When will second hand Rolex dealers get desperate?

[TunaTuna]

Rolex prices have come down off their highs, but still way way above pre covid prices.

Dealers with physical stores in the jewelry districts around the country are dead with very little traffic. Moda has fewer and fewer reference checks for potential deals. Online dealers don't want to buy stock, and if they do the offers are laughable. Yet prices are staying firm.

DavidSW prices are extremely high. Takuya, SohAIS and the rest are keeping their prices high too. I don't see any deals in a market that has screeched to a halt.

I don't think we are going to see below retail pricing, but certainly pre covid pricing or near that is in the cards. What is it going to take for prices to reflect this slow watch market?

[Langnam]

Why do you think the market is slow?
If I were to judge just by the incoming threads here, I’d say the market is still smoking and people are still buying from Trusted Sellers at over retail prices.


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[GradyPhilpott]

Originally Posted by Langnam

Why do you think the market is slow?
If I were to judge just by the incoming threads here, I’d say the market is still smoking and people are still buying from Trusted Sellers at over retail prices.


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TRF is not a representative sample of watch buyers, not even Rolex buyers.

It seems we are seeing more posts about new purchases, though.

[njlam]

With short US interest rates over 5% (they were almost zero a year ago), it is expensive to hold inventory. While ADs sell everything they get in, grey that are holding inventory may be feeling the pressure of the costs of holding watches for sale. There may be pressure to sell...

While I have yet to get a call from a Rolex AD for the watches I want, I have gotten calls for PM models that list on Chrono24 for MSRP. Non-hype pieces are languishing...

I have had a lot of luck this year buying non-Rolex preowned watches at much lower prices than offered/listed prices and dealers were quick to acquiesce to any real interest.

FWIW, last month I visited a large/global reseller (AD/grey/preowned dealer) and my rep admitted they really increased inventory during covid and most of their inventory was underwater. It is unclear if they are going to try to ride it out, or they will try to decrease inventory a lower prices.

Interesting times. I just went grey for a watch I was hoping to get from an AD. While it was still at a premium to MSRP, I liked the seller and got a pretty good deal.

[Njkdog]

Originally Posted by njlam

With short US interest rates over 5% (they were almost zero a year ago), it is expensive to hold inventory. While ADs sell everything they get in, grey that are holding inventory may be feeling the pressure of the costs of holding watches for sale. There may be pressure to sell...

While I have yet to get a call from a Rolex AD for the watches I want, I have gotten calls for PM models that list on Chrono24 for MSRP. Non-hype pieces are languishing...

I have had a lot of luck this year buying non-Rolex preowned watches at much lower prices than offered/listed prices and dealers were quick to acquiesce to any real interest.

FWIW, last month I visited a large/global reseller (AD/grey/preowned dealer) and my rep admitted they really increased inventory during covid and most of their inventory was underwater. It is unclear if they are going to try to ride it out, or they will try to decrease inventory a lower prices.

Interesting times. I just went grey for a watch I was hoping to get from an AD. While it was still at a premium to MSRP, I liked the seller and got a pretty good deal.

Higher interest rate means that it’s cheaper to hold inventory. It’s more expensive to hold cash.
You kind of got the exact opposite of the truth there…

[soldes]

The fact that the Grey dealers are not paying premiums for sought after models, and offering laughable dollars to buy, says to me that they are not moving as much pieces as when the market was high (I know, tell us something we don't know!). A better way to get an accurate assessment would be to dig into their sales receipts; but of course, they wont give us that info.

They have made business adjustments with their buying, but DO NOT want to compromise their bottom line by showing dramatic price decreases, even though some of them are getting a reality check, if they bought high at the frenzy.

To me, January and February will shed a brighter light on their willingness to go downward in price, in order to move their stock; since they are probably waiting for a Rolex price increase, to justify the unrealistic asking numbers of what they have for sale.
My guess? They going to have to adjust downwards after the holidays, in order to move what they have.

[nighthawk77]

I don’t think it’s something which will happen suddenly.

Here in the UK there’s only a few models which you can take to a reseller and make a profit, which should lead to less people flipping and more availability for those who want models directly from the AD. You can sell privately which may make a better return but this obviously comes with an increased risk.

