The case for buying above MSRP

[superstarmar]

Originally Posted by askdanny

Obviously, the ideal Rolex steel-sports purchase is at a duty-free Rolex AD -- at the airport for example. But legally you should be declaring the purchase as you go through customs in your country anyway. (And the odds that the watch is available as you make your way through the airport are slim.)

So realistically, you buy at a local AD where you'll pay full price plus sales tax. In many big cities like Chicago, New York, or Los Angeles, you'll pay close to 10% in sales tax. In many countries in Europe, we're talking 20%. On a Hulk, Daytona, or Pepsi this is big money.

There is no telling when the watch will be available at your AD, and what the sales tax or MSRP will be at when the watch is available, as waiting lists are not made public. The only thing you know is that there will be no discount. With time, MSRP and sales tax are likely to go up, not down. Sales taxes are less unpopular than property taxes because it is a consumer tax. Americans are often cash-poor but land-rich. So sales taxes are more likely to be approved or voted on to bolster state coffers. Rolex MSRP can only go up, as I believe Rolex steel-sports models are currently underpriced; I believe the new movements will be the justification for the price increase.

Online grey dealers are not currently under the obligation to charge sales tax. This might soon change as Internet sales taxes are falling under more scrutiny because brick-and-mortars complain they can't compete. I predict online sellers in all industries will be made responsible for charging sales tax at checkout. Currently online grey dealers will offer no sales tax and free overnight shipping. (I'm not a grey dealer, just a Rolex lover.)

If Rolex shortage is mostly due to increased demand, and more people than ever in the history of the world have the financial wherewithal to buy into such an aspirational brand -- whose reputation constantly ranks first -- the shortage might get worse, not better. I heard Rolex is increasing output, but I don't think we've seen the peak demand yet -- and demand will continue to outpace supply.

Do you want to wait one or two more years for that hard-to-get Rolex and roll the dice to save $500, $1000 or even $2000 depending on the model? MSRP and sales tax are both such unknown variables that paying "grey prices" now can make sense. Plus, in two years, who knows what the market value will be. The Daytona didn't jump straight from $12,000 to $22,000. But it has relentlessly gone up and is standing at $22,000 now.

So go buy that Hulk or BLNR and enjoy them now!

I got my BLNR back in 2016 at 10% off plus no tax and ship
Out of state. Sadly I let it go , I would not pay $2000/3000
premium on a pre-owned modern watch .
Whether it be another BLNR or a Hulk which I’m not a fan of
at all... I only buy what’s available at least at MSRP or less.
That’s me , I can only speak for myself.
If I pay a premium, then I may as well save that money and
add to get a pm ... eventually my grail.

[Jmbarrack]

The case for paying more in my opinion is as follows:

Retail + Sales tax price = X
Secondary Market premium price = X+premium
Secondary market price w/o sales tax (online forum sale / cash transaction) = ~X

Obviously, much of this formula depends on your state sales tax and the piece. But there are plenty of models which fetch a premium of around 8-10%, matching the sales tax in a few states.

[dubins930]

Originally Posted by ROLMARINER

There's that "mass produced" cliche again.

It doesn't mean anything when there are only a fraction being manufactured compared to demand. If Rolex makes 35,000 GMT's a year I'd be shocked, and with 9 different configurations I'd estimate they probably only make 3,000 BLRO's.

There are probably 2,500,000 Rolex owners who would gleefully take one at MSRP and therefore likely 750,000 Rolex owners who would pay a premium.

As a point of reference, Apple has produced and sold 63 Million iPhone X's. BLRO "mass produced". LOL. Nope.

Nothing in the watch industry is massed produced when compared to an apple iPhone. Fabergé made 50 imperial eggs throughout the last century, as a point of reference that would make the BLRO mass produced . Maybe made up production numbers and overdramatic enthusiasm for a watch will keep the grey market prices afloat...

[ROLMARINER]

Originally Posted by dubins930

Nothing in the watch industry is massed produced when compared to apple. Fabergé made 50 imperial eggs throughout the last century, as a point of reference that would make the BLRO mass produced.

Stop. There are maybe 50 people in the entire world who can afford or want Fabergé eggs.

