Crazy Prices

[dmash]

Originally Posted by Farsh14

Tyler: How do you have so many PP but only one Rolex? was just curious haha

That's like saying....

'How do you have so many Ferraris but only one Mercedes?'

[sutats]

People that are willing to pay the asking prices. Life is short and we only have one, money comes and goes. What is a lot of money to some might be a drop in the ocean to others.

[007_Omega]

Either Rolex magically really ups the production and you see these models in ADs (not happening) or people refuse to pay the premium on the grey market.

As long as people are willing to pay for it, that's what will be charged.

[SearChart]

Another thread on this!
I don't know what's worse, the availability and prices of these hot models or the continues whining about it all...

Oh wait, I do! Definitely the whining.

[Divingdeep87]

You can get a blnr in 3 months in Europe? Not that bad..

[BLACKHORSE 6]

Rolex is limiting the supply, because that’s what’s in their best interest. For decades, and especially through the quartz crisis, no other company in the Swiss watch industry has shown themselves to be as business savvy as Rolex.

https://en.m.wikipedia.org/wiki/Newsvendor_model

[mattza]

Originally Posted by BLACKHORSE 6

Rolex is limiting the supply, because that’s what’s in their best interest. For decades, and especially through the quartz crisis, no other company in the Swiss watch industry has shown themselves to be as business savvy as Rolex.

https://en.m.wikipedia.org/wiki/Newsvendor_model

I wonder what the plan is going forward? Are they going to keep limiting the supply and having empty AD's? Or are they going to get people so worked up because "they want what they can't get" and then flood the market with availability?

[Bladeshot]

Originally Posted by HL65

Actually smart collectors are not selling their watches because they actually bought them to wear and enjoy and paid retail from an AD.

Touché! I buy mine preowned. And I sell one when I want to try another reference. I don’t speculate on price. I buy what I want to wear.

#nosafequeens

Quote: “There can be only one” ☝️ (on my wrist at a time!) PS> love your Callsign.


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[Bladeshot]

Originally Posted by AK797

He said I passed the flipper test and then asked if I'd like my name put down for anything and I said no, you don't get my number that easy, love.

Oh, man, that’s an awesome response! Well done!


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[FTX I]

Originally Posted by HL65

Actually smart collectors are not selling their watches because they actually bought them to wear and enjoy and paid retail from an AD.

[AK797]

Originally Posted by Bladeshot

Oh, man, that’s an awesome response! Well done!


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I used to be the pretty girl walking into a club when I stepped into any AD in the old days, but recently I ain't be feeling so wanted, so was good to get my mojo back.

[lecorsaire]

Originally Posted by wytrader

Cannot see it ending until MSRP comes into line, do not see it going the other way. I think the grey market is a more realistic pricing mechanism than Rolex's random guessing across currencies. Due to CHF move a couple of years ago I think Rolex has backed off playing around with prices too much so I truely think grey market prices are a future reality.

It will end once the new people get tired of the same watches. A lot of the people paying the premiums are nouveau riche fashion types. I personally do not believe it will be sustainable for a long time. None of these watches are rare.

While not everyone will agree with me, IMO both the white ceramic Daytona and BLNR are nicer watches than the SS BLRO. The jubilee just is not as popular as the oyster on sports models. The DaytonaC promo ad has 278k views on YouTube after 27 months and the SS BLRO has 266k views in just 3. We’ve seen even the TT CHNR selling for a premium which in unheard of for TT. I think interest has very little to do with the watch itself, but more because it is new and hyped up by hundreds of fashion, watch and lifestyle websites online.

It will be interesting to see what happens with the next new sports models Rolex introduces next Baselworld especially if not a new Sub, GMT or Daytona config.

[avega357]

Originally Posted by asiparks

August 28th 2020. Around 2:30.

It's probably to do with markets, or money, or production or Illuminati or Instagram...

