How to stop the flipping scourge

[Jack T]

Outside of the people on TRF, hardly anyone wants, or expects to own more than one Rolex in their lifetime.

[DLRIDES]

Originally Posted by Jack T

Seems to me the AD’s are complicit in this matter, at least enough of them are to provide the grey market with more supply than can be found in the AD stores.

the AD’s have deals in place to move the stock in bulk to grey dealers.

the grey dealers are flush with inventory, and that stock isn’t coming from a few individuals going from shop to shop picking up one watch at a time.

/\

THIS

The grey dealers , and there are many, commonly show cases full of “supposed” hard to get models with stickers and unfilled warranty cards. These did not come from random individuals “flipping” watches, but came from AD back doors !

[vh2k]

Originally Posted by edisonstar23

Had a good laugh… especially being required to bring in your pieces yearly.

If you recently purchased a desirable Richard Mille piece, don’t laugh when the boutique asks you to pay them a visit, and you better have the watch you purchased six months ago.

[HideMyWalletPlease]

Rolex can hire and train a network of watch tracers. These would be large intimidating men. They could probably get some amateur MMA guys. They could pop in on you at any time and if you’re not wearing the watch they slap you around a little. I think it’s really doable. One guy could visit 5-6 customers in a day.

[Net-man]

Juice ain’t worth the squeeze for Rolex.
If the things go back to discount days, I am sure some things will be done.
Tudor is capturing market at the lower end, no other brand is threatening Rolex dominance in their price bracket, what’s not to like.
In the process Rolex is weeding out pesky small time ADs with customer base is intact.
Unless the middle man aka AD start hurting there is no pressure on the brand.
As many have stated correctly, AD are Rolex’s true customers. Are they unhappy, doesn’t seem like to be.


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[Boaters]

Originally Posted by Mystro

Rolex is getting paid and that’s all they care about. They don’t care about their customers or that many are unhappy with how to buy their products. Rolex is guarding their brand and moving it upmarket anyway they have to.
The stories from many AD’s on how crappy Rolex has treated them for decades will not foster any loyalty to Rolex any more than to just keep their franchise. Rolex then starts to kill off family owned dealers that have loyally carried the Rolex brand for 40+ years.
Watchmakers with Rolex accounts also mirror how crappy Rolex treats them. You don’t need any more evidence that Rolex is looking out for Rolex.

Our “trusted sellers” aka grey market was here long before this madness started. They sold below msrp for decades yet no one was outraged they were getting a better deal than they could at their Rolex dealer from the grey market. It’s a different market now so adapt. This ”participation trophy” generation is learning some hard lessons in life.

That pretty much sums it up

[telesquire]

Originally Posted by donq

Stop flipping? Why?

Flipping is what keeps the market value up.

I’ve never bought anything from a Rolex AD.

And I don’t plan to. I don’t care for anything they have for sale there.

All my Rolexes were purchased used, and they are all worth about 2x what I paid for them.

I say keep it up. Maybe they will be worth 3x what I paid for them soon!

Lol.....Worth? Don't confuse the retail asking prices with the prices you would get as a private seller. Anyway who cares what the watches I own are 'worth' Only your surviving relatives would give a hoot....unless you are the guy who likes to tell non owners how much your watch is worth?

[Harry-57]

Originally Posted by VegasBaby

Why weren't all the people criticizing flippers and flipping buying these items when they were readily available, just a few years ago??

Presumably because back then, those evil flippers and greys were driving discounts, not bubbles. Now they are doing the opposite and they are doing it to personally piss off anyone who wants to buy a Rolex and can't. And Rolex is complicit. Self important much?

Don't like how the grey market works for Rolex and a handful of other brands that buck the trend? Buy an Omega, Breitling, Tag etc. Get a massive discount. Got to have a Rolex? Get in line or dig deep, same as the rest of us. Or buy a Rolex your AD actually has for sale. They do have some.

[zengineer]

There is an imbalance between supply and demand. And not just a small imbalance.

