“Not a Supply Issue / There is NO Shortage” Says Govberg

[NachoNeal]

Originally Posted by Chester01

No, I’m afraid I don’t loose credibility. Look up some very, very basic statistics. 9 percent of the global population live in poverty, and 80 percent live on less than 10 dollars a day. Soo, suffice to say my good friend that no, most cannot afford a Rolex today. We WIS people tend to live quite sheltered lives, get out and about a little just a little past your neighborhood gates my friend and look around.


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[IMG]kettle by Nacho Neal, on Flickr[/IMG]

[Krash]

Originally Posted by Chester01

No, I’m afraid I don’t loose credibility. Look up some very, very basic statistics. 9 percent of the global population live in poverty, and 80 percent live on less than 10 dollars a day. Soo, suffice to say my good friend that no, most cannot afford a Rolex today. We WIS people tend to live quite sheltered lives, get out and about a little just a little past your neighborhood gates my friend and look around.


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Yes and no. The overwhelming majority of people on this planet cannot afford a Rolex. That is very true, no doubt.

However, the number of millionaires has risen pretty dramatically over the last several years; especially in the USA and China. The demand for luxury watches has never been stronger as a result of this.

People keep trying to minimize basic, fundamental economic principles, but it's simply incorrect to do so.

The demand for these watches exceeds supply. That's the way it works. There is no "artificial shortage" or grey market conspiracies. Someone tried to argue that it's not a free market. That's a crazy argument too. What we're seeing with Rolex watches is quintessentially free market behavior. There isn't a better example of free market behavior.

[Chester01]

Originally Posted by Krash

Yes and no. The overwhelming majority of people on this planet cannot afford a Rolex. That is very true, no doubt.

However, the number of millionaires has risen pretty dramatically over the last several years; especially in the USA and China. The demand for luxury watches has never been stronger as a result of this.

People keep trying to minimize basic, fundamental economic principles, but it's simply incorrect to do so.

The demand for these watches exceeds supply. That's the way it works. There is no "artificial shortage" or grey market conspiracies. Someone tried to argue that it's not a free market. That's a crazy argument too. What we're seeing with Rolex watches is quintessentially free market behavior. There isn't a better example of free market behavior.

No, I don’t claim a conspiracy. I claim that you and I have been at the trough, buying up 1-2 Rolex ever 5 years, now there are hundreds of gray dealers now at the same trough buying 5-10 maybe more per month and they are all over the trough. So yea supply all alright but manipulated supply. It’s called cornering the market.


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[David001]

Originally Posted by Chester01

No, I’m afraid I don’t loose credibility. Look up some very, very basic statistics. 9 percent of the global population live in poverty, and 80 percent live on less than 10 dollars a day. Soo, suffice to say my good friend that no, most cannot afford a Rolex today. We WIS people tend to live quite sheltered lives, get out and about a little just a little past your neighborhood gates my friend and look around.


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The 20% of people that you haven't mentioned (1,534,800,000 people) live on a lot more than ten bucks a day.

Out of that 1,534,800,000 people, there are approx 575,550,000 people in the world with a personal wealth of between $100,000 and one million.

If only one percent of that sub group, of that sub group, want a watch then there is 5,755,500 people looking for a Rolex.
In other worlds, if only 0.075% of people in the world want a Rolex every year then Rolex needs to make 5.75 million a year - and that's not counting the other 569,794,500 people (with between $100k and a million) that might want one as well.


A LOT more young people have more money to spend these days and because of fashion a lot more of them want a Rolex watch.

Twenty (or even ten) years ago this never used to be the case, it was only really at the golf and yacht club, or certain workplaces, where I saw people wearing them and it was usually people over forty wearing them, not young people.

The demographic has grown, now they're popular fashion items for young people.

[drfrankenstein]

Originally Posted by Krash

Yes and no. The overwhelming majority of people on this planet cannot afford a Rolex. That is very true, no doubt.

However, the number of millionaires has risen pretty dramatically over the last several years; especially in the USA and China. The demand for luxury watches has never been stronger as a result of this.

