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?