Curious for the MSRP only crowd

[Sisyphus]

I personally think a huge chunk of the current rolex second market value is not sustainable and basically triggered by the grey market acquiring a substantial amount of pieces from ADs. Therefore, I would take the view that were this issue to disappear (say by Rolex taking over distribution or otherwise), the prices would considerably drop (maybe not to retail, but likely to remain reasonable). Furthermore, any positive value difference when compared to retail would be driven by real demand as opposed to speculation.

Cheers,


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[Gimoozaabi]

Understood, no one is willing to pay over retail, for current models that is, how about the discontinued Rolex wathces? Surely there is hardly a way to get 16610lv for example, for the price it was sold in 2004.

[Nairn1980]

Originally Posted by Gimoozaabi

Understood, no one is willing to pay over retail, for current models that is, how about the discontinued Rolex wathces? Surely there is hardly a way to get 16610lv for example, for the price it was sold in 2004.

Many many people ARE willing to pay over mrsp and do!
I just don’t think many people here want to stick their hand up and admit it. The grey market is thriving

[IR201]

Originally Posted by Gimoozaabi

Understood, no one is willing to pay over retail, for current models that is, how about the discontinued Rolex wathces? Surely there is hardly a way to get 16610lv for example, for the price it was sold in 2004.

Good point. Wouldn’t the same logic apply? “That’s not an $X watch”.


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[tkdgod]

10-15% over retail I would pay in today’s market. Right now the hype and prices are just too crazy which is making the fun and enjoyment of collecting impossible.

[Cauhauna]

I sell and pay above MSRP for things all the time (outside of the watch business).

That said, i'd be fine paying above MSRP for a watch, too.

I haven't done so because the above MSRP prices for the piece i want (116500) is above what i'm willing to pay. Someone is paying it, which is fine. I'd personally pay 22.

Anything else, I think can be had for retail from the right AD.

[daveswordfish]

I recently got an EXP2 from my AD. Took 7 wks to get. On the list for an SD43 for three months now. It’ll take however long it takes. Plenty of other pieces to wear.

I remember not too long ago, you went to grays/TS’s for a discount. Now some folks feel lucky to give these guys 50% - 300% markup. To each his own, but seems really self defeating to me.

First, the current situation will continue as long as folks continue to pay the vig. Stop paying, and things slowly return to normal.

Second, it would be a pretty hollow purchase for me. I’d feel pretty dumb knowing I paid double or triple what the manufacturer says it’s worth. Even dumber that I paid that exorbitant markup simply because “I want it now.”

Lastly, yes, anyone can do what they want with their money and everyone sees value differently. For me, I’d look at that watch and forever see the word Schmuk written across the dial. Right under the crown logo.

Oh, and for all the guys buying and flipping, you have every right to. God Bless. I’ve no issue with you. For me though, price gouging is a pretty lame-ass way to make a buck. Way better when it was an everybody wins scenario.


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[copperjohn]

It’s not a matter of principle. It’s cost vs benefit. I want the BLRO for example. I’ve waited awhile, and when I first looked on watch recon the were running around $16500-$17500. That was more than I would spend knowing the MSRP. (I especially would not buy one at the current rate of $22K) If it dropped around $12000 I might have snapped it up. At my age, by the time an AD gets one in the I am allowed to buy, it might not be something I’d wear anymore. And I don’t really need the “AD experience”. They don’t add anything to the value or enjoyment of the watch. My only goal is the buy and wear the watch.

And yes, there are other brands. But there is nothing anyone sells that would make me not want the BLRO. I would be spending money only for the sake of spending money. Which seems stupid.

[fsprow]

[QUOTE=Sisyphus;11613035]I personally think a huge chunk of the current rolex second market value is not sustainable and basically triggered by the grey market acquiring a substantial amount of pieces from ADs. Therefore, I would take the view that were this issue to disappear (say by Rolex taking over distribution or otherwise), the prices would considerably drop (maybe not to retail, but likely to remain reasonable). Furthermore, any positive value difference when compared to retail would be driven by real demand as opposed to speculation.
…………
By the way, speculation IS “real demand”. And “reasonable” is in the eye of the buyer.

[thenewrick]

I won't buy used/unverified pieces. Having them cost extra is just a nail in the coffin. I don't mind waiting whatsoever.

I'd only buy vintage used.

[Rashid.bk]

Originally Posted by brandrea

I think we all have a line in the sand as to what we will pay. It’s different for everyone

Exactly what I was thinking. MSRP would be option one and preferred so you deal with the AD, as for taxes, don’t care as it’s a fact of life and will consider that as part of the MSRP price.
When it comes to grey, I don’t mind a premium. But $150k for 5711 or $33k for a ss Daytona just because….NO!
$14k for an Explorer 1, ludicrous. There’s a ceiling I would tolerate and it’s specific to each model.

