What'd happened if everyone stop buying grey?

[Rolesor_66]

This is a highly hypothetical question and I know someone may or may not like it. I've been on this forum for about a year now and I would check in the discussion board every few weeks, I'm always intrigued by everyone's perceptions of this brand and I actually learn something from it. Like how to start the conversation with my local ADs getting my first Rolex to the scholars sharing knowledge on the vintage Rolex.

As much as I consider myself lucky to get my first Rolex in retail, there's still a lot of frustration with the grey market pricing. I understand the definition of supply and demand it postulates the unit price for a particulate good, what if everyone just stops buying at the secondary marked-up price on the current production models? Would that slow the demand on grey dealers so the price outputs will be adjusted based on available quantities? Interested in hearing everyone's thoughts.

[doboy007]

Great things :)

[rolexpatek363]

Omg

[Adam84]

Hypothetically? A race to the bottom….

Hypothetically flippers would disappear….then the question is could supply keep up with the people who only buy at AD along with the increased demand from those who only usually buy grey after the flippers leave?

If supply can’t meet that demand then people will go back to grey….but probably at a cheaper price because speculators and flippers wouldn’t be there.

I think there will always be a place for greys, because even if the flippers leave, a lot of people will have grey hair if they don’t go grey

[WilsdorfNDavis]

For the foreseeable future demand will continue to outstrip supply so the overpriced grey market will continue to exist...

[dpt.calvin]

Armageddon.

[samuel019]

I don’t know

Let’s try it

[JRell]

Dreams would come true.

[askdanny]

Grey operate on thin margins. One of the misconceptions is that the grey are gouging consumers. It is the flippers who benefit most here.

For example the flipper gets a highly sought-after Rolex at retail ($10K) and sells it to Davidsw for $20k. Davidsw sells it for $23K. That's a $3K margin on a $20K investment.

Stopping to buy from the grey will make the grey stop buying from the flippers; it doesn't mean the grey will accept to break even or take a loss on a product that they currently have and is essentially not perishable.

Stopping to buy from the grey and we all lose: suddenly our watches are unsellable. Our Rolex become Breitlings and Tags.

[77T]

What if, instead, everyone stops buying from ADs?


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[kirth]

Originally Posted by askdanny

Grey operate on thin margins. One of the misconceptions is that the grey are gouging consumers. It is the flippers who benefit most here.

For example the flipper gets a highly sought-after Rolex at retail ($10K) and sells it to Davidsw for $20k. Davidsw sells it for $23K. That's a $3K margin on a $20K investment.

Stopping to buy from the grey will make the grey stop buying from the flippers; it doesn't mean the grey will accept to break even or take a loss on a product that they currently have and is essentially not perishable.

Stopping to buy from the grey and we all lose: suddenly our watches are unsellable. Our Rolex become Breitlings and Tags.

Enjoying the opportunity to buy Rolexes at retail (or close to it) would be fine by me if it meant making my watches harder to sell. Aquiring watches is not an investment strategy for me.

[rod727]

Demand is demand….not sure there would be any impact? Is the assumption that Greys drive demand?

[askdanny]

Originally Posted by kirth

Enjoying the opportunity to buy Rolexes at retail (or close to it) would be fine by me if it meant making my watches harder to sell. Aquiring watches is not an investment strategy for me.

As soon as someone cares about value retention on this forum, he is branded as the evil money-grubbing wh*re who is using beautiful timepieces as “investment strategy”.

Can there be a middle ground? To care about your watch’s value doesn’t necessarily mean you’re investing in watches. No one is immune to life’s adversities… should you need to liquidate because of unforeseen circumstances, health issues, job loss — there is peace of mind in knowing you can do that easily without losing your shirt. It is smart to care about value retention when you’ve spent $10K on a watch.

[jarecki]

Originally Posted by askdanny

Grey operate on thin margins. One of the misconceptions is that the grey are gouging consumers. It is the flippers who benefit most here.

For example the flipper gets a highly sought-after Rolex at retail ($10K) and sells it to Davidsw for $20k. Davidsw sells it for $23K. That's a $3K margin on a $20K investment.

Stopping to buy from the grey will make the grey stop buying from the flippers; it doesn't mean the grey will accept to break even or take a loss on a product that they currently have and is essentially not perishable.

