Grey Dealers Are Loaded With Stocks, Selloff Soon?

[JSolution]

Originally Posted by fsprow

It's hard to know what the real inventory is. Some resellers often will advertise watches they don't actually have, but believe they can acquire soon. Also, some may be in longer term inventory, not advertised, as a bit of price movement speculation.

By the way, resellers (this is not a true "grey market") are not the enemy as some here think. They are just in business to help establish a market above or below MSRP to reflect what people are willing to pay. Many fine folks in this business.

Wel said.

[hambone1983]

no one is dropping their prices, so however fast inventory is turning over is sufficient to suit them. With current interest rates it takes 4 months to eat 1% of capital invested in inventory, and their margins are probably fatter now than they've ever been. I don't see prices dropping any time soon.

[SN13]

Prices will only start to trickle when people stop buying.

The intersection of price vs demand vs supply has not been crossed yet...


As price increases, demand decreases. As price Decreases, demand Increases.

The demand for a $10M DaytonaC is ~0.
The demand for a $0 DaytonaC is ~infinity.

So where is the equilibrium?

As prices increase, SUPPLY of 2nd hand DaytonaC increases.
As prices decrease, SUPPLY of 2nd Hand DaytonaC decrease.

Everyone is Selling their DaytonaC @ $10M
No one is selling their DaytonaC @ $0.

So where is the equilibrium?

Currently that appears to be enough Sellers of their own Daytona at $35k to equal the buyers at $35k.

At some point those willing to sell a product outpace those willing to buy.

At that point, the only way to sell yours, before the other guys, is to be slightly lower.

That's what AD's had to do for a long time. Discount. Be slightly lower than the AD down the street who wouldn't Discount as much to make the sale.

We'll see what the future holds.

[tirefryer]

Originally Posted by Marcjvr

Nah. We need them. Try and sell a Rolex privately and you will learn how valuable they are

This doesn't compute with me since in my mind, i work hard, do all the right things, save for luxury items and when time avails itself, I indulge and purchase a Rolex (or two or three or whoever many), why would I, or anyone, want to sell their Rolex? To me, an item like this commemorates a special occasion, celebrates milestones or achievements, so why would you sell it?
I think this is more of a recent phenomenon where people have elevated Rolex (and other such luxury brands) as a thing of status, rather than a high quality and robust tool which is made to be used, appreciated and enjoyed.
I suppose people will fall into two categories: ones who will wear and enjoy the watches and put them to the test as designed OR those who pamper, collect, show-off and then flip them as a commodity as to them, it's just a "thing".
Regardless, each of mine are special and have meaning attached to them, and as such, will be passed on to my kids, some family and a couple of close friends.

[Coffes4closers]

Here’s something to ponder. How on earth could gray prices decrease when they themselves are paying top dollar to the flippers? Their margins are not what many of you may think. I would even go as far as to say that their margins are almost identical or even smaller in many instances than they were in the “good old days.” Only a very poor business person would allow the market to drop and take a loss on the countless watches that they have personally paid top dollar for. Full disclosure, I have acquired pieces through ADs, Gray market dealers, and private sales, and believe they all serve an important role. The only thing that will make this go away is a massive and dramatic increase in production by Rolex that meets demand, which we all know will not happen.

[DJ39]

Nothing will change, grey dealers have become institutionalized into the system.

Even if the market dips, the demand will just float them back up.

[SN13]

Originally Posted by Coffes4closers

Here’s something to ponder. How on earth could gray prices decrease when they themselves are paying top dollar to the flippers? Their margins are not what many of you may think. I would even go as far as to say that their margins are almost identical or even smaller in many instances than they were in the “good old days.” Only a very poor business person would allow the market to drop and take a loss on the countless watches that they have personally paid top dollar for. Full disclosure, I have acquired pieces through ADs, Gray market dealers, and private sales, and believe they all serve an important role.

The only thing that will make this go away is a massive and dramatic increase in production by Rolex that meets demand, which we all know will not happen.

LOL.

Rolex must be the only thing you've ever dealt with that had a bubble... or a spike in demand that wasn't met with a spike in supply.

This is my 6th experience with a hobby / passion that's seen a giant hype of demand... For items still in production, there's usually a point where people don't NEED any more of the item and decide that they're done spending money on it for now.

I see that approaching.

You look at supply as a current production number only, I look at supply as what's coming today, and what's available from the past 60 years of Rolex production....

Many people want a "Sub" but not everyone wants the SAME sub.

Technically a 116610 and a 126610 are different watches. But do you see yourself owning a 116610, 126610, 114060, 124060, 16610, 14060, 16800, 5513... etc. just to say you have one of each? or do they replace each other in the lineup based on your preferences?

If you love the 5 digit cases, you may own a 16610.

If you love acrylic crystals and no-date vintage, you'd go for a 5513.

If you want a Ceramic date, you're likely not going to have a 116610 AND a 126610 in the collection as they're too similar and the $10k is better served branching out into something else. A GMT? a Datejust? even a Two-Tone Sub might be an option.

The point is, that outside of a few very obsessive and wealthy collectors, most of us are going to spread our funds around to have variety.

