Threads are overhyping the selling price of Grey Professional models

[seabreeze60]

Given that all Grey’s purchase at MSRP from an AD. A reasonable markup would be 15% to 20%. Greys generally have lower overhead expenses than a typical retail store.

Here’s how markup is calculated:

$10,000 - $8000 = $2000 gross profit
$2000/$10000 = 20% margin
$2000/$8000 = 25% markup

Not bad for flipping a popular Rolex!

Of coarse it’s a free market. You can pay what you want!

[m j b]

[Fleetlord]

"huh"?

[mistercoach32]

I..........wait...........what?

[Rashid.bk]

I didn't see the connection to threads. I'm lost.
But I will say it's obvious in today's market that social media greatly effects prices.

[breitlings]

I think OP is saying some of the TRF sellers ask for more than BobsWatches.com and that is sometimes true. DavidSW I believe has a storefront. I think BobsWatches should sponsor some giveaways on this site and potentially donate more to TRF to change the perception as an outsider.

[beshannon]

Any place to talk about watches?

[Sarosh]

Erm.....this again?

[ALF61]

Originally Posted by seabreeze60

Given that all Grey’s purchase at MSRP from an AD. A reasonable markup would be 15% to 20%. Greys generally have lower overhead expenses than a typical retail store.

Here’s how markup is calculated:

If the markup is 20%, then 80% of the selling price is the cost. If the Rolex cost is $8000 the calculation would be $8000/80% = $10,000. $10,000 would be the your cost for a product with a 20% markup.

Bob’s who has a storefront and lots of staff works off of a 24% markup. Photo included.

Of coarse it’s a free market. You can pay what you want!!

First, you have to get your terms and numbers right.

markup does not equate to profit margin. If you mark up and $8,000 watch to $ 10,000, you are effectively marking up 25%, not 20%, for a profit margin of 20% of the sale. If you mark up 50% over cost, you end up with a 30% profit margin on the sale price.

[seabreeze60]

Originally Posted by Fleetlord

"huh"?

Fleetlord,

I have read threads and posts that talk about paying 50-100% over the MSRP for SS Professional models. I’m simply stating that’s a huge markup for flipping a popular Rolex in a short period of time.

Just making a point.

[shapa]

I would never pay over MSRP for my watch. It's already expensive enough for most people. Yes, it is overhyped, and need to ignore all the noise. Don't be a sucker and feed the Grey.

[ROLMARINER]

Originally Posted by Sarosh

Erm.....this again?

No, this is different.

This is the "it only costs $45 in stainless steel, ceramic, and other raw materials to make a Rolex its a rip off rip off rip off" repetitive variant, it's more elusive than the very popular 'grey market is the devil' theme.

[Sarosh]

Originally Posted by ROLMARINER

No, this is different.

This is the "it only costs $45 in stainless steel, ceramic, and other raw materials to make a Rolex its a rip off rip off rip off" repetitive variant, it's more elusive than the very popular 'grey market is the devil' theme.

Lol I stand corrected. Thank god a new thread topic

[ROLMARINER]

Originally Posted by Sarosh

Lol I stand corrected. Thank god a new thread topic

Yup, and what these raw material zealots forget is that the finely engineered springbars cost $3,000.

Each.

[RJRJRJ]

Originally Posted by seabreeze60

Given that all Grey’s purchase at MSRP from an AD....

That's quite an assumption to make

[LndLord]

What

[seabreeze60]

Originally Posted by ALF61

First, you have to get your terms and numbers right.



markup does not equate to profit margin. If you mark up and $8,000 watch to $ 10,000, you are effectively marking up 25%, not 20%, for a profit margin of 20% of the sale. If you mark up 50% over cost, you end up with a 30% profit margin on the sale price.

Correct!

On my example should be:

20% margin
25% markup

Thanks

[sensui]

I think I get it.... You dictate what a fair mark up is... Because you reference Bob's watches as a storefront and they only mark up x. Glad your cleared that up, I was starting to think capitalism had something to do with it.

[faz]

Originally Posted by seabreeze60

Given that all Grey’s purchase at MSRP from an AD. A reasonable markup would be 15% to 20%. Greys generally have lower overhead expenses than a typical retail store.

Here’s how markup is calculated:

If the markup is 20%, then 80% of the selling price is the cost. If the Rolex cost is $8000 the calculation would be $8000/80% = $10,000. $10,000 would be the your cost for a product with a 20% markup.

Bob’s who has a storefront and lots of staff works off of a 24% markup. Photo included.

Of coarse it’s a free market. You can pay what you want!!

The math, as pointed out by others, has a problem.

20% markup on $8000 = $8000 + 1600 = $9600

For a final price of 10k, the markup is 25% on $8000
(25/100 x $8000 = $2000)

Now two fundamental issues with your argument:

- Greys are buying them at MSRP ? Why would an AD risk selling a watch at MSRP to a grey dealer while they can easily sell it at the same price to general public? You might say they get to sell their other non-popular items along with the popular ones to a grey dealer, that would be true. But if I were to bet, I would bet the greys are paying more than MSRP to the AD for popular items.