People keep trying to minimize basic, fundamental economic principles, but it's simply incorrect to do so.

The demand for these watches exceeds supply. That's the way it works. There is no "artificial shortage" or grey market conspiracies. Someone tried to argue that it's not a free market. That's a crazy argument too. What we're seeing with Rolex watches is quintessentially free market behavior. There isn't a better example of free market behavior.

It's not a free market because ADs cannot set prices, are limited to whom they can sell watches int he context of limited supply and increased demand.

The secondary market prices exist because the primary (AD) market is economically flawed. One simply cannot say what the true prices would be without the secondary market and the mark-up that occurs because of the middleman supplying watches from the AD.

Furthermore, secondary market dealers don't work on an island, they act as a network and work among themselves to set prices. A free market is an economic system in which prices are determined by unrestricted competition between privately owned businesses - that does not describe the sale of Rolex.

[Chester01]

Originally Posted by David001

The 20% of people that you haven't mentioned (1,534,800,000 people) live on a lot more than ten bucks a day.

Out of that 1,534,800,000 people, there are approx 575,550,000 people in the world with a personal wealth of between $100,000 and one million.

If only one percent of that sub group, of that sub group, want a watch then there is 5,755,500 people looking for a Rolex.


A LOT more young people have more money to spend these days and because of fashion a lot more of them want a Rolex watch.

Twenty (or even ten) years ago this never used to be the case, it was only really at the golf and yacht club, or certain workplaces, where I saw people wearing them and it was usually people over forty wearing them, not young people.

The demographic has grown, now they're popular fashion items for young people.

Let me play devils advocate here. In general the overall number of folks wearing watches has declined. Apple Watch is eating the lunch of all Swiss companies. The reality is despite your data, there are less and less space on the wrist for mechanicals, as more and more move to so called smart watches. Another interesting point to consider is why is there a gray market? They exist to help AD’s who are not moving inventory right? Given the vast amount of gray dealers one can argue that things may not be what they seem-though that’s admittedly more speculation on my part and have no data on that.

Just a question, what percent of the so called demand would you say is due to gray market demand? Given that the grays here on the forum seem to have no problem and seem to get to the front of the line, all day everyday.


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[David001]

Originally Posted by Chester01

Let me play devils advocate here. In general the overall number of folks wearing watches has declined. Apple Watch is eating the lunch of all Swiss companies. The reality is despite your data, there are less and less space on the wrist for mechanicals, as more and more move to so called smart watches. Another interesting point to consider is why is there a gray market? They exist to help AD’s who are not moving inventory right? Given the vast amount of gray dealers one can argue that things may not be what they seem-though that’s admittedly more speculation on my part and have no data on that.

Just a question, what percent of the so called demand would you say is due to gray market demand? Given that the grays here on the forum seem to have no problem and seem to get to the front of the line, all day everyday.


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You're just making things up now as you go along to suit your opinion.

If you're the sort of person that is going to swap your "many" Daytonas and GMTs for an Apple watch then hurry up and do it, so the rest of us can carry on.

[Krash]

Originally Posted by drfrankenstein

It's not a free market because ADs cannot set prices, are limited to whom they can sell watches int he context of limited supply and increased demand.

Stupid argument. Of course it's a free market. The very definition of a free market is that manufacturers and dealers are free to negotiate the terms of their relationship without government controls or government intervention.

That's how a free market works. Rolex is free to dictate the terms of their relationship with the dealers. The dealers are free to except or deny those terms. Apple does the same thing. Most manufactures do...

Honestly, it's getting to the point where you people are embarrassing yourselves.

[Chester01]

Originally Posted by David001

You're just making things up now as you go along to suit your opinion.

If you're the sort of person that is going to swap your "many" Daytonas and GMTs for an Apple watch then hurry up and do it, so the rest of us can carry on.

Lol, me Apple Watch never. But it’s a serious question, to you or the group. Are folks here really going to say that the vast explosion of the gray market and the vast amounts of watches they snatch up every single day is only a small sliver of the reason why regular folks cannot access watches at the AD? Really???


