Sport Rolexes coming down in price / less demand?

[Auragentum]

I recently noticed the SS GMT 116710 and the SS Sub date 116610 being offered at very attractive pricing (at least according to European standards) on the grey market. In addition, it seems that many ADs have plenty in stock of these.

Grey dealers are offering new ones for the equivalent of around 7,000 USD - which is about 20% below MSRP in many EU countries.

Has anyone else noticed this? Any comments on why? Crisis mode/less demand setting in? Increased production?

EDIT: Made a mistake... meant to say 20% - not 25%

[Mickey®]

Haven't they always been "attractive(ly) priced" in Grey Market?
I agree that in my travels I see every model everywhere...no shortage in USA as far as I am concerned.

[Cru Jones]

Originally Posted by Auragentum

I recently noticed the SS GMT 116710 and the SS Sub date 116610 being offered at very attractive pricing (at least according to European standards) on the grey market. In addition, it seems that many ADs have plenty in stock of these.

Grey dealers are offering new ones for the equivalent of less than 7,000 USD - which is about 25% below MSRP in many EU countries.

Has anyone else noticed this? Any comments on why? Crisis mode/less demand setting in? Increased production?

really? do tell, please.

[Auragentum]

Originally Posted by Mickey®

Haven't they always been "attractive(ly) priced" in Grey Market?
I agree that in my travels I see every model everywhere...no shortage in USA as far as I am concerned.

Sure, the grey market has always been quite attractive. Especially for vintage/second hand. But 15-20% under list for a brand new Sport Rolex is a bit alarming in my book.

But then again, I haven't been following the market closely before recently, when I was in buying mode again. Previously I just bought from ADs with whatever discount I managed to negotiate.

In addition, when you have ADs fairly reluctant to offer discount and then seeing the same watch 20% lower from another dealer (albeit not authorized), it makes you wonder, how well Rolex is managing their strict price strategy.

Either way, there is no way I am paying full or close to list (regardless of the service or overhead of the AD) if I can save 15-20% by buying grey market.

In most cases, the grey dealers obviously also purchase the watch at a lower price than they are selling for - meaning that substantial discounts are offered to them some how.

I am all for ADs making a buck, but something does not quite add up. How do the grey market dealers get them at those prices?

Am I missing something here?

EDIT: Meant to say 20% - not 25%

[Mickey®]

Originally Posted by Auragentum

Sure, the grey market has always been quite attractive. Especially for vintage/second hand. But 20-25% under list for a brand new Sport Rolex is a bit alarming in my book.

But then again, I haven't been following the market closely before recently, when I was in buying mode again. Previously I just bought from ADs with whatever discount I managed to negotiate.

In addition, when you have ADs fairly reluctant to offer discount and then seeing the same watch 25% lower from another dealer (albeit not authorized), it makes you wonder, how well Rolex is managing their strict price strategy.

Either way, there is no way I am paying full or close to list (regardless of the service or overhead of the AD) if I can save 20-25% by buying grey market.

In most cases, the grey dealers obviously also purchase the watch at a lower price than they are selling for - meaning that substantial discounts are offered to them some how.

I am all for ADs making a buck, but something does not quite add up. How do the grey market dealers get them at those prices?

Am I missing something here?

LET ME KNOW which Grey is selling SPORT Rolex at 25% off!!!!
I'll buy another today!!!

[Auragentum]

Originally Posted by Cru Jones

really? do tell, please.

In your case, I would start by looking towards your neighboring country Italy. A simple search on some well know watch portals should illustrate some of the attractive prices.

[bondtoys]

You forget, that in the EU countries, everything is subject to a ~20% VAT.
To have a fair comparison, you'll have to add this on US prices or deduct that amount, when exporting the watch out of the EU.

[Auragentum]

Originally Posted by Mickey®

LET ME KNOW which Grey is selling SPORT Rolex at 25% off!!!!
I'll buy another today!!!

It may or may not apply to you since you are in the US where pricing on just about anything is ridiculously lower than the rest of the world - particular Europe.

Btw, I made a serious mistake before. I meant to say 20% off.

[Auragentum]

Originally Posted by bondtoys

You forget, that in the EU countries, everything is subject to a ~20% VAT.
To have a fair comparison, you'll have to add this on US prices or deduct that amount, when exporting the watch out of the EU.

Sure, I am aware of this - I did not forget. I am talking about grey market dealers within EU. I have spoken to a few who offer unused 2011 GMTIIc at around 5,100-5,200 EUR.

[Deyn Man]

i may say something stupid, but i'll say it anyways...

as with new models, you hardly get any discount. in fact, there is even a premium over the suggested retail price (like the new Exp II 42mm... at least here in the philippines since it was only officially released here around a month ago)... perhaps since the newer (ie. 2011 basel releases) are out, the "older" ones are now selling at the "right" price?

again, not really sure about this, just my opinion...

