A sad sate of affairs or market manipulation?

[minute_man]

There was that thread the other day with a video of a guy chatting a gray dealer allegedly exposing the truth behind certain Rolex references shoratge. Unfortunately it got locked and I don’t know why it had to. Others got derailed to the extent of getting members banned; that one was still a far cry from turning hostile. So there’s that.
I won’t go into judging the guy who shot the video. The right of taking pictures of public places and spaces is irrelevant to the subject matter. So is the guy and his attitude.
There’s nothing in the video, related to the proverbial AD and gray dance that should come as a surprise to anyone older than 5 years of age. What surprises me though, is the way many people are willing to turn a blind eye and chalk it all up to “free market, going prices, msrp being just a number” and the like clichè. And they ferociously stand by this, flawed imo, reasoning. Again, I don’t think it could be a genuine belief of theirs as it’s against reason and, imho always, this happens FOR a reason.
This is a coordinated effort of controlling, manipulating and exploiting a market which is borderline illegal and downright unethical. The takeaway from the video is a term. The one of the “Broker".
Brokerage is more of an established institution in real estate business, shipping business, insurance etc. Brokers are well respected, prominent commercial men who need not hide.
In fact, a broker is known to all and by all involved in the transaction. Moreover, business ethics dictate that you don’t bypass a broker in the aforementioned sectors. That’s the rule. And brokers are registered, too. Fake ones are weeded out on sight.
A hidden “broker” or a broker hiding is by definition NOT a broker but just a shady middle man making a quick buck. Which begs the question: How legal is that? Someone buys a bundle of watches from an AD, both hot ones and slow movers.
Now who’s that person? Because the AD has to issue the individual a receipt. Or an invoice if selling to another enterprise / entrepreneur. But Rolex IS the central distributor who allocates watches to the AD network. The AD is a retailer. Gray Rolex watches are sold at “retail” to whoever poses as a buyer. Not as merchandise to another retailer. Now, at what price does this “buyer" or should I call him a broker? Acquires these watches? Especially the “hot” ones. Okay, I’ll be naïve and say they just serve the purpose of relieving the AD of the unwanted models while getting something worth their while for so doing. But we all know that is not the whole truth. So, does this extra money paid by the “broker" to the AD evet gets declared to where it should? Right, I didn’t think so.
While it is perfectly normal and accepted to have private sales and purchases, when someone routinely does so, this person’s activity inevitably transitions into commercial activity. The same is true, by definition, when one purchases something with the intention of re-selling. Which in turn begs the question, how many of those “broker" individuals declare any income acquired out of this activity? Yeah, right.
The above effectively renders all those gray watches pre owned and “opened box" as the term would be for electronics. This merchandise is normally sold at A DISCOUNT.
The fact that some capitalize by questionable means on people’s willful ignorance, need of instant gratification, vanity or worse, doesn’t make the former (act) any more acceptable or any of the latter (reasons, pretexts or excuses) more reasonable.

[MRPWRPATX21]

If you are trying to propose that the action of an AD selling a watch to a gray dealer as being illegal or market manipulation, I think you are stretching and then some.

If the ADs didn't sell any watches to gray dealers, it still wouldn't help your chances of getting a white dial Daytona, because there are so few made relative to demand.

Refusing to examine the situation from all angles will give you tunnel vision on this topic.

[vh2k]

Nice post. Would like to visit Greece someday.

[ltdan]

Not getting a clear picture of the story here, but the worst thing I have seen is AD's buying up their own stock then re-selling as 'used' that is what people should be posting about.

[minute_man]

Originally Posted by MRPWRPATX21

If you are trying to propose that the action of an AD selling a watch to a gray dealer as being illegal or market manipulation, I think you are stretching and then some.

If the ADs didn't sell any watches to gray dealers, it still wouldn't help your chances of getting a white dial Daytona, because there are so few made relative to demand.

Refusing to examine the situation from all angles will give you tunnel vision on this topic.

That is what I'm trying to do without getting everyone bored by regurgitating unavailability frustration posts.
Please, take the time to read carefully. ADs selling to gray dealers Legally isn't my concern.

[minute_man]

Originally Posted by vh2k

Nice post. Would like to visit Greece someday.

You'll love it

[Seddyspaghetti]

Thanks for sharing your thoughts.

[vh2k]

Originally Posted by ltdan

Not getting a clear picture of the story here, but the worst thing I have seen is AD's buying up their own stock then re-selling as 'used' that is what people should be posting about.

When the same principals operate an Authorized Dealer AND a secondary market reseller... that is indeed an interesting scenario. And we all know the biggest one in the U.S.

[jltait]

I think what you’re missing here is that the jewelry market is not a regulated one. The bullion market, stock market, real estate market are, however, and “brokers” there are a real thing with real rules and at least tacit oversight. Rolex watches may as well be apples or oranges or paper clips in your comparison. People will charge and pay what the market will bear, and lots of hands will touch them in the interim.

