Value retention

[Hawkeye1]

One of the main reasons people by Rolex is that they hold their value better than most brands. That said, when one purchases one on the secondary market and pay the premium, you're pretty much committed to that watch because the second you sell it, you're most likely going to take a loss. I'm in a constant struggle with instant gratification and common sense. Reading the Maui post below, I want to fly there tomorrow to buy $10k in jewelry so I can get that Sky Dweller!
In people's experience, do gray market prices hold up over time?

[Rado63]

Just for fun, if you bought a Daytona at retail last year 2018, and wanted to sell it today would your selling price be what you payed for it or what is the curent secondary market price?
If you purchased a Daytona today on the secondary market for $22k and next year 2020, you want to sell it, will you ask the price you payed in 2019 or the current secondary market price?
If history is going to repeat, then we see Rolex prices remaining stable, and increasing. Yes there are rises, and then prices have fallen, but chances are good you will keep most of what you spent on that Daytona. My.02.

[Likestheshiny]

when one purchases one on the secondary market and pay the premium, you're pretty much committed to that watch because the second you sell it, you're most likely going to take a loss.

Only if you buy it at its most expensive -- which you can never know until after the fact. As noted, Daytonas are a great example. Someone who paid the "ridiculous" markup when the ceramic release first hit the secondary market would do just fine selling now. I bought my BLNR on the secondary market and if I sold it today I'd pocket around $4k (which I won't, cuz I still really like it).

[teck21]

Only for a very few select models is ‘value retention’ a real thing, even for a Rolex.

Otherwise Rolex watches hold their value better, but that’s only relative to most other brands.

You’d almost certainly take a hit on any Rolex watch you buy from the very minute it leaves the AD.

It’s just a luxury good after all. With very few exceptions, these are depreciating goods.

If you aren’t prepared to take a dollar loss, you may want to reconsider your purchase. Especially if you’re going to drop 10k on jewellery that becomes more or less instantly unsellable except at a very steep loss.



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[Hawkeye1]

Originally Posted by teck21

Only for a very few select models is ‘value retention’ a real thing, even for a Rolex.

Otherwise Rolex watches hold their value better, but that’s only relative to most other brands.

You’d almost certainly take a hit on any Rolex watch you buy from the very minute it leaves the AD.

It’s just a luxury good after all. With very few exceptions, these are depreciating goods.

If you aren’t prepared to take a dollar loss, you may want to reconsider your purchase. Especially if you’re going to drop 10k on jewellery that becomes more or less instantly unsellable except at a very steep loss.



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That’s what I’m struggling over. I can accept depreciation from retail but the depreciation from a secondary market price is what I’m not sure I can accept. If I buy jewelry, there’s a small chance the boss will be happy about that. But really I’m trying to justify getting a gray piece if given a “hall pass” to spend that kind of money. Or just wait indefinitely lol

[solesman]

If you would be keeping the Daytona, then a loss isn't relevant

[Jona]

I, for one, do not buy Rolex for value retention. I have bought many watches that lose a lot of value, e.g. Breitling because I liked them. I buy Rolex for the design, durability, serviceability, and workmanship. Maybe those factors contribute to their holding value, but that is not why I buy them. I truly feel sorry for the many people who buy them solely with $ in their head.

[herts9]

I buy them because I think they're kick ass in terms of functionality and engineering, and beautiful to boot. The fact that x vs y models hold values more than others is an added bonus, but is sorely not needed from my perspective.

[AAK_JR]

I bought my first Rolex, an Explorer II Polar, back in 1999. I currently bought my third Rolex last month, a GMT-II BLNR with Oyster bracelet on the grey market thru one of the dealers on this site. I negotiated to a price that I was comfortable paying also knowing I cannot buy this model at an AD at retail. I brought up my fist Rolex purchase because I did not start researching prices until this last purchase and found that my Polar has increased over 135% in the 20 years. I have only sold one of my Rolex's because I never wore it and a financial decision.