Economy isn’t great either, so there’ll be a slow down in demand from AD & greys which might help availability and see grey prices reduce.

It’s possible that some inventory was acquired at higher rates which is why secondary prices remain high. Another theory is that once prices start to fall, there’s no going back up so dealers holding out for as long as possible.

Regardless, if there’s a model you’re interested now would be a good time to speak with your AD. Depending on the model, going grey might be a good idea to save the wait, as some models are now quite close to MSRP.

[illiguy]

I think large greys are doing ok

[joli160]

Never, lots of ‘grey’ sellers are already in the business many years before the hype and are financially very healthy.

[Redfoot]

I think the big greys are financially healthy enough to weather a significant downturn- the past 3 years have been extraordinary for them. I also feel they have loyal high net worth customers who prefer to purchase what they want, when they want it and like the concierge service- especially on PP, AP, RM, Lange, etc.

The smaller greys are the ones that will get desperate first, if they do at all. Especially if they were relying on low interest rates to fund their business. But, I could see them offloading bundles to larger greys to remain liquid, and also allowing both parties to save face and "protect" the market without dropping prices.

It always upsets me to see the watch I want offered BNIB, dated current month, for 30-40% over retail. Same way when I see the grey dealers on Youtube with bins full of Subs, GMT's, etc. Just takes all the joy out of the watches for me.

[1William]

Without specific data it is all just speculation based on observation and perspective. Have certain models adjusted downward? Yes, but what are the Trusted Sellers paying for the watches? It is all about margins of what they pay to what they can sell for. I would believe for the large sellers the crazy covid merchandise has long since been moved along and they are buying and selling based on the current market. A continued slowing or market decrease in secondary price will continue into 2024 for some models. You are still not getting a SS Daytona, Pepsi, Batmen or any other super desirable watch for retail or close unless you can get one from an AD. The average speculative customer who wanted to be in an equity position in a watch from the get go has gone away and half of the conversation had is from people who have limited knowledge or experience. My prediction for 2024 is more movement on prices but nothing drastic either way unless a world event[s]dictate otherwise. My speculation based of my 30 plus years in the hobby.

[Gaussian]

The biggest sign of things catching-up will be when the ADs admit defeat and begin selling their stickered “exhibition” only pieces on a walk-in basis.

Probably going to begin soon rather than later. One of my close friends is a big-shot realtor; when I asked him this week if the inventory is still non-existent, he replied that they need more buyers, not more property, now. He went on to say that the multiple-offer frenzy has evaporated.


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[Patekfinder]

Originally Posted by Gaussian

The biggest sign of things catching-up will be when the ADs admit defeat and begin selling their stickered “exhibition” only pieces on a walk-in basis.

Probably going to begin soon rather than later. One of my close friends is a big-shot realtor; when I asked him this week if the inventory is still non-existent, he replied that they need more buyers, not more property, now. He went on to say that the multiple-offer frenzy has evaporated.


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Watches of Switzerland sold off almost all of their exhibition pieces as “preowned” with box and no warranty card a few weeks ago, this included all highly sought after pieces and they were sold at retail to anyone who walked in off the street regardless of purchase of history.


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[996marty]

The greys I’m guessing have done very well and can possibly ride it out

[thenewrick]

Greys expect demand and prices to increase in the future and keeping a watch in inventory isn’t difficult or expensive. It holds up some of their cash flow but isn’t the same as holding onto something that is cumbersome and requires lots of maintenance to keep in stock.

I’ve been following some watch sales for over a year and the price comes down like 1% each month or so and then they often hit a floor where the grey will either not sell it or just trade it to another dealer.

Once greys start selling at big discounts all others will have to follow suit and it would hurt their entire industry so nobody wants to be that guy. That being said. The first grey to go big discount and clear inventory will fare better than the others who follow suit to lower their prices even more to compete. They don’t want to get into a reverse bidding war. So for now it’s just stuck with high inventory and high prices and nobody buying watches 2nd hand.

We’ll see who flinches first or if demand begins increasing again.

I do find it a little frustrating seeing these references not drop to a price I’m comfortable buying at and just sitting in inventory cases or being traded around the dealer networks but oh well it is what it is.

