Grey market pricing, I am confused

[Nads786]

Originally Posted by FlashinLeather

So you are telling me that you bought it for 38k right?

Ha - I was looking at a five digit Sub and a 39 explorer as I overheard. DavidSW is an awesome place to check out retired models. I'm still thinking about that five digit sub. The 39 matte explorer not so much.

[Gaussian]

Originally Posted by 77T

Agree with market absurdity, in general term that is.

But…
If one element was changed in the used car market then it would operate like the secondary luxury watch market for Rolex, AP, PP, RM pieces.

That element is constrained production per annum.

Porsche GT3/RS, Ferrari 296, and others in that category routinely sell above MSRP due to their scarcity.


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We’re talking about watches that are made by the millions, not limited production vehicles that might be one of a few thousands or even hundreds or fewer.

Not an apples-to-apples comparison.

I personally would never pay above sticker for anything that is currently in production and made by the millions just because there is a temporary anomaly with the world economy.

Each to their own though.


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[BraveBold]

Originally Posted by Gaussian

We’re talking about watches that are made by the millions, not limited production vehicles that might be one of a few thousands or even hundreds or fewer.

Not an apples-to-apples comparison.

I personally would never pay above sticker for anything that is currently in production and made by the millions just because there is a temporary anomaly with the world economy.

Each to their own though.


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Desirable (well above msrp) Rolexes are not produced in the millions annually. Hundred thousand, sure.

Price points at msrp are 1/20th those cars. They are often produced in the thousands.

The pool of buyers who can afford to buy and maintain these watches at msrp is massively bigger than for those cars.

So absolutely comparable.

[rushca01]

Originally Posted by 77T

For a $200 delta you chose not to buy?

Even if they had accepted that small delta, you’d still be paying well over msrp - my logic is swallow the $200 since you are already more than $2K above msrp anyway.
Just my


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Yeah, I guess it’s the principle. On the flip side, the seller also lost the sell (and is still bumping the same watch) over a small difference. At the end of the day I don’t need it so I’m willing to walk away.

[Rollei35]

Originally Posted by Nads786

When I was at DavidSW in person, a customer was negotiating for a John Mayer Daytona and I heard the sales associate say, "sorry we can't go below $38K it's a buyers market right now."

Does this sales associate even understand the term of "buyers market"?
My understanding is that when supply is greater than demand it's buyers market. Buyers have more choice and negotiating power.

[ap1]

Originally Posted by Rollei35

Does this sales associate even understand the term of "buyers market"?
My understanding is that when supply is greater than demand it's buyers market. Buyers have more choice and negotiating power.

And also, a John Mayer yg green for 38 I was confused all around

[garyk]

Originally Posted by carwashchris

If your a owner, the value of your collection is sinking.

My 2 cents. Chris

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Thank goodness. I have been waiting for the day I don't have to be perceived as a flipper by ADs. I don't care what the values are, I wear my watches and dont sell or trade them...So stupid for far too long...

[Cwillis0001]

Originally Posted by GB-man

Backpack dealer: 25-35 year old male hailing from Miami, LA or Texas that believes they know a great deal about watches since entering the hobby in Q2 2020. Their inventory consists of a JM Daytona, Pepsi, Batman and six different colored OPs. They moonlight as long term crypto bulls and yearn to one day rent a Lamborghini and stock/“own” a RM030.

[Cwillis0001]

Originally Posted by Mystro

You’re also never getting a SS Daytona from a AD regardless what the economy or watch market is currently trending.

Huh? People get SS Daytonas from ADs every single day. Where else would all the used ones come from?

[Cwillis0001]

Also, I think a lot of people don't know the difference between a gray market dealer and a used watch dealer. A gray market dealer gets a watch directly from the manufacturer, usually due to overstock, and was never an end buyer. Think Jomashop or Watchmaxx or whatever. These are still new watches.

A used dealer bought the watch from a supposed end buyer who bought it from an AD and sold it or flipped it or whatever. These are used watches, despite what the used dealers will tell you. Just because the thing still has stickers on it doesn't mean it's new. The "trusted sellers" here are not gray dealers. They are used watch dealers, one and all.

