Grey deal stocks

[squatchy]

Originally Posted by fiebru1119

While I take your point, I have a hard time believing ADs are treating these guys as average Joe’s. How many watches have we seen ourselves here on TRF with plastics intact, unnamed warranty cards, etc. That’s a big no-no-heck I requested they leave the glide clasp sticker on when I bought my LVc at an AD and it was a hard “no”.

I can only speak for our policies, but as an example:
I had a very good client that came into my store and talked watches for a while. 12-18 months years later, he had purchased 5 SS professionals from me and we had a very good professional relationship. That is, until, we found his name associated with a white dial Daytona being sold on a forum. Further searching discovered that all watches had been flipped. I immediately contacted him to inform him he would no longer be our client.
In these cases, we followed Rolex policy... filled out warranty, remove stickers, etc... but I know of other dealers that skip those steps because "the client prefers it that way". These dealers are either incredibly naive or willing to turn the other way...
Regardless, the number of watches that grays have fully stickered with blank warranties is truly cringe-worthy, so I understand the frustration on TRF...

[Quamby]

If Rolex takes action against AD's in Hongkong for policy violations, there'd be no AD's left in Hongkong.

[seabreeze60]

Originally Posted by Quamby

If Rolex takes action on AD's in Hongkong for policy violations, there'd be no AD's left in Hongkong.

I wonder what % of buyers at AD’s are selling into the gray market? Any guesses? No one knows for sure.

[calh22a]

It’s a no brainer for some ADs. Do I sell to a random customer off the street that may not likely be a repeat customer or do I sell them through the back door in bulk to a grey dealer at over retail.

[seabreeze60]

So as long as the AD is getting over MSRP and the buyer is a steady customer this will continue?

[jlovda]

Originally Posted by squatchy

I can only speak for our policies, but as an example:
I had a very good client that came into my store and talked watches for a while. 12-18 months years later, he had purchased 5 SS professionals from me and we had a very good professional relationship.

If the individual was a very good client and you knew him, how many watches did he own already and what models? Why would anyone need five more Rolexes with a six month period? Were they corporate gifts? Were they all the same model?

[Mr. K]

Wow, look at all those ceramic Daytona's. That is absolutely amazing.

I have resigned myself to the fact that many of the watches that demand a premium are no longer attainable for me at this time.

You gotta pay to play. Unfortunately right now, while I might be able to pay, I am unwilling to pay premium prices to play.

Sometimes, you just need to know when to fold and let the people with the big bucks fight it out.

Until things level out, Rolex is just a spectator sport for me. Wish it wasn't so, but that is the way it is.

[seabreeze60]

Originally Posted by Mr. K

Wow, look at all those ceramic Daytona's. That is absolutely amazing.

I have resigned myself to the fact that many of the watches that demand a premium are no longer attainable for me at this time.

You gotta pay to play. Unfortunately right now, while I might be able to pay, I am unwilling to pay premium prices to play.

Sometimes, you just need to know when to fold and let the people with the big bucks fight it out.

Until things level out, Rolex is just a spectator sport for me. Wish it wasn't so, but that is the way it is.

If you and thousands of others do the same prices will come down. I was in another thread dominated by gray buyers and traders that believe they are doing the market a favor. My position was not well received!

[Wahlberg]

Originally Posted by upsidedownbelt

This is my understanding as well. I follow 3 or 4 of the big grays here in the US and my question is. If they are buying up slow moving inventory form the AD's to get the desirable pieces, then why do they mostly post only the good pieces for sale on their websites? I would assume they have to take a number of slow movers to get a LVC or Daytona, and when they posted their inventory online we would see 5 or 10 DateJust for every 1 Daytona. Most of what I see them selling is hard to get stuff. Where does all this "unwanted inventory" go?

I was wondering this as well.

And the DJs I see are still way too expensive.

[Wahlberg]

Originally Posted by squatchy

As an AD myself, I can tell you that we've severed relationships with established "clients" after learning... sometimes months or years later... that they are flipping their purchases. But this can be difficult to police, unless in the OP's case, they share it all over social media.

How many people come in and drop 50-100-250k, ask for a daytona and are willing to take a few others as well (PMs at discount) and this doesn't ring a bell?

I've heard stories about ADs here in Europe. ADs know who they are selling to and no one minds.

[seabreeze60]

3 years ago grays were purchasing excess inventory and selling at a discount. Now they are buying the most popular models and controlling the market.

I like to look at Jamashop’s website as reference. They are a long term internet gray seller. Big change in their pricing strategy over the past 2 years. You can see what is hot and not.

[dcash0615]

Originally Posted by wisguy

So, Rolex reduces supply, ADs sell at full price to the grays, customers buy at a premium from the grays, how is this good for anybody?