The Illuminati had not been proposed yet as a reason, I think you are on to something

World Rolex domination by the new order, diabolical

[SeaAndSky]

Originally Posted by HL65

Actually smart collectors are not selling their watches because they actually bought them to wear and enjoy and paid retail from an AD.

I couldn’t agree more.

[mikkolopez]

Happy was able to beat these prices with a 10% discount off retail when I got my SubC Date.

No way am letting this piece go even with today’s prices.

Wish that the Daytona Steel preowned prices drop so I can get mine. The DaytonaC is way crazy now.


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[No SUBctitute]

Originally Posted by AK797

Well we have direct evidence in the shape of Brexit here, which led to a huge demand surge, supply did not change one bit ofc, and this was principally because the price was lower, not higher, to foreigners, but then as prices moved up to reflect this, the foreigners were driven out of our market, and yet still prices climbed higher as UK demand kept rising even unto this day in a true Veblen manner. I think it is mostly a demand driven issue, supply is secondary.

I don't see "direct evidence" of SS Rolex sports model sales demonstrating behavior of being a Veblen good in this situation, based on the evidence you provided.

While your logic trail is reasonable at first, we are relying on anecdotal evidence that when foreigners left the market due to increasing prices demand kept increasing BECAUSE of the rising prices. You are also dismissing out-of-hand the effect of limited supply. The anecdotal evidence (I'm relying on it, too) seems to indicate that there is a SS Rolex sports models supply problem in UK ADs (as there is in US ADs). The low UK prices for Rolex (and later the limited supply) bore witness to demand outstripping supply. In the absence of convincing evidence to the contrary, one relies on traditional supply and demand principles to explain buying behavior.

If the new Pepsi GMT is a Veblen good, then grey dealers will get plenty of action at $20,000 and won't have to lower their price to sell the watch. And if its a Veblen good and they do lower the price then demand will decrease as customers will perceive that purchasing the watch doesn't convey enough status. I don't see that happening.

My main argument against SS Rolex watches being a Veblen good is that that the $5-10K price point for a well-made mechanical watch which will last for generations does provide enough intrinsic value that much of the demand will be sustained by the quality of the good itself. A precious metal Rolex contains less intrinsic value for the amount paid for the watch and is a better candidate for a Veblen good. However, I do appreciate hearing your opinion on the matter.

[AK797]

Originally Posted by No SUBctitute

I don't see "direct evidence" of SS Rolex sports model sales demonstrating behavior of being a Veblen good in this situation, based on the evidence you provided.

While your logic trail is reasonable at first, we are relying on anecdotal evidence that when foreigners left the market due to increasing prices demand kept increasing BECAUSE of the rising prices. You are also dismissing out-of-hand the effect of limited supply. The anecdotal evidence (I'm relying on it, too) seems to indicate that there is a SS Rolex sports models supply problem in UK ADs (as there is in US ADs). The low UK prices for Rolex (and later the limited supply) bore witness to demand outstripping supply. In the absence of convincing evidence to the contrary, one relies on traditional supply and demand principles to explain buying behavior.

If the new Pepsi GMT is a Veblen good, then grey dealers will get plenty of action at $20,000 and won't have to lower their price to sell the watch. And if its a Veblen good and they do lower the price then demand will decrease as customers will perceive that purchasing the watch doesn't convey enough status. I don't see that happening.

My main argument against SS Rolex watches being a Veblen good is that that the $5-10K price point for a well-made mechanical watch which will last for generations does provide enough intrinsic value that much of the demand will be sustained by the quality of the good itself. A precious metal Rolex contains less intrinsic value for the amount paid for the watch and is a better candidate for a Veblen good. However, I do appreciate hearing your opinion on the matter.

Well we have another example in the LVc, price rose sharply in Aug on disco rumours, supply did not change ofc, and the price rose steadily each month until Basel as demand chased the higher prices, and then in Mar the rumours were revealed to be not true, but we didn't see any price fall as with a normal good, rather price and demand still remains high and that is due to the Veblen effect, not a perceived supply shortage. The BLNR has had a similar ride with disco rumours also helping to fuel a price rise that were proved false in Mar but there too prices are still rising. So it is basically a momentum effect, once price starts moving up on certain models, the more the people want them for a variety of reasons, status, exclusivity, FOMO and profitability.

