Official AD Selling pre-owned?

[myanezt]

Originally Posted by Cloudchaser

Car customers rely on trading their vehicles in when purchasing new. Currently, used car prices are higher than ever before, so dealership sales of used cars are "hotter than the hinges in hell."

To expect a car dealer to artificially suppress the prices of used cars seems...well, strange.

And to expect them to not participate in a hot market because customers somehow expect a "fairer" price on (the customer's) principle seems like a strange expectation.

And, really, watches are no different. Nobody is owed a good price on a new or used watch.

I'm not suggesting that you should or shouldn't buy a Daytona at used market prices, but I'd offer that it is a stretch to refer to a Porsche dealer selling used cars as a "grey."

To me, the watch market really isn't any different.

I think WIS expectations have crossed the line into unrealistic. The market is the market.

I don't think Rolex USA will see that as a natural normal situation... anyway, Just sent them an email asking

[Harry-57]

Originally Posted by myanezt

Nop... dont make any sense pay 38K to an official dealer that is supposed to sell it a 13K

They are supposed to sell a new one for MSRP or less. The watch in question is used. Of course they're not going to sell a used Daytona for less than it is worth. They are running a business not a charity.

My AD sells used watches including Rolex. I don't know, but I wouldn't be surprised if the hot used models don't go on display. My car dealer does the same. There are queues for desirable used models. When they get one in, they don't need to advertise, they just pick the phone up.

[Belugahype]

I've seen a few ADs carry used inventory, a lot of times they're trade-ins. Seems like a lot of ADs cant even hold onto used inventory as well

[S52]

When my AD found out I owned a collection they actually asked me if I was interested in trading in or outright selling them any of my Rolex watches.

I found it a bit odd and politely declined.

I've never sold a piece and have no interest in doing so... but even if I ever decided to it seems like a suckers game to do it through an AD- akin to trading in a car at a dealership. I always sell my stuff on my own via craigslist or appropriate classified/ forum for top dollar.

[beshannon]

Originally Posted by S52

When my AD found out I owned a collection they actually asked me if I was interested in trading in or outright selling them any of my Rolex watches.

I found it a bit odd and politely declined.

This is a current business model. An AD near me specifically advertises pre-owned watches and never talks about the brands they are a dealer for.

[Beto737]

Perhaps it’s just me, but there something eerie about being offered a watch at 38k from the same place I’m hoping to get it from at 13k.

I agree, conflict of interest of sorts. Neither my former nor current AD, deal in preowned inventory.

[RolexSimon]

Originally Posted by myanezt

Yes, of course the 5 years answer is a brush off. What surprise me is Rolex allowing AD became greys, I think there is a big conflict of interest here....

I think it is country dependent. For example - in Australia, one big Sydney AD multi-brand dealer is allowed to sell used PPs but not used Rolex.

[teck21]

Originally Posted by myanezt

I don't think Rolex USA will see that as a natural normal situation... anyway, Just sent them an email asking

Interesting, keep us updated.

I too find it somewhat strange that the practice is allowed given how it enables ADs to seamlessly become their own grey dealer.

It certainly does not happen at ADs where I am.


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[Cloudchaser]

Any attorneys with relevant specialization care to pontificate on the bounds of what Rolex (as a company/vendor) can and can't do relative to controlling the peripheral sales at an independently owned business?

Remember, Rolex prices are "MSRP" in the first place, in the US, and "RRP" in other countries. There is a big difference there.

In a former life as an independent retailer, I know that my most in demand vendors have no legal ability to mandate me selling at any price. All efforts to do so, as I assume is the case with Rolex, were always delivered by spoken word in person, and was often backed by a subtle reminder that they can choose who they do business with in the future.

Never once did I receive anything in writing saying anything even remotely similar. MSRP is exactly that in technicality...a "suggestion." So a retailer comes to understand that the strong-arming is nuanced so as to dance around actual law.

Point is, what Rolex does currently in regard to potentially pulling dealerships for selling above MSRP is in a grey (all pun intended) area; we're all somewhat lucky that Rolex ADs aren't as willing to collude as Rolex is to price fix. The two (price fixing and collusion) are kissing cousins, but one is generally accepted and the other exceedingly rare.

Porsche clearly allows their dealers to sell above MSRP on in demand models. And, arguably, that has served the intended purpose of removing the middleman/reseller. The Porsche market markup on GT/GTS/etc. models predates the red-hot Rolex market by 10 years, at least.

If Rolex reacted similarly, things could really get interesting.

[Dabbadon8]

Originally Posted by Cloudchaser

Any attorneys with relevant specialization care to pontificate on the bounds of what Rolex (as a company/vendor) can and can't do relative to controlling the peripheral sales at an independently owned business?

Remember, Rolex prices are "MSRP" in the first place, in the US, and "RRP" in other countries. There is a big difference there.

