactly.

[martinr]

I wonder what name Patek uses when buying from a grey. Hi I’m Thierry Stern and I’m looking for a 5711, could you tell me the AD name on the certificate? You want how much for that! I’ll take two.

[GreenLantern]

Originally Posted by martinr

I wonder what name Patek uses when buying from a grey. Hi I’m Thierry Stern and I’m looking for a 5711, could you tell me the AD name on the certificate? You want how much for that! I’ll take two.

It's done the same way companies like Disney, Microsoft, Apple, Google, buy property and/or look to negotiate and sign leases: under a different name.

Otherwise, once you hear the name "Apple" you'll jack up your prices and/or be unwilling to budge on your price since Apple is flush with cash.

[martinr]

Originally Posted by GreenLantern

It's done the same way companies like Disney, Microsoft, Apple, Google, buy property and/or look to negotiate and sign leases: under a different name.

Otherwise, once you hear the name "Apple" you'll jack up your prices and/or be unwilling to budge on your price since Apple is flush with cash.

And how do you know this?

[GreenLantern]

Originally Posted by martinr

And how do you know this?

How do you think I know?

[martinr]

Originally Posted by GreenLantern

How do you think I know?

I don’t think you know. Especially after that question.

[GreenLantern]

Originally Posted by martinr

I don’t think you know. Especially after that question.

[Uros]

Does anyone know one example of AD loosing Patek?! With so many watches on grey market I would guess this should be common thing to happen...oh no wait:)



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[italiafan]

Originally Posted by Fat_ninja

The point of this story is that money makes money...? If the builder had the capital. He could have made that extra 1mil...but he didn’t. Capital isn’t free.

No.
It means that during the 18 months he took to build the house the speculators were cashing in on an exploding feeding frenzy. His price was already contractually agreed upon. So during the building period the value rose more than he was getting paid.
Then...we all know what happened...2008.

[astewartconst]

The gray dealers are the “vip customers” we keep hearing about. They most likely have an arrangement to get these hot pieces and split the profits back with the AD


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[Russell996]

Originally Posted by astewartconst

The gray dealers are the “vip customers” we keep hearing about. They most likely have an arrangement to get these hot pieces and split the profits back with the AD


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Of course, all makes perfect sense now.

[Fat_ninja]

Originally Posted by italiafan

No.
It means that during the 18 months he took to build the house the speculators were cashing in on an exploding feeding frenzy. His price was already contractually agreed upon. So during the building period the value rose more than he was getting paid.
Then...we all know what happened...2008.

LOL. Just messing with you.

[Uros]

Originally Posted by GluryOl

Look on the PP website...many AD's have lost their franchise and its well documented in many threads...the reasons aren't given

Yes there is consolidation of network which is normal, still doesnt explain dozens of watches on chrono24...



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[Uros]

Originally Posted by GluryOl

dozens of watches on chrono from a company that makes 63 000 p.a.???

Im relating to all "hot", "unobtanium" models, PP, AP, Rolex...guess they are not coming new to chrono24 from factories...

By the way dont whish to be conspiracy theory guy or I know the best, simply acknowledging there is huge grey market which must be coming from retailers, one way or another...


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