The D500 still gets plenty of action at a 50% plus premium, and I suspect the Pepsi will comfortably do so too.

I agree that supply issues do play a part in this, but I still maintain this is more demand and perception led, and as price rises have not led to a fall in demand which would put pressure on prices to fall, rather the opposite has happened and kept the pressure on prices to continually rise, so I think they are Veblen goods.

[milgauss2007]

It is simply an asset bubble and like all bubbles will deflate at some point in the future. When no one can say for sure but these things never go on forever.

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[padi56]

Originally Posted by SearChart

Another thread on this!
I don't know what's worse, the availability and prices of these hot models or the continues whining about it all...

Oh wait, I do! Definitely the whining.

Have to agree mate how this forum has changed now if its not alignment points the constant whining about the so called short supply,or will this go up or down if I bought this or that and the rest of the Rolex OCDs.I sometimes wonder why some buy Rolex watches, perhaps to wear the brand, or perhaps just to moan about them.

[douglasf13]

Originally Posted by No SUBctitute

...My main argument against SS Rolex watches being a Veblen good is that that the $5-10K price point for a well-made mechanical watch which will last for generations does provide enough intrinsic value that much of the demand will be sustained by the quality of the good itself.

Surely you really don’t think $10K is reasonable for a steel watch that likely costs in the three-figures to make? If we were talking a couple grand or so, like a Sinn, then maybe I’d agree, but even that’s stretching it. Even a $600 Hamilton isn’t that bad of a watch.

Take a Sub and a Porsche 911 from the late ‘60s, and, while new 911s now cost about 12x or so what they did back then (around double vs. inflation,) a Sub costs about 35x more...and that’s for something that’s an anachronism vs. Porsche, which is still leading edge tech.

[lecorsaire]

Originally Posted by padi56

Have to agree mate how this forum has changed now if its not alignment points the constant whining about the so called short supply,or will this go up or down if I bought this or that and the rest of the Rolex OCDs.I sometimes wonder why some buy Rolex watches, perhaps to wear the brand, or perhaps just to moan about them.

Yes I am whining. I legitimately want a white DaytonaC and would like the BLRO since I love the GMT. I had the opportunity last year to buy a black dial DaytonaC twice for around $15k and I passed because while I like both the white one is the one I really like. For me it is not about the money. I could easily go to a jeweler in midtown and buy an unworn Daytona today. It is about not throwing money away. I value it and refuse to give a middleman $7k (the price of many decent watches) just to have it right away.

I wasn’t always in a position to afford these watches and I am not a flipper. I do not sell anything that I buy. If I wanted to show off I would just pay the $20k and then sell it after 6 months or a year.

I also don’t feel that SS Rolex is worth $20k. In the past these sorts of watches were ones on you could always walk in and buy. Gold for this price and $30k absolutely but not SS.

[handsfull]

Originally Posted by HL65

Actually smart collectors are not selling their watches because they actually bought them to wear and enjoy and paid retail from an AD.

Originally Posted by Justinmg

More money then Brains

These ^

Also the ease of the acquisition of money. Easy money is easy to spend...it wasnt really EARNED. Witnessing way too many 20 (even 30!) somethings still being quietly funded by mommy/daddy.

[mattza]

Originally Posted by lecorsaire

Yes I am whining. I legitimately want a white DaytonaC and would like the BLRO since I love the GMT. I had the opportunity last year to buy a black dial DaytonaC twice for around $15k and I passed because while I like both the white one is the one I really like. For me it is not about the money. I could easily go to a jeweler in midtown and buy an unworn Daytona today. It is about not throwing money away. I value it and refuse to give a middleman $7k (the price of many decent watches) just to have it right away.

