Sure, ADs care about flippers- but is it for the reason we think it is?

[daOnlyBG]

Heads up: not an investment thread, but rather, a thread about the AD experience.

I was thinking about authorized dealers' incentives some time ago, along with certain realities buying a watch through an AD. The current prevailing theory is that if an AD catches you "flipping" an allocated Rolex model, then said AD blacklists you (see the recent thread titled "Banned from my AD," link here).

Some people even believe that said AD shares your name with other ADs, and perhaps even Rolex itself, but there's little-to-no evidence to suggest so (and that requires a giant leap of faith to consider).

There's just one problem here: the "motive" is missing. Why should an AD care if you sold that Daytona for twice its MSRP? Not only did the AD get its sale through your purchase, but they could not have sold it for more- so any point about competition is moot; even if it was competition, I imagine most people would want to pay less for the same exact item.

And yet, if you sell said Daytona on the market, you will certainly draw the ire from your AD. So is there more to the story?

"Some people just want to have a supplement income," one salesman in Vegas told me.

"Bro, take a small hit on that Datejust... you'll make it up and more with the Sub Date," suggested the nearby grey-market dealer.

Taking a hit on the Datejust, though... that's a problem for the AD. Now you're not only competing with the AD for a select group of customers (not everybody is a watch enthusiast; of the watch enthusiasts, not everybody is a Rolex fan; of Rolex fans, not everybody is a Datejust fan; of all the Datejust fans, not everybody likes two-tone, etc etc)- you're also taking advantage of the fact that Rolex ADs can't advertise discounts, and if a customer was to go in and ask for one, any little discount quickly eats away from the sales associate's small commission (the AD institution takes away most of it).

It's the flipping of non-allocation pieces that ADs really dread. Yes, flipping that GMT-Master means you're a player in the market and you're likely to have a business model where you calculate bottom lines. And in doing that, you're likely to buy certain pieces to dump quickly and at a discount that ADs might not be able to.

Thoughts?

[Zakalwe]

Originally Posted by daOnlyBG

Some people even believe that said AD shares your name with other ADs, and perhaps even Rolex itself, but there's little-to-no evidence to suggest so (and that requires a giant leap of faith to consider).

I’m not sure I have a view on your post as a whole - I may ponder it. However on this particular point, I do have a view. A casual estimate is that 80% of AD’s in this country are owned by the same AD chain - Watches of Switzerland Group. If you buy anything from any of their stores, they retain your details on a company-wide database that is accessible from any of their other stores. This doesn’t require faith, as members here and on other fora have reported going in to a WOS AD who has been able to retrieve their purchase history across all group AD’s.

This AD chain is also known to blacklist flippers - the evidence is from multiple posters in the thread you reference.

Putting these two facts together, it’s easy to conclude that if you get caught flipping a hot Rolex round these parts, your details will instantly be shared with close to 100 AD’s and you will be blacklisted from most AD’s in the land. It happens. At least here. Over there, I dunno.

[jacksprat]

I honestly dont think the AD cares that you flip the watch. ROLEX CARES THAT YOU FLIP THE WATCH. Rolex then scolds the AD for selling to a flipper. Probably threatens them with loss of AD status and/or loss of incoming number or watches to sell. Of course AD then takes it out on the flipper. Bans them and sends their name to other ADs. Shit flows down hill.

[nda]

It's the same with a few car manufacturers too - Ferrari and Porsche don't like speculators, their 'hot' models only go to those they think are going to keep them rather than immediately sell for a profit.

Is it because Rolex/Ferrari only want the watches to go to people who will keep them? Possibly.

[Speedbird-1]

Originally Posted by nda

It's the same with a few car manufacturers too - Ferrari and Porsche don't like speculators, their 'hot' models only go to those they think are going to keep them rather than immediately sell for a profit.

Is it because Rolex/Ferrari only want the watches to go to people who will keep them? Possibly.

It's not working.
Everything's available, if you have the dough.
2020 Ferarri's, Porsche's, Lamborghini's, McClaren's ALL available on Autotrader.

[nda]

Originally Posted by Lt Virgil Hilts

Everything's available, if you have the dough.
2020 Ferarri's, Porsche's, Lamborghini's, McClaren's ALL available on Autotrader.

Which is not in dispute.

The question was why would Rolex or their dealers care?

[grimps]

Originally Posted by nda

Which is not in dispute.

The question was why would Rolex or their dealers care?

I actually believe that Rolex and most of their dealers do prefer the watches to go to a good home for the retail price .
Although its tough for them to manage I know from my local AD that they always try to get genuine local customers what they want

[Swiss Mad!]

Not sure I fully understand where your coming from with this OP?

