Is demand real?

[dtwer]

Originally Posted by zjd168

The demand is real, face it.

Just think about China, the 2nd GDP in the world and getting close to #1 anytime in the very near future. 1.5 billion population, just assuming only 20% of them reaching the average of US (very conservative assumption) and the other 80% are abject poverty who can't afford any luxury (which is not true, just for the sake of argument), it is already big enough to spawn the equivalence of the luxury and Rolex buying power/market of the US, which had the number 1 Rolex sales until early 2010s. Chinese people basically buy up Rolex/AP/PP from all over the world literally. Chinese grey markets (Daiguo) have been a booming business for years and I witness the Rolex prices (Sub, Hulk, BLNR, DJ, e.g.) increasing from 15-20% discounts (before 2017) to big premium with the rest of the world. I am very sure people in China and HK with similar level of incomes are more willing to spend on luxury items than people in US.

This is the Chinese Rolex buying power that basically was negligible before 2000 and very small before 2010. On top of that how about the new consumers from India of similar population and rising economy?

No plan to argue and anyone can choose not to believe any of these though.

The real world economy tells a very different story.

[zjd168]

Originally Posted by dtwer

The real world economy tells a very different story.

Could you please elaborate?

[Chester01]

Originally Posted by johnjm

You would only buy all the TP in the world if there was a massive demand and you could make a great mark up.

See what I did there.


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I did. Lol. Clever, and agreed that is correct. but it still holds both ways. Right a supply of something, that gets artificially tighter (because a smaller portion holds a greater percent) creates a false demand that would be decreased if we ceased buying all the TP.

I mean Rolex was always popular, so the market was ripe for it this. Despite the demand however, it still holds we can get what ever we want and the gray market is not having any problems getting any model they want. To be clear I’m not saying demand has not gone up. My point is that the the insta hype and illusory scarceness has created a sense that we have a supply problem, but that’s not true, as the watches actually exist, you simply have to go to a different store and pay the mark up.


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[UK_]

Originally Posted by drfrankenstein

They are listed for sale on the website. Why does this mean I have no idea? Maybe they aren't motivated sellers but they are listed for sale.

As someone said earlier, to list a watch on C24 you have to have it in your possession.

Lastly, this is not my opinion. This is my observation following these watches for 5 months. The amount of inventory and price hasn't changed significantly, they aren't moving. This is the market at work - I don't have to convince anyone of anything, the numbers speak for themselves.

Do you honestly believe that for every one of those postings, that poster has the actual watch for sale in their possession? I don’t believe that for a second.


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[UK_]

Originally Posted by dtwer

The real world economy tells a very different story.

What is that story?


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[Rameez-Q]

I was going to create a threat about this, we here don't do ourselves any favors.

My friend a new customer bought a DJ41 his first purchase a month ago and was offered a new blue sub a week ago but it went before he could say yes.

There is demand, we here and other Rolex enthusiasts always complain, AD 's have these watches, without them they'll be out of business! Especially Rolex boutiques. Their just being given to other customers first, a lot of whom aren't on here, local people and people who keep their purchases to themselves.

They also go to resellers who will probably buy bulk to get rid of dead stock.

There is more demand than supply, but when every man and his dog want's a watch that is worth more than retail only few will be given it, thus the dealers have capitalized on this demand to push the brand and sell other models similar to Porsche. You buy something you don't really want/need to get something that you do.

Does anyone here really believe an AD will get 3 or 4 Pepsi's, Hulks or batmans a year? A load of BS. These are the dealers with 3-4 staff in the areas with the highest rent and rates with every purchase through the book. They'd all be bankrupt if this was the case!

[drfrankenstein]

Originally Posted by UK_

Do you honestly believe that for every one of those postings, that poster has the actual watch for sale in their possession? I don’t believe that for a second.


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I don't know what to tell you anymore. I gave you data to support my position, your rebuttal is saying my analysis is false based on merely your opinion and no additional factual information. Agree to disagree.

[Sandpit]

Originally Posted by UK_

What is that story?


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It wasn't my story to tell, but I might help elaborate.

China's GDP has been on the decline for several years now (albeit very gradual). USA GDP tanked almost 32% this year. The UK GDP tanked by 20%. The Euro area is down 12%. India is expected to contract 9%.....the list goes on.

Couple that with massive unemployment and that should tell you enough about the state of the global economy.

Rolex might be one of the exceptions, but luxury goods and watch sales are hurting heavily. I would expect that outside of the hype pieces (bought and traded as if they're Tesla stock) Rolex numbers will equally hurting in some way given the wide belief that the Datejust line is its bread and butter in terms of sales volume.