Frankly people should be buying and selling to each other but everyone is so paranoid about getting burned. I personally have almost gotten burned by trying this so it is sketchy out there. But really, individuals should be trading watches amongst each other for reasonable prices rather than relying on sketchy greys who are clinching the bag with diamond hands hoping for another social media bump in demand or something.

[TheDogHouse]

Until these things are sitting available in stores for immediate purchase, you will not see any desperate price drops. The exception being individual dealers who may experience cash flow issues.

[Benjack]

Originally Posted by TheDogHouse

Until these things are sitting available in stores for immediate purchase, you will not see any desperate price drops. The exception being individual dealers who may experience cash flow issues.

I agree with you, It's available in the stores for immediate purchase will help the grey market price drop not sure this will happen.

[Calatrava r]

Supply still remains limited. ADs, from what I hear, still have no stock ready for immediate sale to random walk-ins anywhere in the world. Nothing has really changed except the crazy used prices are not rising like crazy on most of the models. Many folks who follow the used watch market see this as a needed correction with maybe a little more downside to go, but stabilization of the market and then strengthening next year.

[amh]

Demand still exceeds supply. Track your favorite reference on watchcharts.com and see for yourself. It will take years to undo this situation.

In the meantime, the grey price is merely Market Price. You'll spend more climbing the imaginary ladder at your local AD compared to the grey markup.

[huncho]

the true answer is no one knows. you still can't get most watches from ADs and now the stock market and a lot of crypto has been going straight up all of november and december. people will have a lot of money to blow at this rate

[TunaTuna]

Interesting to hear other's perspectives, thank you for chiming in!

[Hardtimes]

Only bad businesses get desperate...

[Watchman001]

Brick and mortar used watch dealers (including ADs with used sections) near me are not moving much, if anything. These stores also have an online presence. I have seen the same watches in the showroom for 7 months. One sales person complained about what they had purchased a 5711 and an AP for and how they are underwater on them and still no demand.

[Gaussian]

Originally Posted by Watchman001

Brick and mortar used watch dealers (including ADs with used sections) near me are not moving much, if anything. These stores also have an online presence. I have seen the same watches in the showroom for 7 months. One sales person complained about what they had purchased a 5711 and an AP for and how they are underwater on them and still no demand.

Pigs get fat and hogs get slaughtered.

Just as true in the watch world as it is elsewhere.

Is it bad that I don’t feel at all sad for the flippers, who were often the ones getting the call, are now the ones feeling the squeeze?


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[4reRlxGuy]

I don't see much of a slow down at my local greys in socal. Still need to make an appointment and while waiting I see watches being purchased in an assembly line process. Only difference is prices have come down.

[hambone1983]

Originally Posted by Gaussian

Pigs get fat and hogs get slaughtered.

Just as true in the watch world as it is elsewhere.

Is it bad that I don’t feel at all sad for the flippers, who were often the ones getting the call, are now the ones feeling the squeeze?


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aren't pigs and hogs the same thing? I think I'd understand economics better if I knew the difference!

[Gaussian]

Originally Posted by hambone1983

aren't pigs and hogs the same thing? I think I'd understand economics better if I knew the difference!

“This idiom is used to express being satisfied with enough, that being greedy or too ambitious will be your ruin.”

https://www.usingenglish.com/referen...aughtered.html

But to answer your question, pigs that reach a certain size/age/maturity are often referred to as hogs and are the ones that are usually sent to the slaughter house as they are big, eat the most and will not grow further.






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[hambone1983]

Originally Posted by Gaussian

“This idiom is used to express being satisfied with enough, that being greedy or too ambitious will be your ruin.”

https://www.usingenglish.com/referen...aughtered.html

But to answer your question, pigs that reach a certain size/age/maturity are often referred to as hogs and are the ones that are usually sent to the slaughter house as they are big, eat the most and will not grow further.






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I appreciate the edification! I wasn't sure that farms were actually still a thing until I was 18 or so.

[Patekfinder]

Originally Posted by Watchman001

One sales person complained about what they had purchased a 5711 and an AP for and how they are underwater on them and still no demand.

HA! Good! Love to hear it.


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[Mystro]

I’ve noticed a lot of watches being sold through our trusted sellers this last three weeks. If anything, I see it starting to pick up.