Are you really saying AD's dread the thought of a customer flipping a TT Datejust MORE than they dread the thought of a customer flipping a SS Professional sports model??

Apologies if I've misinterpreted your context.

Personally, I don't really think AD's want their customers flipping ANY watch they sell them, regardless of model or reference.

Im sure there are 'Some' AD's that have been guilty of slipping watches out the back door to the highest bidder, but I also believe Rolex are on, & have been on a mission for some time to stamp out this practice and AD's are now under no illusion that their whole AD status is at risk if caught carrying out this practice.

[Simon_jrees]

From what I understand it's Rolex that inform the AD's about known flippers and instruct them to be blacklisted. As for caring when they've already made a sale, I believe they'd prefer people to keep and enjoy them rather than selling them on at twice the price knowing it may be a sought after model, depriving someone who wants one to keep of the chance of owning that particular model and paying retail not rip off prices.

[Travelair007]

Can someone help me understand this >> New Grey inventory comes from ADs...Greys are flippers by definition. As far as we can tell, they continue to receive watches and aren’t banned.

[Harry-57]

The AD may not want to care if a hot model gets flipped, but their customers do. The AD will try to balance the appearance of the situation so as not to piss off regulars who are on lists and/or drop big money on goods in their shops.

Lots of people know their ADs. They pop in. They've been doing so for years. They don't buy just Rolex or even other watches. If someone is sitting on a Daytona list and someone else in my small town starts rocking one and claiming to have got it off a walk in at the AD, or out of the vault because of a special relationship with them, people speak to the AD about it. Some angrily.

The last instance of this was when a local minor celebrity wore a grey Rolex and claimed that the AD could get them anything they wanted. My AD had to do a lot of fire fighting off the back of that. Of course my AD sells to strangers and tourists. They occupy a prime site in a popular international tourism location. It's a balancing act bestrewn keeping the stock turning over and not getting hollowed out to the extent that their more local (and repeat) customers don't want to shop there.

I don't think Rolex care about individuals selling their private property. But they will watch for signs that an AD might be particularly naughty, like selling a large proportion of hot models to particular buyers or groups of buyers. This isn't about individual flippers so much as an AD profiteering from a playing field that they have tilted in their favour. Rolex are exceedingly good at guarding their business and reputation. They can't and won't turn a blind eye to any situation that might hurt them. If they don't think something will have that kind of impact, why would they care? They have more important things to be doing.

[djgallo]

This subject has been talked to death....

[brandrea]

Originally Posted by Swiss Mad!

Not sure I fully understand where your coming from with this OP?

Are you really saying AD's dread the thought of a customer flipping a TT Datejust MORE than they dread the thought of a customer flipping a SS Professional sports model??

Apologies if I've misinterpreted your context.

Personally, I don't really think AD's want their customers flipping ANY watch they sell them, regardless of model or reference.

Im sure there are 'Some' AD's that have been guilty of slipping watches out the back door to the highest bidder, but I also believe Rolex are on, & have been on a mission for some time to stamp out this practice and AD's are now under no illusion that their whole AD status is at risk if caught carrying out this practice.

I agree Morning Max

[Bearxj86]

It's called FOMO FO'SHO.

Who would love to sell their products at one price (forced to sell) and then the person turns around and sells it for double and doesn't wear it? I think ultimately it would piss anyone off.

[sgwatchguy]

Originally Posted by djgallo

This subject has been talked to death....

+1


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[SpeedyTuomas]

If I were a European AD I would be careful about stalking what my customers do and gathering info..it could be a GDPR violation (Europe) and lead to big trouble. To the subject: I at least don't care what other people do with their property and ADs get revenue with zero effort so I would not complain too much in their position.

[mykii]

It's just about controlling supply chain, and business model. Rolex does profit from the grey market in brand image, and their supply chain can profit from it too if they can sell pre-owned for the same mark-ups with blessing from Rolex HQ (not historically always possible, from my understanding).

Mr Joe wants the watch he can't buy, Mr Dave loves the fact his new SS watch is appreciating and unobtainable, and Rolex / the ADs can enjoy growing demand and empty shelves.

[Swiss Mad!]

Originally Posted by brandrea

I agree Morning Max

Cheers Brian


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[amilch]

Some ADs wil get upset if you sell/flip non hot models.

[Calatrava r]

It is age old, but nobody cares if you lose money, only when you make money do concerns arise all over the place with everyone.

[Ichiran]

Disagree that the motive is missing. Getting on the wrong side of Rolex may potentially cause an AD to lose that lucrative multi-million Rolex dealership. That will put most AD out of business. The incentive is clearly there - that Rolex dealership.