In the last 20 years, Rolex has sold 20 Million watches. Add to that those sold on the second-hand market in the same timespan, you're probably looking at 30 Million watches making it into new homes.

I stand by my estimate of perhaps 3,000 BLRO's being produced each year.

Let's say only 1% of all people who purchased a Rolex in the last 20 years would be interested in a Ceramic Pepsi. DJ owners excited about a sport model, Sub owners looking for a bit of color, 5 Digit owners looking to upgrade, pick your poison. That's 300,000 potential buyers for 3,000 BLRO's produced this year. Don't like 1%? Make it half a percent, make it even smaller, the numbers still support the same reality.

That's not "mass produced". In the context of how large the Rolex potential consumer group is, that's extremely limited.

You aren't going to win the numbers game when it comes to the Rolex audience and the tiny amount of Daytona's and Pepsi's they manufacture each year.

[123Blueface]

Originally Posted by ROLMARINER

Stop. There are maybe 50 people in the entire world who can afford or want Fabergé eggs.

In the last 20 years, Rolex has sold 20 Million watches. Add to that those sold on the second-hand market in the same timespan, you're probably looking at 30 Million watches making it into new homes.

I stand by my estimate of perhaps 3,000 BLRO's being produced each year.

Let's say only 1% of all people who purchased a Rolex in the last 20 years would be interested in a Ceramic Pepsi. DJ owners excited about a sport model, Sub owners looking for a bit of color, 5 Digit owners looking to upgrade, pick your poison. That's 300,000 potential buyers for 3,000 BLRO's produced this year. Don't like 1%? Make it half a percent, make it even smaller, the numbers still support the same reality.

That's not "mass produced". In the context of how large the Rolex potential consumer group is, that's extremely limited.

You aren't going to win the numbers game when it comes to the Rolex audience and the tiny amount of Daytona's and Pepsi's they manufacture each year.

I believe your argument about “tiny amount” is quite flawed.
Evidence is the vast numbers of available BLRO world wide at greys, as an example. They can be readily found in a heartbeat, at a premium of course.
Some greys have dozens to offer.

The reality is they have been removed from the standard non grey market by unscrupulous ADs selling to greys to help them move their other stock.

[123Blueface]

Originally Posted by ROLMARINER

Stop. There are maybe 50 people in the entire world who can afford or want Fabergé eggs.

In the last 20 years, Rolex has sold 20 Million watches. Add to that those sold on the second-hand market in the same timespan, you're probably looking at 30 Million watches making it into new homes.

I stand by my estimate of perhaps 3,000 BLRO's being produced each year.

Let's say only 1% of all people who purchased a Rolex in the last 20 years would be interested in a Ceramic Pepsi. DJ owners excited about a sport model, Sub owners looking for a bit of color, 5 Digit owners looking to upgrade, pick your poison. That's 300,000 potential buyers for 3,000 BLRO's produced this year. Don't like 1%? Make it half a percent, make it even smaller, the numbers still support the same reality.

That's not "mass produced". In the context of how large the Rolex potential consumer group is, that's extremely limited.

You aren't going to win the numbers game when it comes to the Rolex audience and the tiny amount of Daytona's and Pepsi's they manufacture each year.

I believe your argument about “tiny amount” is quite flawed.
Evidence is the vast numbers of available BLRO world wide at greys, as an example. They can be readily found in a heartbeat, at a premium of course.
Some greys have dozens to offer.

The reality is they have been removed from the standard non grey market by unscrupulous ADs selling to greys to help them move their other stock. If you want to view that as scarce, then I guess it is, but not by my logic.

[ROLMARINER]

Originally Posted by 123Blueface

I believe your argument about “tiny amount” is quite flawed.
Evidence is the vast numbers of available BLRO world wide at greys, as an example. They can be readily found in a heartbeat, at a premium of course.
Some greys have dozens to offer.

The reality is they have been removed from the standard non grey market by unscrupulous ADs selling to greys to help them move their other stock. If you want to view that as scarce, then I guess it is, but not by my logic.

There's too much focus on the supply chain and when it comes to the scarcity conversation that's just noise. AD's are bad, grey's are bad, none of that matters.