As long as that remains true there will be a secondary market that can't be controlled by a product manufacturer, at least not one making a million items each year.

The idea that you can stop people from selling an item for twice what they paid is one of two things: insanity or communism.

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[Justinmg]

Originally Posted by teck21

That sort of advice is as useful as saying traffic jams would disappear if everyone drove a bit faster.


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Originally Posted by vh2k

There is nothing inherently wrong with purchasing watches from the secondary channel. It's mainly misdirected frustration because most people don't want to pay the prices being sought/paid for desirable models.

If people didn’t buy from greys, it would drive prices down which would stop flipping and more watches would be available at AD. It’s pretty simple. But people have to have instant gratification and are willing to pay over msrp so the problem will persist.

[StanGMT]

After 54 years of using my 1675 GMT Master as my daily watch, I thought it might be time to 'retire' it and buy a new Pepsi GMT Master to see out the rest of my days. How naive was I?!! My AD effectively told me that, unless I had a purchase history of some tens of thousands of pounds with them, they wouldn't even put me on the waiting list! I've seen 2-3 month old GMT Masters, unworn, at £17,000 asking price, but I would pay that on principle.

I'm not taking this sort of blackmail, so I've ditched Rolex and recently bought an Omega Speedmaster Professional Master Chronometer to replace my retired GMT Master. I love the Omega - it sits on my wrist beautifully and has, over the first month, been incredibly accurate (less than +/- 2sec over the month). It's manual wind but, hey, twenty sec per morning winding it is nothing.

What a crazy world we live in . . . . . !

Stan.

[Dougiebaby]

Originally Posted by teck21

It is a problem. Everybody knows that.

There’s no blame to be assigned for doing it because that’s just rational human behaviour, the chance for a quick buck.

But every watch that gets taken away from an AD purely for the sole purpose of selling again without adding value deprives another genuine customer of a chance of it from an AD, that is also surely not in doubt.

What is it you think Rolex and/or ADs can do, in conjunction or not, to ensure as few watches as possible go to these opportunistic scalpers?

As it stands, Rolex tries to ‘dissuade’ its ADs from funnelling directly to greys (via the threat of dealership revocation), and to individual flippers (via black listing of individuals).

This discussion is not about Rolex increasing supply to resolve the demand issues, or demand supply issues in general, such as whether demand is ‘real or fake’.

The market situation is what it is, littered with opportunities for scalpers to profit.

In this light, what else can, or should Rolex/ ADs do?

Curious as to people’s views.

Mine are straightforward. Make sure everybody pays ‘market’ price via relationship building/bundling (even though Rolex frowns on outright binding), but I understand that’s not a popular view, and it also has its drawbacks.

What solutions would some of you propose?

Edit:
For the purpose of this particular discussion, flipping refers to the buying of a popular reference at an AD with little or no intention of being the end user, but for monetary profit.


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Your complaint really is rather naive and condescending. Naive because one can do whatever one wants to with whatever they purchase. Condescending in that who are you to determine if one is a genuine customer or not.

Would it bother you if said person purchased that Daytona only to smash it with a hammer and throw the broken pieces into a river?

What if said person purchased that Daytona and gave it to his ungrateful and uninterested daughter for her 13th birthday? She is not a "genuine customer."

What if said person was a HUGE watch nut over the years but fell on hard times and was given opportunity to purchase a Daytona and flipped it to pay off a few mortgage payments or medical bills?

People can do whatever they want to (within legal boundaries) with whatever they purchase.

Why get your panties in a bunch about what you cannot control and other people do?

If a collector wants to keep the watch he/she purchased, great.
If a collector wants to flip the watch he/she purchased, great.
If a collector wants to give a Daytona to his snot-nosed, ungrateful daughter for her 13th birthday, great.

It's his/her decision ... period.

[Driver8]

Ignoring the wider discussion point of whether flipping should be stopped anyway, the only thing that can actively be done to discourage flipping is for Rolex to raise their MSRPs to such a point that it is no longer profitable for people to buy them at retail with a view to immediately reselling them. That's all.