[Zakalwe]

Originally Posted by Ichiran

Disagree that the motive is missing. Getting on the wrong side of Rolex may potentially cause an AD to lose that lucrative multi-million Rolex dealership. That will put most AD out of business. The incentive is clearly there - that Rolex dealership.

Exactly.

The question isn’t why the AD’s care. It’s why Rolex cares enough to put pressure on AD’s to curb scalping.

[Claven2]

Originally Posted by daOnlyBG

Heads up: not an investment thread, but rather, a thread about the AD experience.

I was thinking about authorized dealers' incentives some time ago, along with certain realities buying a watch through an AD. The current prevailing theory is that if an AD catches you "flipping" an allocated Rolex model, then said AD blacklists you (see the recent thread titled "Banned from my AD," link here).

Some people even believe that said AD shares your name with other ADs, and perhaps even Rolex itself, but there's little-to-no evidence to suggest so (and that requires a giant leap of faith to consider).

There's just one problem here: the "motive" is missing. Why should an AD care if you sold that Daytona for twice its MSRP? Not only did the AD get its sale through your purchase, but they could not have sold it for more- so any point about competition is moot; even if it was competition, I imagine most people would want to pay less for the same exact item.

And yet, if you sell said Daytona on the market, you will certainly draw the ire from your AD. So is there more to the story?

"Some people just want to have a supplement income," one salesman in Vegas told me.

"Bro, take a small hit on that Datejust... you'll make it up and more with the Sub Date," suggested the nearby grey-market dealer.

Taking a hit on the Datejust, though... that's a problem for the AD. Now you're not only competing with the AD for a select group of customers (not everybody is a watch enthusiast; of the watch enthusiasts, not everybody is a Rolex fan; of Rolex fans, not everybody is a Datejust fan; of all the Datejust fans, not everybody likes two-tone, etc etc)- you're also taking advantage of the fact that Rolex ADs can't advertise discounts, and if a customer was to go in and ask for one, any little discount quickly eats away from the sales associate's small commission (the AD institution takes away most of it).

It's the flipping of non-allocation pieces that ADs really dread. Yes, flipping that GMT-Master means you're a player in the market and you're likely to have a business model where you calculate bottom lines. And in doing that, you're likely to buy certain pieces to dump quickly and at a discount that ADs might not be able to.

Thoughts?

If you ask me, it is as simple as almost all ADs deal in used rolex as well. They want you to use them for resale so they share in the markup, vs hoarding the secondary market profit for yourself.

[Claven2]

Originally Posted by Zakalwe

Exactly.

The question isn’t why the AD’s care. It’s why Rolex cares enough to put pressure on AD’s to curb scalping.

Rolex cares because the current climate damages their brand's good image by fostering a belief that rolex doesnt want to make the watches people want to buy. That isnt true, and is more a function of grey market hoarders than Rolex's production strategy. In reality most bad behavior is on dealers, not rolex SA. If they don't police it, they create omega, jlc, etc. fans out of frustrated rolex customers.

Rolex has been around a long time and knows harder economic times will reoccur, while many AD's cant see past the current climate where there is lots of disposable income and cheap lending.

[superpop]

The reason Rolex should care, and hopefully does, is because they should be concerned about the buying experience of their target customers. With luxury brands, the fastest way to turn off a buyer is to make the product impossible to get. Or worse yet, force them to buy from some back alley flipper with no storefront. Rolex has competitors and these competitors take share away from them when they make it impossible to get the products they are selling. The market will probably temper this a bit though unfortunately as these same luxury buyers tend to throttle back spending in the days to come.

[Bizcut1]

Originally Posted by djgallo

This subject has been talked to death....

I know.

But there aren't any other threads except newbie how long will it take to get and what's it worth, scratches, incoming, and your Hulk might be discontinued.



Good Sunday, everyone!

[brucethemanlee]

Huh?


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[mrmarty]

At this current climate, I think it matters to AD's who buys their watches or what they do it with it. Rolex does.

In this climate of where Rolex is trying to uphold a certain image in consumer eyes with buying experiences and securing their AD's, its no surprise that they are going after the grey markets and even after their own AD's for watches ending up on the gray market. The AD's at this point are more concerned with their status with the company over just selling watches. It would be a negative mark on them when a bulk of the watches they sell end up on the gray market.

So yes, I can see why AD's are instilled the fear when it trickles down from headquarters.

[Nikrnic]

I have a good relationship with my AD. I've never bought jewelry from him just Rolex and and an ocassional Seiko. I never ask him too much of how he conducts business although I know he runs a tight ship and has his VIPs as well. Personally he just said if i flip my Batman (which i wouldn't) not to put it on the net. As far as any data base goes I have my doubts other than franchised dealers who share an inventory list.

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