Is this an AD conflict of interest?

[Brew]

Great, now I don't have to figure out how to hide him.

[mountainjogger]

Originally Posted by HogwldFLTR

There are advantages for dealerships buying back watches for both the dealers and customers. I see no conflict of interest there at all. Why shouldn't they sell used watches. It's a market segment and they have every right to participate.

Agree.

I have sold a vintage piece to my AD and purchased new and used from my AD. Easier to build a relationship this way than buying stuff I do not want.

[mountainjogger]

And one more thought.

If you mean a "conflict of interest" toward to the AD's customers, the answer is clearly no. Buying a watch is an arms length transaction between two parties - seller and buyer.

This is a classic capitalist transaction. The AD does not represent your interest and the AD has no duty to do so. Period, end of story.

Now, if the AD was a lawyer or a broker and you hired the AD to represent your interest in buying or selling a watch, and he or she put their interest of above yours then maybe there might be a conflict.

But otherwise, in the transaction between you and the AD, the AD's only interest is his or her own. There can be no conflict.

On the other hand, there may or may not be a conflict of interest with regard to the AD's duty to Rolex. That would depend on the terms of the contract between the AD and Rolex.

[Token74]

Whilst it is optically a bit odd, it all makes sense. Some would argue that they shouldn’t be allowed to do it, others would argue that they should be allowed to sell new watches at whatever price they want, treating the retail price as a recommended price rather than an actual price.


Sent from my iPhone using Tapatalk

[Sublovin]

Originally Posted by mountainjogger

If you mean a "conflict of interest" toward to the AD's customers, the answer is clearly no. Buying a watch is an arms length transaction between two parties - seller and buyer.
:

Well, could be two things.

1) could be seen as a conflict of interest because a consumer is looking at an AD as the only Rolex authorized source to provide them with new, authentic products, and selling used conflicts with that because it could cause them to make more watches “used”....get my drift?

2) could also be seen as a conflict between AD and Rolex because the AD could be using the secondary market as a way to increase profits which do not roll up hill to Rolex, and in doing so, might turn consumers away from their products due to lack of availability and inflated prices.

Number 2 is the one I have thought about more....dealers, in theory, are potentially turning people away from the brand due to frustration. If I am Rolex, I would want my retail channel to have a sense of obligation for putting these things in the display case. The buzz and demand is good for Rolex, but for the average consumer looking to memorialize an event or a gift, it is unlikely they will be willing to pay the premium or sit on a waiting list. These shoppers will likely buy a different brand...hard to imagine that scenario being good for Rolex.

[mountainjogger]

Originally Posted by Sublovin

Well, could be two things.

1) could be seen as a conflict of interest because a consumer is looking at an AD as the only Rolex authorized source to provide them with new, authentic products, and selling used conflicts with that because it could cause them to make more watches “used”....get my drift?

2) could also be seen as a conflict between AD and Rolex because the AD could be using the secondary market as a way to increase profits which do not roll up hill to Rolex, and in doing so, might turn consumers away from their products due to lack of availability and inflated prices.

As to 1), I get your drift, but that is on the consumer for thinking that the AD is in his corner. He is there to do business. He does not work for the consumer or owe a duty to the consumer. It is an arm's length transaction. Just my opinion.

As to 2), yes, depending on the contract between the AD and Rolex. But that is Rolex's issue or non issue. Not the consumer's. Just my opinion.

For me... I like it when an AD sells used as well. More to look at. More to learn from. Different strokes for different folks.

[Sublovin]

Originally Posted by mountainjogger

As to 2), yes, depending on the contract between the AD and Rolex. But that is Rolex's issue or non issue. Not the consumer's. Just my opinion.
:

Yep, I never said this would be a consumer issue. As I have said multiple times in this thread, I personally don’t care, but I would be surprised if Rolex doesn’t.

[Ravager135]

Originally Posted by Sublovin

I will start by saying that I am a watch collector, not a watch investor. Anyone who has seen my posts over and over knows I am in it for the interest in watches, not my savings account. This is not about market prices per say, just something I recently began giving more thought to.

Some AD’s sell used watches, and some don’t. For the ones who don’t, that I know of....they will still take certain watches on trade, but then wholesale them. For those who sell used watches, I recently began wondering if there is a conflict of interest. I was in an AD last week and they had a “used” BLNR....for $13,500. I found this interesting because I thought to myself, why would they EVER sell a new one...so long as the price of used is higher than MSRP? You follow?
This is a new thing for Rolex with the exception of the occasional steel Daytona back in the day. I realize MSRP is “suggested”, but I know this dealer doesn’t sell new pieces above that....makes you wonder....
I’m not saying it’s wrong, and I assume Rolex doesn’t care, just makes you think about the fact that anytime they sell a steel Rolex for MSRP they are literally giving away potential profits. We know that many dealers are making money on grey market/back door deals, but this is a very in your face way of doing it.
Just thinking...

