How to stop the flipping scourge

[DLRIDES]

Originally Posted by Jack T

Seems to me the AD’s are complicit in this matter, at least enough of them are to provide the grey market with more supply than can be found in the AD stores.

the AD’s have deals in place to move the stock in bulk to grey dealers.

the grey dealers are flush with inventory, and that stock isn’t coming from a few individuals going from shop to shop picking up one watch at a time.

/\

THIS

The grey dealers , and there are many, commonly show cases full of “supposed” hard to get models with stickers and unfilled warranty cards. These did not come from random individuals “flipping” watches, but came from AD back doors !

[amanbra]

I've finally managed to find an AD that's not or at least appears that they are not and are actively enforcing the sharing around model.

I echo others here, everyone has a price, I haven't flipped any watch but if someone walked up to me and said 100k for my new tt SUB well... what do you do?

[BNA/LION]

As long as we have strong demand it will Not Stop!

As a matter of fact, more non watch collectors are buying from AD's and flipping to make some quick bucks. There have always been the AD's favorites (many here) who have gotten the call and the AD has a good Idea they are flipping and others who have an understanding with AD's too.

[Sothy]

People criticizing ADs for favouring long-time customers or just customers who spend more are not being fair to an AD. Rolex (almost all of its products are mass produced, so this is relative), doesn’t send as many Daytonas to stores as it does Datejusts. This isn’t good or bad, but it is what it is. Dealers have to take inventory. They need to sell that inventory. Since the Daytonas, GMTs, and Subs are easy to sell, dealers need to incentivize the purchase of other models. The dealers aren’t being “jerks,” they have to sell watches to stay in business. If it was first come first serve, people would use proxy buyers (think line ups). If it was via an app, computer programs would purchase the watches (sneaker business has issues with collectibles too). Formal bundling and/or informal “VIP” lists do suck for those starting out. I “had to” buy a datejust 31 before I got my sub. The datejust is great though, and why were many looking at sports watches only? Why do they (including me) like it more? We’re all influenced. Some via their parents decades ago, some yesterday on Instagram. ADs used to have different practices. They’d discount non-sports models to get one to favour them (some prefer datejusts and day dates of course). Or they’d get a grey to buy all of the datejusts to get the sports models too (some probably still are doing this). But whether it was by discounting some models (not alllowed anymore apparently), or getting one to buy some models first (frowned on, but hey), ADs have to move product.

I don’t want MSRP to increase rapidly as it may decrease rapidly. You never know, and while I might lose 20% if I sell, it’s better than losing 50% if models are produced in varying numbers or sold at different prices each year. The stability of the design, brand, and pricing is one of the attractions (the other being that I took my sub scuba diving and maybe I wouldn’t with some other expensive brands as I don’t really trust them…so trust is important imo). I’d like to see more Rolexes sold to first-time buyers (I waited and waited until I could afford two basically to buy my first one) and I mean “I only want one watch and can afford one watch” buyers. The way to do this is to make precious metals more popular imo. Why are some of the richest people in the world trying to buy a “basic” steel Nautilus instead of a (crazy) complicated one in precious metal? Make people want the two-tone Daytona more than the steel one (make an optional ceramic bezel version, brushed centre link option, etc). Allow bezel swaps (say Batman to Pepsi), etc. So that certain models aren’t the only attractive ones or so that you don’t “need to” buy both a Pepsi and a Batman, just two bezels and an extra GMT hand.. I love the DayDate40. Keep making the day dates and datejusts even better. The latest dials are amazing. But I’m not convinced that it’s the AD’s fault.

[HMHM]

Originally Posted by Sothy

People criticizing ADs for favouring long-time customers or just customers who spend more are not being fair to an AD. Rolex (almost all of its products are mass produced, so this is relative), doesn’t send as many Daytonas to stores as it does Datejusts. This isn’t good or bad, but it is what it is. Dealers have to take inventory. They need to sell that inventory. Since the Daytonas, GMTs, and Subs are easy to sell, dealers need to incentivize the purchase of other models. The dealers aren’t being “jerks,” they have to sell watches to stay in business. If it was first come first serve, people would use proxy buyers (think line ups). If it was via an app, computer programs would purchase the watches (sneaker business has issues with collectibles too). Formal bundling and/or informal “VIP” lists do suck for those starting out. I “had to” buy a datejust 31 before I got my sub. The datejust is great though, and why were many looking at sports watches only? Why do they (including me) like it more? We’re all influenced. Some via their parents decades ago, some yesterday on Instagram. ADs used to have different practices. They’d discount non-sports models to get one to favour them (some prefer datejusts and day dates of course). Or they’d get a grey to buy all of the datejusts to get the sports models too (some probably still are doing this). But whether it was by discounting some models (not alllowed anymore apparently), or getting one to buy some models first (frowned on, but hey), ADs have to move product.

