Extortion

[rockysw]

https://www.fratellowatches.com/the-...han-you-think/

I am glad at least some popular watch blogs are calling a spade a spade. Whether you agree or not that Rolex AD practices are extortion, it is a good read.

[Calatrava r]

Hopefully, secondary prices will continue to drop so more inventory is available in the stores. The watch buying crowd will lessen when there is a real cost of depreciation in just taking the watch out of the store.

[Akacoke]

I think the market is gonna be hot for awhile. By that I mean a long while

[THC]

Originally Posted by Akacoke

I think the market is gonna be hot for awhile. By that I mean a long while

Agree

These prices aren’t going anywhere… best time to buy was yesterday

[Akacoke]

Originally Posted by THC

Agree

These prices aren’t going anywhere… best time to buy was yesterday

These are just price corrections. Rolex is just like housing market give track record of last 50 years

[jitdc]

Hot market? I'm assuuming that's a joke lol...

Many of the in-demand Rolex watches from 1 year ago have dropped nearly 50% from their peak on the secondary market. Most are approaching MSRP or are already below. There are a tiny few outliers, steel Daytonas and meteorite Daytona's remain close to 2x MSRP. We may not see WG Subs in the mid 20's for instance but close, almost all models can be readily purchased from a wide varity of grey market sellers and the average buyer, only buying to flip will find significantly reduced offers from the grey market.

[Akacoke]

Originally Posted by jitdc

Hot market? I'm assuuming that's a joke lol...

Many of the in-demand Rolex watches from 1 year ago have dropped nearly 50% from their peak on the secondary market. Most are approaching MSRP or are already below. There are a tiny few outliers, steel Daytonas and meteorite Daytona's remain close to 2x MSRP. We may not see WG Subs in the mid 20's for instance but close, almost all models can be readily purchased from a wide varity of grey market sellers and the average buyer, only buying to flip will find significantly reduced offers from the grey market.

You are only describing the market back in 2017 which. We are all fine with.

[RollingInTheDeep]

Originally Posted by rockysw

https://www.fratellowatches.com/the-...han-you-think/

I am glad at least some popular watch blogs are calling a spade a spade. Whether you agree or not that Rolex AD practices are extortion, it is a good read.

Not sure whether I would call it actual extortion albeit I agree it rightfully does feel like extortion.

Rolex has empowered ADs to call the shots as they see fit; which is intelligent in and of itself as Rolex can always pull the "that's up to the AD, we don't deal with retail" card and blame the ADs.

Aside from that, when you think of Rolex's consumer stratgegy, i.e., using primarily jewelry businesses (which they themselves call Rolex Jewelers), the extortion-like approach is smart business on behalf of the AD.

ADs make ~40% margin on Rolex and anywhere from 60%+ on jewelry. If Rolex/Tudor is all you sell and you start adding up what you have invested in a boutique refresh, retail rent, etc. you have no choice but to squeeze every dollar you can out of every sale, especially since you can't control stock and are at the mercy of Rolex. Rolex in this case is to blame, as they are the ones who created this environment to an extent. If they controlled the retail channel, they could employ better controls around who gets watches based on watch buying history, etc.

Many will tell you they would rather pay "market" on their favorite watch rather than build a history/get extorted just to keep waiting year over year with false hope because someone of the forum posted a white dial 116500 with the topic "GOT THE CALL!"

[Wrist King]

Risk free rate now 5%. Rolex yields nothing. Free money over. Prices have 30-50% further to fall and demand will evaporate. Winter is coming.


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[Hollie_Rollie]

Originally Posted by Wrist King

Risk free rate now 5%. Rolex yields nothing. Free money over. Prices have 30-50% further to fall and demand will evaporate. Winter is coming.


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This would be nice.

Don’t forget all the buyers who bought for investment purposes- once they see their investments continue to dip we may see an influx of for sales from private sellers and grey dealers


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[Pablito]

Originally Posted by Wrist King

Risk free rate now 5%. Rolex yields nothing. Free money over. Prices have 30-50% further to fall and demand will evaporate. Winter is coming.


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Totally agree. Maybe those who are trying to convince themselves that the market is still hot are truly denying and mostly don’t want to see their « investment » devalued 😂. On my side, I can live with the fact that a part of my collection doesn’t worth the hype anymore. Only the SS Daytona and some meteorite stuff remain in a 2X range.

[Rolexken]

Originally Posted by Akacoke

You are only describing the market back in 2017 which. We are all fine with.

Agree.

[Cauhauna]

Originally Posted by Wrist King

Risk free rate now 5%. Rolex yields nothing. Free money over. Prices have 30-50% further to fall and demand will evaporate. Winter is coming.


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LOL! i hope so, but i don't buy it.

you're telling me a nautilus will be 40-50k again? where do i send the wire?

[watchtabs]

Originally Posted by Cauhauna

LOL! i hope so, but i don't buy it.

you're telling me a nautilus will be 40-50k again? where do i send the wire?

You mean when 5711s were selling for 17k on David?

[Fleetlord]

I see people have so much hope that Rolex will indeed increase production and the AD cases will be filled to the brim, bursting at the seams with all ones favorites...GMTS, Subs, EXP2, Daytonas!! (well maybe not..lol)..

Well, while Rolex may be preparing for more production, who is to say what references those will be?

Odds on they will crank out high factory margin TT DJ and keep the Professional watches in check to fuel FOMO..

[Harry-57]

Extortion? Hahahahahahahahahahahahahahahahahahahahahahahahaha hahahahahahahahahahahahahahahahahahahahahahahahaha hahaha. It's a watch, not oxygen, insulin or fresh drinking water.

