AP official pre owned and e-commerce

[Champagnepapi]

Hello my friends,



So I’ve been Been watching old interviews of Francois Bennahmias.

I recall people discussing the rumor AP was going to get into the official pre-owned market and e-commerce sales.

I thought it was just a rumor. But if you skip this interview (from 2018) to 10:32 and watch until the end. That’s exactly their plan. Just seems like they are a bit behind on it. They also discuss controlling the grey prices.

https://youtu.be/p5YodO_iNZ0


Am I the only one who never seen this interview or paid attention to it?Thoughts?


Sent from my iPhone using Tapatalk

[RolexZen]

Originally Posted by Champagnepapi

Hello my friends,



So I’ve been Been watching old interviews of Francois Bennahmias.

I recall people discussing the rumor AP was going to get into the official pre-owned market and e-commerce sales.

I thought it was just a rumor. But if you skip this interview (from 2018) to 10:32 and watch until the end. That’s exactly their plan. Just seems like they are a bit behind on it. They also discuss controlling the grey prices.

https://youtu.be/p5YodO_iNZ0


Am I the only one who never seen this interview or paid attention to it?Thoughts?


Sent from my iPhone using Tapatalk

Yeah, been discussed here at that time.

[psm11]

Yes I have seen it discussed a few times over the last couple years. I think it is a great idea however, if they are just going charge grey prices (e.g., $100k for a black ROC) then I don't know how beneficial it will be to folks that want to buy an AP but can't get a new one from a boutique.

If they roll this out and they count pre-owned purchases toward purchase history then I think that will be a game changer. There are plenty of used ROOs that I love and would happily buy right now except the $30k+ I would drop on a used ROO isn't helping me make any inroads with AP to work towards the watch I want. But man, the thought of being able to buy a used ROO that I actually like and would wear to "start the relationship" instead of a CODE is exciting.

[J.T.]

The Miami boutique last week told me this wasn't going to happen when I asked about it

[psm11]

Originally Posted by J.T.

The Miami boutique last week told me this wasn't going to happen when I asked about it

Man that is a bummer. I do recall however reading/hearing this preowned program was going to be an AP house thing so maybe they were just talking about it not happening at the boutiques.

[Reign]

The prices have runaway too much in the secondary market for them to seriously do something, ROs at a 3-10x MOIC now…

This was possible in 18/19 when only a couple things were above msrp and only a bit above at that.

A CPO program now would destroy their MSRP strategy for new pieces

[AperolSpritz]

Had a similar chat with the my boutique manager (AP owned boutique). This is not going to happen. The idea looks good but in real-life it's unworkable.

[psm11]

Originally Posted by Reign

The prices have runaway too much in the secondary market for them to seriously do something, ROs at a 3-10x MOIC now…

This was possible in 18/19 when only a couple things were above msrp and only a bit above at that.

A CPO program now would destroy their MSRP strategy for new pieces

What is their strategy?

[scottywein]

Originally Posted by psm11

What is their strategy?

Finally being able to sell at MSRP after providing discounts for many years.

[psm11]

Originally Posted by scottywein

Finally being able to sell at MSRP after providing discounts for many years.

Would a CPO program really destroy that? I'd imagine they could still charge a premium over retail for a CPO model (and depending on the model it could be quite high). I am more attracted to the prospect the money you spend on a used piece counting towards your spend with the brand. That's the predicament I am in now. Spend $30k on a CODE from the boutique I don't really want and would not really wear or spend the same amount on a used ROO that I would likely wear all the time. The former at least gets me into the family and (hopefully) on the path to a ROC. The latter gets an AP on my wrist immediately that I would wear but wouldn't scratch my ROC itch.

[thekman]

I just can't imagine being in an AP boutique and being told we can't sell you 30k Jumbo but we can sell you a used one for 150k.

[scottywein]

Originally Posted by thekman

I just can't imagine being in an AP boutique and being told we can't sell you 30k Jumbo but we can sell you a used one for 150k.

