How are resellers able to undercut Rolex MSRP?

[991911s]

Okay I understand how SS models sell above MSRP due to overwhelming demand. I was on hunt for SS Skydweller Bluedial, but given the over $7k premiums, have given up for now.

Can someone educate me as to how EBay sellers are able to take a brand new YG Skydweller with the crocodile band with a $38.5k MSRP and sell for $28k?

Is this a demand issue as well? If so, what the heck is the markup on these watches?

Just seems like paying $28k for a $38k watch is a much greater value than spending $21k for a $14k MSRP watch. I get that it just depends on what you want, but a quick explanation would be appreciated!

[tyler1980]

when they are the only ones buying these watches at AD's and you are buying from them on eBay they get discounts since they are buying everyone's watches for them.

It creates a cycle of them buying lots of watches from AD's and you not buying any watches from AD's. They are now the AD's best and most important customers so they also get a good amount of the hot watches too.

One word... volume.

[991911s]

Originally Posted by tyler1980

when they are the only ones buying these watches at AD's and you are buying them from them on eBay they get discounts since they are buying everyone's watches for them.

It creates a cycle of them buying lots of watches from AD's and you not buying any watches from AD's. They are now the AD's best and most important customers so they also get a good amount of the hot watches too.

Okay, so these resellers are buying a bunch of watches from the AD’s including the hot sellers (SS models) and “must also buy” not so hot sellers...they resell the hot ones at a premium and attempt to break even on the not so hot? (Like this YG Skydweller)

If this is correct, how many watches can they be buying at a time?

[Sarosh]

Originally Posted by 991911s

Okay, so these resellers are buying a bunch of watches from the AD’s including the hot sellers (SS models) and “must also buy” not so hot sellers...they resell the hot ones at a premium and attempt to break even on the not so hot? (Like this YG Skydweller)

If this is correct, how many watches can they be buying at a time?

I think in a nutshell.....yes.

they can buy as little as maybe 20-50 I guess at any given time. Doesn’t matter either way. Watches aren’t coming our way. Lol.

[991911s]

Originally Posted by Sarosh

I think in a nutshell.....yes.

they can buy as little as maybe 20-50 I guess at any given time. Doesn’t matter either way. Watches aren’t coming our way. Lol.

Oh...kinda makes sense now...an interesting business model

[Sarosh]

Originally Posted by 991911s

Oh...kinda makes sense now...an interesting business model

Well it must be working well for them since they’re still in business and also making a decent living of people paying their prices. Lol

[bobby81]

The reason the Grey Market Sellers are able to sell Watches at a considerable discount is because AD’s are given so many Watches to sell every year. So in order to keep their dealership they need to shift so many Watches. So Grey Dealers usually form a relationship with some AD’s & if you are looking for a certain Model that isn’t really in demand the AD will pass it on to the Grey Dealer when the Grey Dealer has an order to fill, otherwise it’s just opportunists who get a chance to purchase a sought after Model & then sell it on to Grey Dealers. I wouldn’t say for sure if this is how it works but from what I’ve heard it seems this is what happens


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[tyler1980]

Originally Posted by 991911s

Okay, so these resellers are buying a bunch of watches from the AD’s including the hot sellers (SS models) and “must also buy” not so hot sellers...they resell the hot ones at a premium and attempt to break even on the not so hot? (Like this YG Skydweller)

If this is correct, how many watches can they be buying at a time?

they are making money on all of them. If they get a 20% discount they are selling them to you at a 10% discount for instance. If they get a hot watch at retail they sell it at a premium. Secondary dealers always sell at market prices and RRP is almost never market price. Its a made up number and is almost always too high or too low.

AD's are limited in how they can participate in the free market where as secondary dealers do not have these restrictions.

[991911s]

Originally Posted by bobby81

The reason the Grey Market Sellers are able to sell Watches at a considerable discount is because AD’s are given so many Watches to sell every year. So in order to keep their dealership they need to shift so many Watches. So Grey Dealers usually form a relationship with some AD’s & if you are looking for a certain Model that isn’t really in demand the AD will pass it on to the Grey Dealer when the Grey Dealer has an order to fill, otherwise it’s just opportunists who get a chance to purchase a sought after Model & then sell it on to Grey Dealers. I wouldn’t say for sure if this is how it works but from what I’ve heard it seems this is what happens


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So a Skydweller like this is not a very hot seller?

[tyler1980]

Originally Posted by 991911s

So a Skydweller like this is not a very hot seller?

not really. Its big and its gold and its expensive. Its a different ballgame than a SS sub or a SS DJ.

Doesnt mean its not a great watch though.

[bobby81]

Originally Posted by 991911s

So a Skydweller like this is not a very hot seller?

There’s a difference between a hot seller & the almost impossible to get Model’s such as the S/S Daytona Ceramic


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[991911s]

Originally Posted by tyler1980

they are making money on all of them. If they get a 20% discount they are selling them to you at a 10% discount for instance. If they get a hot watch at retail they sell it at a premium. Secondary dealers always sell at market prices and RRP is almost never market price. Its a made up number and is almost always too high or too low.

AD's are limited in how they can participate in the free market where as secondary dealers do not have these restrictions.

Thanks Tyler!...so this Skydweller has a $38.5 MSRP....their price is $28k...this represents a 27% discount...did they actually pay less than $28k for this watch?