[Auragentum]

Originally Posted by Deyn Man

i may say something stupid, but i'll say it anyways...

as with new models, you hardly get any discount. in fact, there is even a premium over the suggested retail price (like the new Exp II 42mm... at least here in the philippines since it was only officially released here around a month ago)... perhaps since the newer (ie. 2011 basel releases) are out, the "older" ones are now selling at the "right" price?

again, not really sure about this, just my opinion...

Thanks for chipping in. Could be. In Europe I am definitely not seeing any premiums over any recent releases, including the latest Explorer II.

But it could just be that the novelty factor of the latest GMT and Sub is wearing down after a few years. Perhaps that coupled with the EU crisis setting in, making people nervous and pressured to clear stock? I don't know - just speculating.

[impalass]

Originally Posted by Auragentum

Sure, the grey market has always been quite attractive. Especially for vintage/second hand. But 15-20% under list for a brand new Sport Rolex is a bit alarming in my book.

But then again, I haven't been following the market closely before recently, when I was in buying mode again. Previously I just bought from ADs with whatever discount I managed to negotiate.

In addition, when you have ADs fairly reluctant to offer discount and then seeing the same watch 20% lower from another dealer (albeit not authorized), it makes you wonder, how well Rolex is managing their strict price strategy.

Either way, there is no way I am paying full or close to list (regardless of the service or overhead of the AD) if I can save 15-20% by buying grey market.

In most cases, the grey dealers obviously also purchase the watch at a lower price than they are selling for - meaning that substantial discounts are offered to them some how.

I am all for ADs making a buck, but something does not quite add up. How do the grey market dealers get them at those prices?

Am I missing something here?

EDIT: Meant to say 20% - not 25%

I've read that grey dealers buy excess stock from AD's at cost. These AD's have to order X amount of watches per year to keep their accounts regardless of wheather they can sell them or not.

In the end everybody is happy, except, perhaps, the manufacturers ?

Do not know how accurate this is, but it seems plausible to me. Would love to hear other opinions/theorys.

[Deyn Man]

Originally Posted by Auragentum

Thanks for chipping in. Could be. In Europe I am definitely not seeing any premiums over any recent releases, including the latest Explorer II.

But it could just be that the novelty factor of the latest GMT and Sub is wearing down after a few years. Perhaps that coupled with the EU crisis setting in, making people nervous and pressured to clear stock? I don't know - just speculating.

if my memory serves me right, the new Exp II 42mm retails more than the GMTIIC in local ADs...

yeah, perhaps the demand on the ceramics have died down?

[Auragentum]

Originally Posted by impalass

I've read that grey dealers buy excess stock from AD's at cost. These AD's have to order X amount of watches per year to keep their accounts regardless of wheather they can sell them or not.

In the end everybody is happy, except, perhaps, the manufacturers ?

Do not know how accurate this is, but it seems plausible to me. Would love to hear other opinions/theorys.

It sounds plausible and would certainly explain the low prices. It is not the first time I have heard of this either. From my time working with exclusive sports cars, we often sold long overdue stock to grey market dealers. So I could certainly believe if the same happened with Rolexes and other higher end watches. But I am still surprised by the low price level.

Originally Posted by Deyn Man

if my memory serves me right, the new Exp II 42mm retails more than the GMTIIC in local ADs...

yeah, perhaps the demand on the ceramics have died down?

Maybe the demand has not died down as much as the supply has gone up? Perhaps Rolex has shipped more than can be sold?

[Actsulb]

Very interesting information. Thank you TRF members.

[bondtoys]

Originally Posted by Auragentum

Sure, I am aware of this - I did not forget. I am talking about grey market dealers within EU. I have spoken to a few who offer unused 2011 GMTIIc at around 5,100-5,200 EUR.

So, how can you be sure, that they paid the complete tax?

[dooder202]

Originally Posted by Auragentum

I recently noticed the SS GMT 116710 and the SS Sub date 116610 being offered at very attractive pricing (at least according to European standards) on the grey market. In addition, it seems that many ADs have plenty in stock of these.

Grey dealers are offering new ones for the equivalent of around 7,000 USD - which is about 20% below MSRP in many EU countries.

Has anyone else noticed this? Any comments on why? Crisis mode/less demand setting in? Increased production?

EDIT: Made a mistake... meant to say 20% - not 25%

I actually noticed this too myself, doesn't seemd to be as high or strong of a demand I guess.

[Speed]

I have seen no downward price trend in SS sport watches...at all. Quite the opposite.