- Greys don't have overhead and so 15-20% mark up is reasonable for them? Some of the well known ones around here must have a few people working for them, just to advertise on various websites/ship/clean/repair/do all the work with the volume they are working in.

At the end of the day, it is your money and you can do with it as you like. I agree with that.

[dwjez14]

Some grays actually pay over retail as well. Not every watch a gray has was bought at retail. We know this because look at home many different cards some grays have. Warranty cards from United States , other countries. Different dealers. It’s my understanding their is a whole network of people working with Resellers around the world p. I would feel good in saying I doubt david sw and some of these guys walked into an ad and bought 4 Batman’s , 3 hulks , some stainless steel Daytona’s etc. there are even more middle men that only sale to dealers. People that find the watches and are happy making 500-1000 to sale a watch to a dealer so the dealer can then mark up the watch. Either way if you have the connections you are making good money buying and selling watches. The real elephant in the room is as long as people will pay these premiums for hot watches. Then the market will never change. This same thing is happening with shoes and some designer clothing as well. I have a great example. So my sub hulk came from out of country. My dealer has another guy that he works with that found the watch from a guy that got the watch direct from an Ad. So my watch had 3 people get a cut. The guy that got it retail made what I was told 750.00 on watch and then my guy and his friend both split the rest of the profits. It’s a crazy business with multiple people getting paid often times on just one watch. We live in the crazy world where so many people just aren’t patient we want now now now no matter what it cost to get the hottest product. I know lots of our members refuse to pay over retail while many of the newer members and members with deep pockets just do not care as long as they get the watch. Although I do notice the Pepsi and stainless Daytona do sit longer due to the double retail. These other few watches don’t sit as long because many people can tollerare paying couple thousand over retail. The best example is the dodge demon. Wow so many people paid over retail even direct from dealer. Crazy world it is

[Uggi]

This thread will end up locked like all the others.
Bets on how long it takes?

[Johny]

Is this just a free ad?

[ian.thomas]

If I buy a watch for $8,000 and sell it for $7,000 I can eventually become rich by making it up through volume.

[ROLMARINER]

Originally Posted by seabreeze60

Fleetlord,

I have read threads and posts that talk about paying 50-100% over the MSRP for SS Professional models. I’m simply stating that’s a huge markup for flipping a popular Rolex in a short period of time.

Just making a point.

There are 4 parties here so let's make sure we're talking about the right ones:

AD's = They pay Rolex their dealer cost.

Flippers = They got one from an AD and are profiteering, small operators, can't command grey prices when they sell.

Grey's = They pay AD's or individual flippers leaving room for a profit, they get good quantities, they can get better costs.

End Users = They pay grey's as it's the only way they can get a watch.

So, when you hear statements like "no one should be paying 50% to 100% over MSRP to get a Rolex" that is in reference to the End Users who are paying the big premiums.

The grey's, different story, they are likely negotiating the dollar amount between MSRP ($10K) and grey price ($18K) and a smart AD or flipper would attempt to do a 50/50 split. Grey's can also get a bigger share of the profit on a hot SS model by taking some unloved references off of the AD's hands.

Should also be noted that when you see people proclaim "I just saw a BLRO for $15K! The prices are falling! The bubble is bursting!" they are referring to an individual flipper who has to sell his at a lower price than established trusted sellers otherwise there is no rationale for anyone to buy it from him. So be careful of false price indicators coming from some forum listings, Instagram, reddit, etc.

Lastly, in case this is on your mind as well, no one buying a $10K MSRP Rolex for $18K is speculating and expecting to flip for a profit at any time now or in the future. The people paying the grey are doing so because they are diehard enthusiasts who simply have to have a specific reference, no other motive involved.

[dwjez14]

Rolmariner , you got it. So many parties involved

[Old Geezer]

No one knows what greys pay ADs for watches. I would venture a guess that they pay less than MSRP, MSRP, and yes, maybe premium over MSRP for a coveted model. What they sell them for is their own business as long as people are willing to pay. I don't get the assertions in this thread from the OP.

[ltmgeller]

Originally Posted by Old Geezer

No one knows what greys pay ADs for watches. I would venture a guess that they pay less than MSRP, MSRP, and yes, maybe premium over MSRP for a coveted model. What they sell them for is their own business as long as people are willing to pay. I don't get the assertions in this thread from the OP.

X2 I know for a fact that there are Grey's getting their watches below msrp. They've sold watches (complete with stickers and customized valid warranty card) for less than msrp and were still able to make a profit. Now they are able to capitalize on the market. You can't fault them for that. An object is only worth what someone is willing to pay for it, and right now people are lining up to pay

[The Libertine]

Originally Posted by ROLMARINER

No, this is different.

This is the "it only costs $45 in stainless steel, ceramic, and other raw materials to make a Rolex its a rip off rip off rip off" repetitive variant, it's more elusive than the very popular 'grey market is the devil' theme.

Well since we’ve yet to find the proverbial silver bullet, perhaps we could try to merge the two?

[dan993]

Not long on this forum and I'm bored of this SS flipping thing already.

[JacksonStone]

Originally Posted by dan993

Not long on this forum and I'm bored of this SS flipping thing already.

Just imagine how those of us who have been here longer feel. We remember when it was different.