Even if the DaytonaC is "Discontinued" it will be replaced with another Daytona and maybe it's better, maybe it's not, but the average guy who wants a Daytona isn't going to spend $50k on the 2016 version and ANOTHER $50k on an almost identical 2021 version just because one is a 116500 and the other is a 126500.

[Bladeshot]

Originally Posted by Oystersteel

Rolex watches are thought of as little more than $$$$££££$$$€€€€££$$ object things, instead of watches bought to be worn and enjoyed.

I see what you did there. That’s a good one. Made the post worth the read.

[Milibrk@]

Originally Posted by Marcjvr

Nah. We need them. Try and sell a Rolex privately and you will learn how valuable they are

Truth hurts.

[daOnlyBG]

Originally Posted by Francist

I've never seen so many of them loaded with so many stocks.
Except a few very rare pieces almost everyone have rootbeer, pepsi, starbucks, batgirl, DJ, you name it.
Looks like they expect another price increase & everyone going all-in....which is how the market-top is usually formed.
What do u guys think?

Things people have been holding out for years:

1. The "bubble" to pop
2. Grey market dealers to get burnt via sell-off
3. Everyone dumping Rolex for other brands
4. Rolex supply to catch up to global demand
5. Ceramic coke GMT

Maybe the last one will come true?

[SDGT3]

Originally Posted by Gary Busey

forget it man. if people are dumb enough to buy NFTs and Dogecoine, you can bet your a55 that there is a gazzillion dollars of excess liquidity out there, and hard assets like the good ole Rollie wont sell off.

This,,,,

people are throwing ridiculous money at ridiculous crap these days...

[Alan111]

Originally Posted by SN13

LOL.

Rolex must be the only thing you've ever dealt with that had a bubble... or a spike in demand that wasn't met with a spike in supply.

This is my 6th experience with a hobby / passion that's seen a giant hype of demand... For items still in production, there's usually a point where people don't NEED any more of the item and decide that they're done spending money on it for now.

I see that approaching.

You look at supply as a current production number only, I look at supply as what's coming today, and what's available from the past 60 years of Rolex production....

Many people want a "Sub" but not everyone wants the SAME sub.

Technically a 116610 and a 126610 are different watches. But do you see yourself owning a 116610, 126610, 114060, 124060, 16610, 14060, 16800, 5513... etc. just to say you have one of each? or do they replace each other in the lineup based on your preferences?

If you love the 5 digit cases, you may own a 16610.

If you love acrylic crystals and no-date vintage, you'd go for a 5513.

If you want a Ceramic date, you're likely not going to have a 116610 AND a 126610 in the collection as they're too similar and the $10k is better served branching out into something else. A GMT? a Datejust? even a Two-Tone Sub might be an option.

The point is, that outside of a few very obsessive and wealthy collectors, most of us are going to spread our funds around to have variety.

Even if the DaytonaC is "Discontinued" it will be replaced with another Daytona and maybe it's better, maybe it's not, but the average guy who wants a Daytona isn't going to spend $50k on the 2016 version and ANOTHER $50k on an almost identical 2021 version just because one is a 116500 and the other is a 126500.

@SN13 - post up some more pics of your PM sports models. I know you flashed a 16528 a couple of times on here...... My favorite vintage model for sure.

[SN13]

Originally Posted by Alan111

@SN13 - post up some more pics of your PM sports models. I know you flashed a 16528 a couple of times on here...... My favorite vintage model for sure.

Haha.

You know how to derail me

I have that 16628. (Assuming a Typo on the 16528)

Just for you Alan. From Friday.

[blargle]

Originally Posted by Gary Busey

forget it man. if people are dumb enough to buy NFTs and Dogecoine, you can bet your a55 that there is a gazzillion dollars of excess liquidity out there, and hard assets like the good ole Rollie wont sell off.

Unfortunately you are correct I think

Monetary supply is obscene, it shall flow into assets so long as it flows off the printers

[Goin2drt]

Originally Posted by garyk

Don’t hold your breath for a sell off!

As a matter of fact depending on the "release" info prices could soar. They will remove the listings for a few days and then re post with higher prices.

[SN13]

Originally Posted by blargle

Unfortunately you are correct I think

Monetary supply is obscene, it shall flow into assets so long as it flows off the printers

Yeah, I agree with this.... sad.

[Rolexatlast]

Originally Posted by fsprow

It's hard to know what the real inventory is. Some resellers often will advertise watches they don't actually have, but believe they can acquire soon. Also, some may be in longer term inventory, not advertised, as a bit of price movement speculation.

By the way, resellers (this is not a true "grey market") are not the enemy as some here think. They are just in business to help establish a market above or below MSRP to reflect what people are willing to pay. Many fine folks in this business.

They are just in business to make money, which they get by increasing the cost to the end user, by reducing AD supply of new watches to end users

[GreenLantern]

How many SS Daytonas can I get with my DOGE?!

[Cambo]

If there ever was an increase in inventory (I doubt there will be) China is waiting....heck they may (by themselves) keep driving prices up.