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[Krash]

Originally Posted by Chester01

Let me play devils advocate here. In general the overall number of folks wearing watches has declined. Apple Watch is eating the lunch of all Swiss companies. The reality is despite your data, there are less and less space on the wrist for mechanicals, as more and more move to so called smart watches. Another interesting point to consider is why is there a gray market? They exist to help AD’s who are not moving inventory right? Given the vast amount of gray dealers one can argue that things may not be what they seem-though that’s admittedly more speculation on my part and have no data on that.

Just a question, what percent of the so called demand would you say is due to gray market demand? Given that the grays here on the forum seem to have no problem and seem to get to the front of the line, all day everyday.


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Another stupid argument. There is overlap. Lots of buyers of Apple Watches also wear a Rolex, Omega, Breitling, etc. Plus, an Apple Watch typically costs less than a $1,000, so it's a different price point in terms of market segment anyway.

Gray dealers exist because there is a demand for them to exist. They're no different than any other capitalist. If there was no demand and no money to be made, they wouldn't exist.

[David001]

Originally Posted by Chester01

Lol, me Apple Watch never. But it’s a serious question, to you or the group. Are folks here really going to say that the vast explosion of the gray market and the vast amounts of watches they snatch up every single day is only a small sliver of the reason why regular folks cannot access watches at the AD? Really???


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First - you buy Daytonas and GMTs and would never consider giving them up for an Apple watch, but your theory is Apple is going to kill the luxury watch market?

Second - no doubt that grey dealers have an impact on price and obtainability, that's how it works, they know they can buy these pieces and sell them for much higher prices.
It's been going on for years.

No conspiracy, just capitalism and consumerism.

This getting dull now.

[Rrpdc]

Originally Posted by RJRJRJ

Govberg is one of the most well known ADs in the US, and they own Watchbox.

Yes, They own huge grey dealer watch box. Interesting they even posted that video since they are major dealer in grey market feeding the cycle.

[Deroya]

Imagine if Rolex decides to be their own retailer someday and cut all the ADs out, evening the playing field for everyone? Oh what a glory that would be to see. Wouldn't cut out the wait time, but at least everyone in theory would get a fair shot in a queue or line.

[drfrankenstein]

Originally Posted by Krash

Stupid argument. Of course it's a free market. The very definition of a free market is that manufacturers and dealers are free to negotiate the terms of their relationship without government controls or government intervention.

That's how a free market works. Rolex is free to dictate the terms of their relationship with the dealers. The dealers are free to except or deny those terms. Apple does the same thing. Most manufactures do...

Honestly, it's getting to the point where you people are embarrassing yourselves.

The definition of free market is an economic system in which prices are determined by unrestricted competition between privately owned businesses. There is clearly restricted competition, particularly among secondary dealers who set the "market price."

[Krash]

Originally Posted by drfrankenstein

The definition of free market is an economic system in which prices are determined by unrestricted competition between privately owned businesses. There is clearly restricted competition, particularly among secondary dealers who set the "market price."

WRONG!

Most manufactures dictate price to retailers.

Again, gray market dealers set the prices based on what the market will bear. It's no different than real estate.

FREE MARKET MEANS NO GOVERNMENT CONTROL, INFLUENCE OR INTERVENTION.

[dtwer]

Originally Posted by David001

First - you buy Daytonas and GMTs and would never consider giving them up for an Apple watch, but your theory is Apple is going to kill the luxury watch market?

Second - no doubt that grey dealers have an impact on price and obtainability, that's how it works, they know they can buy these pieces and sell them for much higher prices.
It's been going on for years.

No conspiracy, just capitalism and consumerism.

This getting dull now.

This +1.

No apple watch is ever going to threaten the luxury watch brands. Luxury watch is about status, not functionality. It appeals to the same human emotion that makes gold and gem stones the universally treasured objects in human societies over millennia.