Rolex makes X amount of BLRO's and they are all sold, with massive 5+ year waiting lists, and people willing to spend a 100% premium to get one. At any given moment only a dozen are for sale at the grey's or in the forums and they disappear within hours.

That's not the description of a 'mass produced' product. McDonald's french fries which are available to any one of a billion people on every street corner who want them are a mass produced product.

[123Blueface]

Originally Posted by ROLMARINER

There's too much focus on the supply chain and when it comes to the scarcity conversation that's just noise. AD's are bad, grey's are bad, none of that matters.

Rolex makes X amount of BLRO's and they are all sold, with massive 5+ year waiting lists, and people willing to spend a 100% premium to get one. At any given moment only a dozen are for sale at the grey's or in the forums and they disappear within hours.

That's not the description of a 'mass produced' product. McDonald's french fries which are available to any one of a billion people on every street corner who want them are a mass produced product.

Again, you are flawed to think these are not mass produced and either you believe this flaw, or wish to convince yourself of it.
You are playing with semantics that they are sold. They are sold to a middle man, the greys, and then inflated to the consumer. They are still available, brand new, and plenty in supply for sale currently. That by no means is scarcity. It’s just a new game being played with an in demand product.
No modern Rolex can be qualified as limited production by the true definition. They are all mass produced.

[dubins930]

Originally Posted by ROLMARINER

Stop. There are maybe 50 people in the entire world who can afford or want Fabergé eggs.

In the last 20 years, Rolex has sold 20 Million watches. Add to that those sold on the second-hand market in the same timespan, you're probably looking at 30 Million watches making it into new homes.

I stand by my estimate of perhaps 3,000 BLRO's being produced each year.

Let's say only 1% of all people who purchased a Rolex in the last 20 years would be interested in a Ceramic Pepsi. DJ owners excited about a sport model, Sub owners looking for a bit of color, 5 Digit owners looking to upgrade, pick your poison. That's 300,000 potential buyers for 3,000 BLRO's produced this year. Don't like 1%? Make it half a percent, make it even smaller, the numbers still support the same reality.

That's not "mass produced". In the context of how large the Rolex potential consumer group is, that's extremely limited.

You aren't going to win the numbers game when it comes to the Rolex audience and the tiny amount of Daytona's and Pepsi's they manufacture each year.

Who can’t afford what has nothing to do with asinine comparisons ....Dude you’re clearly making up numbers haha... and comparing watch production to iPhones ... actual Rolex production has zero correlation to your odd product and demand percentages...

[ROLMARINER]

Originally Posted by dubins930

Who can’t afford what has nothing to do with asinine comparisons ....Dude you’re clearly making up numbers haha... and comparing watch production to iPhones ... actual Rolex production has zero correlation to your odd product and demand percentages...

iPhones are a mass produced luxury item, exactly what some are saying a new Basel Rolex release is, certainly a better comp than a Fabrege egg. LOL. Funny even just typing that.

As for numbers, I said I was making it up, but I believe it probably paints a realistic picture. Feel free to take a stab at some numbers yourself. Start with 1M watches made in a year, take away about 50% of them for non-Sport, Ladies, and PM models, and divide the remaining Sport models by the 10 references and the 100+ configurations of metals, bezels, dials, and bracelets they are offered in and take a stab at how many units Rolex produces each year of a specific GMT with a specific bezel and bracelet combination.

(Hint: It's going to be about 3,000)

[dubins930]

Originally Posted by ROLMARINER

iPhones are a mass produced luxury item, exactly what some are saying a new Basel Rolex release is, certainly a better comp than a Fabrege egg. LOL. Funny even just typing that.

As for numbers, I said I was making it up, but I believe it probably paints a realistic picture. Feel free to take a stab at some numbers yourself. Start with 1M watches made in a year, take away about 50% of them for non-Sport, Ladies, and PM models, and divide the remaining Sport models by the 10 references and the 100+ configurations of metals, bezels, dials, and bracelets they are offered in and take a stab at how many units Rolex produces each year of a specific GMT with a specific bezel and bracelet combination.

(Hint: It's going to be about 3,000)

You got me.. the BLRO is the most special, desired and rare Rolex in existence... I think they made 2 a year cause they are so rare.. the numbers work....