I think a lot of people are missing the point... I don't think anyone is suggesting that an AD cannot sell a used watch above MSRP or that for a long time used watches would sell well below MSRP. What, I think, OP may be suggesting is that an AD could take a watch out of inventory, take some stickers off, call it "used," and resell it at an inflated cost. Another individual commented that the sale history could discourage this practice, though I see no reason an AD would need to disclose exactly how they came about a used watch. They could literally "sell" it to a staff member and then re-sell it for double MSRP with some models.

To be fair, I haven't seen this happening. In the few ADs I have been in recently, any used stock they had were clearly older models or less desirable ones. That said, even before all the stainless steel madness, I never really saw ADs discount used watches all that much. This idea that it was a buyers market for so long and now it just so happens to be the reverse is certainly true when it comes to grey dealers who sold watches at significant discounts. I've never been to an AD in my 11 years of collecting and seen anything used that was a good deal.

[dtwer]

Originally Posted by 904VT

I wouldn't be surprised if some ADs are using some resellers as middlemen to move a hot new watch to another AD with a used section and vice versa. The middleman would just guarantee that each party receives same number of "hot" watches back in return that are in "used" form as new watches they supply or minus whatever they work into their deal. All the ADs now have used hot watches they can sell at high premiums that never came to their store as new stock. Not to mention great to have someone to buy up all those redesigned DJs they have in stock too. I'm against this practice entirely, but feel it is going on in some segments of the market.

I wouldn't mind being the said "middlemen." Let me buy a couple hot pieces at a time, wear them for a couple months, then sell them back to the AD for the same prices I have paid; rinse and repeat.

[Tangier11]

WTH is wrong with some people on here. I found this thread interesting and thought provoking. If there have been other threads on this subject I haven't seen it in my years on here. If you don't get anything from a particular thread, simply move on, there is no need to make smart ass comments. Some folks need to grow up.

[Bizcut1]

Originally Posted by Brew

Great, now I don't have to figure out how to hide him.

Yes. They finally banned him. What a miserable character. Good riddance.

[CashGap]

I don't think people understand the concept of "Conflict of Interest".

The AD has a responsibility to profit maximize for the equity holders. These actions do not constitute a conflict.

The AD has a responsibility to meet their contractual obligations with Rolex. These actions do not constitute a conflict.

The AD is ABSOLUTELY in conflict with the consumer... there is a "surplus" between the bottom dollar the seller will accept and the top dollar the buyer will pay. The AD and the consumer are each trying to get as much of that surplus as possible.

Any cute notions about "service" and "relationships" aside, this is the essential conflict in these transactions. AD tries to get consumer as close as possible to the highest price they are willing to pay, consumer tries to get AD as close as possible to the lowest price they are willing to accept.

Rolex refusing to either increase MSRP to match the market price at this supply level, or increase production to match the market demand at this MSRP, are the problem. All else are symptoms and work arounds.

[golden_time]

This is so thought provoking.
Rolex WILL close an AD that is not following the rules.
In the UK, for example, a Rolex AD is not allowed to post a watch. It HAS to leave through the front door with a client, or be delivered by a staff member.
Rolex are meticulous, if there is a whisper of wrongdoing they will close the account.

So... is it worth losing the account? To make an extra few thousand pounds, on one watch, vs potentially hundreds of thousands of pounds over years selling the watches at MRSP. I dont think it is worth it. I'm pretty sure the retailers will feel the same way.

Production has increased, from what I have heard. But it is going to be a long, slow process. Only a quarter of the watches Rolex manufacture are steel professional models, so it's going to take a while to see a noticable- visible- increase.
It will NEVER meet the demand, and that's just the way is.

[CashGap]

Originally Posted by RJRJRJ

It's simply one party telling the other "this is what we think you should sell this for.." The buyer (AD) can sell for whatever they want since they own the product, but Rolex can say we don't want to deal with you any more..

Read this if you care to. It's very interesting.
https://www.americanbar.org/content/...thcheckdam.pdf

Yes. Built on two bedrocks principles:

1 - Private Property Rights - AD owns the watch and can smash it, sell it to a grey for 150% of MSRP or sell it to their buddy for 50% off.

2 - Free association - Rolex can choose not to deal with an AD who sells at prices Rolex does not like.

This is a very, very good thing in a free society. The market ALWAYS works until the government tries to "help" it.

[Bizcut1]

Originally Posted by CashGap

I don't think people understand the concept of "Conflict of Interest".

The AD has a responsibility to profit maximize for the equity holders. These actions do not constitute a conflict.

The AD has a responsibility to meet their contractual obligations with Rolex. These actions do not constitute a conflict.

The AD is ABSOLUTELY in conflict with the consumer... there is a "surplus" between the bottom dollar the seller will accept and the top dollar the buyer will pay. The AD and the consumer are each trying to get as much of that surplus as possible.

Any cute notions about "service" and "relationships" aside, this is the essential conflict in these transactions. AD tries to get consumer as close as possible to the highest price they are willing to pay, consumer tries to get AD as close as possible to the lowest price they are willing to accept.

Rolex refusing to either increase MSRP to match the market price at this supply level, or increase production to match the market demand at this MSRP, are the problem. All else are symptoms and work arounds.

Interesting points. Definitely.