In a former life as an independent retailer, I know that my most in demand vendors have no legal ability to mandate me selling at any price. All efforts to do so, as I assume is the case with Rolex, were always delivered by spoken word in person, and was often backed by a subtle reminder that they can choose who they do business with in the future.

Never once did I receive anything in writing saying anything even remotely similar. MSRP is exactly that in technicality...a "suggestion." So a retailer comes to understand that the strong-arming is nuanced so as to dance around actual law.

Point is, what Rolex does currently in regard to potentially pulling dealerships for selling above MSRP is in a grey (all pun intended) area; we're all somewhat lucky that Rolex ADs aren't as willing to collude as Rolex is to price fix. The two (price fixing and collusion) are kissing cousins, but one is generally accepted and the other exceedingly rare.

Porsche clearly allows their dealers to sell above MSRP on in demand models. And, arguably, that has served the intended purpose of removing the middleman/reseller. The Porsche market markup on GT/GTS/etc. models predates the red-hot Rolex market by 10 years, at least.

If Rolex reacted similarly, things could really get interesting.

It’s contractual. AD signs contract agreeing to Rolex’s terms and breaches it if they don’t comply. Penalties can be basically whatever, loss of AD status for certain and possibly damages. If not covered by contract it’s generally free game.

[Cloudchaser]

Rolex cannot mandate the sales price; it is, by law, suggested (in the US). Other aspects can certainly be mandated contractually, but not the selling price. I have been under these contracts and price is conspiculously absent.

[garyk]

Yep, pre owned Rolex at the AD for “market prices”...

[gerry100]

Got mine used from an AD

[Dabbadon8]

Originally Posted by Cloudchaser

Rolex cannot mandate the sales price; it is, by law, suggested (in the US). Other aspects can certainly be mandated contractually, but not the selling price. I have been under these contracts and price is conspiculously absent.

I would respectfully disagree with you. If you have a citation I’d love to see it but short of indentured servitude the us generally has a strong freedom to contract. You can always breach a contract if that’s what you’re getting at. Below is an easy example of how your right to sell at a certain price can be restricted by contract. Fixed right of first refusal. Not going to write a memo, but google freedom of contract if you want to learn more.

https://www.quickenloans.com/learn/r...-first-refusal

[flyboyyy]

Originally Posted by Cloudchaser

Rolex cannot mandate the sales price; it is, by law, suggested (in the US). Other aspects can certainly be mandated contractually, but not the selling price.

Sure they can!

Anyone who thinks a mfgr legally cannot set a minimum selling price in the US is factually inaccurate and incorrect - minimum selling pries can indeed be set by a mfgr (lookup “Colgate Policy”) or MRP’s. There are a whole host of products in the US that span many industries that are under MRP’s…likely some you’ve even purchased without even knowing it…if you’re in business vey long working with in demand products you will have dealt with the policies from mfgr’s. It’s actually quite common, even if consumers don’t recognize it or know it exists.

Here’s a TLDR for those who don’t want to read the lengthy court decisions on said policies.:

https://en.wikipedia.org/wiki/Unilateral_policy

This is the Supreme Court decision from 2007 that made it so:

https://en.wikipedia.org/wiki/Leegin...._v._PSKS,_Inc.

[Cloudchaser]

Originally Posted by flyboyyy

Sure they can!

Anyone who thinks a mfgr legally cannot set a minimum selling price in the US is factually inaccurate and incorrect - minimum selling pries can indeed be set by a mfgr (lookup “Colgate Policy”) or MRP’s. There are a whole host of products in the US that span many industries that are under MRP’s…likely some you’ve even purchased without even knowing it…if you’re in business vey long working with in demand products you will have dealt with the policies from mfgr’s. It’s actually quite common, even if consumers don’t recognize it or know it exists.

Here’s a TLDR for those who don’t want to read the lengthy court decisions on said policies.:

https://en.wikipedia.org/wiki/Unilateral_policy

This is the Supreme Court decision from 2007 that made it so:

https://en.wikipedia.org/wiki/Leegin...._v._PSKS,_Inc.

Thank you! 2007 was the exact year that I sold my retail business, so my experience predated that court decision. I was completely unaware of that 2007 decision and was working from dated info.

You learn something new every day, as they say!

[TswaneNguni]

Its her main business ...

[Jack T]

Originally Posted by myanezt

Yes, of course the 5 years answer is a brush off. What surprise me is Rolex allowing AD became greys, I think there is a big conflict of interest here....

Yes, I see your point; what’s surprising is that it isn’t so clear to so many on this thread.

[joli160]

Why would any AD let a flipper make more money on a sale than themselves ?
That is poor business, hence all the AD games.

[fskywalker]

Originally Posted by joli160

Why would any AD let a flipper make more money on a sale than themselves ?
That is poor business, hence all the AD games.

True!