However, if they did that, they may fall into the Panerai trap, and find that demand goes off a cliff and suddenly they'll have supply outstripping demand, which is something that no manufacturer in any segment wants. Rolex sell literally everything they make, and at a price they're happy with. Where is the incentive to do anything to change that?

The current difficulty in getting hold of (most) Rolexes is down to one very VERY simple thing - Demand outstrips Supply. There's no mystery, no rocket science, no conspiracy, no secret cabal controlling things - it's just free market economics. Prices are simply a function of supply and demand. As soon as something becomes unpalatable to people (e.g. price of entry is too high, or fads/fashions change and people "go off" Rolex watches), then demand drops, supply exceeds demand, and prices drop accordingly.

People whine and moan all the time (especially on FB, but on forums as well) about why Rolex can't supply them with what they want. From a economists standpoint, I find that absolutely hilarious!

[Fleetlord]

Originally Posted by Driver8

Ignoring the wider discussion point of whether flipping should be stopped anyway, the only thing that can actively be done to discourage flipping is for Rolex to raise their MSRPs to such a point that it is no longer profitable for people to buy them at retail with a view to immediately reselling them. That's all.

However, if they did that, they may fall into the Panerai trap, and find that demand goes off a cliff and suddenly they'll have supply outstripping demand, which is something that no manufacturer in any segment wants. Rolex sell literally everything they make, and at a price they're happy with. Where is the incentive to do anything to change that?

The current difficulty in getting hold of (most) Rolexes is down to one very VERY simple thing - Demand outstrips Supply. There's no mystery, no rocket science, no conspiracy, no secret cabal controlling things - it's just free market economics. Prices are simply a function of supply and demand. As soon as something becomes unpalatable to people (e.g. price of entry is too high, or fads/fashions change and people "go off" Rolex watches), then demand drops, supply exceeds demand, and prices drop accordingly.

People whine and moan all the time (especially on FB, but on forums as well) about why Rolex can't supply them with what they want. From a economists standpoint, I find that absolutely hilarious!

You're absolutely right.

Panerai RAISED retail prices AND production. The market hates that and rejected that strategy immediately.

The delta for low key retail and market price is a main factor in the popularity of the the select brands who can manage their production and distribution properly and understand the importance of value retention to the market.

That's why Rolex hasn't made 100X SS Daytonas and raised their price to $35K retail, because that is market poison.

A nice, low MSRP that sells easily in the secondary market for essentially 3x that and is distributed in limited numbers to the AD and to the general public from the AD, is the rising tide that floats all Rolex.

[AdamW]

Originally Posted by Justinmg

Stop buying watches from grey dealers

THIS

[vh2k]

Originally Posted by Justinmg

If people didn’t buy from greys, it would drive prices down which would stop flipping and more watches would be available at AD. It’s pretty simple. But people have to have instant gratification and are willing to pay over msrp so the problem will persist.

Price elasticity of demand ensures people WILL ALWAYS purchase at a price they deem fair.

This has been tested on the white dial 116500.

At $40,000+, global demand completely dries up. People think it's too expensive.

At $38,000-$39,875, there are just enough customers to move the trickle of units that come into the secondary channel.

Now, what happens if the secondary channel started lowering prices to $35K? More people would find that price fair, and would be willing to pay it.

At $30K, even more people. At $25K, even more people.

So, it's impossible to just tell everyone to stop buying from the secondary market. That channel is what establishes the top market price.

Moreover, it doesn't really stop the flipping because the secondary dealers maintain the spread between offer price and market price.

If secondary price is $38K, they are purchasing for $34-35K. If secondary price fell to $35K, the offer price would drop to $31-32K. So, the dealer maintains a reasonable margin. Flippers make a little less... but not enough less to stop flipping.

[Harry-57]

Originally Posted by Dougiebaby

People can do whatever they want to (within legal boundaries) with whatever they purchase.

This is basically where the discussion both begins and ends.

But only on planet Earth.