Stopping to buy from the grey and we all lose: suddenly our watches are unsellable. Our Rolex become Breitlings and Tags.

That’s what I’m curious about - are the greys’ margins really that low? Judging from a number of other posts, greys are offering ridiculously low prices if you want to sell them a watch - leading me to believe their margins are much higher…

[askdanny]

Originally Posted by jarecki

That’s what I’m curious about - are the greys’ margins really that low? Judging from a number of other posts, greys are offering ridiculously low prices if you want to sell them a watch - leading me to believe their margins are much higher…

They’re offering ridiculous low prices right now because the grey currently doesn’t need the stock — doesn’t want the stock. But they will take your watch for an “unpassable” deal. The market is down so there is excess inventory.

[Harry-57]

Grey Rolex premiums would go down towards MSRP and I would start buying Rolex watches from greys.

[kirth]

Originally Posted by askdanny

As soon as someone cares about value retention on this forum, he is branded as the evil money-grubbing wh*re who is using beautiful timepieces as “investment strategy”.

Can there be a middle ground? To care about your watch’s value doesn’t necessarily mean you’re investing in watches. No one is immune to life’s adversities… should you need to liquidate because of unforeseen circumstances, health issues, job loss — there is peace of mind in knowing you can do that easily without losing your shirt. It is smart to care about value retention when you’ve spent $10K on a watch.

I re-read my post and didn’t see anything like that. In fact, It would appear that I didn’t accuse you of anything whatsoever.

I am glad that my weak words
Have struck but thus much show of fire from Brutus.

[mikelprz]

End of Days

[2loaded]

They would buy from each other on refeed...

[Stud Screw]

Who do I look like? Leonard Nimoy?

[mountainjogger]

Is this a trick question?

[Seddyspaghetti]

Idk but i like going grey when prices are below retail

[jwkl91]

While this is true, what makes a watch different than any other consumer purchase? We've happily accepted that almost everything else we buy, even in the $10,000s (e.g. cars) lose a substantial portion of value / continue to decline with ownership.

Would think of it as (i) would you have made the purchase / be into the hobby if it was guaranteed it was a significant loss in value and (ii) think those with zero intention of ever selling effectively are taking that view since it would be a very poor financial decision to rely on the value of a watch collection to pay for extreme circumstances (and there should be a separate savings account for that...)

[47Fountain]

Without grey dealers, the AD's would have an even tighter grip on everybody's cajones.

[just1time]

What happens if the whole world held their breathe?

[HogwldFLTR]

[1William]

Originally Posted by 77T

What if, instead, everyone stops buying from ADs?


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This is an interesting flip of the question. Never going to happen for either the dealers or the Greys. The market will adjust based on supply and demand. I will buy what I want, when I want for a price I can live with. Just like many my collection is a hobby.

[beshannon]

Originally Posted by Rolesor_66

This is a highly hypothetical question

Less sales would mean production cuts and therefore less overall stock.

Is that the answer you were looking for?

[Majin Buu]

At present times AD or nothing!


J.

[Rolesor_66]

Originally Posted by askdanny

Grey operate on thin margins. One of the misconceptions is that the grey are gouging consumers. It is the flippers who benefit most here.

For example the flipper gets a highly sought-after Rolex at retail ($10K) and sells it to Davidsw for $20k. Davidsw sells it for $23K. That's a $3K margin on a $20K investment.

Stopping to buy from the grey will make the grey stop buying from the flippers; it doesn't mean the grey will accept to break even or take a loss on a product that they currently have and is essentially not perishable.

Stopping to buy from the grey and we all lose: suddenly our watches are unsellable. Our Rolex become Breitlings and Tags.

Thanks for the response, unfortunately, that's exactly the financial incentive why people would sell to grey.
Let's say grey dealer A declines to pay 10k over retail, and grey dealer B offers 8k over retail. Dealer B bought it 8k over retail and relisted it for $21k, didn't sell over 30 days, and received another message to buy the same model for 5k over retail. Their new cost average is $16.5k each and is still listed for sale at $21k. I'm just curious what if we (consumers) just stop buying at grey and how they will adjust the pricing based on quantities.