[dannyp]

Originally Posted by Gimoozaabi

Understood, no one is willing to pay over retail, for current models that is, how about the discontinued Rolex wathces? Surely there is hardly a way to get 16610lv for example, for the price it was sold in 2004.

Originally Posted by IR201

Good point. Wouldn’t the same logic apply? “That’s not an $X watch”.


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With out-of-production watches, I think the question is whether they were sought by collectors well before the ultra-hype pricing of the past couple of years.

116500 vs 116520 vs 16520 is perhaps the best example. All else equal, a 116520 goes for less than a 116500 and the price of the last generation version is likely reflective of the inflated price of the current version. However, a 16520, with the Zenith movement, goes for more than its successor because it's considered a collector's item. Even when prices settle on the 116500 and 116520, I expect the 16520 to remain somewhat elevated.

Originally Posted by thenewrick

I won't buy used/unverified pieces. Having them cost extra is just a nail in the coffin. I don't mind waiting whatsoever.

I'd only buy vintage used.

This is what I care most about, too, and the only way I want to acquire watches. My willingness to pay "over" MSRP is therefore a function of impatience, and what I'll pay to get it that way sooner, not a function of what the watch is "worth" to me.

So, for example:

-Paying higher tax in a neighboring state
-Buying a plane ticket to/from a state far away
-Buying in another country where local pricing/exchange rates come out higher
-Paying requisite import duties when coming back with watch from said country
-Bundling with "undesirable" model, which you know you can/will sell, and know you'll take a ~$1-3,000 loss on*
-Slipping the SA a few hundred bucks/bringing "gift" (i.e. "bribe")**



*Risk I wouldn't want to take, but have heard about others doing successfully (note: different than bundling with stuff you don't really want but keep anyways)
**Haven't done it, seems shady, not advocating it, but it does fall into this category

[Bill11783]

$10k for a Pepsi vs. market of $20k+ is a big difference. I would probably go $500-$1k above retail to get one. Everyone has their own limit. I was buying Breitlings for years…and had thought “who would ever pay retail for a watch?”… then I found Rolex 😀.

[dannyp]

Originally Posted by Bill11783

$10k for a Pepsi vs. market of $20k+ is a big difference. I would probably go $500-$1k above retail to get one. Everyone has their own limit. I was buying Breitlings for years…and had thought “who would ever pay retail for a watch?”… then I found Rolex 😀.

Haven't you heard? "MSRP" is the new "discount" (at least when Rolex, PP and AP are concerned)

[IR201]

Originally Posted by dannyp

With out-of-production watches, I think the question is whether they were sought by collectors well before the ultra-hype pricing of the past couple of years.

116500 vs 116520 vs 16520 is perhaps the best example. All else equal, a 116520 goes for less than a 116500 and the price of the last generation version is likely reflective of the inflated price of the current version. However, a 16520, with the Zenith movement, goes for more than its successor because it's considered a collector's item. Even when prices settle on the 116500 and 116520, I expect the 16520 to remain somewhat elevated.



This is what I care most about, too, and the only way I want to acquire watches. My willingness to pay "over" MSRP is therefore a function of impatience, and what I'll pay to get it that way sooner, not a function of what the watch is "worth" to me.

So, for example:

-Paying higher tax in a neighboring state
-Buying a plane ticket to/from a state far away
-Buying in another country where local pricing/exchange rates come out higher
-Paying requisite import duties when coming back with watch from said country
-Bundling with "undesirable" model, which you know you can/will sell, and know you'll take a ~$1-3,000 loss on*
-Slipping the SA a few hundred bucks/bringing "gift" (i.e. "bribe")**



*Risk I wouldn't want to take, but have heard about others doing successfully (note: different than bundling with stuff you don't really want but keep anyways)
**Haven't done it, seems shady, not advocating it, but it does fall into this category

I hear you but I'm having a hard time squaring the logic here.

There are people on here championing MSRP as it if was written on a stone tablet as the absolute truth of what the watch is worth. I see this as full faith in the institution of Rolex to know the "true value" over faith in the market to know the true value.

But when it comes to discontinued watches, the same stance does not seem to apply. People's valuation of a watch, for the most part, is no longer "MSRP". Why is that? It's because of external market forces, driven by collectors as you say. I doubt anyone is arguing that a vintage sea dweller is a "better made" watch with better, higher quality materials than today, right?

It just doesn't seem to reconcile for me, but happy to hear how I'm wrong.

[WatchGuy1966]

I simply don't want them enough to pay over MSRP

[gwozhog]

99.9 percent of the population already thinks we are insane for buying a Rolex. Pay over retail and that last .1 percent will probably agree with them too.