Those who agree are already on side. After all, it's only simple statement of fact. Those who for some bizarre reason do not agree, never will. You are wasting your keystrokes.

[BroncoOne]

Originally Posted by ZDaytonawatchlvr

1. Dealer will not provide the Box, or Warranty card for 24 months after purchase. Customer must bring the watch purchased to the original dealer after the 24 months to receive the box and warranty card.
2. The original warranty is only good for the original purchaser unless the watch is sold or traded to a Rolex AD.
3. No more than 2 professional models to a single purchaser in any 12 month period.
4. Any watch that ends up in Grey Dealer inventory within 24 months of purchase at a Rolex AD will result in the Purchaser being banned from future Rolex watch purchases for a period of 5 years and the dealer receiving a reprimand/fine.

I'm sure others on this forum could come up with other good ideas.

On #2 I completely disagree. What happens if I want to give my Rolex to my son or nephew? Given longevity of these watches, they may not need a service until that time. Why should they be prevented from the benefits of a still active warranty that I got as part of the purchase? Will service be refused if the warranty expired and my kid got my watch instead of the AD? There are many more Rolex that have passed hands this way than by flipping (it’s been going on for decades, not just the last few years like flipping has). It’s part of the Rolex brand identity and value. Destroying this so someone walking in off the street can buy a steel Daytona at MSRZp does nothing good for anyone but that guy, who is likely the flipper. Flippers don’t care what happens after they get paid. Real owners do and they can’t be hurt.

The rest is unenforceable and not worth the huge amount of resources to try doing any of it. And what about a boss buying his or her team each a Rolex for job well done on a big windfall deal? Only two of them get the Rolex?

I’m not as opposed to the others and respect you for coming up with ideas to help enthusiasts get watches, but I just don’t see simple market economics as something g Rolex needs to invest in stopping when it helps Rolex.

[BroncoOne]

Originally Posted by vh2k

If you recently purchased a desirable Richard Mille piece, don’t laugh when the boutique asks you to pay them a visit, and you better have the watch you purchased six months ago.

If you sold me a New Richard Mille I’d be back on my own to see the next one that you’ve got for me. You wouldn’t have to make anyone who enjoys watches visit any boutique even if they weren’t ready to buy something specific , especially if they are a customer of that place.


Most of us won’t just walk by a watch boutique while walking through a retail shopping area.

Just look at all of the photos of empty cases. They even go in when they know that there are no new Rolex watches LOL

[VegasBaby]

Originally Posted by Harry-57

Presumably because back then, those evil flippers and greys were driving discounts, not bubbles. Now they are doing the opposite and they are doing it to personally piss off anyone who wants to buy a Rolex and can't. And Rolex is complicit. Self important much?

Don't like how the grey market works for Rolex and a handful of other brands that buck the trend? Buy an Omega, Breitling, Tag etc. Get a massive discount. Got to have a Rolex? Get in line or dig deep, same as the rest of us. Or buy a Rolex your AD actually has for sale. They do have some.

Actually, they weren't buying back then because there was no FOMO, no urgency and quite frankly no desire because they were all readily available and attainable at any AD. Once social media started going crazy, hyping every SS model in the Rolex catalogue, well this where we are.
.
Up until late 2017, I use to buy all my watches from Greys ,where large discounts were offered. Since then, I buy all my watches from my local AD, where paying retail is way better than paying the overinflated/market price for the watches I desire. Of course, I only get one watch per year but that works for me!!! You gotta go with the flow......

P.S. Back in the 60's and 70's, Greys pretty much didn't exist as the common discount on high end watches was 33%+. Of course, the retail markup was was greater back then so ADs had more room.

[Harry-57]

Originally Posted by VegasBaby

They do indeed! I use to buy all my watches from Greys when large discounts were offered and now I buy all my watches from my local AD, where paying retail is way better than buying from Greys. Of course, I only get one watch per year but that works for me!!! You gotta go with the flow......

You sure have. I bought a "cheap" BLRO today. I only paid MSRP! My Rolex AD will usually either match the grey market or get close enough on other brands to get the business.