[Johngalt1]

Originally Posted by AAK_JR

I bought my first Rolex, an Explorer II Polar, back in 1999. I currently bought my third Rolex last month, a GMT-II BLNR with Oyster bracelet on the grey market thru one of the dealers on this site. I negotiated to a price that I was comfortable paying also knowing I cannot buy this model at an AD at retail. I brought up my fist Rolex purchase because I did not start researching prices until this last purchase and found that my Polar has increased over 135% in the 20 years. I have only sold one of my Rolex's because I never wore it and a financial decision.

US inflation from 99 to 19 is 54%.

[beshannon]

Originally Posted by Hawkeye1

do gray market prices hold up over time?

About the same as the rest of your money

[joli160]

You are wrong in your assumption imo. Most buyers are not interested in becoming a second hand watch dealer.
The idea

Luxury cost money, like many watch lovers I have enough of that, value retention is therefore no issue at all.

[123Blueface]

For the record, I have never bought a Rolex because of value retention.
Never.

[rmlovett1]

Originally Posted by 123Blueface

For the record, I have never bought a Rolex because of value retention.
Never.

⬆️⬆️⬆️ Same for me! I can only think of 2-3 times I’ve ever made a profit when selling or trading a watch, and I’ve traded/sold quite a few. I’m just in it to try as many pieces, within reason, that I can, the enjoyment, knowledge, and the journey. One day I’ll be completely content with my collection....maybe

[dtwer]

I think it's largely about risks; upside or downside. When you buy at a premium price your downside risk is high when it comes time for you to sell it.
Additionally there are inherent risks in selling. Do you have a good process to protect yourself from scammers?

Having said that, even if you take a loss when you sell your watch you don't necessarily need to view it as a loss, if you have already enjoyed the ownership of the watch. The "loss" is nothing more than the money you pay in exchange for the joy of wearing the watch.

That's why in the end, you should only buy the watch if you are absolutely going to enjoy it and can afford the "loss."

[Calatrava r]

Originally Posted by dtwer

I think it's largely about risks; upside or downside. When you buy at a premium price your downside risk is high when it comes time for you to sell it.
Additionally there are inherent risks in selling. Do you have a good process to protect yourself from scammers?

Having said that, even if you take a loss when you sell your watch you don't necessarily need to view it as a loss, if you have already enjoyed the ownership of the watch. The "loss" is nothing more than the money you pay in exchange for the joy of wearing the watch.

That's why in the end, you should only buy the watch if you are absolutely going to enjoy it and can afford the "loss."

I agree. There is not really a loss on a watch. There is an enjoyment cost which varies from model to model. If you love a watch, keep it a long time and will wear it often, a high enjoyment cost is irrelevant. The good life has a cost.

[Brew]

If you pay for instant gratification, and receive same, why would you expect value retention too? That seems a bit piggish.

[mattsrs]

Problem is some people see Rolex watches as tech piece. Like want to update every year when new iphone comes out :D

[beshannon]

Originally Posted by mattsrs

Problem is some people see Rolex watches as tech piece. Like want to update every year when new iphone comes out :D

Exactly, which explains the fascination with year, version and possibility of being discontinued.

Some truly worshipping at the altar

[Calatrava r]

Pay the premium and you will lose in the short term. If you buy a 13K retail watch for 24K the going rate, keep in mine these re-sellers do not do this for their health. The are in this to make money, a lot of money. Its called mark up.
They buy the watches at 15 to 18K and see what the market will pay. So if you sell the watch quick expect to lose 4 to 8K on the gray price. For the same money, I am buying from a respected gray market dealer with a return policy, no questions asked, forever fake return policy and house warranty over an individual. So if you sell the watch yourself you will never get the premium a gray will get. Loss anyway you cut it. I don't see the market moving much higher here in the near term.

[shapiroeric]

Watches are like cars....buy it if you want it, use it, and don’t worry about future value....this place is worse than the car forums about what prices will look like in a year or 5.....it’s a watch, a piece of metal that tells time....not an investment or money storage unit.....


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[mattsrs]

Originally Posted by shapiroeric

Watches are like cars....buy it if you want it, use it, and don’t worry about future value....this place is worse than the car forums about what prices will look like in a year or 5.....it’s a watch, a piece of metal that tells time....not an investment or money storage unit.....


