Controversial Takes on the "Shortage" and Grey Dealers

[Dlong]

I'm new to the forum. Have a black sub with date and the wife has a 41mm ss datejust with blue dial that she just got back from a warranty repair. We picked up her watch yesterday at the store and their rolex counter was pretty bare. She said they got zero deliveries in October, will get none in November and none in December. Kinda sucks going into the holiday season. She said right now the hot watches are subs, gmt , daytona and 41mm datejust with jubiliee bracelet and fluted bezel and blue dial. I have a Pepsi on the list here and a jeweler in FL that we frequent. Not to sure about the grey market thing as I was told a rolex dealer lost their dealership for selling over msrp. The other reason for the limited stock is that rolex is a private company that does not have to answer to greedy shareholders so they keep there manufacturing to about a million pieces a year. Plus, the economy has been great and peoples portfolios have been doing quite well. Hence why I bought both mine and my wifes at the same time and got a fantastic discount back in October 2017. Timing was right as I cant even find a sub in a store, never mind with a discount. I think the guys that are selling out the back door are taking quite a risk in losing their dealership. People that work for an AD or rolex cant even get watches. And if they do, they must have their initials engraved so that they can not just buy and flip watches. I get my info from two people personally that I know that work for rolex for what ever it is worth.

[T3F]

Originally Posted by Dlong

She said they got zero deliveries in October, will get none in November and none in December.

There's just no way this is true. There is no chance that an AD goes three months without receiving any watches. Multiple ADs I've talked to said that they get deliveries pretty much on a weekly basis. The only reason they'd be saying this would be if they were selling out the back door to grey market dealers (or, as someone else noted, might secretly be a grey dealer themselves).

The other reason for the limited stock is that rolex is a private company that does not have to answer to greedy shareholders so they keep there manufacturing to about a million pieces a year.

I also can't stand when ADs throw around this statement -- Rolex is still a company that is trying to make money, and a million -- MILLION! -- watches is a lot! It's more than any other luxury watch brand.

Plus, the economy has been great and peoples portfolios have been doing quite well. Hence why I bought both mine and my wifes at the same time and got a fantastic discount back in October 2017. Timing was right as I cant even find a sub in a store, never mind with a discount.

The economy is doing well, and that certainly contributes to some extent. However, the economy was also doing well back in October 2017, and at many other points in the last 50 years. However, Rolex stock in AD's cases has never suddenly dried up across the board like it has in the last 12 months.

I think the guys that are selling out the back door are taking quite a risk in losing their dealership.

I think they are taking a risk, but at the same time, it's unlikely they get caught if they are reasonably smart about, as Rolex isn't currently doing anything to stop them. Additionally, selling out the back door might allow some of these ADs to go from making a slight profit that just allows them to stay in business to making substantial money. They're selling a bunch of watches they wouldn't be able to sell to normal customers through bundling deals, or, if they're operating as grey dealers themselves, are selling sport models for a substantial amount over list.

[Pops1973]

Originally Posted by EDL7

Grey dealers...are...Rolex AD's...

I have suspected this for some time and I have abeen in contact with a grey that has all the watches - I asked to meet and buy a certain watch he refused to meet and replied that if I wanted the watch I pay and he will deliver it. There are 2 ads in the city and I have been in both one of them is an independent and I was laughed out the shop and told I needed to buy so much before I would get anything the other ad is a large national chain and after going in a few times I was put on a list. I suspect the independent is the grey as well.

[ROLEXster]

Originally Posted by EDL7

Grey dealers...are...Rolex AD's...

Grey is a subsidiary of a Rolex AD.

Usually it's managed by the Rolex AD owner's sons / daughters.
Keeping all the profits in the family.

[peterpl]

Supply my ass!! Stop it with this supply bullshit.

Its not supply. There are 1000s upon 1000s of these so called "rare" watches around the world. LOL - time to take of those rose colored glasses and sit down and look at whats for sale and by who for a minute.

[Pops1973]

Originally Posted by peterpl

Supply my ass!! Stop it with this supply bullshit.

Its not supply. There are 1000s upon 1000s of these so called "rare" watches around the world. LOL - time to take of those rose colored glasses and sit down and look at whats for sale and by who for a minute.

Well said - I have not been on this forum long but it’s becoming very clear that demand is there but so is supply and these watches are not rare I see a rare Rolex every week and I live in a small city. It’s all a game the greys and ads are linked and if Rolex don’t see it or don’t want to. why I am not sure. But Rolex is the one losing the credibility it’s their brand and is seriously putting me off. I have gone from wanting a Rolex ASAP to now Where I am not bothered when it comes. No urgency at all. Not going to a grey anytime soon to pay over msrp.

[Dlong]

Crazy stuff, eh?? What I don't understand is that every single Rolex that comes into this country goes to Long Island city. They are all shipped in their plastic coffin. The green fancy box goes to the AD seperately. Now, I would think that Rolex documents all models and serial numbers of each watch and where they are going. Its really not that difficult. When a watch is sold, the deal is reported to Rolex with the warranty being registered and you get your green plastic card. Why would Rolex want to hurt their dealers?? Whole thing just does not make sense. But what do I know. Would I pay $18,000 for a $9000 Rolex from AuthenticWatches and not through an AD with a Rolex warranty? Not me. Rolex dealers should be up in arms. I know I'd be pissed going into the holiday season without any product.