Over the course of maybe 30 years ish, I have saved more on MSRP buying from greys than I have paid over MSRP for a couple of hot watches which my dealer simply couldn't help me with.

[gerry100]

TRF and other internet denizens comprise a small subset of Rolex customers. < 5 % IMO.

Rolex cannot ramp up production without undermining quality and ultimately the brand.

Rolexs long term customer base are those who buy for special occasions or events and establish a relationship with the brand. Empty cases at the time of purchase mean new relationships with Omega/Tudor/Breitling etc.

I also think we've got FOMO among regular AD customers leading them to reserve watches in advance.

My AD had never seen me before when I bought my pre owned 16570 and might not see me again, but I dont think "Special Occasion" customers buy used.

Supply of watches will normalize at some point.

Meanwhile, us 5 percenters can enjoy conspiracy theories,finger pointing,offering Rolex mgt advice and whipping up prices.

[Gab27]

Originally Posted by Justinmg

If people didn’t buy from greys, it would drive prices down which would stop flipping and more watches would be available at AD. It’s pretty simple. But people have to have instant gratification and are willing to pay over msrp so the problem will persist.

If AD's put EVERY person on a list who asked and attended to them in EXACT sequential order, I think this would be a fairer argument (i.e., if I go in an ask about a stainless Daytona, and someone with a $300,000 spend history goes in and asks about the same watch the day after, then I get offered that Daytona before the customer with the spend history.)

[Tricolore66]

When Rolex actually does something to try to cut the flipping, nobody likes it. Not selling via post, only face-to-face transactions to "local" buyers...everyone complained. Removing stickers and insisting on sizing watch at pickup...everyone complained. Holding warranty cards for a year...everyone complained.

They could insist that everyone pay 100% up front for their watches. I think you'd see a lot of people drop off the "list" if they had to pay in full and wait a year. Proof of payment goes to Rolex before they accept the order, and if they see orders from the same person at multiple AD's they sniff it out.



You realize Rolex doesn't see this as a problem. There's not another consumer brand on the planet that wouldn't love to have this "problem."

[donas]

Originally Posted by cerendigit

Reduce the demand.

This! There are many great brands available, stop feeding the frenzy.

If people are willing to pay ridiculous prices for steel watches, charge that price at the AD; once the top market price is found, flipping for profit will be more difficult, because no one will pay it.

[BayAreaTech]

I wish there was a simple solution. Though given market effects, and Rolex having quite a bit of experience here -- their may be no solution.

[BroncoOne]

On the FOMO argument, sure, that helps drive demand but there is a greeter force at play which is also another aspect of human nature.

It’s people thinking:” If someone like you can get one, then I don’t want one any more.”

Exclusivity supports growing demand even without supply (actually, especially without supply).

[Rolexatlast]

Rolex cannot stop anyone selling their watch. It is their property and owners are free to dispose of their watches however they wish. Unless Rolex were to introduce some form of leasing arrangement (like cars) or licensing (like IT), but that would be a bit extreme

However, they could have a global registration scheme, and restrict selling more than one SS and one PM per year to a single owner. Christmas and birthday presents could be catered by the person paying for the watch not necessarily being the registered owner, provided the registered owner is present at the AD with ID

After all, Rolex watches are not consumables. They do not wear out, so needs more than one SS watch. This benefits Rolex as it allows more people to own watches, rather than concentrate in the hands of the few. And would be good long term as those individuals will return the following year to buy another, rather than give up on Rolex

This would not stop someone selling the watch, but hopefully would minimise it, allowing more owners to buy their watches at ADs, and at a lower cost.

This would be by cutting out the mass purchasing by individuals and ADs selling out the back door to greys. And hopefully stop the current situations where all new models are in the greys the day after being released

[Pekoblue]

If you are able to figure this out you will be able to stop people from ‘flipping’ stocks in the stock market, lol.


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[joli160]

Rolex welcomes the current situation.
Actually they promote the grey market and made it easier last year by removing the customer name from the warranty card.

Brand has never been stronger