[superpop]

I think what most people are saying is that Rolex, like many other manufacturers, is making a mass produced product in the sense that the watches they make are not a limited run and then they stop, or even a numbered run. They could make BLRO's for 10 more years if demand was there. That is why there is all the bubble hype. These are modern mass produced fashion jewelry with a great marketing team. Keep in mind, the fanatics on this board represent a fraction of the Rolex buyers out there, and the bulk of the buyers are like sheep that will flock to the next "look at me" item in vogue in 12 months. What is disappointing is that Rolex is letting this hype ruin the buying experience for folks that want to have the true AD experience and turning off folks that may want to buy their first Rolex. This will punish the brand in the future.

[MTBer]

So, whether or not something is mass produced isn’t determined by the manufacturing process, but rather how many potential buyers there are for the product in relation to how many copies of the product are manufactured?

[ROLMARINER]

Originally Posted by MTBer

So, whether or not something is mass produced isn’t determined by the manufacturing process, but rather how many potential buyers there are for the product in relation to how many copies of the product are manufactured?

Since I'm certain no one views Rolex as a maker of hand-crafted artisan timepieces, I don't view the "mass produced" comment to be about the manufacturing process but rather the supply chain, ie "produced in very large quantities".

If it is the other way around and people are actually talking about Rolex as a "mass manufacturer" that's certainly correct, no argument. But the value of one of their watches isn't determined by how much time or effort it takes to make one; the value of a Rolex is in its unmistakable quality, innovation, style, and scarcity.

I think in the context of this thread, the argument being made is that people shouldn't spend $18K on a BLRO because a) it's stainless steel and that's PM money, b) someone can get an AP or other brand instead, and c) Rolex makes 1 Million watches a year and grow on trees.

Well, a) some people don't like PM watches, b) some people find AP and other brands boring, and c) despite making mass quantities of their expansive lines, when you drill down to one bezel/bracelet combination of one specific reference like the BLRO they only make a couple of thousand a year.

[Homo Sapien X]

Originally Posted by Jean Melkanian

Stop. You are trying to justify yourself paying that astonishing amount of money above MSRP for an average watch, but no one is judging you there is no need for it.

Fact is the BLRO watch is mass produced and in no way scarce, just like the other SS models, and will continue to be mass produced in the years to come.

Agreed with you. $10k above MSRP for a Daytona is insensible.


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[rominvicta]

Originally Posted by ROLMARINER

It seems its easy to be one of the lucky ones who gets to pay MSRP for a BLRO, perhaps you should take the time to be more accepting of those of us without that good fortune. I'd guess that 70% of the BLRO's and 500C's are being bought via the grey market and there are a lot of us here.

The BLRO was the one and only watch I wanted, and no other Rolex or other brand was going to be satisfactory. I never liked the old aluminum Pepsi and the ceramic's dynamic and professional red and blue struck a chord and I had to have it even if it meant overpaying. Some would call that being a 'passionate enthusiast' which is exactly what I am.

The cliche of "justification" doesn't apply to people who have the $2K to $8K it takes to buy their way out of the AD favoritism game. To many of us it's not a number that moves the needle. It's not like I dropped $2.5M on a house in a bad neighborhood or invested $3.5M in a weak stock. It's $2K to $8K.

Completely agree with you! I do the same. It is just market price. Once was in Egypt. Price per liter of gasoline was 25 cents, but fuel was not available at stations so i had to buy it black market for triple that price and still it was cheaper than my homeland. Assume it is the same case. Plus you buy long term, all of us agree that even a premium of 50% over MSRP today will get you a surplus if you decide to sell it in five year time.

[ROLMARINER]

Originally Posted by Jean Melkanian

Stop. You are trying to justify yourself paying that astonishing amount of money above MSRP for an average watch, but no one is judging you there is no need for it.
Fact is the BLRO watch is mass produced and in no way scarce, just like the other SS models, and will continue to be mass produced in the years to come.