[johnjm]

Originally Posted by Chester01

I did. Lol. Clever, and agreed that is correct. but it still holds both ways. Right a supply of something, that gets artificially tighter (because a smaller portion holds a greater percent) creates a false demand that would be decreased if we ceased buying all the TP.

I mean Rolex was always popular, so the market was ripe for it this. Despite the demand however, it still holds we can get what ever we want and the gray market is not having any problems getting any model they want. To be clear I’m not saying demand has not gone up. My point is that the the insta hype and illusory scarceness has created a sense that we have a supply problem, but that’s not true, as the watches actually exist, you simply have to go to a different store and pay the mark up.


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Supply problem = higher demand


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[dmash]

Originally Posted by Rameez-Q

Does anyone here really believe an AD will get 3 or 4 Pepsi's, Hulks or batmans a year? A load of BS. These are the dealers with 3-4 staff in the areas with the highest rent and rates with every purchase through the book. They'd all be bankrupt if this was the case!

As I said in another thread, it's super odd on TRF, how the AD/Grey defending goes on. Almost to the point it seems they're buddies with said businesses.

100% spot on with the stock, they lie constantly. Especially these ADs spewing this nonsense in large cities. In addition to your point about rent, some of them even paid HUNDREDS of thousands of dollars (out of pocket) to renovate. Would they really do that for these so called measly allocations? Haha, keep drinking the kool-aid guys.

I WILL say though, that the SkyD truly is somewhat of a unicorn, especially blue color. I think that is the least produced SS watch Rolex makes.

[Chester01]

Originally Posted by johnjm

Supply problem = higher demand


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Yes. Well, the question is real supply problem or artificial? My points above have been that it is artificial. You and I can create this “problem” and fabricate the same “supply problem” with any good that is generally well needed liked, Canada goose jackets, paper towels, certain boots, etc. once a smaller amount of people take over the distribution from a larger group 1) that larger group now has less product to give out (general public thinks there is a supply problem) 2) the public has to now pay the jacked up prices from smaller group of folks (though interestingly can get any model they desire).

I’ll agree that overall demand has gone up, once they gray market cannot stock daytonas, hulks, etc. until then, supply is just fine so long as you know where to look.


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[johnjm]

Originally Posted by Chester01

Yes. Well, the question is real supply problem or artificial? My points above have been that it is artificial. You and I can create this “problem” and fabricate the same “supply problem” with any good that is generally well needed liked, Canada goose jackets, paper towels, certain boots, etc. once a smaller amount of people take over the distribution from a larger group 1) that larger group now has less product to give out (general public thinks there is a supply problem) 2) the public has to now pay the jacked up prices from smaller group of folks (though interestingly can get any model they desire).

I’ll agree that overall demand has gone up, once they gray market cannot stock daytonas, hulks, etc. until then, supply is just fine so long as you know where to look.


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What do you do for a living?


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[Kevin of Larchmont]

Originally Posted by Chester01

Yes. Well, the question is real supply problem or artificial? My points above have been that it is artificial. You and I can create this “problem” and fabricate the same “supply problem” with any good that is generally well needed liked, Canada goose jackets, paper towels, certain boots, etc. once a smaller amount of people take over the distribution from a larger group 1) that larger group now has less product to give out (general public thinks there is a supply problem) 2) the public has to now pay the jacked up prices from smaller group of folks (though interestingly can get any model they desire).

I’ll agree that overall demand has gone up, once they gray market cannot stock daytonas, hulks, etc. until then, supply is just fine so long as you know where to look.


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A few days ago you said repeatedly across multiple posts on this thread that supply was pinched by the grays and when I made the point that supply wasn’t pinched by the grays because the watches were still in the marketplace you diverted. Now you say that supply is just fine as long as you know where to look essentially making my point. Thank you for coming around, I guess, in a wordy and circular fashion.

[Chester01]

Originally Posted by Kevin of Larchmont

A few days ago you said repeatedly across multiple posts on this thread that supply was pinched by the grays and when I made the point that supply wasn’t pinched by the grays because the watches were still in the marketplace you diverted. Now you say that supply is just fine as long as you know where to look essentially making my point. Thank you for coming around, I guess, in a wordy and circular fashion.

My point is what is happening with supply and largely demand is artificial, rather that actual. What I said is supply is fine you need to know where to look (because it’s pinched). Otherwise we could simply go to the AD.


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[Kevin of Larchmont]

Originally Posted by Chester01

My point is what is happening with supply and largely demand is artificial, rather that actual. What I said is supply is fine you need to know where to look (because it’s pinched). Otherwise we could simply go to the AD.