[Auragentum]

Originally Posted by bondtoys

So, how can you be sure, that they paid the complete tax?

I can't and most buyers certainly do no mind if the watch was originally exported and thus VAT exempt. Price is their main concern.

We live in an increasingly connected world and the market does not really care about VAT, GST and other taxes. People trade watches across continents easily and willingly jump on a plane for 10-15 hours just to get a bargain.

[Auragentum]

Originally Posted by Speed

I have seen no downward price trend in SS sport watches...at all. Quite the opposite.

Perhaps it is different in the US or dependent on state. However, with the recent rally in the USD/CHF I could imagine there would be room for additional discounts. Have you searched online for deals?

When you say quite the opposite - are you saying that pricing has gone up?

[Speed]

I keep abreast of prices. I also do not see loads of different SS models at ADs. I suppose they could have a bunch in the safe...

[Auragentum]

Originally Posted by Speed

I keep abreast of prices. I also do not see loads of different SS models at ADs. I suppose they could have a bunch in the safe...

Okay. Could you share some pricing on the GMTIIc? What is current list price in the US and what can you buy it for from grey market dealers?

It would be interesting to see if it matches the EU pricing.

[ChuckFinlay]

No downward trend on pricing in the UK, but definitely more SS models in AD's windows, but with an entry level price of £5K plus for anything Sub/GMT like, it's no surprise...DSSD probably the slowest seller, one local AD having had one in the window for a good month or so.

[The GMT Master]

Well, there has been no shortage of demand from where I am - business is surprisingly good considering the economic climate, and that's not just selling your bread and butter steel sports models. We've been selling a lot of bi-metal and diamond pieces too - people have money to spend, but want to make sure it's on a quality product, and Rolex fits the bill perfectly.

However, I think there may be other factors at hand - Rolex is cutting down the dealer network, and I wouldn't be surprised if the smaller ADs with poor positioning were struggling. For us, there would be no logical reason to sell a steel sports model, at cost - they sell far too well for that. Any dealership forced into doing that must be really on the rocks.

The other reason why grey dealers might have good prices is that they are buying from overseas, and taking advantage of local tax refunds and currency differences. This is something the grey market has done for a long time, ensuring they can offer very low prices whilst still maintaining their profit margins. Obviously, this is something Rolex frowns upon, and if an AD was found to be shipping their watches overseas at heavy discount, I would imagine Rolex would throw the book at them.

In any case, the grey market is just that - grey! It's very hard to know exactly what they're doing to maintain such low prices. I don't know how desperate things are on the European mainland (probably quite bad in Greece and Portugal, I'd imagine), but certainly here, we're thrilled to pieces with the trade we're doing

Hope this helps

Chris

[Auragentum]

Thanks a lot for chipping in Chris

I believe it might be a combination of dealers in a bit of a jam offering discounts whilst at the same time, vat being exempted via export. This could provide the necessary price decrease to enable grey dealers selling at 20% off list. However, I would not be surprised if they are earning less than 10% margin.

[T.S.Eliot]

On the contrary, Rolex prices and especially sports SS have gone and are still going up here in the Middle East. When I speak to ADs here they blame it to the continuous rising of the CHF especially compared to the USD which is becoming worth nothing!

China is another factor in the demand for luxury items in general and European in particular.

In short, as long as the US are printing money like paper and the Chinese are getting richer because no one wants to do the dirty work, you will have to be content driving an Aveo and wearing a Casio!

Cheers,
K

[sellis]

In the Boston area, only one AD (out of the 6 I visited) had the SS Sub C LN in stock ($8000) and they weren't willing to budge a lick on price. So I went Grey here on TRF and saved about 10%. Still, you'd be hard pressed to get a new SS Sub C LN here in the for sale section for less than $7200. That's only 10%!

[Auragentum]

Originally Posted by tseliot

On the contrary, Rolex prices and especially sports SS have gone and are still going up here in the Middle East. When I speak to ADs here they blame it to the continuous rising of the CHF especially compared to the USD which is becoming worth nothing!

China is another factor in the demand for luxury items in general and European in particular.

In short, as long as the US are printing money like paper and the Chinese are getting richer because no one wants to do the dirty work, you will have to be content driving an Aveo and wearing a Casio!

Cheers,
K

Well, as you probably know the CHF has been plummeting recently - especially due to the SNB's announcement/intentions about more or less pegging it to the EUR. Hence, the CHF excuse is not valid any longer - at least for now.

Money printing and ridiculous monetary policies are continuously happening worldwide. The FED is the master, but currency intervention/wars, QE and bailouts are happening big time everywhere. We are headed for "interesting" times.

If you happen to go to Europe it would be a good opportunity to pick up a SS sport or two :)