[6161HH]

Originally Posted by Gaussian

I personally would never pay above sticker for anything that is currently in production and made by the millions just because there is a temporary anomaly with the world economy.

This ^^^^^^^^. The above statement has always been my modus operandi even during the crazed pricing in 2020. Better to go without and wait for eventual return to normalcy.

[Mystro]

Originally Posted by Cwillis0001

Huh? People get SS Daytonas from ADs every single day. Where else would all the used ones come from?

People win the lottery every day but I don’t build my retirement income on the idea of winning.

[jb335]

You still can’t walk in and buy most Rolex at an Ad, hence the higher grey prices. Pretty basic.

And while the market has softened it’s still historically high.

Also, I have a respectable buying history with my AD and I still have only had one incoming this year. So it’s misleading to imply ADs are struggling to move most watches.


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[Cwillis0001]

Originally Posted by Mystro

People win the lottery every day but I don’t build my retirement income on the idea of winning.

Yeah me neither. If anyone is conflating Daytona availability with retirement income or the Mega Millions draw , I'm not sure what to say.

[bradford87]

Originally Posted by 6161HH

This ^^^^^^^^. The above statement has always been my modus operandi even during the crazed pricing in 2020. Better to go without and wait for eventual return to normalcy.

This seems like a good thread to rant in:

At my local AD on the weekend, they had the Explorer 40 as a display, so I took the opportunity to try it on. The associate asked if I would like to put my name down on the "list". Which is nothing more than a random sheet of paper that I'm sure goes straight to the bin.

I made the comment that they have taken my name multiple (easily a dozen) times over the last 4 year, first for an Explorer 39, then when discontinued an OP Black, and the day it was announced an Explorer 40. At this point it is frustrating. I do have a small purchase history with them, buying my Black Bay Blue from them at a time when they were also trying to push me to a Sub at a 20% discount.

Leaving the store, I had a shift in my mindset. I had always wanted my name on the warranty card, but now I'm waiting for the day that the grey market gets within 0-5% of retail. Given their practices, I'm sure this will result in 90% of their customer base disappearing overnight. When it does, I'll be supporting grey (or at least a different AD) and taking joy in seeing their business deteriorate to the point that they deservedly lose the Rolex line.

[Gebbeth]

Was Timepiece Gentleman a backpack seller....of other people's watches?

All joking aside, for any business, cashflow is critical. You need a flow of money coming in in order to fund your operations, let alone try to grow your business.

In the recent past, cashflow was not a problem. Not only was there a supply of Rolexes of all kinds coming in from their AD contacts (cmon, we all know this was happening), keeping their input costs low, but they could generate cashflow from both sales to retail customers and to other dealers.

With prices going up and up, dealers could rely on 2 sources of buyers to get cashflow.

The first signs of a slowdown was at the dealer-to-dealer level. They had first inklings that a slowdown was going on, and I think the volume of dealer-to-dealer sales were less reliable for cashflow purposes.

BUT, dealers still had shlups like us that would be willing to buy a 2017 GMT Master IIs at $8000 over CURRENT retail prices because the crypto was still in the money.

A few interest rate hikes, and many Sam Bankman-Fried and Fried-like prosecutions later, cash is tight, for everyone.

So those dealers who had cash in-hand and in the bank were probably holding on to their Rolex inventory hoping for pops in price to sell. Not everyone can keep their watches forever....how many GMTs and Cermits can you have anyway?

So prices have fallen at both levels. ADs are losing their status, and with Bucherer....who knows how many will remain?

Anyway, it is what it is.

[jb335]

Originally Posted by bradford87

Leaving the store, I had a shift in my mindset. I had always wanted my name on the warranty card, but now I'm waiting for the day that the grey market gets within 0-5% of retail. Given their practices, I'm sure this will result in 90% of their customer base disappearing overnight. When it does, I'll be supporting grey (or at least a different AD) and taking joy in seeing their business deteriorate to the point that they deservedly lose the Rolex line.

They stopped putting the purchasers name on warranty cards over 3 years ago.


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[simplythebest]

If a 10k MSRP watch is selling for 10% above MSRP + tax, is there really enough meat in it for the aftermarket sellers?

If their source is a flipper who I assume also wants to make money, do they split $1k? Are both parties willing to take the risk of holding the bag if the prices continue to fall.