I wasn’t always in a position to afford these watches and I am not a flipper. I do not sell anything that I buy. If I wanted to show off I would just pay the $20k and then sell it after 6 months or a year.

I also don’t feel that SS Rolex is worth $20k. In the past these sorts of watches were ones on you could always walk in and buy. Gold for this price and $30k absolutely but not SS.

$20,000+ for an SS Rolex GMT is insane to me, but people are willing to pay that

[douglasf13]

Originally Posted by handsfull

These ^

Also the ease of the acquisition of money. Easy money is easy to spend...it wasnt really EARNED. Witnessing way too many 20 (even 30!) somethings still being quietly funded by mommy/daddy.

Yeah, and I'd imagine the available credit has something to do with it. It's probably why it seems like we see more wearers worrying about damaging their new "investment."

[ashbaug2]

Does anyone remember what the BLNR went for on the secondary market when it first came out? How does that compare to the BLRO now?

[Euge]

I always see posts that say incoming and then unboxing a shipping box that came from I don’t know what place.........to me that’s scary plus I won’t pay over MSRP.........IMHO that just ruins the experience of going and searching for a watch, and getting it at an AD with the documents on your name. That’s just my 0.02


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[WJGESQ]

Originally Posted by Lee66

When will this madness end? The crazy prices being asked for the Batman, Hulk, James Cameron and the new ceramic Daytona are just depressing. What's driving the demand?

Buyers and limited supply or the perception there of.


Hats what drives prices up. Or down.

[No SUBctitute]

Originally Posted by douglasf13

Surely you really don’t think $10K is reasonable for a steel watch that likely costs in the three-figures to make?

..and that’s for something that’s an anachronism vs. Porsche, which is still leading edge tech.

On your first point, I used to agree with you. When I went to buy my 6-digit Sub some years back, which i did for about $7300, I looked high and low for the best Swiss automatic watch in my price range (which slowly crept up from a $3000 Omega Seamaster 300 to the Planet Ocean/Sub range :-)). I looked at the normal suspects in sports watches--Brietling, Tag, Omega, etc., before I made my way to Rolex. I came to the conclusion that I thought the Sub was a good value.

What makes it a good value? The movement, the incredible steel that still looks new after more than half a decade of daily wear, the brilliant clasp, the beautiful and tough ceramic bezel that others started making after Rolex, the solid link bracelet that I expect to last a long time, the absolute work-horse robust construction. this thing is stellar. What other watch competes with it? At the time I bought my Sub, the Planet Ocean was a contender. However, the case was MUCH thicker, the clasp wasn't as nice, and the Rolex steel was nicer, to name a few things. So what other watch gave me everything the Rolex does? Nothing.

As far as your notion that the Sub costs under $1,000 to construct. That's laughable. If it was was possible, then other companies would do it. What other dive watches on the market provide the same quality movement, steel, construction, durability, and value retention for that MSRP? Grand Seiko, Omega, Tudor....the list is relatively short. So, I'd say that the Sub is a good value. Some of the other great values in sports watches are sold by Rolex itself--Black Bay, Black Bay 58, Black Bay Steel, Black Bay GMT, Pelagos. For less than half the cost, they are more then half the watch that Sub is. But to actually compete with the Sub on every level, these don't quite do it..you have to look at the short list above that has Grand Seiko and Omega on it. And I always love to hear other opinions on what watches are built as well as the Sub in the price range.

And to your second point, that Porsche is leading edge technology but Rolex is not. I beg to differ. Rolex is a leader in horological engineering. Look at the SS Sky Dweller. It is an awesome feat of engineering for $14k--time, date, 24-hour hand, and month. Wow. The new GMT and new 3235 movements are great movements for the price point.

[No SUBctitute]

Originally Posted by AK797

Well we have another example in the LVc, price rose sharply in Aug on disco rumours, supply did not change ofc, and the price rose steadily each month until Basel as demand chased the higher prices, and then in Mar the rumours were revealed to be not true, but we didn't see any price fall as with a normal good, rather price and demand still remains high and that is due to the Veblen effect, not a perceived supply shortage.