[csaltphoto]

We know that Rolex makes ~ 1M watches a year. Let's just say that 50,000 of those are SS subs. We have no real idea of the actual figures but this estimate seems reasonable and is a common internet guess. Its probably not off by more than 2x. So probably not more than 100K and probably not less than 25K. So lets go with 50K. Say 10% of those reach the US. Probably half go to Asian countries, another 10-20% to the EU and the rest of the world gets the remainder. So that's 5000 watches a year to the US. Or about 100/state/year. 8/month/state. Adjust for population per state and so on. I know I'm just guessing but I think most would agree these numbers can't be that far off.

Or another way to look at it would be 1 sub for every 40,000 adults in the US per year. Not every adult wants one but that is just not a lot of subs, especially if there is a sudden run on popularity and no increase in production. Even if the production numbers were twice that it would be 1 sub for every 20,000 adults. Still not a lot.

[Uppersouth]

Originally Posted by Deepseadog

Is Mike back in Philly?

Lol, says it every time!

[Brew]

Originally Posted by Krash

WRONG!

Most manufactures dictate price to retailers.

Again, gray market dealers set the prices based on what the market will bear. It's no different than real estate.

FREE MARKET MEANS NO GOVERNMENT CONTROL, INFLUENCE OR INTERVENTION.

Yours is just one def., all caps or otherwise.

[HiBoost]

Originally Posted by vh2k

Govberg/Watchbox says Rolex has increased shipments to ADs — even of sports models. Rolex isn’t holding back anything. No artificial shortage. Strength in the secondary market creates more demand through authorized dealers... and the cycle perpetuates itself.

It may not be "artificial", like there's a warehouse in Geneva with a bunch of Pepsis that they just don't want to ship. But that in no way equates to Rolex keeping shipments the same or increasing them. Go to 1:20 in this video interview with an AD and he says that in 2020 he only received "just over half" of the number of pieces that he got in 2019. Production was way down. We know that demand exceeded supply even when supply was 100%, but if supply has almost cut in half then there's going to be a huge gap. 2021 is even lower per my AD.

https://www.youtube.com/watch?v=o6jC57BZgMU

[Krash]

Originally Posted by Brew

Yours is just one def., all caps or otherwise.

That's because there is only 1 definition. LOL!

Are there other kinds of free markets?

WTF!


I just copied this from Google.

What is meant by free market economy?

The free market is an economic system based on supply and demand with little or no government control. ... Free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions.

[drfrankenstein]

Originally Posted by Krash

WRONG!

Most manufactures dictate price to retailers.

Again, gray market dealers set the prices based on what the market will bear. It's no different than real estate.

FREE MARKET MEANS NO GOVERNMENT CONTROL, INFLUENCE OR INTERVENTION.

Originally Posted by Brew

Yours is just one def., all caps or otherwise.

Originally Posted by Krash

That's because there is only 1 definition. LOL!

Are there other kinds of free markets?

WTF!


I just copied this from Google.

What is meant by free market economy?

The free market is an economic system based on supply and demand with little or no government control. ... Free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions.

Common Constraints on the Free Market

All constraints on the free market use implicit or explicit threats of force. Common examples include: prohibition of specific exchanges, taxation, regulations, mandates on specific terms within an exchange, licensing requirements, fixed exchange rates, competition from publicly provided services, price controls, and quotas on production, purchases of goods, or employee hiring practices. Common justifications for politically imposed constraints on free markets include consumer safety, fairness between various advantaged or disadvantaged groups in society, and the provision of public goods. Whatever the outward justification, business firms and other interest groups within society often lobby to shape these constraints in their own favor in a phenomenon known as rent-seeking. When free market behavior is regulated, the scope of the free market is curtailed but usually not eliminated entirely, and voluntary exchanges may still take place within the framework of government regulations.

[Fleetlord]

A bit of an unfocused pontification to respond to multiple fronts in this tread.


The Apple Watch is no threat to Rolex. In fact it probably helps keep people interested in watches kinda like Invicta does.