The closest comparison I can think of is the current used car market

[Champagnepapi]

Originally Posted by thekman

I just can't imagine being in an AP boutique and being told we can't sell you 30k Jumbo but we can sell you a used one for 150k.

Perhaps in order to keep it somewhat separated from the new retail pieces, they would have the pre owned sold online for first come first served type of thing. Interesting times


Sent from my iPhone using Tapatalk

[l_chissle]

Originally Posted by Champagnepapi

Perhaps in order to keep it somewhat separated from the new retail pieces, they would have the pre owned sold online for first come first served type of thing. Interesting times


Sent from my iPhone using Tapatalk

MB&F do this, and it seems to work fine, but I guess it's on a much smaller scale

[psm11]

Originally Posted by thekman

I just can't imagine being in an AP boutique and being told we can't sell you 30k Jumbo but we can sell you a used one for 150k.

I get this and agree with you that it would be really strange. However, I think it would be a lot better received than we think mainly because the experience will be entirely controlled by AP and, presumably, you'd get the same boutique treatment as if you were buying a new piece. I know I sound like a broken record but the most attractive part of this is the prospect of your spend on CPO pieces counting towards a purchase history. Most people who would be interested in a used piece are going to pay secondary prices anyways to Joe blow gray dealer that does nothing for their relationship with AP, so why not pay that to AP instead and reap the benefits.

[J.T.]

Originally Posted by psm11

I get this and agree with you that it would be really strange. However, I think it would be a lot better received than we think mainly because the experience will be entirely controlled by AP and, presumably, you'd get the same boutique treatment as if you were buying a new piece. I know I sound like a broken record but the most attractive part of this is the prospect of your spend on CPO pieces counting towards a purchase history. Most people who would be interested in a used piece are going to pay secondary prices anyways to Joe blow gray dealer that does nothing for their relationship with AP, so why not pay that to AP instead and reap the benefits.

100% agreed. The mid 6 figure sum I've spent in the grey market would have gotten me 2-3x as many watches from AP if I had established that relationship via CPO

[GoingPlaces]

Originally Posted by thekman

I just can't imagine being in an AP boutique and being told we can't sell you 30k Jumbo but we can sell you a used one for 150k.

This is exactly the challenge. There is a rub here, and it will not resonate well long term.

I can only imagine someone picks up a piece for 40K retail and the a month later sells it back to AP. How would that work? Even if AP says you have to keep the watch for at least a year or whatever, then buyer goes to grey and sells for massive margin.

[VogelPhoenix]

Originally Posted by thekman

I just can't imagine being in an AP boutique and being told we can't sell you 30k Jumbo but we can sell you a used one for 150k.

I mentioned this in a different thread before - according to claims on a different forum, the rumored Rolex CPO program, which seems to be about as real as the AP one, was going to be limited to watches at least two years out of production. While not quite "vintage", most would agree that for such watches the market is the market. That would remove some of the bad taste.

[psm11]

Originally Posted by GoingPlaces

This is exactly the challenge. There is a rub here, and it will not resonate well long term.

I can only imagine someone picks up a piece for 40K retail and the a month later sells it back to AP. How would that work? Even if AP says you have to keep the watch for at least a year or whatever, then buyer goes to grey and sells for massive margin.

I don't think AP will ever be able to stop some buyers from flipping even with the best protocols in place to counteract it. Perhaps the CPO program would offer other benefits that those who are looking to be long term clients value (preference on receiving other pieces, etc). I would think with the CPO program AP could start to control secondary market prices and level them. I can't imagine they are happy seeing gray dealers pocket that crazy difference between MSRP and open market.

[GoingPlaces]

Originally Posted by psm11

I don't think AP will ever be able to stop some buyers from flipping even with the best protocols in place to counteract it. Perhaps the CPO program would offer other benefits that those who are looking to be long term clients value (preference on receiving other pieces, etc). I would think with the CPO program AP could start to control secondary market prices and level them. I can't imagine they are happy seeing gray dealers pocket that crazy difference between MSRP and open market.