I don’t want MSRP to increase rapidly as it may decrease rapidly. You never know, and while I might lose 20% if I sell, it’s better than losing 50% if models are produced in varying numbers or sold at different prices each year. The stability of the design, brand, and pricing is one of the attractions (the other being that I took my sub scuba diving and maybe I wouldn’t with some other expensive brands as I don’t really trust them…so trust is important imo). I’d like to see more Rolexes sold to first-time buyers (I waited and waited until I could afford two basically to buy my first one) and I mean “I only want one watch and can afford one watch” buyers. The way to do this is to make precious metals more popular imo. Why are some of the richest people in the world trying to buy a “basic” steel Nautilus instead of a (crazy) complicated one in precious metal? Make people want the two-tone Daytona more than the steel one (make an optional ceramic bezel version, brushed centre link option, etc). Allow bezel swaps (say Batman to Pepsi), etc. So that certain models aren’t the only attractive ones or so that you don’t “need to” buy both a Pepsi and a Batman, just two bezels and an extra GMT hand.. I love the DayDate40. Keep making the day dates and datejusts even better. The latest dials are amazing. But I’m not convinced that it’s the AD’s fault.

I disagree with your proposal of allowing bezel swaps though. It opens up a lot of opportunities for crooks to assemble frankenstein watches which are neither here nor there. Decide on one, buy it and if down the road you fancy another, trade the present watch for the other.

[Sothy]

Originally Posted by HMHM

I disagree with your proposal of allowing bezel swaps though. It opens up a lot of opportunities for crooks to assemble frankenstein watches which are neither here nor there. Decide on one, buy it and if down the road you fancy another, trade the present watch for the other.

I can see that. It would be a concern. But they do allow dial swaps for some models (which includes hand changes at times). One used to be allowed to buy a GMT and get two bracelets (oyster and jubilee) and 3 bezels (black, pepsi, coke). The issue is that many will just buy two models instead of trading. So less models are available for first time buyers. They’ve recently allowed GMT owners to order oyster/jubilee bracelets according to this forum. If so, the Frankenstein issue already exists. But I do see your point/concern. Mine is just that making two-tone and precious metal watches the ones that we all want will make demand more even across models which would help with the flipping issue as the size of the profit would be reduced.

[Gab27]

The only way to flat out stop it would probably be to remove MSRPs entirely and allow ADs to set their own pricing.

It is what it is. A lot of Rolex buyers are not buying because they like the brand or the watch. And Rolex is commonly viewed as (and used as) practically its own currency.

[Justinmg]

Stop buying watches from grey dealers

[teck21]

Originally Posted by Justinmg

Stop buying watches from grey dealers

That sort of advice is as useful as saying traffic jams would disappear if everyone drove a bit faster.


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[vh2k]

Originally Posted by Justinmg

Stop buying watches from grey dealers

There is nothing inherently wrong with purchasing watches from the secondary channel. It's mainly misdirected frustration because most people don't want to pay the prices being sought/paid for desirable models.

[Justinmg]

Originally Posted by teck21

That sort of advice is as useful as saying traffic jams would disappear if everyone drove a bit faster.


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Originally Posted by vh2k

There is nothing inherently wrong with purchasing watches from the secondary channel. It's mainly misdirected frustration because most people don't want to pay the prices being sought/paid for desirable models.

If people didn’t buy from greys, it would drive prices down which would stop flipping and more watches would be available at AD. It’s pretty simple. But people have to have instant gratification and are willing to pay over msrp so the problem will persist.

[StanGMT]

After 54 years of using my 1675 GMT Master as my daily watch, I thought it might be time to 'retire' it and buy a new Pepsi GMT Master to see out the rest of my days. How naive was I?!! My AD effectively told me that, unless I had a purchase history of some tens of thousands of pounds with them, they wouldn't even put me on the waiting list! I've seen 2-3 month old GMT Masters, unworn, at £17,000 asking price, but I would pay that on principle.