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[Bill11783]

Some ADs sell new and used. Next topic

[Kevin of Larchmont]

Perfectly normal for ADs to sell pre-owned watches. ADs take trade-ins on new watches; I’ve both purchased used Rolexes from my AD and traded Rolexes in on new ones there. For the last couple of years my AD has had more pre-owned watches in the cases than new ones with pre-owned watch prices more than new ones. When I bought my EXP II a year ago at retail ($8K?) they had an identical pre-owned example in the case for $13K. Of course they sell pre-owned watches, they are forced to sell new watches at retail while the only limit on the price of used watches is what the market will bear. That used EXP II lasted about a week.

[Nairn1980]

Originally Posted by myanezt

I don't think Rolex USA will see that as a natural normal situation... anyway, Just sent them an email asking

Rolex cannot stop an AD selling pre-owned stock. However they must be in a separate area and clearly market as being pre-owned.

[ks58]

The AD bought it from some bloke and paid well over retail for the pre-owned piece to resell. And they buy new pieces for half the retail cost direct from Rolex. So yes, a pre-owned piece is going to go for more in the secondary market. The new pieces are for the good clients.

[Cigars&Watches]

Don’t like it at all. Makes it a lot easier for AD shenanigans to sell at a higher price. Thankfully my dealer doesn’t do this.

[Cigars&Watches]

Originally Posted by joli160

Why would any AD let a flipper make more money on a sale than themselves ?
That is poor business, hence all the AD games.

I can see your point but ADs need to keep their VIP happy who spend 50-100k a year on much higher margin items. If they dont sell Daytonas, etc to good customers they will leave. Also, they need to lure or dangle the moderate pieces in order to drum new and future business. In The long run ADs make more from this example I believe.

[Kevin of Larchmont]

Originally Posted by Cigars&Watches

Don’t like it at all. Makes it a lot easier for AD shenanigans to sell at a higher price. Thankfully my dealer doesn’t do this.

It’s not shenanigans, it’s capitalism. Your logic suggests that an AD sell their trade-in watches out the back door (presumably to evil greys), that it is somehow wrong for ADs to profit from the sale of their trade-in inventory which they own, that their customers who wish to move on from a piece due to boredom or need or death should be forced onto the open market and away from the relatively safe and sanitary marketplace of the AD from whom they originally purchased and have a relationship with. Canada is a capitalist country too. Free markets work. Central planning won’t work for luxury goods any better than it works for food.

[brandrea]

Some do some don’t.

[myanezt]

Originally Posted by Kevin of Larchmont

It’s not shenanigans, it’s capitalism. Your logic suggests that an AD sell their trade-in watches out the back door (presumably to evil greys), that it is somehow wrong for ADs to profit from the sale of their trade-in inventory which they own, that their customers who wish to move on from a piece due to boredom or need or death should be forced onto the open market and away from the relatively safe and sanitary marketplace of the AD from whom they originally purchased and have a relationship with. Canada is a capitalist country too. Free markets work. Central planning won’t work for luxury goods any better than it works for food.

Would be wise to check how this is stipulated on the Rolex reseller agreement, I don’t have idea how is the normal contract in jewelry but is other industries, like IT the partner agreement restricts completely the re-selling of preowned equipment… the idea behind I think is to avoid grey market and biases to promote highly margin pre-owned equipment instead new equipment which is the real interest that the company has (Rolex don’t get any benefit having their partners selling pre-owned).

I think the point here is not the Rolex reselling policy, for me having an official AD offering and pre-owned piece that was requested as a MRSP is total conflict of interest and lot of people will be suspicious that they can divert new pieces to second market and buy it again to resell… or the second thought was that they will don’t have any interest in offer me a new piece at MRSP if I buy a second-hand piece for 3x the official value. In any case, the price was an exaggeration… a pre-owned black Daytona a 38K is above preowned market.

I’m no saying that they are doing that because I got feedback from people that bought there several pieces at MRSP but I think sometimes is clean buy from a Boutique and avoid additional dealer interest like this one or the purchase history in jewelry to get hot timepieces.

[Cigars&Watches]

Originally Posted by Kevin of Larchmont

It’s not shenanigans, it’s capitalism. Your logic suggests that an AD sell their trade-in watches out the back door (presumably to evil greys), that it is somehow wrong for ADs to profit from the sale of their trade-in inventory which they own, that their customers who wish to move on from a piece due to boredom or need or death should be forced onto the open market and away from the relatively safe and sanitary marketplace of the AD from whom they originally purchased and have a relationship with. Canada is a capitalist country too. Free markets work. Central planning won’t work for luxury goods any better than it works for food.

My logic is that the AD not accept trade ins at all... If I walk into an AD and see pre-owned watches in the case at a much higher mark up than MSRP of course I'm going to think they are shady: whether they are or are not.. how did they get the Daytona, Pepsi, blue face sky dweller.. you sell them back your sub at a good price to get a BLNR, you sell back your BLNR to get a BLRO, and on and on... that's grey dealing to me and should not be tolerated in an AD...
they're playing the game with their inner network to make that so: leave the shadiness to the greys..
(and yes I know this happens out the back with some AD's already)