Personally I wold love to see it and it would draw me to the brand because it would give me access through a proper channel. Looking at it from AP's perspective, not sure what the upside is as it would be an expensive undertaking and would put you at war with the greys.

[Xerxes77]

When AP discuss this they are not on the wave like this….maybe it’s better to remember that even in the beginning at 2020 a AP ROC are easy to buy directly from Boutique and in 2019 you received and discounts.
On that moment they want to protect customers to resale the AP watch with a big loose.
I buy in 2015 a ROO vampire with 22k and I sold it in 4 months for 15k.
Now it’s not anymore that situation so AP not do it….just my opinion

[gretch6364]

I think it could work, but would be complex for sure.

Some of the issues with some of the ideas here....if you are AP and you can sell a used ROC for let's say $100K, why would you sell a new one for $34K? Just have someone wear it for a couple days and sell it as used.

The temptation would be too great.

[Fenrira]

If I were AP and hypothetically wanted to roll out a CPO program, I’d probably set certain criteria to address some issues mentioned above:

1. The program won’t include watches currently in production
2. Only watches which have been officially registered with the same owner for > two years qualify; this discourages flipping
3. AP won’t give you cash for your watch; you can only use your existing piece to trade up for something in the current collection
4. AP will value your watch at significantly below market value. However, AP will offer you several options from the current catalogue to purchase at retail. Your watch’s value will then be set off against the retail price of the piece you choose.

What this would look like in practice: Z purchased a black dial 15400st from the boutique in 2015 for $15,000. He participates in this CPO program, and AP values his watch at $30k. The boutique offers him three options: a 15500st (non-blue), 26240st (black or silver), or a 26715st in ruthenium.

Assuming Z picks the 26240 ($33,800 retail), he pays $3,380 for it. He now has a new watch which is worth a lot more on the market than his 15400. AP will now sell the 15400 (which probably cost them less than $10,000 to manufacture) for $65k. Factoring the cost to manufacture the 26240 of let’s say $16k (I may be wildly off here), AP “lost” $13k on it since they sold it to Z for $3k. This still results in a net gain of over $42k between the two watches.

It’s a win almost all around: long-standing clients are rewarded, AP is able to exert some control over gray market pricing and benefit from it, while reducing the incentive to immediately flip pieces allocated at retail. Since flipping is minimized, this results in fewer watches in circulation and therefore sustainably high prices on the market. In turn, this will allow AP to comfortably raise retail prices by 10%-12% annually.

[J.T.]

Originally Posted by Fenrira

If I were AP and hypothetically wanted to roll out a CPO program, I’d probably set certain criteria to address some issues mentioned above:

1. The program won’t include watches currently in production
2. Only watches which have been officially registered with the same owner for > two years qualify; this discourages flipping
3. AP won’t give you cash for your watch; you can only use your existing piece to trade up for something in the current collection
4. AP will value your watch at significantly below market value. However, AP will offer you several options from the current catalogue to purchase at retail. Your watch’s value will then be set off against the retail price of the piece you choose.

What this would look like in practice: Z purchased a black dial 15400st from the boutique in 2015 for $15,000. He participates in this CPO program, and AP values his watch at $30k. The boutique offers him three options: a 15500st (non-blue), 26240st (black or silver), or a 26715st in ruthenium.

Assuming Z picks the 26240 ($33,800 retail), he pays $3,380 for it. He now has a new watch which is worth a lot more on the market than his 15400. AP will now sell the 15400 (which probably cost them less than $10,000 to manufacture) for $65k. Factoring the cost to manufacture the 26240 of let’s say $16k (I may be wildly off here), AP “lost” $13k on it since they sold it to Z for $3k. This still results in a net gain of over $42k between the two watches.