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This is fun. Less supply equals pinched. The same amount of watches in the marketplace spread across more vendors does not equal pinched because the watches are still in the marketplace. Diffused maybe but not pinched. The primary complaint of many appears to be that the diffusion increases prices perhaps creating the illusion of scarcity but the watches are still there. And the diffusion requires more effort to find what you want. More money and more effort resulting in less convenience is the chief complaint, not fewer watches.

Respectfully submitted.

[Chester01]

Originally Posted by Kevin of Larchmont

This is fun. Less supply equals pinched. The same amount of watches in the marketplace spread across more vendors does not equal pinched because the watches are still in the marketplace. Diffused maybe but not pinched. The primary complaint of many appears to be that the diffusion increases prices perhaps creating the illusion of scarcity but the watches are still there. And the diffusion requires more effort to find what you want. More money and more effort resulting in less convenience is the chief complaint, not fewer watches.

Respectfully submitted.

Same amount of watches spread across “more vendors” is where I disagree. I see it as a funnel. Rolex-AD-gray- consumer. The AD has less because they are selling 99% to gray dealers (who jack up price and are not selling to the regular joe who wants a graduation watch. They are selling to the folks that don’t want to wait and have the dough to get it now) leaving very little for the regular consumer.

I don’t know what is so difficult about simple math. If the hundreds and hundreds of Rolex in the hands of the gray dealers went back to the authorized dealers, there would be a greater number of watches available to those who walk in at said AD. simply not a debatable point.

If it were real demand, one would not be able to source Rolex anywhere. If there was a real supply problem, they would not be available anywhere.


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[Kevin of Larchmont]

99% to gray dealers? This is where your argument loses credibility, with “simple math” based on imaginary numbers. This is where I exit the rabbit hole, I’ve made my point.

[teck21]

Originally Posted by Kevin of Larchmont

99% to gray dealers? This is where your argument loses credibility, with “simple math” based on imaginary numbers. This is where I exit the rabbit hole, I’ve made my point.

Their world crumbles if it could ever be proven that ‘not 99%’ of AD stock finds its way to grey dealers.

Fortunately for them no proof is available to prove one or the other. Just like god must exist to some because no one can prove he doesn’t.

There’s a huge AD-grey dealer conspiracy to deprive them of popular models. On a global scale no less.


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[steveyrock]

I feel like some people in the group need an economics 101 class

[UK_]

Originally Posted by Chester01

Same amount of watches spread across “more vendors” is where I disagree. I see it as a funnel. Rolex-AD-gray- consumer. The AD has less because they are selling 99% to gray dealers (who jack up price and are not selling to the regular joe who wants a graduation watch. They are selling to the folks that don’t want to wait and have the dough to get it now) leaving very little for the regular consumer.

I don’t know what is so difficult about simple math. If the hundreds and hundreds of Rolex in the hands of the gray dealers went back to the authorized dealers, there would be a greater number of watches available to those who walk in at said AD. simply not a debatable point.

If it were real demand, one would not be able to source Rolex anywhere. If there was a real supply problem, they would not be available anywhere.


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I too am going to exit this rabbit hole of made up numbers.

Supply and demand is a balance, with price an output function.

I cannot honestly see how you can make an argument that because something is available at a price, there is not great demand.

And then when you say 99% of AD sales are the the grey market, well you have lost me.

The simple fact is there is a limited supply, and massive demand. No matter what evil people are in the market, this will lead to high secondary prices. It’s as simple as that, and is the same for any in demand good with limited availability that are sold below the true market price (concert tickets are a good example).

There is a whole section of economics devoted to this - look up ‘Veblen’ and ‘Positional’ goods.

Although I am not sure you will agree with the fundamentals of economics!


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[173rdabn]

look at gray pricing. Hyped demand wouldn't command those prices.

[UK_]

Originally Posted by 173rdabn

look at gray pricing. Hyped demand wouldn't command those prices.

Why? So no one is buying the grey watches at those prices?


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[Rameez-Q]

Originally Posted by dmash

As I said in another thread, it's super odd on TRF, how the AD/Grey defending goes on. Almost to the point it seems they're buddies with said businesses.

100% spot on with the stock, they lie constantly. Especially these ADs spewing this nonsense in large cities. In addition to your point about rent, some of them even paid HUNDREDS of thousands of dollars (out of pocket) to renovate. Would they really do that for these so called measly allocations? Haha, keep drinking the kool-aid guys.