I'm not taking this sort of blackmail, so I've ditched Rolex and recently bought an Omega Speedmaster Professional Master Chronometer to replace my retired GMT Master. I love the Omega - it sits on my wrist beautifully and has, over the first month, been incredibly accurate (less than +/- 2sec over the month). It's manual wind but, hey, twenty sec per morning winding it is nothing.

What a crazy world we live in . . . . . !

Stan.

[vh2k]

Originally Posted by Justinmg

If people didn’t buy from greys, it would drive prices down which would stop flipping and more watches would be available at AD. It’s pretty simple. But people have to have instant gratification and are willing to pay over msrp so the problem will persist.

Price elasticity of demand ensures people WILL ALWAYS purchase at a price they deem fair.

This has been tested on the white dial 116500.

At $40,000+, global demand completely dries up. People think it's too expensive.

At $38,000-$39,875, there are just enough customers to move the trickle of units that come into the secondary channel.

Now, what happens if the secondary channel started lowering prices to $35K? More people would find that price fair, and would be willing to pay it.

At $30K, even more people. At $25K, even more people.

So, it's impossible to just tell everyone to stop buying from the secondary market. That channel is what establishes the top market price.

Moreover, it doesn't really stop the flipping because the secondary dealers maintain the spread between offer price and market price.

If secondary price is $38K, they are purchasing for $34-35K. If secondary price fell to $35K, the offer price would drop to $31-32K. So, the dealer maintains a reasonable margin. Flippers make a little less... but not enough less to stop flipping.

[AdamW]

Originally Posted by Justinmg

Stop buying watches from grey dealers

THIS

[FXR]

Rolex can easily develop an owner’s register (as PP is doing) and force all AD to fill in the form (name address… lots of details) for all watches sold at time of purchase. And in parallel restrict the warranty to the registered owner.

This would not avoid grey but could have an slight effect on current trend…

[shaunylw]

Originally Posted by FXR

Rolex can easily develop an owner’s register (as PP is doing) and force all AD to fill in the form (name address… lots of details) for all watches sold at time of purchase. And in parallel restrict the warranty to the registered owner.

This would not avoid grey but could have an slight effect on current trend…

Could have an effect, that’s for sure. In my mind, it would just bring the value down a touch. Instead of a Daytona selling for 35k, it sells for 34k to cover the cost of a potential service. They need something huge to prevent flipping, i just don’t see it happening. I also don’t see why they would invest any time or effort into it.

Flipping has made the brand bigger than ever. People tend to flock to what they can’t have. If Rolex had full cases and unlimited availability, many of us would be thrilled. But the demand would die.


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[Mystro]

Rolex is getting paid and that’s all they care about. They don’t care about their customers or that many are unhappy with how to buy their products. Rolex is guarding their brand and moving it upmarket anyway they have to.
The stories from many AD’s on how crappy Rolex has treated them for decades will not foster any loyalty to Rolex any more than to just keep their franchise. Rolex then starts to kill off family owned dealers that have loyally carried the Rolex brand for 40+ years.
Watchmakers with Rolex accounts also mirror how crappy Rolex treats them. You don’t need any more evidence that Rolex is looking out for Rolex.

Our “trusted sellers” aka grey market was here long before this madness started. They sold below msrp for decades yet no one was outraged they were getting a better deal than they could at their Rolex dealer from the grey market. It’s a different market now so adapt. This ”participation trophy” generation is learning some hard lessons in life.

[Boaters]

Originally Posted by Mystro

Rolex is getting paid and that’s all they care about. They don’t care about their customers or that many are unhappy with how to buy their products. Rolex is guarding their brand and moving it upmarket anyway they have to.
The stories from many AD’s on how crappy Rolex has treated them for decades will not foster any loyalty to Rolex any more than to just keep their franchise. Rolex then starts to kill off family owned dealers that have loyally carried the Rolex brand for 40+ years.
Watchmakers with Rolex accounts also mirror how crappy Rolex treats them. You don’t need any more evidence that Rolex is looking out for Rolex.

Our “trusted sellers” aka grey market was here long before this madness started. They sold below msrp for decades yet no one was outraged they were getting a better deal than they could at their Rolex dealer from the grey market. It’s a different market now so adapt. This ”participation trophy” generation is learning some hard lessons in life.

That pretty much sums it up

[donq]

Stop flipping? Why?