My sense is that flippers and aftermarket sellers would stop buying before aftermarket prices retreat to MSRP. This would yield a lot of 'incoming' posts here for models that had previously been difficult to get well before the aftermarket prices hit MSRP or less.

[BraveBold]

I think some are misdirecting blame a bit.

Demand at msrp massively exceeds supply for some models (eg Daytona). It should be a $20k+ watch. That is what the market has been saying for years and certainly well before the speculative bump post 2020. Individual opinions on whether it “should” be a $20k are pretty much irrelevant there, other than of course someone deciding to purchase or not.

Rolex could address through: 1) increasing supply (significantly) or 2) raising prices.

The latter would cool speculation but if they go to far, it could create a risk that in a macro downturn those watches (flagship / aspirational for the line) could drop below msrp. This could (would) taint the brand halo. Not necessarily in their long term best interest.

They could also of course increase supply but recently this was not possible and runs into the same risk of long-term overrunning demand and hurting image.

The real issue is the amplification from the flipper market. They (Rolex) could address through programs like short term lease to own, or registries, but those too will garner complaints and may be unwieldy to implement efficiently at these price points and volumes.

The ADs participate in all this while being left with too little supply and skewed incentives (not necessarily aligned to the same interests of Rolex). But the real driver of the problems is simply due to Rolex playing the long game and pricing watches below where the current market is.

[Gladiat0r]

I paid slightly over (maybe $1000) msrp for a brand new watch from DavidSW. I called 2 AD’s and they both said they may not see it for 6-12 months if even.

He had the exact model and dial I was looking for. It’s not even a desirable watch. But it was perfect for my wife and I had no issue buying and paying a slight premium to get it in time for our anniversary.

No regrets here and I don’t care to check “the market” and see what it’s going for since my wife is beating the thing up in Pilates class anyway lol.

[6161HH]

Originally Posted by bradford87

This seems like a good thread to rant in:

At my local AD on the weekend, they had the Explorer 40 as a display, so I took the opportunity to try it on. The associate asked if I would like to put my name down on the "list". Which is nothing more than a random sheet of paper that I'm sure goes straight to the bin.

I made the comment that they have taken my name multiple (easily a dozen) times over the last 4 year, first for an Explorer 39, then when discontinued an OP Black, and the day it was announced an Explorer 40. At this point it is frustrating. I do have a small purchase history with them, buying my Black Bay Blue from them at a time when they were also trying to push me to a Sub at a 20% discount.

Leaving the store, I had a shift in my mindset. I had always wanted my name on the warranty card, but now I'm waiting for the day that the grey market gets within 0-5% of retail. Given their practices, I'm sure this will result in 90% of their customer base disappearing overnight. When it does, I'll be supporting grey (or at least a different AD) and taking joy in seeing their business deteriorate to the point that they deservedly lose the Rolex line.

I can understand your frustration but maybe take a deep breath and try to see things from the AD’s perspective. For the past 3-4 years Rolexes, especially sports models, have been in short supply; so AD’s everywhere have had to create lists for allocation of their products. However maybe supply/demand paradigm might be shifting in our favor?

Probably a better arc would have been to thank the SA for his/her time and respectfully request a call should a 40mm Explorer become available. Nothing to lose by asking rather than venting and leaving the store in a huff. Just sayin’ …

[zengineer]

Originally Posted by bradford87

This seems like a good thread to rant in:



At my local AD on the weekend, they had the Explorer 40 as a display, so I took the opportunity to try it on. The associate asked if I would like to put my name down on the "list". Which is nothing more than a random sheet of paper that I'm sure goes straight to the bin.



I made the comment that they have taken my name multiple (easily a dozen) times over the last 4 year, first for an Explorer 39, then when discontinued an OP Black, and the day it was announced an Explorer 40. At this point it is frustrating. I do have a small purchase history with them, buying my Black Bay Blue from them at a time when they were also trying to push me to a Sub at a 20% discount.



Leaving the store, I had a shift in my mindset. I had always wanted my name on the warranty card, but now I'm waiting for the day that the grey market gets within 0-5% of retail. Given their practices, I'm sure this will result in 90% of their customer base disappearing overnight. When it does, I'll be supporting grey (or at least a different AD) and taking joy in seeing their business deteriorate to the point that they deservedly lose the Rolex line.