I appreciate that no one is judging. Please also appreciate that I am not trying to justify anything, it's strange that this keeps coming up. This is a Rolex forum, right? You would assume that some of its members have enough weekend fun money for the $8K overage not to matter, no? We live in a world where if one doesn't have a relationship with an AD or a decade's worth of patience there is an awesome way out- the friendly neighborhood grey dealer. Not sure why it's surprising that some of us went this route as our best available option.

Call the BLRO whatever you like but there aren't enough to go around. "Mass produced" is as useless a phrase as "MSRP". Both mean nothing when there simply aren't any out there. The Pepsi GMT doesn't need to be hand-crafted out of precious metal by cave-dwelling Swiss artisans to be superior to every other watch on the planet; it just has to be drop-dead gorgeous. And it is.

[HogwldFLTR]

I'm OK paying above MSRP if it's below the going Gray rate. I bought my Daytona 116500C for over MSRP and still made money trading it in to the AD on my new watch.

[ROLMARINER]

Originally Posted by rominvicta

Completely agree with you! I do the same. It is just market price. Once was in Egypt. Price per liter of gasoline was 25 cents, but fuel was not available at stations so i had to buy it black market for triple that price and still it was cheaper than my homeland. Assume it is the same case. Plus you buy long term, all of us agree that even a premium of 50% over MSRP today will get you a surplus if you decide to sell it in five year time.

Thank you rominvicta! We each have our own values and our own budgets and it's up to each of us to spend what we can afford on the things that we treasure.

And your point about long term is quite important- I'm never selling the BLRO so I am not affected by what its cost is today or its value may be decades down the road. If I'm fortunate enough to go another 40 years it'll be my companion for the journey and you can't put a price on that.

[rominvicta]

Originally Posted by ROLMARINER

Thank you rominvicta! We each have our own values and our own budgets and it's up to each of us to spend what we can afford on the things that we treasure.

And your point about long term is quite important- I'm never selling the BLRO so I am not affected by what its cost is today or its value may be decades down the road. If I'm fortunate enough to go another 40 years it'll be my companion for the journey and you can't put a price on that.

Rolmariner i just meant that even if one decides to sell a piece bought above MSRP in some years it won’t be at a loss. Sometimes this makes you quite comfortable paying above MSRP. At least I feel like that.

[dubins930]

Originally Posted by ROLMARINER

it just has to be drop-dead gorgeous. And it is.

One thing we could agree on... i just wish they had gotten the bezel colors a little more spot on, the cranberry/magenta doesn't quite do it for me

[MTBer]

.

[Uggi]

Originally Posted by Jean Melkanian

There are more than enough BLRO sitting around, just look at grey dealers cases, that's what you don't seem to want to realize. Rare are the people willing to part with their hard earned money on something mass produced, very common and as a luxury, no matter how much money they possess.

I don't buy your argument. That's like saying there are loads of Picasso paintings sitting around "for sale" if people are willing to pay market prices for those items. Picasso was one of the most prolific painters of all time and there are 50,000+ pieces by him out there all technically "for sale" if the price is right. In art terms they are "mass produced" and "common" but does that make them mass produced and common in everyday terms? No. That would be nonsense.
You cannot use terms like mass produced and common to describe Rolex watches - if you do what language is left to describe Apple watches or McDonald's fries?
It's relative terminology and the terminology you are using to describing Rolex watches is silly.

[MTBer]

Originally Posted by ROLMARINER

Since I'm certain no one views Rolex as a maker of hand-crafted artisan timepieces, I don't view the "mass produced" comment to be about the manufacturing process but rather the supply chain, ie "produced in very large quantities".

So, the fundamental problem here is that you're arbitrarily choosing how you want to define a term, and using that definition as the basis for further arguments. That's circular reasoning.

Originally Posted by ROLMARINER

If it is the other way around and people are actually talking about Rolex as a "mass manufacturer" that's certainly correct, no argument.

In the parlance of the industry, manufacturing pertains to the creation of a tangible good, whereas production is more general, and is defined as the conversion of inputs to outputs, either tangible or intangible. That being said, if you agree that Rolex is a mass manufacturer, then you must inherently accept that their products are mass produced.

It should be evident by now that "mass production" is a type of production (as opposed to job/unit, batch, or flow); it has absolutely nothing to do with availability.