Demand for a Veblen good goes up BECAUSE price goes up. In the case of the LVc, the disco rumors caused demand to increase, and the increased demand caused prices to go up. An increase in price did not cause the increase in demand.

Originally Posted by AK797

So it is basically a momentum effect, once price starts moving up on certain models, the more the people want them for a variety of reasons, status, exclusivity, FOMO and profitability.

If people increasingly desire a watch due to profitability, that is NOT an indicator of a Veblen good.

Originally Posted by AK797

I agree that supply issues do play a part in this, but I still maintain this is more demand and perception led, and as price rises have not led to a fall in demand which would put pressure on prices to fall, rather the opposite has happened and kept the pressure on prices to continually rise, so I think they are Veblen goods.

Interesting points you make. I would love to see a supply increase of stainless steel sport watches to test the Veblen theory. I do not think as the price goes down that demand will also decrease because people think they aren't exclusive enough.

Thanks for the great dialogue!

[douglasf13]

Originally Posted by No SUBctitute

On your first point, I used to agree with you. When I went to buy my 6-digit Sub some years back, which i did for about $7300, I looked high and low for the best Swiss automatic watch in my price range (which slowly crept up from a $3000 Omega Seamaster 300 to the Planet Ocean/Sub range :-)). I looked at the normal suspects in sports watches--Brietling, Tag, Omega, etc., before I made my way to Rolex. I came to the conclusion that I thought the Sub was a good value.

What makes it a good value? The movement, the incredible steel that still looks new after more than half a decade of daily wear, the brilliant clasp, the beautiful and tough ceramic bezel that others started making after Rolex, the solid link bracelet that I expect to last a long time, the absolute work-horse robust construction. this thing is stellar. What other watch competes with it? At the time I bought my Sub, the Planet Ocean was a contender. However, the case was MUCH thicker, the clasp wasn't as nice, and the Rolex steel was nicer, to name a few things. So what other watch gave me everything the Rolex does? Nothing.

As far as your notion that the Sub costs under $1,000 to construct. That's laughable. If it was was possible, then other companies would do it. What other dive watches on the market provide the same quality movement, steel, construction, durability, and value retention for that MSRP? Grand Seiko, Omega, Tudor....the list is relatively short. So, I'd say that the Sub is a good value. Some of the other great values in sports watches are sold by Rolex itself--Black Bay, Black Bay 58, Black Bay Steel, Black Bay GMT, Pelagos. For less than half the cost, they are more then half the watch that Sub is. But to actually compete with the Sub on every level, these don't quite do it..you have to look at the short list above that has Grand Seiko and Omega on it. And I always love to hear other opinions on what watches are built as well as the Sub in the price range.

And to your second point, that Porsche is leading edge technology but Rolex is not. I beg to differ. Rolex is a leader in horological engineering. Look at the SS Sky Dweller. It is an awesome feat of engineering for $14k--time, date, 24-hour hand, and month. Wow. The new GMT and new 3235 movements are great movements for the price point.

First point: That's essentially opinion and marketing. Plenty of people choose other brands over Rolex. I mean, the 3135 movement, while a good one, is decades old and can't really touch the tech of a Co-Axial. The newer Rolex movements are a nice step forward.

These are Veblen goods, and the price for sale isn't necessarily predicted by the cost to make them. We're talking about mass produced watches made of steel. There were some great old threads about how much these things might cost to make. I mean, we're talking a movement that's been made for decades, and likely costs less than a hundred or two bucks to make, considering you can buy a top grade ETA 2892 for less than couple of hundred bucks off the shelf. And so how much does a steel case, dial, hands, etc. cost???

My point about Porsche is that their cars are still leading edge technology, whereas NO mechanical watches are leading edge technology. They were surpassed by quartz/digital. Yet, despite that, their prices have risen dramatically vs. a brand like Porsche, which also proves their pivot to Veblen good, luxury items in the '80s.