The grey market would cease to exist if they could only get 5% over retail and ADs weren't discounting below retail. The spread will always be significantly more than that.

[433]

Spot on!

Originally Posted by GB-man

Backpack dealer: 25-35 year old male hailing from Miami, LA or Texas that believes they know a great deal about watches since entering the hobby in Q2 2020. Their inventory consists of a JM Daytona, Pepsi, Batman and six different colored OPs. They moonlight as long term crypto bulls and yearn to one day rent a Lamborghini and stock/“own” a RM030.

[77T]

Originally Posted by rushca01

Yeah, I guess it’s the principle. On the flip side, the seller also lost the sell (and is still bumping the same watch) over a small difference. At the end of the day I don’t need it so I’m willing to walk away.

That is the best path if it wasn’t a grail for you.

While we talk about overpaying for a Rolex (or any other brand for that matter) there are so many other things in life for which we overpay. I’d posit that each one of us spend more than necessary for convenience - perhaps as much as a new Rolex in sum each year.


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[Oystersteel92]

Originally Posted by Podmornica

The secondary grey watch market is dead in the backyard pool floating face down! "Juan"

Not just that the prices collapsed - but hardly anyone is buying anything. Try selling your brand new 126711CHNR Rootbear: There's no grey dealer in the world that would pay you above the MSRP so you can flip it like back in 2021. Have the Daydate or a plain datejust? Good luck unloading that.

Dealers are full with stock bought at the peak of the market. Most are overleveraged and are hoping for market to bounce. It won't.

The 2020 is long gone. Rates are high, there's no helicopter money. People are spending their cash on vacations again. We will never see that hype in our lifetime again.

That's interesting. What you describe is somewhat like the current housing market. Mortgages are at 8%, which should be killing demand and lowering prices, but because people with 3% mortgages aren't budging, inventory remains extremely low which is putting a floor under the market.

During the great recession we got some tremendous deals when people liquidated their collections to raise cash, but if the grey dealers are well stocked with watches that they have overpaid for, they won't be buyers. It may be nearly impossible to raise cash with a watch sell if it comes down to it, and that excess and high priced inventory may put a floor on prices. Bummer. I want recessionary pricing!

[EEpro]

Originally Posted by FlashinLeather

So you are telling me that you bought it for 38k right?

No kidding. I'll buy two for $76k if anyone has them.

[kopi-c]

Originally Posted by Cwillis0001

Also, I think a lot of people don't know the difference between a gray market dealer and a used watch dealer. A gray market dealer gets a watch directly from the manufacturer, usually due to overstock, and was never an end buyer. Think Jomashop or Watchmaxx or whatever. These are still new watches.

A used dealer bought the watch from a supposed end buyer who bought it from an AD and sold it or flipped it or whatever. These are used watches, despite what the used dealers will tell you. Just because the thing still has stickers on it doesn't mean it's new. The "trusted sellers" here are not gray dealers. They are used watch dealers, one and all.

Trusted sellers here, I would not support because they're part of the root cause why the average person is unable to buy their first watch brand new at the Rolex AD.

Stop buying used watches above retail and maybe things will get back to normal.. watches are to be enjoyed/worn and not kept for an investment or locked up in safe.

[skipstar]

Originally Posted by Gaussian

Imagine if the used car market functioned like this used rolex market.

How many of us would willingly pay above new MSRP for a used car?

It all seems absurd even if we were trying to normalize it all. . .


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Check out prices on a used 2023 Range Rover Sport, 15-20K above MSRP in the Boston area, absolutely insane.

[Armis]

Originally Posted by GB-man

Backpack dealer: 25-35 year old male hailing from Miami, LA or Texas that believes they know a great deal about watches since entering the hobby in Q2 2020. Their inventory consists of a JM Daytona, Pepsi, Batman and six different colored OPs. They moonlight as long term crypto bulls and yearn to one day rent a Lamborghini and stock/“own” a RM030.

Wow, that is a detailed description. But I am curious why the RM030 specifically.

[dnpina]

Maybe this will generate more watch collectors when they realize they can buy their favorite piece for the low right now! but that's just my theory