[minute_man]

Originally Posted by jltait

I think what you’re missing here is that the jewelry market is not a regulated one. The bullion market, stock market, real estate market are, however, and “brokers” there are a real thing with real rules and at least tacit oversight. Rolex watches may as well be apples or oranges or paper clips in your comparison. People will charge and pay what the market will bear, and lots of hands will touch them in the interim.

This is indeed true, jewelery market is not a regulated one. Never said or implied it was or that it should be. It's all about the method money is made and the questions it raises.

[ganiccus]

yup I kinda see where you are coming from with this post OP. In fact, I would not even be surprised if some of these so called 'brokers' are criminals laundering their dirty money through ADs and grey dealers.

[Bobby T]

Originally Posted by ltdan

Not getting a clear picture of the story here, but the worst thing I have seen is AD's buying up their own stock then re-selling as 'used' that is what people should be posting about.

An AD buying up their own stock and then re-selling as "used/pre-owned" in order to take advantage of inflated prices on hot SS models, would certainly qualify as the very example of market manipulation. Certainly, not illegal but, most definitely, unethical and unscrupulous!

[CashGap]

OP, a key life lesson: Not everything you don't like or don't understand is bad. Your post reads as "I do not like or do not understand this, therefore, here are some random allegations of illegality with no basis in fact".

Rolex sets MSRP on some references (ladies, some PM) far above their actual market value.

Rolex sets MSRP on other references (Daytonas, SS sports models) far below their actual market value.

Rolex has their reasons, probably related to their unique structure allowing them to take a multi decade approach to managing the brand.

The market will not be thwarted. Some buyers choose to transact at the market price. Some instead buy four ladies models at MSRP (far above market value) along with $50k of 50% margin gold jewelry to get their SS sports model at MSRP. Some spend years building faux relationships with multiple ADs before being deemed worthy to buy at MSRP.

To each their own.

[Clique]

Originally Posted by cashgap

op, a key life lesson: not everything you don't like or don't understand is bad. your post reads as "i do not like or do not understand this, therefore, here are some random allegations of illegality with no basis in fact".

Rolex sets msrp on some references (ladies, some pm) far above their actual market value.

Rolex sets msrp on other references (daytonas, ss sports models) far below their actual market value.

Rolex has their reasons, probably related to their unique structure allowing them to take a multi decade approach to managing the brand.

The market will not be thwarted. Some buyers choose to transact at the market price. Some instead buy four ladies models at msrp (far above market value) along with $50k of 50% margin gold jewelry to get their ss sports model at msrp. Some spend years building faux relationships with multiple ads before being deemed worthy to buy at msrp.

To each their own.

+1

[aczaja10]

It's the power of no, plus ADs wanting to get rid of hard to move pieces. The power of no is immense in certain transactions, particularly with those who have the means. They don't like to be told no, Thus, it works like a charm for luxury goods. It also works in other lines of work where a person or company has earned a great reputation. He, she or it can charge more, do or sell less and earn a larger profit.

[Nikrnic]

Saw the video. This goes on everywhere. ADs bundling hot with cold to move dead inventory that Rolex bestows upon them to keep their status. I don't agree but it's the way it is and not illegal. I don't see it changing. Grey dealers existed when there were no shortages, the difference being they gave bigger discounts than ADs. Supply and Demand always drives the market.

Sent from my SM-G970U using Tapatalk

[JSCP]

Originally Posted by ltdan

Not getting a clear picture of the story here, but the worst thing I have seen is AD's buying up their own stock then re-selling as 'used' that is what people should be posting about.

Yes I noticed large AD was going what seem to be that type of activity. Recently I noticed they don’t advertise preowned Rolex or PP. so yeah happens. You would think Patek and Rolex would “see it”. Maybe they did.

[peterpl]

In many industries what the ADs and Grays are doing is called Cartel Behavior. Its illegal in many industries and countries actually and the company I work for we require all our staff (> 10,000ppl) to complete courses every 6 months on exactly this.

[minute_man]

Originally Posted by peterpl

In many industries what the ADs and Grays are doing is called Cartel Behavior. Its illegal in many industries and countries actually and the company I work for we require all our staff (> 10,000ppl) to complete courses every 6 months on exactly this.

Precisely

[Fleetlord]

The grey market just another sales distribution channel for Rolex.

It's also a completely free avenue of promotion that communicates to the general public the value retention and appreciation of Rolex. That is a crucial tenet of luxury goods in the current market. When references sell on the grey market for over retail, they become MUST OWN pieces. This affects the brand positively across ALL references. Even Datejusts & OP are now trading over retail on the grey market. That is direct communication to the luxury buyer that Rolex is a great brand and is "worth" buying.


This is why Rolex allows the grey market to continue. It's of tremendous benefit.

[horseShu]

The prudent thing to do would be to patiently wait until the hype subsides.
The guy who thinks he can "ride the wave" would likely get burned.

But everyone's stuck at home, reading watch forums. Getting brainwashed by all the pics and "incoming" posts (real or otherwise), and thus fell victim to their internal FOMO and is now wanting one. Just because.