[TheWatchEnthusiast]

What about discontinued watches ? Why do we pay market value for them? Whatever the market value is. Because there isn’t another way. So if I want a discontinued model it’s ok to pay market value but if I want to buy a current model that most likely would be as good as discontinued for me it’s not the same? Being a current model ( at least some current models) doesn’t mean they will ever be more accessible from an AD ( to some people at least ) than the discontinued ones. What’s wrong about getting what you want, when you want it and with no mass or fuss ?
Nobody is twisting anyone’s arm to pay above MSRP but if you can afford it and you want that watch, then I believe that it makes no sense to play games and waste your time. If you don’t see the value then you simply don’t pay and move on. There is plenty of other models or manufacturers.



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[Uggi]

Originally Posted by Jean Melkanian

Stop. You are comparing apples and oranges. Rolex is a mass produced luxury watch. AP is not. PP is not. Independents are not. IWC is. breitling is. Compare Rolex to other luxury watch brands not to fries or apple watch, you sound silly and automatically lose credibility.
Rolex makes mass produced items whether you like it or not. Trying to convince yourself of the opposite to make you feel better is silly.

I can see you are struggling with the idea of a comparative argument. Repeating the same illogical position whilst telling others to "stop" is a puerile approach to debate. So OK... carry on with yourself. But you're wrong.

[Uggi]

Originally Posted by Jean Melkanian

I compare what is comparable, the only struggling i face is dealing with people who try to justify spending big sums of money on things that are not worth it...but again this is a forum and this is my opinion, i don't really care if i'm right or wrong, that's not the intent of my posts.

Oh go on then I'll play one more round. If Rolex SS BLROs are "common" and "mass-produced" what English words would you use to describe Casio watches or Apple watches or Seiko watches in terms of their production quantities and ubiquity?

[MTBer]

Originally Posted by Uggi

Oh go on then I'll play one more round. If Rolex SS BLROs are "common" and "mass-produced" what English words would you use to describe Casio watches or Apple watches or Seiko watches in terms of their production quantities and ubiquity?

Rolexes watches are massed produced. Casio and Apple watches are mass produced in greater quantities. “Mass” describes the type of production. Quit being obtuse.

*Manufacturing Chemist

[Uggi]

Originally Posted by MTBer

Rolexes watches are massed produced. Casio and Apple watches are mass produced in greater quantities. “Mass” describes the type of production. Quit being obtuse.

*Manufacturing Chemist

You mean mass produced.
Maybe I'm just precious about effective use of English but to say Rolex SS BLROs are "mass produced", Apple Watches are "mass produced in greater quantities", Casio watches are "mass produced in even greater quantities", Volkswagens are "mass produced in still greater quantities" and McDonalds fries are "mass produced in quantities even greater than that" is a clumsy and misleading use of the term "mass produced".
I also think it is disingenuous. I live in an affluent area, I fly business class everywhere and I visit well-to-do restaurants blah blah. I haven't seen one Rolex SS BLRO in the wild yet. Describing them as "common" is inaccurate and I stand by that. Describing them as "common" is obtuse and it renders the word "common" impotent. On my way to work this morning I saw several Porsches and two Ferraris (maybe they are mass produced too - you'd probably say so, I wouldn't). Maybe you'd say Picassos are mass produced (in relative terms you'd have a better argument than with Rolex SS BLROs) but I wouldn't.
I would describe Rolex SS BLROs as "uncommon".
That's not obtuse - just literate.

* normal bloke

[ancientmariner]

Originally Posted by TheWatchEnthusiast

What about discontinued watches ? Why do we pay market value for them? Whatever the market value is. Because there isn’t another way. So if I want a discontinued model it’s ok to pay market value but if I want to buy a current model that most likely would be as good as discontinued for me it’s not the same? Being a current model ( at least some current models) doesn’t mean they will ever be more accessible from an AD ( to some people at least ) than the discontinued ones. What’s wrong about getting what you want, when you want it and with no mass or fuss ?
Nobody is twisting anyone’s arm to pay above MSRP but if you can afford it and you want that watch, then I believe that it makes no sense to play games and waste your time. If you don’t see the value then you simply don’t pay and move on. There is plenty of other models or manufacturers.
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Says it all