It’s a win almost all around: long-standing clients are rewarded, AP is able to exert some control over gray market pricing and benefit from it, while reducing the incentive to immediately flip pieces allocated at retail. Since flipping is minimized, this results in fewer watches in circulation and therefore sustainably high prices on the market.

That's a hell of a plan. Well done

[ramenlover]

Originally Posted by Fenrira

If I were AP and hypothetically wanted to roll out a CPO program, I’d probably set certain criteria to address some issues mentioned above:

1. The program won’t include watches currently in production
2. Only watches which have been officially registered with the same owner for > two years qualify; this discourages flipping
3. AP won’t give you cash for your watch; you can only use your existing piece to trade up for something in the current collection
4. AP will value your watch at significantly below market value. However, AP will offer you several options from the current catalogue to purchase at retail. Your watch’s value will then be set off against the retail price of the piece you choose.

What this would look like in practice: Z purchased a black dial 15400st from the boutique in 2015 for $15,000. He participates in this CPO program, and AP values his watch at $30k. The boutique offers him three options: a 15500st (non-blue), 26240st (black or silver), or a 26715st in ruthenium.

Assuming Z picks the 26240 ($33,800 retail), he pays $3,380 for it. He now has a new watch which is worth a lot more on the market than his 15400. AP will now sell the 15400 (which probably cost them less than $10,000 to manufacture) for $65k. Factoring the cost to manufacture the 26240 of let’s say $16k (I may be wildly off here), AP “lost” $13k on it since they sold it to Z for $3k. This still results in a net gain of over $42k between the two watches.

It’s a win almost all around: long-standing clients are rewarded, AP is able to exert some control over gray market pricing and benefit from it, while reducing the incentive to immediately flip pieces allocated at retail. Since flipping is minimized, this results in fewer watches in circulation and therefore sustainably high prices on the market. In turn, this will allow AP to comfortably raise retail prices by 10%-12% annually.

This sounds very interesting for existing customers, but won’t it mean that those who want to get their first Royal Oak are out of luck? Since they will be competing with those trading up their old watches

[neal.jy]

Originally Posted by Fenrira

If I were AP and hypothetically wanted to roll out a CPO program, I’d probably set certain criteria to address some issues mentioned above:

1. The program won’t include watches currently in production
2. Only watches which have been officially registered with the same owner for > two years qualify; this discourages flipping
3. AP won’t give you cash for your watch; you can only use your existing piece to trade up for something in the current collection
4. AP will value your watch at significantly below market value. However, AP will offer you several options from the current catalogue to purchase at retail. Your watch’s value will then be set off against the retail price of the piece you choose.

What this would look like in practice: Z purchased a black dial 15400st from the boutique in 2015 for $15,000. He participates in this CPO program, and AP values his watch at $30k. The boutique offers him three options: a 15500st (non-blue), 26240st (black or silver), or a 26715st in ruthenium.

Assuming Z picks the 26240 ($33,800 retail), he pays $3,380 for it. He now has a new watch which is worth a lot more on the market than his 15400. AP will now sell the 15400 (which probably cost them less than $10,000 to manufacture) for $65k. Factoring the cost to manufacture the 26240 of let’s say $16k (I may be wildly off here), AP “lost” $13k on it since they sold it to Z for $3k. This still results in a net gain of over $42k between the two watches.

It’s a win almost all around: long-standing clients are rewarded, AP is able to exert some control over gray market pricing and benefit from it, while reducing the incentive to immediately flip pieces allocated at retail. Since flipping is minimized, this results in fewer watches in circulation and therefore sustainably high prices on the market. In turn, this will allow AP to comfortably raise retail prices by 10%-12% annually.

This is actually probably the best idea I've heard on what this program could look like.

[911AP]

Originally Posted by Fenrira

If I were AP and hypothetically wanted to roll out a CPO program, I’d probably set certain criteria to address some issues mentioned above:

1. The program won’t include watches currently in production
2. Only watches which have been officially registered with the same owner for > two years qualify; this discourages flipping
3. AP won’t give you cash for your watch; you can only use your existing piece to trade up for something in the current collection
4. AP will value your watch at significantly below market value. However, AP will offer you several options from the current catalogue to purchase at retail. Your watch’s value will then be set off against the retail price of the piece you choose.