So I say, this is all self-inflicted and we all get what we deserve.

[jltait]

Originally Posted by peterpl

In many industries what the ADs and Grays are doing is called Cartel Behavior. Its illegal in many industries and countries actually and the company I work for we require all our staff (> 10,000ppl) to complete courses every 6 months on exactly this.

This would require an association of manufacturers to be true, like multiple suppliers of a commodity such as oil or marijuana working together to maintain high prices.

We are talking about one watch company supplying a uniquely designed product whose use may be replaced and replicated by any number of other products from countless manufacturers. There is no Rolex cartel. Just a market of watches where some dealers try to make as much money as they can. Would love to see some balsy member though try to bring a RICO case. Would be fun to watch unfold.

[Oxfordian]

I see a lot of posts on TRF and other forums about this alleged link between AD and Grey.

Has anyone actually got proof that this supposed AD to Grey market chain actually exists or is it just the usual conspiracy theory from those who don't/won't accept that it doesn't happen.

I maybe naive on this but in the UK I really don't see this happen but maybe I am just in denial and it really does exist.

[Gwai]

Originally Posted by Fleetlord

The grey market just another sales distribution channel for Rolex.

It's also a completely free avenue of promotion that communicates to the general public the value retention and appreciation of Rolex. That is a crucial tenet of luxury goods in the current market. When references sell on the grey market for over retail, they become MUST OWN pieces. This affects the brand positively across ALL references. Even Datejusts & OP are now trading over retail on the grey market. That is direct communication to the luxury buyer that Rolex is a great brand and is "worth" buying.

This is why Rolex allows the grey market to continue. It's of tremendous benefit.

Originally Posted by jltait

We are talking about one watch company supplying a uniquely designed product whose use may be replaced and replicated by any number of other products from countless manufacturers. There is no Rolex cartel. Just a market of watches where some dealers try to make as much money as they can. Would love to see some balsy member though try to bring a RICO case. Would be fun to watch unfold.

+1

Cheers
Marc

[garyk]

Originally Posted by minute_man

You'll love it

I’ll second this. We visited Greece on our honeymoon in 1972. We had the time of our lives! So beautiful and such amazing people. We will travel there again!

[sgwatchguy]

Greys been in business before this hype wave and will do so after as well. Only less of them. Before they were the discounted source, now they’re the premium source. There’s greys for handbags, shoes etc as well. No law enforcement agency would go after this situation as its going to be a stretch to make the case, borderline as you said, and the victims here would be hype afflicted watch buyers too impatient to wait it out and to consider the 99% of all other brands and models produced.

Now explain to someone that the unethical behavior is primarily limited to SS while PM models are even available at discounts, and it’s more laughable and less illegal or unethical.

[RolexBrian]

Simple, supply and demand plus capitalism. Either wait it out on a waiting list or pay a premium to a grey dealer.

[Chester01]

Originally Posted by RolexBrian

Simple, supply and demand plus capitalism. Either wait it out on a waiting list or pay a premium to a grey dealer.

This exactly. I mean there are plenty of suckers that can’t wait and want what they want now, and are willing to pay for that privilege. If everyone says I had enough, Prices would come down. I mean this is not like say milk or eggs here and so saying manipulation is an interesting word. With capitalism one charges what one can get, period. But because jewelry sales have declined, AD need the gray market to soak up their excess and gray needs ad for supply.

[chemistrynerd]

If a very wealthy individual went around to a few high end car dealerships (think Ferrari or Bugatti, etc.) and bought up the newest model, high demand, cars coming up (i.e. model year 2021) and basically took delivery, then put them up on Autotrader for sale for greater than MSRP.......this is not illegal. Not where I live anyway. As long the first person pays tax on MSRP when purchasing at dealership and then the second person is also.

This isn't fair but it isn't illegal. I do not think Gray dealers are doing anything illegal. Is buying and selling cars over and over illegal activity? As long as sales tax is being paid on each transaction its all good.

I would love a blue dial Skydweller. I can afford it at MSRP. It isn't going to happen for me. So I bought a DJ41 with a blue dial. Not having a Skydweller means less to me than paying an extra 10k more for one.

[brandrea]

Originally Posted by Fleetlord

The grey market just another sales distribution channel for Rolex.

It's also a completely free avenue of promotion that communicates to the general public the value retention and appreciation of Rolex. That is a crucial tenet of luxury goods in the current market. When references sell on the grey market for over retail, they become MUST OWN pieces. This affects the brand positively across ALL references. Even Datejusts & OP are now trading over retail on the grey market. That is direct communication to the luxury buyer that Rolex is a great brand and is "worth" buying.


This is why Rolex allows the grey market to continue. It's of tremendous benefit.

Exactly this ^^^

Rolex AD’s are also less likely to provide discounts which cheapen the brand IMHO. Good on them, they’ve got an in demand product. The alternative is just about every other brand.