The Apple Watch is a DIRECT threat to Seiko and Citizen lower tier offerings. For the same money you can get a crappy fashion quartz Seiko or a highly functional Smart Watch.

BUT, are Seiko and Citizen closing up shop? NOPE

What are they doing?

They are moving upscale and focusing into the world of higher end and luxury watches.

Citizen is coming out with an entire line of SS mechanical sports watches. One is $7K. It looks the part for sure.

They are trying to get up the ladder to somewhere in the Rolex orbit.

There is more money than ever flooding the streets and craving and demanding luxury goods.

The digital economy is not fully understood by pundits.

When a 16yr kid can earn millions and millions of dollars making short dance videos and taking some selfies and other teens can earn the same if not more streaming video games. Some old school theory goes out the window IMHO.

Guess what they all want with this bounty of seemingly effortless cash?

They want ROLEX and ROLEX is subtly helping them buy the best references for ROLEX.

[Chester01]

Originally Posted by David001

First - you buy Daytonas and GMTs and would never consider giving them up for an Apple watch, but your theory is Apple is going to kill the luxury watch market?

Second - no doubt that grey dealers have an impact on price and obtainability, that's how it works, they know they can buy these pieces and sell them for much higher prices.
It's been going on for years.

No conspiracy, just capitalism and consumerism.

This getting dull now.

You say no a lot and that’s fine but present little to no data. Here is data, fact 1: Apple sold more watches than the entire Swiss watch industry. Fact 2: In 2019 Apple sold 36 percent more Apple watches than 2018, while the Swiss watch industry declined 13 percent. Fact 3: Swiss watch exports declined 21 percent from 2019. The past decades have seen brands converge to deal with market forces and increasingly the industry is dominated by only a few-more facts. The very few are now propping up what’s left of the entire industry.


Now, I don’t like Apple watches but you don’t need to be a weather man to tell which way the wind blows.


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[CashGap]

Originally Posted by drfrankenstein

It's not a free market because ADs cannot set prices, are limited to whom they can sell watches int he context of limited supply and increased demand.

The secondary market prices exist because the primary (AD) market is economically flawed. One simply cannot say what the true prices would be without the secondary market and the mark-up that occurs because of the middleman supplying watches from the AD.

Furthermore, secondary market dealers don't work on an island, they act as a network and work among themselves to set prices. A free market is an economic system in which prices are determined by unrestricted competition between privately owned businesses - that does not describe the sale of Rolex.

100% incorrect, every paragraph.

0 - Every person listed in your response is a voluntarily participant, free of government intervention. That's a free market.

¶ 1 - ADs gave up their right to sell above MSRP when they entered into a voluntary dealer agreement. Supply unable to meet demand at MSRP in no way limits to whom they can sell.

¶ 2 - The secondary market prices exist because Rolex are unwilling to set MSRP to market price on high demand (mark BLNR up) and low demand (mark ladies' down) models. The "true" prices if they did would be similar to the secondary market, as the AD and Rolex are more efficient than the greys, offset by the buyers being less hesitant to buy from ADs at a given price.

¶ 3 - Argumentum ad Ignorantiam. You have no evidence of collusion amongst greys, and such collusion would fail if it set a price above the Market Clearing Price. These prices are set by competition free of government intervention* between privately owned businesses - that DOES describe the sale of Rolex.

Here's the lesson you must take away.

"Not everything you don't like or don't understand is bad".

That is key, or you'll never understand. You can't get a SS Daytona new for the price on Rolex website by walking into a store. You don't like it. You don't understand it (see your post). Therefore, something must be "wrong" or "bad" or "criminal" or "fixed" or "rigged". No. Rolex just set the price on the website too low, and the free market fixes it via the greys.





*Business is profoundly affected by government information, but Rolex is not singled out for particular interference beyond what every business faces.

Originally Posted by drfrankenstein

The definition of free market is an economic system in which prices are determined by unrestricted competition between privately owned businesses. There is clearly restricted competition, particularly among secondary dealers who set the "market price."