I WILL say though, that the SkyD truly is somewhat of a unicorn, especially blue color. I think that is the least produced SS watch Rolex makes.

This is it exactly. My local AD was a WOS carrying multiple brands, their now a sole Rolex boutique. I went to a resteraunt, the owner had every sport model possible.

Once your on the gravy train you'll get what you desire but it requires purchase history. I think if your in bigger cities where there are many many customers you'll be second best in a long line but there's no way these AD's get 4 or 5 daytonas a year.

Their all simply kept for the right customer.

It could be, i was quite surprised at the SkyD blue dial premium also double retail.

Hopefully corona when in full effect brings in a good correction next year!

[drfrankenstein]

Originally Posted by UK_

I too am going to exit this rabbit hole of made up numbers.

Supply and demand is a balance, with price an output function.

I cannot honestly see how you can make an argument that because something is available at a price, there is not great demand.

And then when you say 99% of AD sales are the the grey market, well you have lost me.

The simple fact is there is a limited supply, and massive demand. No matter what evil people are in the market, this will lead to high secondary prices. It’s as simple as that, and is the same for any in demand good with limited availability that are sold below the true market price (concert tickets are a good example).

There is a whole section of economics devoted to this - look up ‘Veblen’ and ‘Positional’ goods.

Although I am not sure you will agree with the fundamentals of economics!


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UK,

I don't think anyone here is arguing that there isn't a supply issue - Rolex doesn't make enough. I also acknowledge that these watches are in high demand - I don't think there's any question.

What I don't agree with is the premise that this is a simple supply and demand issue. Regardless of how it happens, the funneling of watches to secondary sellers results in inflated prices that can't be accounted for by simple supply and demand. What I cited regarding BLNR listings on C24 and following it month to month, backs my point. I think Hulk is also headed in the direction but I am less sure.

I also don't agree that 99% of GD inventory is from ADs fwiw.

[UK_]

Originally Posted by drfrankenstein

UK,

I don't think anyone here is arguing that there isn't a supply issue - Rolex doesn't make enough. I also acknowledge that these watches are in high demand - I don't think there's any question.

What I don't agree with is the premise that this is a simple supply and demand issue. Regardless of how it happens, the funneling of watches to secondary sellers results in inflated prices that can't be accounted for by simple supply and demand. What I cited regarding BLNR listings on C24 and following it month to month, backs my point. I think Hulk is also headed in the direction but I am less sure.

I also don't agree that 99% of GD inventory is from ADs fwiw.

Well I think we agree - there is clearly an impact form aggressive resellers holding a lot of inventory.

Also, traditionally when goods rise in price, demand falls, keeping prices steady. However, Rolex watches (like some other luxury goods) so seem to exhibit the characteristics of ‘Voblen’ goods, where as price increases, demand actually increases too (FOMO, bandwagon effect, perception if quality and scarcity).

Ultimately though, it’s mostly a supply and demand equation, the greys may take a margin, but are not the main drivers.


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[rmcarlton]

Originally Posted by zion_rasta

I also got the call.

To extend my vehicle warranty..

[eskiserkan]

There is demand but its not that real as priced by gray dealers.

[Chester01]

Originally Posted by UK_

I too am going to exit this rabbit hole of made up numbers.

Supply and demand is a balance, with price an output function.

I cannot honestly see how you can make an argument that because something is available at a price, there is not great demand.

And then when you say 99% of AD sales are the the grey market, well you have lost me.

The simple fact is there is a limited supply, and massive demand. No matter what evil people are in the market, this will lead to high secondary prices. It’s as simple as that, and is the same for any in demand good with limited availability that are sold below the true market price (concert tickets are a good example).

There is a whole section of economics devoted to this - look up ‘Veblen’ and ‘Positional’ goods.

Although I am not sure you will agree with the fundamentals of economics!


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What do you mean about made up numbers? Look We have data that Rolex used to certify the chronometers and they did about 900,000/year. So about 900k to the AD. Now take 900,000- x (amount in gray market) =much less than 900,000 at AD’s.


We walk in and they are like oh man, sorry demand is so high, Rolex cut production. Yes, well how many never made it onto the shelf? They went out the back door. Given how many watches there are In the Gray market, we can infer quite a lot. It used to be there was only one door out of the AD-the front door. Now they are sending them out the back, in bulk. How do I know, search the popular gray market? Where did they get them? The AD. How many do the top gray dealers have for sale? Many my friend, and more tomorrow too.

Luxury goods are very good at giving the illusion of exclusivity Because people that spend a lot of money, like the feel like they are exclusive and special. The reality is 99% of all luxury goods are easily sourced.


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