[tyler1980]

Originally Posted by 991911s

Thanks Tyler!...so this Skydweller has a $38.5 MSRP....their price is $28k...this represents a 27% discount...did they actually pay less than $28k for this watch?

that would make the AD margin very tight, but no reseller is going to sell watches at a loss. An individual seller would though if they are moving on to something else, but if its a business they had to pay less than 28.

They could also buy it in the UK at a discount, and get a VAT retun, as the retail price is cheaper as well. Im sure there is a lot of currency factors and shady importing going on in the secondary market.

[oldman2005]

Originally Posted by 991911s

Thanks Tyler!...so this Skydweller has a $38.5 MSRP....their price is $28k...this represents a 27% discount...did they actually pay less than $28k for this watch?

From what I read many resellers/greys also own ADs or basically the front door is AD and back door is grey.

[tyler1980]

Originally Posted by oldman2005

From what I read many resellers/greys also own ADs or basically the front door is AD and back door is grey.

not really. Its way too risky to do that. Some resellers who are also AD's probably make more money on used watch sales. Similar to used cars, the margins can be better and their AD badge above the door is a huge advantage vs a non AD jewelry store who also is selling used Rolex watches. That said, they wouldn't risk their AD status being that stupid so its probably way, way more complex than that for the ones who may be doing this.

[991911s]

Originally Posted by tyler1980

that would make the AD margin very tight, but no reseller is going to sell watches at a loss. An individual seller would though if they are moving on to something else, but if its a business they had to pay less than 28.

They could also buy it in the UK at a discount, and get a VAT retun, as the retail price is cheaper as well. Im sure there is a lot of currency factors and shady importing going on in the secondary market.

So after some thought, I surmise that my best “bang for buck” with a Skydweller is most likely a pristine Pre-Owned Gold Skydweller for something close to $22-$25k...like this:...which has a $38.5k MSRP...

[tyler1980]

Originally Posted by 991911s

So after some thought, I surmise that my best “bang for buck” with a Skydweller is most likely a pristine Pre-Owned Gold Skydweller for something close to $22-$25k...like this:...which has a $38.5k MSRP...

i guess if you want a strap. I think at retail and for what it is, the SS sky dweller is the best value watch Rolex makes. For an annual calendar watch with a second time zone its a great deal. I would be more inclined to pay the premium for a SS sky dweller than almost any other watch, mainly because i actually think retail is too low for what it is.

No one pays retail for a PM sky dweller. So whatever RRP is doesnt matter. No one pays it so dont factor the maximum possible price (RRP) into the equation and think you getting a better deal than you are.

[991911s]

Originally Posted by tyler1980

i guess if you want a strap. I think at retail and for what it is, the SS sky dweller is the best value watch Rolex makes. For an annual calendar watch with a second time zone its a great deal. I would be more inclined to pay the premium for a SS sky dweller than almost any other watch, mainly because i actually think retail is too low for what it is.

No one pays retail for a PM sky dweller. So whatever RRP is doesnt matter. No one pays it so dont factor the maximum possible price into the idea you are getting a deal.

That was my initial thinking. At only $14.5 MSRP, even paying a small premium seemed reasonable to me. But then seeing the asking price of up to $21k for a Blue dial, I started questioning that.

Luckily I am in no hurry. Paying $7k over MSRP for the Blue dial is definitely out.

[beshannon]

Originally Posted by 991911s

but a quick explanation would be appreciated!

They paid less than they are selling it for.

Simple.

[tyler1980]

Originally Posted by 991911s

That was my initial thinking. At only $14.5 MSRP, even paying a small premium seemed reasonable to me. But then seeing the asking price of up to $21k for a Blue dial, I started questioning that.

Luckily I am in no hurry. Paying $7k over MSRP for the Blue dial is definitely out.

if you can get a new PM one on a strap for 28k, just imagine what you will be able to sell it for. Way less. You will still take a major hit. You might be better off with the SS version even with the premium as thats where the buyers are. Bracelet and SS.

If you are keeping it forever then get what you like better as the SS version costs less than the PM one anyway so dont get hung up on the fact that one is over retail and the other is below.

[991911s]

Originally Posted by beshannon

They paid less than they are selling it for.

Simple.

I had no idea that a watch MSRP of $38k has a $10k margin. 😯 Wow

[991911s]

Originally Posted by tyler1980

if you can get a new PM one on a strap for 28k, just imagine what you will be able to sell it for. Way less. You will still take a major hit. You might be better off with the SS version even with the premium as thats where the buyers are. Bracelet and SS.

If you are keeping it forever then get what you like better as the SS version costs less than the PM one anyway so dont get hung up on the fact that one is over retail and the other is below.

I think you hit the nail right on the head: “just imagine what you will be able to sell it for. Way less”...I never resell my watches but I’m patient until the right deal comes my way.

I’ll wait for that individual who buys new at $28k, then turns it over for the latest and greatest...and hopefully I get it for the “way less” price!

[breitlings]

Originally Posted by tyler1980

that would make the AD margin very tight, but no reseller is going to sell watches at a loss. An individual seller would though if they are moving on to something else, but if its a business they had to pay less than 28.

They could also buy it in the UK at a discount, and get a VAT retun, as the retail price is cheaper as well. Im sure there is a lot of currency factors and shady importing going on in the secondary market.

They might, certain costing methods do allow for allocation of items based on different needs. It's fairly common in the auto industry for example to sell fuel efficent small cars at extremely low prices (assigning them lower costs), and large cars that are big sellers at a higher prices that absorbs some of the costs of the fuel efficient cars to maintain CAFE standards.