There is ZERO restricted competition presented here for us to consider, the market sets the market price. Only the market CAN set the market price. The secondary dealers react to it. If they all agreed "Hey, we buy SS Daytona for $12k but none of us will sell below $35k", the first one to defect and sell at $34k dominates. The rest have no mechanism to punish him for defecting.

This seems new and novel if you've not been exposed to it, but economists have studied all of this for a century. The lessons are there, we only need to read them.



Not everything you don't like (you've made that clear) or don't understand (you continue to make that clear) is bad.

[drfrankenstein]

Originally Posted by CashGap

100% incorrect, every paragraph.

0 - Every person listed in your response is a voluntarily participant, free of government intervention. That's a free market.

¶ 1 - ADs gave up their right to sell above MSRP when they entered into a voluntary dealer agreement. Supply unable to meet demand at MSRP in no way limits to whom they can sell.

¶ 2 - The secondary market prices exist because Rolex are unwilling to set MSRP to market price on high demand (mark BLNR up) and low demand (mark ladies' down) models. The "true" prices if they did would be similar to the secondary market, as the AD and Rolex are more efficient than the greys, offset by the buyers being less hesitant to buy from ADs at a given price.

¶ 3 - Argumentum ad Ignorantiam. You have no evidence of collusion amongst greys, and such collusion would fail if it set a price above the Market Clearing Price. These prices are set by competition free of government intervention* between privately owned businesses - that DOES describe the sale of Rolex.

Here's the lesson you must take away.

"Not everything you don't like or don't understand is bad".

That is key, or you'll never understand. You can't get a SS Daytona new for the price on Rolex website by walking into a store. You don't like it. You don't understand it (see your post). Therefore, something must be "wrong" or "bad" or "criminal" or "fixed" or "rigged". No. Rolex just set the price on the website too low, and the free market fixes it via the greys.





*Business is profoundly affected by government information, but Rolex is not singled out for particular interference beyond what every business faces.



There is ZERO restricted competition presented here for us to consider, the market sets the market price. Only the market CAN set the market price. The secondary dealers react to it. If they all agreed "Hey, we buy SS Daytona for $12k but none of us will sell below $35k", the first one to defect and sell at $34k dominates. The rest have no mechanism to punish him for defecting.

This seems new and novel if you've not been exposed to it, but economists have studied all of this for a century. The lessons are there, we only need to read them.



Not everything you don't like (you've made that clear) or don't understand (you continue to make that clear) is bad.

I never said anything was bad, I don't begrudge anyone for making money and taking advantage of market insufficiency which clearly exist here. When the supplier (Rolex) limits what the seller can sell for, you cease to have a truly free market. Free market in a democratic sense means it's free from government intervention but that does not what it means from an economic sense.

"Common Constraints on the Free Market

All constraints on the free market use implicit or explicit threats of force. Common examples include: prohibition of specific exchanges, taxation, regulations, mandates on specific terms within an exchange, licensing requirements, fixed exchange rates, competition from publicly provided services, price controls, and quotas on production, purchases of goods, or employee hiring practices. Common justifications for politically imposed constraints on free markets include consumer safety, fairness between various advantaged or disadvantaged groups in society, and the provision of public goods. Whatever the outward justification, business firms and other interest groups within society often lobby to shape these constraints in their own favor in a phenomenon known as rent-seeking. When free market behavior is regulated, the scope of the free market is curtailed but usually not eliminated entirely, and voluntary exchanges may still take place within the framework of government regulations."

"¶ 2 - The secondary market prices exist because Rolex are unwilling to set MSRP to market price on high demand (mark BLNR up) and low demand (mark ladies' down) models. The "true" prices if they did would be similar to the secondary market, as the AD and Rolex are more efficient than the greys, offset by the buyers being less hesitant to buy from ADs at a given price."

^ This is literally a constraint on a free market. You are creating an pathway wherein the prices become inflated by adding a middleman who resells to secondary dealers. There is no way of knowing what the prices of these watches would actually be without the middleman.; ADs selling for market value. Again, not immoral or illegal but also not a free market. Yes, ADs willing enter into this agreement but it puts a limit on the market nonetheless.