Ok the AD makes full margin, that's good, but why could't they sell to final customers with no discount? I'm sure we'd be happy to pay full price at the AD instead of a premium on a website.

The real winners here are the gray dealers, is this sustainable?

For the AD’s that are selling to the gray dealers they are selling the hot SS models at over MSRP in most cases. Maybe their sales documents show the watch was sold at MSRP, but the amount the gray pays over MSRP to the AD is paid in cash or gets applied towards the less disirable models they are buying from the AD. So if Rolex were to audit the AD’s books it would appear no watches were sold above MSRP.

[samshah]

I may be in the minority in saying this but I wish the Greys nothing but success.

When I first started really getting into watches a few years ago, I’d laugh at an AD when they said they couldn’t discount a SubC Date. The going market price was $7,500 and a thousand less for the Sub. Now, not so much...

The market has turned on Rolex against the average joe purchasing however I do see that dynamic of over MsRp changing soon. I think we’ve reached or past the peak on SS pro pricing. Just look at the wealth effect with the stock market as a decent proxy.

If you look outside the Rolex Pro range, there are still very solid deals from Greys. Just depends on what you’re looking for and being patient to pull the trigger.

[avidflyer]

Originally Posted by Etschell

demand is fading hard and the balance will shift sooner than later. trust me on this one, be patient.

Agree.....

[jh225]

Originally Posted by squatchy

The answer to this is simple: Grays don't proclaim themselves as grays to their AD's. They simply seem like really good clients to the dealer, so they get top priority.
Most AD's have waiting lists on watches... who gets to be atop those lists? Those that have spent the most with the store.

As an AD myself, I can tell you that we've severed relationships with established "clients" after learning... sometimes months or years later... that they are flipping their purchases. But this can be difficult to police, unless in the OP's case, they share it all over social media.

If that's the case, you as an AD are just not paying attention. Pretty obvious if a person buys as many of xxx he can get his hands on from you. What is he doing with them, throwing them in a safe as some type of investment?

Also be really interested to know if you are selling all your DJ's & OP's to said buyer? If not, you are being played, big time.

It's glaringly obvious what is going on in Rolex land.

[Wahlberg]

Originally Posted by samshah

there are still very solid deals from Greys

Such as?

[squatchy]

Originally Posted by jlovda

If the individual was a very good client and you knew him, how many watches did he own already and what models? Why would anyone need five more Rolexes with a six month period? Were they corporate gifts? Were they all the same model?

He owned a SubC, a 5513, a Red Sub, Patek Nautilus, Aquanaut and a few others.
One "needs" 5 Rolexes as much as they need 1. All he purchased from me were different references. I wouldn't have sold him two of the same watch if he tried, and wisely he never did or that would have been the obvious red flag right there.

[squatchy]

Originally Posted by jh225

If that's the case, you as an AD are just not paying attention. Pretty obvious if a person buys as many of xxx he can get his hands on from you. What is he doing with them, throwing them in a safe as some type of investment?

Also be really interested to know if you are selling all your DJ's & OP's to said buyer? If not, you are being played, big time.

It's glaringly obvious what is going on in Rolex land.

As I mentioned in post above, he'd never by another of the same watch. We are a luxury jewelry store... you wouldn't believe the shopping habits of some of these people.

Additionally, one can't assume that someone is flipping watches JUST because they're not buying DJ's and OP's. My wishlist of Rolexes does not possess any of those, and I bet a lot of members here are the same way.

[samshah]

Originally Posted by Wahlberg

Such as?

I think there are some really solid deals on less popular Omega Models (e.g., Railmasters, ATs), and also IWCs, etc. just a matter of keeping an on the major greys. A few of the bigger guys had a sale going on some of their stock.

[Jojoshop]

Originally Posted by Etschell

demand is fading hard and the balance will shift sooner than later. trust me on this one, be patient.

Totally agree; It is just a matter of time. There is cycle to everything. What goes up will eventually go down.

[Exploradori]

The only solution to this mess is for Rolex to start selling directly to consumers online.

The AD system is now defunct, greys are impossible to curtail, and the Rolex brand is suffering a lot among regular and young people (ie the future for the brand).

Time's up Rolex. Fix this mess.

[seabreeze60]

Apple has gone direct and controlled their space. Microsoft has stores in most malls. Company after company is changing their formula to control their distribution channel.

Rolex is big enough to do the same. They can keep 50% of their best AD's and open up stores, internet options, etc. Who wouldn't purchase direct from Rolex? However, if the AD is offering the same price and personal service they stay in business and keep customers. That controls the gray market and expands the brand. Given that Rolex is a $8 billion company they are big enough to pull the trigger.

