The AD / Grey Game

[SS Oyster]

Would an AD lose their status with Rolex if caught selling above MSRP to grey dealers out the back door?

Seems like it would be pretty easy to catch from an accounting perspective, so why aren’t Rolex looking at the books? Unless Rolex regional reps are “in the know”.


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[santiagoe]

There is one that lost the line because of that in Montreal not that long ago


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[Drive]

Many years ago there was a dealer in the Midwest that Rolex pulled from there retailers. They were selling to low. I’m pretty sure Rolex can do whatever they want.

[DenaliHD]

HK would have zero ADs if they were watching and wanting to see. Any big cities for that matter.

[t65tampa]

I think the predominant AD to re-seller model is bundling slower selling watches with hot items in package sales. The AD would be more exposed if they were price gouging hot items. If they combine the sale of hot and slower moving pieces, they get the additional benefit of making room for more new stock. That's more helpful than selling one hot watch at a premium.

[ChipWong]

Its happening all the time in the states. In Asia the ADs are selling steel pepsis and daytonas over msrp directly to consumers

[RJRJRJ]

Nobody knows the exact answer to the question, but we do know that they don't like dealers selling above MSRP, and they don't like discounts that are too large. And if they are unhappy with you, they may strip your AD status.

[Steerpike999]

I was in Singapore Feb'17 and at two seperate ADs was offered the LN and BLNR GMT however was told there was a premium to buy the BLNR (from memory it was S$1500-2000 above msrp.) Seemed to be common practice in Singapore.

I passed at the time, came back and purchased my LN from my AD in Melbourne (with a small discount to boot!)

[michael.michael]

Originally Posted by SS Oyster

Would an AD lose their status with Rolex if caught selling above MSRP to grey dealers out the back door?

Seems like it would be pretty easy to catch from an accounting perspective, so why aren’t Rolex looking at the books? Unless Rolex regional reps are “in the know”.


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I'd say Rolex doesn't even care what the AD is doing. What most of us say its AD's game, its actually the Rolex's game itself. AD couldn't really get what they ordered to Rolex easily. So, let's say if they ordered 30 pieces of slow moving models, only then Rolex will provide another 3 pieces of sport or hot models. If then the AD decided to throw all of the sport models to grey dealers, of course they will earn big $$ for short term period, but they will also end up with high inventories of slow moving models, which I think will make things worse for them.

I saw ADs lose their status with Rolex before but just because couldn't catch up with the Rolex's game.

[Nocomment]

Originally Posted by Silentindustries

HK would have zero ADs if they were watching and wanting to see. Any big cities for that matter.

agree

[rambo99]

Originally Posted by Silentindustries

HK would have zero ADs if they were watching and wanting to see. Any big cities for that matter.

its becoming a norm that AD in hk sell their ss sport models to grey dealers through the back door. many of them dont even keep waiting lists for hot models or just reserve it for their VIP customers. i am sure rolex know what is going under. they just pretend they dont see anything, may be they think this is good for them which help developing a sought after luxury brand image.

[Galibier]

Originally Posted by SS Oyster

Seems like it would be pretty easy to catch from an accounting perspective, so why aren’t Rolex looking at the books? Unless Rolex regional reps are “in the know”.

Because the additional cash or benefit in kind wouldn't go through the books?

[gastown604]

Originally Posted by ChipWong

Its happening all the time in the states. In Asia the ADs are selling steel pepsis and daytonas over msrp directly to consumers

It seems to be allowed. In Taiwan it is standard to sell SS Rolex over MSRP and the customer have to buy a Tudor that no one wants at the same time.

Not sure about Patek though. Last time I heard someone who got a 5711 had to buy it with a Lange 1 at MSRP.

[SS Oyster]

Originally Posted by Galibier

Because the additional cash or benefit in kind wouldn't go through the books?

It doesn’t take tracking of cash to find this activity with forensic accounting. Just look at customer name - is a single buyer purchasing a majority of watches? Who’s getting all the SS sports models?


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[Chadridv]

Originally Posted by SS Oyster

It doesn’t take tracking of cash to find this activity with forensic accounting. Just look at customer name - is a single buyer purchasing a majority of watches? Who’s getting all the SS sports models?


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Here in the US, I've never come across an AD that asked over MSRP for a Rolex. I know many of them are offering package deals though. Proposing you buy a typically discounted gold watch at full retail for access to purchase the 'hard-to-get' watches.

No paper trail with that method.

As far as who is getting them? There probably isn't one single buyer, but a select few VIPs that spend hundreds of thousands if not millions. Whether that VIP turns out to be a private enthousiast or a grey dealer doesn't really matter (in regards to your question), what matters is that they're dropping serious money regularly.

[jonnyz1245]

Originally Posted by SS Oyster

It doesn’t take tracking of cash to find this activity with forensic accounting. Just look at customer name - is a single buyer purchasing a majority of watches? Who’s getting all the SS sports models?


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Except they could literally write any name they want on those cards. Rolex doesn't track who buys any watch. When the AD swipes the card, no personal information is transmitted.

[squatchy]

To answer OP question, AD's only report WHAT they sell... not for HOW MUCH. If Rolex mgm't were made aware of a steep discount or markup over MSRP (such as another AD reporting them), it could jeopardize the dealer's account.
Rolex would still prefer discounts and markups to more critical things like leaving warranty cards blank or stickers on the case after sale. These are major no-no's.

[DenaliHD]

I would guess the AD manager/owner/salesmen are also getting an envelope or other perks. Would have to have something in it for them to sell to a gray. Which could potentially cost them their AD status.

[AK797]

Not allowed or very risky in UK and US, thus the rise of bundling. Used to be to greys but now increasingly direct to the shopper.

[marcotagudelo]

Originally Posted by ChipWong

Its happening all the time in the states. In Asia the ADs are selling steel pepsis and daytonas over msrp directly to consumers

this happened to me AD directly sold me above msrp shy of 14 the new BLRO
im in the caribbean.