When I was in florida at an AD I know, we were talking about the Pepsi and how hard they are to come by. He told me, that if I found one and it was $1000 over list, grab it. Was he fishing? Throwing out a worm to me? I dont know. He also told me on an average day, they sell 2-3 rolex's. If he had sport models, it would be 5-6 a day. that's alot of high end watches in a day and open 7 days a week. I though 5-6 a week would be alot.

[el-heffe]

Supposing that AD are selling to gray sellers, for a much better profit, what are they doing with the warrantee that they're required to register at the time of the sale? Not registering the watch, would surely draw the ire of Rolex. On the other hand, I guess they could makeup names, but it seems likely that they'd still get caught over time (and this would be fraud). Am I missing something?

[avega357]

My personal take.

There are some models that are selling like hot cakes and the rest is just hype


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[Matt5999]

Originally Posted by T3F

These topics are somewhat controversial, and have been discussed indirectly in a lot of other threads, but I figured I'd start a thread that directly addresses two related things: whether there is a "shortage," and whether or not Rolex really hates the grey dealers.

I'll start with the "shortage." Up until the last few days, it was my belief that there actually was a huge mismatch between supply and demand for the SS sport models. I'm not saying there isn't, but I don't think it's as huge of a difference as I previously believed. There are a few reasons for my change in opinion, the first being the grey market supply of "rare" models. Someone started a good thread that showed there were hundreds of Daytonas, Sky-Dwellers, BLROs, etc. listed for sale on Chrono24. Also, go to any grey dealer in person or look at their social media accounts, and you'll see that they usually have multiples of all of these models (often 10+ of each). While I haven't personally talked to any grey dealers in person, multiple people on the forums said that they have and have been told that it's very common for the greys to get multiples of each rare model in one shipment from one AD -- one even said that he saw them unpack a shipment and it had multiple BLROs, multiple Daytonas, etc. This hints that ADs are getting a lot more of these models than some of them claim to be getting, which makes sense if you run through the (rough) numbers, which I'll do below.

Rolex makes around 1,000,000 watches per year. I haven't been able to find anything on how many Rolex ADs there are worldwide, but I think that 1,000 is a decent guess. If SS sport models comprise 30% of production, which I think is another reasonable estimate, then each AD receives about 300 SS sport models per year. (Note: this is an average -- the biggest dealers might be getting 1000+ of them, while the smallest might only be getting 100 or so.) There are 18 sports model references by my count (including dial color variations), so the average number of each reference -- again, this is accounts for each dial variation, not just the model in total -- received is 16-17. Realistically, each aren't going to be made in equal numbers -- most likely, more 116610LNs are being made than 116500s -- but you've got to imagine that these dealers are receiving at least 15 Daytonas between the two dial colors and 20+ black Subs per year. This is consistent with what I've heard from an AD that I trust, but seems to fly in the face of what a lot of other ADs have said. I've been told by some that they're lucky to get a Daytona every six months, haven't yet gotten a BLRO, haven't seen a black sub in 3 months, etc., and that just doesn't make any sense. Even if my math is off, which I'm sure it is to some degree, it's unlikely it's off by a factor of 10 like it would have to be to make what some ADs are saying true.

Because of all of the above, I think that a significant portion -- I don't know how to estimate it, but my guess is somewhere between 25% and 75% -- of sales of "rare" models are ending up on the grey market, and that a lot of them are knowingly sold to grey dealers. That brings me to my second point...

My opinion is that, if they wanted to, Rolex would be able to shut down a lot of the sales to grey dealers pretty easily. They could do anything from requiring dealers to keep the warranty cards for a period of time to making buyers give more information (e.g., driver's license, address) about themselves and limit them to, say, 1 of each reference. I'm not saying these tactics would be 100% effective, but I think that there's a number of things they could do to restrict sales to the grey market, none of which seem to be widely adopted.

I think that Rolex secretly likes the grey market. They get the same amount of money for the sport models regardless of who they go to, but if they sell them to grey dealers, they are able to move a lot of undesirable pieces that they wouldn't otherwise be able to sell in that same quantity. The fact that they don't seem to be doing anything, other than a few isolated reports of ADs keeping warranty cards, backs this opinion up.

There's my conspiracy theory-esque take. What does everyone else think?

YOU MENTION SOME VERY GOOD POINTS! This isn't much of a spoiler alert but ADs and grey-marketers are way closer than we think. Often owned by extended family.

Example. The AD will get a Daytona C and sell it at Rolex price of X to the Grey-market counterpart who in turn will put it up for sale for an extra +% at Y. They are basically cooperating.

What ADs actually do to real customers is say "You'll be waiting years before you can get the SS, but hey check out the WG. BTW, if you purchase the WG, which I can give you a discount on, I will "GUARANTEE" an SS within the next couple of months" [/B].

Then whether they deliver on the SS promise it's up to them. We all have no clue who's on top of "the list". ADs are mostly interested in moving more expensive pieces because they're harder to sell and make bigger margins.

I experienced this first hand.... It's all very sad