Where is the original content in that mass of second hand, regurgitated and recycled copy? Let's read the Rolex forum for 2 weeks, assemble all the anecdotes, opinions and observations, paste paste them in, add a bit of commonly known background information, add some padding and pretend we've come up with something original. Beats working, although I'm sure they slaved over the spell check for minutes.

[brandrea]

Originally Posted by Fleetlord

I see people have so much hope that Rolex will indeed increase production and the AD cases will be filled to the brim, bursting at the seams with all ones favorites...GMTS, Subs, EXP2, Daytonas!! (well maybe not..lol)..

Well, while Rolex may be preparing for more production, who is to say what references those will be?

Odds on they will crank out high factory margin TT DJ and keep the Professional watches in check to fuel FOMO..

And/or, this new plant may be more about operating efficiency and less about cranking out more watches

[joli160]

Originally Posted by Fleetlord

I see people have so much hope that Rolex will indeed increase production and the AD cases will be filled to the brim, bursting at the seams with all ones favorites...GMTS, Subs, EXP2, Daytonas!! (well maybe not..lol)..

If they do that Rolex will destroy their own market. Rolex will be seen as a common brand and lose its allure for the opportunist buyer.

[subtona]

Strong word…
Can’t disagree.

Simplest solution is to withhold that cash.
Let the ADs choke on their stock for a year.

Customer doesn’t need the product…
Product must have a customer to survive.

Of course this will not happen.

[Mystro]

Rolex is the master of their destiny and is always 12 moves ahead of maintaining the brand. Rolex will not go back to filled display cases..

[Calatrava r]

Originally Posted by Cauhauna

LOL! i hope so, but i don't buy it.

you're telling me a nautilus will be 40-50k again? where do i send the wire?

I think he was referring to Rolex.

[mountainjogger]

Originally Posted by Harry-57

Extortion? Hahahahahahahahahahahahahahahahahahahahahahahahaha hahahahahahahahahahahahahahahahahahahahahahahahaha hahaha. It's a watch, not oxygen, insulin or fresh drinking water.

[ol' Rex]

So, if having to establish a purchase-history with an AD in order to get a highly sought-after model is "extortion", what is the correct term for paying a used watch salesman 3 times the retail price?

I can think of a few words that fit, but I doubt that they are allowed on this forum...

[watchwatcher]

Originally Posted by Fleetlord

I see people have so much hope that Rolex will indeed increase production and the AD cases will be filled to the brim, bursting at the seams with all ones favorites...GMTS, Subs, EXP2, Daytonas!! (well maybe not..lol)..

Well, while Rolex may be preparing for more production, who is to say what references those will be?

Odds on they will crank out high factory margin TT DJ and keep the Professional watches in check to fuel FOMO..

Originally Posted by brandrea

And/or, this new plant may be more about operating efficiency and less about cranking out more watches

Originally Posted by Mystro

Rolex is the master of their destiny and is always 12 moves ahead of maintaining the brand. Rolex will not go back to filled display cases..

I would have to agree. I think it would be naive to presume we're all getting a call based on a new production plant. There are a LOT of moving parts between that and a glut of watches at the AD.

I'll happily stand corrected if wrong, though.

[jitdc]

I do hope the prices continue to fall in the secondary market. It makes some of the watches I would really like to have more attainable, even from other brands.

I agree with some of the comments above, free money is over. The speculation boom in non-essential markets like watches is at a stand still, it will reduce grey prices back to normal levels. AD's will certianly be calling more but for a lot DJ's and lady DJ's, the desireable steel sports models will remain aftifically more challenging to buy from the AD for a bit longer. But once again there will be plenty available with attractive prices from secondary sellers. Which is a good thing in my opinion.

[BraveBold]

History repeats, repeatedly.

Yields up. “Soft landing” lol. We will see a correction. In some areas severe (eg commercial real estate, some areas of residential RE too) but never as bad or sustained as pundits will call for.

Why? Because every action has an equal and opposite reaction. With the Fed/govt the reaction will (predictably) be too late and too much. They will cut rates because the main factors driving inflation today will get wiped out (and more) before Rolexes correct > additional 25% from here.

The cycle will start anew.

The flippers will get hammered, especially those with leverage. Some businesses built up on this “excess false demand predicated on the next fool” will also be wiped out. Lots of companies built to excessive capacity (Rolex is NOT one of them btw).

But Daytonas won’t start filling shelves. It won’t happen. Subs will be available, DJ at a modest discount. Some will drop more sharply still. But the permanence of 7.5% mortgages is unlikely because of what it implies on the affordability side. Something will break.

[MRBolton]

Originally Posted by watchtabs

You mean when 5711s were selling for 17k on David?

Did they really used to cost that?!

[YGRLX]

Originally Posted by Wrist King

Risk free rate now 5%. Rolex yields nothing. Free money over. Prices have 30-50% further to fall and demand will evaporate. Winter is coming.


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From the guy who’s waited 4 years for a no date sub lol

[Fleetlord]

Originally Posted by MRBolton

Did they really used to cost that?!

yep

[cleansocks]

Rolex artificially lowers the price of their watches at authorized dealers below market. This creates a sense of adventure and hope for people to try to get in on this special price. It drives customers to the stores that sell their brand, and these stores can then take advantage of that excess demand, using perfectly legitimate sales tactics or relationship building. If Rolex just let their ADs sell for market price then there would be no accusations of extortion but also no hope for people to get good deals. I think most people that whine about not being able to get it at "list" would still prefer the possibility of getting it at list than having to pay the real market value. I don't really understand rolex's business model forcing ADs to sell at list given how much unwarranted contempt it creates