AD or Grey Market? What’s the Math?

[NotGrey]

Originally Posted by Flint

Exactly this but unfortunately they keep getting fed !

Well, people want what they want, and grey market price reflects actual demand for the product. People like me that don’t have a long history with Rolex or a wife to buy two tone womens’ pieces can’t really get one the normal way. Been to at least 15 dealers in different cities to no avail.

Rolex could shift production into more mens’ pieces and more steel pieces but it doesn’t really fit their strategy for max long term profitability

[mfnj]

Originally Posted by fskywalker

Not feeding the grey market !


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Amen Brother! Maybe a few years ago when you could actually choose between buying a watch at retail at an AD or obtain one from a grey dealer at a discount (remember the “how much discount” threads of yesteryear!) the math made sense. But for most people, the math does not compute today!

[Jpccarguy]

Another unanswerable question for each of us is time value of money. What is it worth to get your grail watch now, vs waiting... 6 mos? A year?

When I'm diagnosed with inoperable cancer, I'll go grey!

[rmwill]

Very much depends on the watch. If you want a steel Daytona, the grey math makes much more sense if you aren't a whale at your AD. The amount of spend varies by AD and location, bit it will be large multiple of the grey price of the watch. As for easier to get watches like a Sub or GMT, you might have more success but a long wait. At the end of the day, the market makes this decision and the grey SELLING prices reflect that.

[steeevvvooo]

You could make an educated guess when there were actually watches to buy to make a loss on, and a bundle was a potential option. Much harder to guess what that 5 figure jewelery spend of going to hit you if you only buy it to sell on at a loss. There are no rolex to buy at a deep loss now that will gain you favor with an AD, and fewer and fewer other brands by the week!

All this talk of "the game" annoys me though. I'm a market price guy. Above MRSP, below, I don't care... I decide if like a watch but the price is too high IMO I consider alternatives. Not only do I end up happy with what I own for the price I own it for, when I want it, I also explore other brands, go down rabbit holes of the internet researching, and generally have a lot of fun.

To each his own, but the price is the price, either wait forever at an AD for what is effectively a "discount", pay the market price or buy something else that offers you more for the same price.

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[steeevvvooo]

Originally Posted by Atlanta

I recently bought a new WG Sub gray. If I factored the 8.9% sales tax I didn’t have to pay, I paid a $400 premium.


Member #14554
126619LB & 114270

But do you not need (officially) to pay use tax on the purchase? Just because it was purchased out of State doesn't always mean you don't have to pay the tax... (I'm not a lawyer, just looking out for a fellow WIS)

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[Arthur Daley]

Don't know. But when I started collecting I was all about the gray market (and reputable sellers) but that was at a time when the gray market was always cheaper than going via an AD. Plus, my taste was evolving and I was buying lots of different brands so there wasn't much point in building a relationship.

Fast forward a decade and a half later and I now avoid the gray market and try to stick with the same ADs for certain brands. It's worked well. Plus, there's something special about knowing that you're the "first" owner. So ADs all the way for me, now. But it requires patience, and a purchase history to be built over time.

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[Flint]

Originally Posted by NotGrey

Well, people want what they want, and grey market price reflects actual demand for the product. People like me that don’t have a long history with Rolex or a wife to buy two tone womens’ pieces can’t really get one the normal way. Been to at least 15 dealers in different cities to no avail.

Rolex could shift production into more mens’ pieces and more steel pieces but it doesn’t really fit their strategy for max long term profitability

You raise some good points and I sympathise but the more people go grey = the more ADs sell to grey = Very few watches available for genuine buyers like yourself , a vicious circle !

[amh]

I don't want to spend $20k on jewelry - these become essentially worthless the moment you buy it (earrings, rings, diamonds, bracelets etc.) Pennies on the dollar.

Would not mind buying a couple datejusts instead, these will tend to hold their value. But despite being on several fictional AD 'lists' it seems like they have nothing available.

It really means they're not going to sell anything to me. I visit an AD from time to time so they know my face but I'm not going to get overly chummy with them in order to build a 'relationship.'

[aczaja10]

Originally Posted by Arthur Daley

Don't know. But when I started collecting I was all about the gray market (and reputable sellers) but that was at a time when the gray market was always cheaper than going via an AD. Plus, my taste was evolving and I was buying lots of different brands so there wasn't much point in building a relationship.

Fast forward a decade and a half later and I now avoid the gray market and try to stick with the same ADs for certain brands. It's worked well. Plus, there's something special about knowing that you're the "first" owner. So ADs all the way for me, now. But it requires patience, and a purchase history to be built over time.

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Unfortunately, this isn’t an option for most and especially not for those starting out.

When I started, I could go to the same AD and pick up a GMT, a Submariner or even a Daytona in my hands, try all of them on, debate with myself for a few months, all while coming back to the same AD while I debated to try on the same watches again and again. I even had an AD talk me into a Green Submariner over a Black one. Moreover, a big spend history would get you discounts on Rolex watches.

Now, people have to spend big money to be offered watches at full retail and they better be ready to accept whatever watch is “chosen” for them or risk not being called back at all. Case in point, I am looking for a Day Date so a friend introduced me to his AD who is out of state, but not far at all. I called and registered my interest in 4 Day Date combos. About a month later, I received a call for a two tone Sea Dweller, which I politely declined and said I was holding out for a Day Date and said I would also consider a gold Submariner. Crickets. I followed up with a few emails and always received a polite response. Last week, I called to say Merry Christmas and check on the status, sales rep brushed me off completely and told me I needed to stop in personally every few weeks to keep the relationship going and that I had effectively been removed from the list because she hadn’t seen me in so long.

This sucks. I’m not going to drive for hours to say hello hoping that I can buy a watch I don’t want so that I can be considered for a watch I actually want to own. I luckily have a relationship with 3 local ADs that was built over a different time, when I could buy what I wanted when I wanted.

It’s different now than when you (and I) built a relationship. I feel horrible for those starting out. It’s a bad scene right now and doesn’t look like it’s getting any better.

[Gab27]

There are too many variables at play, and these variables would change based on the model, time of year, the dealer, and the person you interact with when you walk in the store.

[Gab27]

Originally Posted by amh

I don't want to spend $20k on jewelry

This was my situation...I wanted a particular high-demand stainless Rolex (that I have wanted since childhood), and there wasn't anything else I wanted. No AD would have interest in selling me just that watch, and you absolutely can't blame them as they are there to make money, and they can make more money selling that watch to someone else.

The secondary market and ADs are both simply interested in maximizing their returns (no differently than when you or I sell a house.)