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This! ++++

[Mystro]

Originally Posted by shapiroeric

Watches are like cars....buy it if you want it, use it, and don’t worry about future value....this place is worse than the car forums about what prices will look like in a year or 5.....it’s a watch, a piece of metal that tells time....not an investment or money storage unit.....


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X4
If you even notice a few grand either way with a watch then you are totally missing how a luxury lifestyle is lived.

The big issue with Rolex is non enthusiast are buying them and when they get tired of it or it is no longer in vogue (that will happen), Rolex watches will go on a massive price dump. Think Harley Davidson in the late 90’s. Never before has Rolex seen this kind of artificial market value so all the rules we used in the last 30 years with Rolex will not apply. This will include the $12,400 msrp Daytona.

[othertbone]

Originally Posted by Hawkeye1

One of the main reasons people by Rolex is that they hold their value better than most brands. That said, when one purchases one on the secondary market and pay the premium, you're pretty much committed to that watch because the second you sell it, you're most likely going to take a loss. I'm in a constant struggle with instant gratification and common sense. Reading the Maui post below, I want to fly there tomorrow to buy $10k in jewelry so I can get that Sky Dweller!
In people's experience, do gray market prices hold up over time?

It doesn't matter if you buy new from the AD or second hand, but I'd never pay a premium over retail.

[scubadds]

Lumping the entire Rolex lineup it one makes it harder to predict your gain/loss with a watch.
Right now the Stainless Pro models are well over list price;
So if you buy at AD price, then you're on the positive equity side of things; if you buy from a grey dealer then you have the wholesale/resale loss
As far a less sought after models without an aftermarket premium; hard to say
But generally, over time Rolex raises prices; so at some point, you won't lose but so much....

[Catatafish]

I don't buy it as an investment, I buy it as a luxury good. Having said that, I'm never going to buy ANYTHING that I know is instantly a big loss should I need to become liquid due to some emergency I didn't plan for.

So yeah, how it retains it's value matters to me. But not because I'm confused about what "investment" means. Rather because I understand that shit happens in life, so I'm no way going to pay an Omega dealer 10,200 for a watch that will sell for 6k the very next day with the tags still on it. With Rolex there's less risk to this, and I prefer to purchase the Rolexes (Rolexi?) that will do this the least. I think there's a lot of people that think that way, they're just misusing the word investment which triggers a lot of people.

[supacarrot]

Originally Posted by Catatafish

I don't buy it as an investment, I buy it as a luxury good. Having said that, I'm never going to buy ANYTHING that I know is instantly a big loss should I need to become liquid due to some emergency I didn't plan for.

So yeah, how it retains it's value matters to me. But not because I'm confused about what "investment" means. Rather because I understand that shit happens in life, so I'm no way going to pay an Omega dealer 10,200 for a watch that will sell for 6k the very next day with the tags still on it. With Rolex there's less risk to this, and I prefer to purchase the Rolexes (Rolexi?) that will do this the least. I think there's a lot of people that think that way, they're just misusing the word investment which triggers a lot of people.

"misusing the word investment which triggers a lot of people"

This!

Pretty sure this thread is about being able to switch to a different watch for about what you put in, not trying to make money.

[Hawkeye1]

Originally Posted by supacarrot

"misusing the word investment which triggers a lot of people"

This!

Pretty sure this thread is about being able to switch to a different watch for about what you put in, not trying to make money.

I 100% agree with both of you. Just to be clear, I am not under the illusion that Rolex or any luxury goods are considered investments, nor am I hoping to flip the steel blue Sky Dweller that's I'm day dreaming about. I guess I was just curious to see if people thought secondary market prices depreciated at the same rate or amount as retail prices? But really a moot point, because if I do end up with it, I don't plan to get rid of it. (unless I change my mind a year later and want a Daytona instead )

[Oxfordian]

I buy watches to wear not for investment or to sell, if my watches are worth something a year or three down the road, that's fine but its not the reason why I bought the watch.

[1SG MTB]

For me, the concept of value retention is only a means of justifying to my wife why I can’t pass up a watch I really want. I could not care less about value retention because I’ll never sell. I realize different strokes for different folks.