The company that I'm on the board of has done the same thing. We're a lot smaller than Rolex. We purchased our entire distribution channel and now are direct. Sales and service are up. Customers are happier!!

The world has changed.

[VicLeChic]

There's something rotten in the distribution.

[Takonwong]

Originally Posted by Mr. K

Wow, look at all those ceramic Daytona's. That is absolutely amazing.

I have resigned myself to the fact that many of the watches that demand a premium are no longer attainable for me at this time.

You gotta pay to play. Unfortunately right now, while I might be able to pay, I am unwilling to pay premium prices to play.

Sometimes, you just need to know when to fold and let the people with the big bucks fight it out.

Until things level out, Rolex is just a spectator sport for me. Wish it wasn't so, but that is the way it is.

X2

I gave up hope, bought other brands until I managed to get the LV from an AD.

[Takonwong]

Originally Posted by squatchy

He owned a SubC, a 5513, a Red Sub, Patek Nautilus, Aquanaut and a few others.
One "needs" 5 Rolexes as much as they need 1. All he purchased from me were different references. I wouldn't have sold him two of the same watch if he tried, and wisely he never did or that would have been the obvious red flag right there.

I’ve bought a few watches over a 12 month period and also sold a few as I’m sure other members have but that shouldn’t make me suspicious. Buyer’s or seller’s remorse and personal tastes change over time too.

[peterpl]

Originally Posted by seabreeze60

I wonder what % of buyers at AD’s are selling into the gray market? Any guesses? No one knows for sure.

It would be a huge amount. Have you been to HK? A walk down a famous street there are hundreds of ADs within a 1-2km strip. Its crazy there. How can it be possible that NONE of these ADs have not a single SS reference but the gray dealers right next door have 100s of them?

Back door sales, cartel like behavior and just dodgy business dealings is the only explanation. Not only in Asia this is happening around the world its the same.

Originally Posted by Exploradori

The only solution to this mess is for Rolex to start selling directly to consumers online.

The AD system is now defunct, greys are impossible to curtail, and the Rolex brand is suffering a lot among regular and young people (ie the future for the brand).

Time's up Rolex. Fix this mess.

I can see this ending very very badly. Rolex need to do something but its quite hard to control as well. If we as customers stop paying these ridiculous prices for SS watches the prices will come down faster than it is now.

Honestly I would strongly recommend if your in the market for a new watch you be slightly more patient and see what plays out in the next 6-12 months. These type of situations never end well for the brand.

Originally Posted by VicLeChic

There's something rotten in the distribution.

Bingo. Its all about making a quick buck thats all. Money talks and bullshit walks. If there are suckers out there paying these crazy prices there is always going to be price gouging and dodgy dealings happening.

If people stop buying you will be surprised how quickly the market turns.

[ROLEXster]

I will just sit quietly on the sidelines and enjoy what I have.
When the tide turns ... I'll pounce on a few pieces.

Seriously though, the current selling channels are broken.
Very very few ADs have a so call VIP / bundle / family list. (regular people have .01% chance here)
Rest of the ADs are backdooring hot models to grey.

I don't even know to what to suggest cuz there are so many problems at every level.

ADs are the middle middle man ...
Some lucky people that bought from ADs will flip to greys
Greys are the new ADs

Maybe make people sign wavers promise not to flip.

[seabreeze60]

“Greys are the new ADs”

That means the channel is broke. It’s an international issue created by the internet and propelled by greed. Rolex needs to fix.

Greys are a wonderful outlet for excess inventory and for individuals to flip purchases. They will never go away.

Rolex hopefully is following this thread. I was told by a Rolex manager that they do track some threads.

[Wahlberg]

Originally Posted by seabreeze60

Greys are a wonderful outlet for excess inventory

Why is Rolex producing so many watches that no one is interested in?

Feels like they are producing 2 million Datejusts a year. Rolex knows 1 million are actually being sold but the other 1 million just sit around at ADs and ADs know they can't sell them so they push them to greys + popular models. That's a shit concept.

1. Lower prices of the Datejust models so they do sell
or
2. lower the production of the DJ models and focus on Subs and GMTS (economies of scale will play a big part so let them figure that out).


Something needs to change and ADs shouldn't be feeling the pain. You see it too many industries. Companies keep producing and expect to grow every year. They expect the stores/dealers to follow, but there is a point that everyone has what it needs and in the current economy the end client isn't that easy to convince to buy something new or replace the older model they had (for example a car).

[jlovda]

Originally Posted by peterpl

I can see this ending very very badly.

The only way this could end badly for Rolex is if there was suddenly a huge dumping of merchandise causing prices to crash. There is almost zero chance the "allure" of owning a Rolex wristwatch collapsing. Right now exclusivity works in their favor.