Flipping is what keeps the market value up.

I’ve never bought anything from a Rolex AD.

And I don’t plan to. I don’t care for anything they have for sale there.

All my Rolexes were purchased used, and they are all worth about 2x what I paid for them.

I say keep it up. Maybe they will be worth 3x what I paid for them soon!

[telesquire]

Originally Posted by donq

Stop flipping? Why?

Flipping is what keeps the market value up.

I’ve never bought anything from a Rolex AD.

And I don’t plan to. I don’t care for anything they have for sale there.

All my Rolexes were purchased used, and they are all worth about 2x what I paid for them.

I say keep it up. Maybe they will be worth 3x what I paid for them soon!

Lol.....Worth? Don't confuse the retail asking prices with the prices you would get as a private seller. Anyway who cares what the watches I own are 'worth' Only your surviving relatives would give a hoot....unless you are the guy who likes to tell non owners how much your watch is worth?

[Jack T]

Outside of the people on TRF, hardly anyone wants, or expects to own more than one Rolex in their lifetime.

[HideMyWalletPlease]

Rolex can hire and train a network of watch tracers. These would be large intimidating men. They could probably get some amateur MMA guys. They could pop in on you at any time and if you’re not wearing the watch they slap you around a little. I think it’s really doable. One guy could visit 5-6 customers in a day.

[Net-man]

Juice ain’t worth the squeeze for Rolex.
If the things go back to discount days, I am sure some things will be done.
Tudor is capturing market at the lower end, no other brand is threatening Rolex dominance in their price bracket, what’s not to like.
In the process Rolex is weeding out pesky small time ADs with customer base is intact.
Unless the middle man aka AD start hurting there is no pressure on the brand.
As many have stated correctly, AD are Rolex’s true customers. Are they unhappy, doesn’t seem like to be.


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[zengineer]

There is an imbalance between supply and demand. And not just a small imbalance.

As long as that remains true there will be a secondary market that can't be controlled by a product manufacturer, at least not one making a million items each year.

The idea that you can stop people from selling an item for twice what they paid is one of two things: insanity or communism.

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[Dougiebaby]

Originally Posted by teck21

It is a problem. Everybody knows that.

There’s no blame to be assigned for doing it because that’s just rational human behaviour, the chance for a quick buck.

But every watch that gets taken away from an AD purely for the sole purpose of selling again without adding value deprives another genuine customer of a chance of it from an AD, that is also surely not in doubt.

What is it you think Rolex and/or ADs can do, in conjunction or not, to ensure as few watches as possible go to these opportunistic scalpers?

As it stands, Rolex tries to ‘dissuade’ its ADs from funnelling directly to greys (via the threat of dealership revocation), and to individual flippers (via black listing of individuals).

This discussion is not about Rolex increasing supply to resolve the demand issues, or demand supply issues in general, such as whether demand is ‘real or fake’.

The market situation is what it is, littered with opportunities for scalpers to profit.

In this light, what else can, or should Rolex/ ADs do?

Curious as to people’s views.

Mine are straightforward. Make sure everybody pays ‘market’ price via relationship building/bundling (even though Rolex frowns on outright binding), but I understand that’s not a popular view, and it also has its drawbacks.

What solutions would some of you propose?

Edit:
For the purpose of this particular discussion, flipping refers to the buying of a popular reference at an AD with little or no intention of being the end user, but for monetary profit.


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Your complaint really is rather naive and condescending. Naive because one can do whatever one wants to with whatever they purchase. Condescending in that who are you to determine if one is a genuine customer or not.

Would it bother you if said person purchased that Daytona only to smash it with a hammer and throw the broken pieces into a river?

What if said person purchased that Daytona and gave it to his ungrateful and uninterested daughter for her 13th birthday? She is not a "genuine customer."

What if said person was a HUGE watch nut over the years but fell on hard times and was given opportunity to purchase a Daytona and flipped it to pay off a few mortgage payments or medical bills?

People can do whatever they want to (within legal boundaries) with whatever they purchase.

Why get your panties in a bunch about what you cannot control and other people do?

If a collector wants to keep the watch he/she purchased, great.
If a collector wants to flip the watch he/she purchased, great.
If a collector wants to give a Daytona to his snot-nosed, ungrateful daughter for her 13th birthday, great.

It's his/her decision ... period.