What this would look like in practice: Z purchased a black dial 15400st from the boutique in 2015 for $15,000. He participates in this CPO program, and AP values his watch at $30k. The boutique offers him three options: a 15500st (non-blue), 26240st (black or silver), or a 26715st in ruthenium.

Assuming Z picks the 26240 ($33,800 retail), he pays $3,380 for it. He now has a new watch which is worth a lot more on the market than his 15400. AP will now sell the 15400 (which probably cost them less than $10,000 to manufacture) for $65k. Factoring the cost to manufacture the 26240 of let’s say $16k (I may be wildly off here), AP “lost” $13k on it since they sold it to Z for $3k. This still results in a net gain of over $42k between the two watches.

It’s a win almost all around: long-standing clients are rewarded, AP is able to exert some control over gray market pricing and benefit from it, while reducing the incentive to immediately flip pieces allocated at retail. Since flipping is minimized, this results in fewer watches in circulation and therefore sustainably high prices on the market. In turn, this will allow AP to comfortably raise retail prices by 10%-12% annually.

. I hope AP is reading this forum. You just did their job for them.

[Fenrira]

Originally Posted by ramenlover

This sounds very interesting for existing customers, but won’t it mean that those who want to get their first Royal Oak are out of luck? Since they will be competing with those trading up their old watches

Good question! Yes, you’re right that it will be even more difficult for newcomers to get a Royal Oak at retail, but I believe that this arrangement is better than the current situation:

1. AP will actually have Royal Oaks to sell you instead of turning potential customers away. Buyers will also be purchasing from a 100% trusted channel.

2. Purchasing from this CPO program will add to your purchase history and increase your chances of a piece at retail.

3. After owning the watch for 2-3 years, you’ll be able to trade it in for a new piece at retail should you wish to do so

And so the cycle continues.

[supernova]

I think when that interview took place in 2018, it made more sense as APs traded lower in the secondary market.

But with high secondary prices now, no way AP can go ahead without being accused of price gouging.

[HurricaneHarry]

Originally Posted by Fenrira

If I were AP and hypothetically wanted to roll out a CPO program, I’d probably set certain criteria to address some issues mentioned above:

1. The program won’t include watches currently in production
2. Only watches which have been officially registered with the same owner for > two years qualify; this discourages flipping
3. AP won’t give you cash for your watch; you can only use your existing piece to trade up for something in the current collection
4. AP will value your watch at significantly below market value. However, AP will offer you several options from the current catalogue to purchase at retail. Your watch’s value will then be set off against the retail price of the piece you choose.

What this would look like in practice: Z purchased a black dial 15400st from the boutique in 2015 for $15,000. He participates in this CPO program, and AP values his watch at $30k. The boutique offers him three options: a 15500st (non-blue), 26240st (black or silver), or a 26715st in ruthenium.

Assuming Z picks the 26240 ($33,800 retail), he pays $3,380 for it. He now has a new watch which is worth a lot more on the market than his 15400. AP will now sell the 15400 (which probably cost them less than $10,000 to manufacture) for $65k. Factoring the cost to manufacture the 26240 of let’s say $16k (I may be wildly off here), AP “lost” $13k on it since they sold it to Z for $3k. This still results in a net gain of over $42k between the two watches.

It’s a win almost all around: long-standing clients are rewarded, AP is able to exert some control over gray market pricing and benefit from it, while reducing the incentive to immediately flip pieces allocated at retail. Since flipping is minimized, this results in fewer watches in circulation and therefore sustainably high prices on the market. In turn, this will allow AP to comfortably raise retail prices by 10%-12% annually.

I’m new to the forum and came across this, what an excellent idea! This would solve a lot of issues.