[xrole]

Originally Posted by JoeBobsFineRolex

I have been very lucky as I have gotten over 8 Rolex watches this year and only in July.

You bought 8 rolexes in 1 month? wtf.

[MAINEZX10]

Originally Posted by IR201

For those who refuse to pay over retail on Rolex, I'm genuinely curious as to this hypothetical:

Would you pay 10,000 USD plus tax for a BLRO, if you wanted one?

or 13,500 USD plus tax for a ceramic daytona, if you wanted one?

Or is it a matter of principle and you'd rather wait for years possibly than pay literally 1 cent over MSRP?

In 2007-2008, I paid $12k for a white dial 116520. The MSRP was $7900. 50% over MSRP. Today I still have the full complete set. Do you think it’s worth $12K or more today???

[hambone1983]

ok, so I have a follow-up question for those who consider the safety/security of buying from an AD as the critical factor

If Rolex allowed dealers to sell watches at whatever the market will bear thus removing the grey dealers entirely from the "BNIB" market, would that satisfy your conditions?

[dannyp]

Originally Posted by IR201

I hear you but I'm having a hard time squaring the logic here.

There are people on here championing MSRP as it if was written on a stone tablet as the absolute truth of what the watch is worth. I see this as full faith in the institution of Rolex to know the "true value" over faith in the market to know the true value.

But when it comes to discontinued watches, the same stance does not seem to apply. People's valuation of a watch, for the most part, is no longer "MSRP". Why is that? It's because of external market forces, driven by collectors as you say. I doubt anyone is arguing that a vintage sea dweller is a "better made" watch with better, higher quality materials than today, right?

It just doesn't seem to reconcile for me, but happy to hear how I'm wrong.

I’m sure “value” is something other than MSRP. However in-production models can, with the right relationship, be had at a price arbitrarily set by Rolex, but set universally. There’s no question about whether MSRP price reflects some intrinsic value or hype.

Discontinued models have often been priced relative to msrp of the current version in the past, whereas now their recalibrating around current model market value, and seem inflated. Those that always exceeded current model msrp are more likely to be collectible and intrinsically worth more as opposed to being probed around hype.

[dannyp]

Originally Posted by hambone1983

ok, so I have a follow-up question for those who consider the safety/security of buying from an AD as the critical factor

If Rolex allowed dealers to sell watches at whatever the market will bear thus removing the grey dealers entirely from the "BNIB" market, would that satisfy your conditions?

Sure. Because there wouldn’t be a feeling of “oh, if I waited I could get this for msrp” and market pricing would prevail universally (and also come down from current market pricing if for no other reason than one or two middlemen would be cut out).

[GradyPhilpott]

My question is, why is owning a Rolex so important that anyone would pay more than what Rolex is asking for a current production watch?

TRF used to make fun of me for paying MSRP for new watches from my AD.

Now, the tables have turned, but I'm not going to make fun of anyone.

I'm just scratching my head.

[IR201]

Originally Posted by dannyp

I’m sure “value” is something other than MSRP. However in-production models can, with the right relationship, be had at a price arbitrarily set by Rolex, but set universally. There’s no question about whether MSRP price reflects some intrinsic value or hype.

Discontinued models have often been priced relative to msrp of the current version in the past, whereas now their recalibrating around current model market value, and seem inflated. Those that always exceeded current model msrp are more likely to be collectible and intrinsically worth more as opposed to being probed around hype.

Okay let me see if I got your system straight here:

If a model is currently available at retail, then MSRP is the appropriate valuation because otherwise the valuation would be market forces and we do not know whether market prices are driven by "hype" (as we strongly suspect) or some other, more legitimate valuation of the watches.

If a model is discontinued/no longer available at MSRP but has NOT historically been collectible, then MSRP remains the best valuation, again to protect against hype inflation.

If a model is discontinued/no longer available at MSRP but HAS historically been collectible, then market valuation is likely the correct one as chances are that valuation is driven by collectibility and not hype or at least not ONLY hype.

Do I have that right?

[IR201]

Originally Posted by GradyPhilpott

My question is, why is owning a Rolex so important that anyone would pay more than what Rolex is asking for a current production watch?

TRF used to make fun of me for paying MSRP for new watches from my AD.

Now, the tables have turned, but I'm not going to make fun of anyone.

I'm just scratching my head.

Fair question but it's not just about importance of owning a Rolex. It is importance of two things, and those two things relative to each other:

1) Owning a Rolex

2) Paying nothing more than MSRP

It seems you are implying in your question that number 2 is so critical that anyone who then proceeds with number 1 must REALLY value owning a Rolex, i.e. hold it in extreme importance. But an alternative explanation could be that some people do not see number 2 as critical as you do, particularly given what the market says.