[Harry-57]

Originally Posted by Dougiebaby

People can do whatever they want to (within legal boundaries) with whatever they purchase.

This is basically where the discussion both begins and ends.

But only on planet Earth.

Those who agree are already on side. After all, it's only simple statement of fact. Those who for some bizarre reason do not agree, never will. You are wasting your keystrokes.

[Driver8]

Ignoring the wider discussion point of whether flipping should be stopped anyway, the only thing that can actively be done to discourage flipping is for Rolex to raise their MSRPs to such a point that it is no longer profitable for people to buy them at retail with a view to immediately reselling them. That's all.

However, if they did that, they may fall into the Panerai trap, and find that demand goes off a cliff and suddenly they'll have supply outstripping demand, which is something that no manufacturer in any segment wants. Rolex sell literally everything they make, and at a price they're happy with. Where is the incentive to do anything to change that?

The current difficulty in getting hold of (most) Rolexes is down to one very VERY simple thing - Demand outstrips Supply. There's no mystery, no rocket science, no conspiracy, no secret cabal controlling things - it's just free market economics. Prices are simply a function of supply and demand. As soon as something becomes unpalatable to people (e.g. price of entry is too high, or fads/fashions change and people "go off" Rolex watches), then demand drops, supply exceeds demand, and prices drop accordingly.

People whine and moan all the time (especially on FB, but on forums as well) about why Rolex can't supply them with what they want. From a economists standpoint, I find that absolutely hilarious!

[Fleetlord]

Originally Posted by Driver8

Ignoring the wider discussion point of whether flipping should be stopped anyway, the only thing that can actively be done to discourage flipping is for Rolex to raise their MSRPs to such a point that it is no longer profitable for people to buy them at retail with a view to immediately reselling them. That's all.

However, if they did that, they may fall into the Panerai trap, and find that demand goes off a cliff and suddenly they'll have supply outstripping demand, which is something that no manufacturer in any segment wants. Rolex sell literally everything they make, and at a price they're happy with. Where is the incentive to do anything to change that?

The current difficulty in getting hold of (most) Rolexes is down to one very VERY simple thing - Demand outstrips Supply. There's no mystery, no rocket science, no conspiracy, no secret cabal controlling things - it's just free market economics. Prices are simply a function of supply and demand. As soon as something becomes unpalatable to people (e.g. price of entry is too high, or fads/fashions change and people "go off" Rolex watches), then demand drops, supply exceeds demand, and prices drop accordingly.

People whine and moan all the time (especially on FB, but on forums as well) about why Rolex can't supply them with what they want. From a economists standpoint, I find that absolutely hilarious!

You're absolutely right.

Panerai RAISED retail prices AND production. The market hates that and rejected that strategy immediately.

The delta for low key retail and market price is a main factor in the popularity of the the select brands who can manage their production and distribution properly and understand the importance of value retention to the market.

That's why Rolex hasn't made 100X SS Daytonas and raised their price to $35K retail, because that is market poison.

A nice, low MSRP that sells easily in the secondary market for essentially 3x that and is distributed in limited numbers to the AD and to the general public from the AD, is the rising tide that floats all Rolex.

[gerry100]

TRF and other internet denizens comprise a small subset of Rolex customers. < 5 % IMO.

Rolex cannot ramp up production without undermining quality and ultimately the brand.

Rolexs long term customer base are those who buy for special occasions or events and establish a relationship with the brand. Empty cases at the time of purchase mean new relationships with Omega/Tudor/Breitling etc.

I also think we've got FOMO among regular AD customers leading them to reserve watches in advance.

My AD had never seen me before when I bought my pre owned 16570 and might not see me again, but I dont think "Special Occasion" customers buy used.

Supply of watches will normalize at some point.

Meanwhile, us 5 percenters can enjoy conspiracy theories,finger pointing,offering Rolex mgt advice and whipping up prices.

[Gab27]

Originally Posted by Justinmg

If people didn’t buy from greys, it would drive prices down which would stop flipping and more watches would be available at AD. It’s pretty simple. But people have to have instant gratification and are willing to pay over msrp so the problem will persist.

If AD's put EVERY person on a list who asked and attended to them in EXACT sequential order, I think this would be a fairer argument (i.e., if I go in an ask about a stainless Daytona, and someone with a $300,000 spend history goes in and asks about the same watch the day after, then I get offered that Daytona before the customer with the spend history.)