"¶ 3 - Argumentum ad Ignorantiam. You have no evidence of collusion amongst greys, and such collusion would fail if it set a price above the..."

^ This is also not true. Watch any episode of Timepiece Gentleman and tell me there isn't collusion of dealers re: pricing. This is well known. It's not illegal or even immoral but also constrains the market.

There seems to be some confusion here regarding the political (capitalism) versus economic definition of free market. Yes, there is no government intervention to set prices but there are significant constraints nonetheless beyond supply and demand.

[Jack T]

Originally Posted by csaltphoto

We know that Rolex makes ~ 1M watches a year. Let's just say that 50,000 of those are SS subs. We have no real idea of the actual figures but this estimate seems reasonable and is a common internet guess. Its probably not off by more than 2x. So probably not more than 100K and probably not less than 25K. So lets go with 50K. Say 10% of those reach the US. Probably half go to Asian countries, another 10-20% to the EU and the rest of the world gets the remainder. So that's 5000 watches a year to the US. Or about 100/state/year. 8/month/state. Adjust for population per state and so on. I know I'm just guessing but I think most would agree these numbers can't be that far off.

Or another way to look at it would be 1 sub for every 40,000 adults in the US per year. Not every adult wants one but that is just not a lot of subs, especially if there is a sudden run on popularity and no increase in production. Even if the production numbers were twice that it would be 1 sub for every 20,000 adults. Still not a lot.

You've given it some thought, but I agree it's pure guess work, and I believe you could be way, way off.

[UK_]

Originally Posted by CashGap

100% incorrect, every paragraph.

0 - Every person listed in your response is a voluntarily participant, free of government intervention. That's a free market.

¶ 1 - ADs gave up their right to sell above MSRP when they entered into a voluntary dealer agreement. Supply unable to meet demand at MSRP in no way limits to whom they can sell.

¶ 2 - The secondary market prices exist because Rolex are unwilling to set MSRP to market price on high demand (mark BLNR up) and low demand (mark ladies' down) models. The "true" prices if they did would be similar to the secondary market, as the AD and Rolex are more efficient than the greys, offset by the buyers being less hesitant to buy from ADs at a given price.

¶ 3 - Argumentum ad Ignorantiam. You have no evidence of collusion amongst greys, and such collusion would fail if it set a price above the Market Clearing Price. These prices are set by competition free of government intervention* between privately owned businesses - that DOES describe the sale of Rolex.

Here's the lesson you must take away.

"Not everything you don't like or don't understand is bad".

That is key, or you'll never understand. You can't get a SS Daytona new for the price on Rolex website by walking into a store. You don't like it. You don't understand it (see your post). Therefore, something must be "wrong" or "bad" or "criminal" or "fixed" or "rigged". No. Rolex just set the price on the website too low, and the free market fixes it via the greys.





*Business is profoundly affected by government information, but Rolex is not singled out for particular interference beyond what every business faces.



There is ZERO restricted competition presented here for us to consider, the market sets the market price. Only the market CAN set the market price. The secondary dealers react to it. If they all agreed "Hey, we buy SS Daytona for $12k but none of us will sell below $35k", the first one to defect and sell at $34k dominates. The rest have no mechanism to punish him for defecting.

This seems new and novel if you've not been exposed to it, but economists have studied all of this for a century. The lessons are there, we only need to read them.



Not everything you don't like (you've made that clear) or don't understand (you continue to make that clear) is bad.

Your fantastic and well articulated response is wasted in those who do not understand it.

People seem to think the grey market dealers are some kind of big ballon that just keeps filling up with SS watches they buy, but never sell.


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[taillight]

Same blue shirt and jacket??

[csaltphoto]

Originally Posted by Jack T

You've given it some thought, but I agree it's pure guess work, and I believe you could be way, way off.

Off in which direction? Given all the different SS sports/professional models I don't think it's more than 50K But it's certainly more than 5K.