[dannyp]

Originally Posted by IR201

Okay let me see if I got your system straight here:

If a model is currently available at retail, then MSRP is the appropriate valuation because otherwise the valuation would be market forces and we do not know whether market prices are driven by "hype" (as we strongly suspect) or some other, more legitimate valuation of the watches.

If a model is discontinued/no longer available at MSRP but has NOT historically been collectible, then MSRP remains the best valuation, again to protect against hype inflation.

If a model is discontinued/no longer available at MSRP but HAS historically been collectible, then market valuation is likely the correct one as chances are that valuation is driven by collectibility and not hype or at least not ONLY hype.

Do I have that right?

Yes! One clarification, though: for the second scenario, it’s typically priced relative to msrp of the current version (less a certain percentage). The msrp at time of original production is largely irrelevant (with the exception of the rare long-lingering NOS pieces, but those are free and far between enough to be all but irrelevant).

[GradyPhilpott]

Originally Posted by IR201

Or is it a matter of principle and you'd rather wait for years possibly than pay literally 1 cent over MSRP?

Originally Posted by IR201

Fair question but it's not just about importance of owning a Rolex. It is importance of two things, and those two things relative to each other:

1) Owning a Rolex

2) Paying nothing more than MSRP

It seems you are implying in your question that number 2 is so critical that anyone who then proceeds with number 1 must REALLY value owning a Rolex, i.e. hold it in extreme importance. But an alternative explanation could be that some people do not see number 2 as critical as you do, particularly given what the market says.

So, who's charging $.01 over MSRP for a new Rolex?

People are free to do with their money as they will.

I have my financial limits that may not affect most here, but for the life of me, I can't see voluntarily getting ripped off by the grey market.

The supply/demand argument holds up for a lot of things, but not luxury items.

I will not pay more than MSRP for a watch, even if the cost is well within my personal limit for watches and I don't think that anyone needs to defend such a stance.

[IR201]

Originally Posted by GradyPhilpott

So, who's charging $.01 over MSRP for a new Rolex?

People are free to do with their money as they will.

I have my financial limits that may not affect most here, but for the life of me, I can't see voluntarily getting ripped off by the grey market.

The supply/demand argument holds up for a lot of things, but not luxury items.

I will not pay more than MSRP for a watch, even if the cost is well within my personal limit for watches and I don't think that anyone needs to defend such a stance.

No one is. That's what makes a hypothetical a hypothetical. I chose an extreme one because I was testing the principled reasoning around MSRP.

Your position is well received by me and I certainly respect you for it. I also respect those who choose to pay whatever they feel like. From my perspective, I'm just curious. No one has to defend themselves.

Though, as long as we're on the topic, my sense is the people who pay grey prices are not militantly judging those who only pay MSRP, or questioning their love of the hobby, but the other way around - the MSRP crowd judging the grey purchasers - is more common.

Would you agree?

[GradyPhilpott]

Originally Posted by IR201

No one is. That's what makes a hypothetical a hypothetical. I chose an extreme one because I was testing the principled reasoning around MSRP.

Your position is well received by me and I certainly respect you for it. I also respect those who choose to pay whatever they feel like. From my perspective, I'm just curious. No one has to defend themselves.

Though, as long as we're on the topic, my sense is the people who pay grey prices are not militantly judging those who only pay MSRP, or questioning their love of the hobby, but the other way around - the MSRP crowd judging the grey purchasers - is more common.

Would you agree?

I agree to the extent that those who drive this market are hurting enthusiasts and the people for whom Wilsdorf saw as his desired market.

If people would refuse to play the game, the market would adjust.

However, I'm not militant about luxury watches. I have a nice enough collection and I know where to find good deals, when I'm in the market.

I'll never need another watch, especially a luxury brand, but there are a couple on my radar and there will be more when I'm ready and I won't get taken to the cleaners and my watch guy will be happy with the deal as I will be.

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[IR201]

Originally Posted by GradyPhilpott

I agree to the extent that those who drive this market are hurting enthusiasts and the people for whom Wilsdorf saw as his desired market.

If people would refuse to play the game, the market would adjust.

However, I'm not militant about luxury watches. I have a nice enough collection and I know where to find good deals, when I'm in the market.

I'll never need another watch, especially a luxury brand, but there are a couple on my radar and there will be more when I'm ready and I won't get taken to the cleaners and my watch guy will be happy with the deal as I will be.

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Very reasonable!

One thing I would add is the following: there's another thread somewhere on here about Rolex artificially restricting supply to preserve/increase market demand. While I'm with you on blaming the flippers who ruin the hobby, you have to wonder whether Wilsdorf had the vision that Rolex would participate - drive, even - the current market games we are seeing. I don't know the history as well as I'm sure you do.