When will second hand Rolex dealers get desperate?

[Guppydriver]

They will get desperate right as I'm doing the kitchen remodel and finishing the basement.

About a year after that, when I've finally built back up a little liquidity, grey prices will skyrocket again.

[77T]

The truth of the matter is the good dealers will Always get a premium price because the scammer dealers (nobody on TRF) scare the bejabbers out of buyers.

Also, the good dealers watch their cost of goods and don’t leverage inventory with debt. Debt just reduces net income.

I believe we will see dealers take “risk off” by accepting consignment pieces for their inventory. Less profitable, with zero financial risk, but keeps the online listings robust.

I do not get the rancor some are voicing about our trusted sellers who got hard-to-source timepieces for us.


Sent from my iPhone using Tapatalk Pro

[Fleetlord]

Not going to happen as the wish casters postulate.

Still plenty and plenty of money out there from the digital economy to move into watches.

Rolex is continuing to consolidate AD locations, so the "scarcity" (or perception of) will continue to be fueled by dealers.

This will offset the decrease in flipping activity highjacking watches from consumers in retail. They still won't be able to get watches, just for different reasons.

Some pieces are still very hard to get. I have a colleague who is hot for a DD40 Platinum Gemset dial and Bezel. Can't get one from any AD whatsoever (drives him nutso as he doesn't like no) Grey's struggle to source NIB. 6yrs ago this was an EASY piece to get at discount.

[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?


Sent from my iPhone using Tapatalk

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.






Sent from my iPhone using Tapatalk

[Hollie_Rollie]

Originally Posted by 77T

I do not get the rancor some are voicing about our trusted sellers who got hard-to-source timepieces for us.


Sent from my iPhone using Tapatalk Pro

Hard to source timepieces? Can you elaborate? I know one used watch dealer that has 4-5 of the same model but only lists one at a time.


Sent from my iPhone using Tapatalk

[77T]

Obviously the models which are in multiples are not hard to get.

My comments were about finding a particular model someone wanted. Something not in their stock. That level of help -


Sent from my iPhone using Tapatalk Pro

[Sublovin]

Plain and simple, when people stop buying. I refuse to pay over retail. If everyone took that approach there would be no inflated secondary market. Very basic economics at play.

[racerx]

AD’s have their pick of buyers. They currently chose to sell to folks they like, not folks that want to buy.

[Sublovin]

Originally Posted by racerx

AD’s have their pick of buyers. They currently chose to sell to folks they like, not folks that want to buy.

Pretty sure the people they like also want to buy.

[Barada7]

There’s often a bump near the holidays. Let’s see what February brings. It’s clearly gone down. And I suspect the trend will continue. For example, for a while certain popular Omega sport watches were hard to find. Not anymore.

[Hkspwrsche]

Until the ADs admit defeat, the grays will have the only stuff in stock.

[njlam]

I have a different take on the situation...

Given the number of hard to get Rolexes available at grey dealers (both good dealers and bad), I think ADs are and always have been complicit in selling these watches directly to them (greys), and/or flippers who ultimately sell them to greys.

All this talk about Rolex cracking down on this practice is BS. The ADs make more money selling directly to grey (and sharing the profits) than they do selling to retail. The growing number of watches with recently dated warranty cards/stickers at grey dealers supports this.

Profit maximizing ADs sell the rest of their inventory to retail customers who buy other stuff (jewelry) and have little left to sell to retail watch enthusiasts who in turn have to look to the greys to buy the watches they want.

It is a corrupt system, but is what it is.

That being said, there seems to be a slow down as the higher cost of holding inventory, and overall demand at the greys may be declining due to the economy. This may be why more people on TRF are "getting the call".

While this may be a trend, the most sought after watches will always be hard to get. YMMV

I recently purchased a grey Batman to enjoy in the new year. I wanted an 11 series to avoid the 31xx vs 32xx issues, so there wasn't any reason to wait. It was nice to buy a watch when I wanted one, from someone who wanted my business.

[inadeje]

Originally Posted by 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?

OP, some good observation’s. My take on your market perception/prediction is as follows:

1. The grey dealers have just exited an extremely lucrative period in their history.
2. During the aforementioned period their trading volumes were off the charts (in comparison to the past)
3. Many of these dealers are “cash rich” or “flush” due to the aforementioned aberration.
4. There’s currently no material cash urgency at these dealer's.
5. Just like the stock market “you only lose when you sell”. So they’re holding overpriced stock and for now the unrealized losses haven’t struck because they’re still holding the stock.

Of course, it’s unrealistic to assume that the above scenario can go on forever and when the first major grey dealer caves to market pressures and cash flow requirements I believe we will see a domino effect reference-by-reference with a vertiginous price collapse that will engulf and bankrupt all but the most diversified grey market players.

We will then see market consolidation. Smaller players either vanishing or joining forces with others to reduce overhead and group together client bases.

The watch market, like luxury goods in general, will experience a dry period that will last until either interest rates return to 0-1% or the governments start giving away free cash again (quantitative easing) 2026? 2027?

[Gab27]

IMO, their prices will remain above MSRP as long as there is an immediate supply shortage relative to demand, and there still is for a lot of Rolex watches.

Places like DavidSW can also sell on the basis of convenience and superior customer service to that of an AD, although if ADs reach a point where they do have readily available new stock, secondary market dealers would still need to adjust their pricing from current levels. (CPOs could potentially also play into the pricing, but from what I've seen thus far, it appears that CPOs are generally priced higher than what most secondary dealers are asking.)

[dba]

Originally Posted by TunaTuna

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.

Just because they're asking $X for whatever watch, doesn't mean they're getting that price. Every time I've bought from DavidSW, we've negotiated a lower price than asking. YMMV

[Osmin]

What kind of business model is this? holding and not selling. That is called investing.
Long term greys can’t keep it on and ultimately start offloading inventory. Certainly the Rolex price increase of Jan 1st, 2024 helps. But slowly the prices will go down. Demand is getting lower in overall, supply better at the ADs. Despite all the Cassandras here in the forum

[zengineer]

Grey dealers didn't all buy every watch they have at peak prices. Some are actual businessmen who have an actual plan that doesn't depend on high leverage and the price of everything always going up forever.

They will gradually lower prices when they begin to be able to buy at lower prices. I can't think of any remotely likely scenario where that happens suddenly in a dramatic way.

[BroncoOne]

Established Gray’s will be fine. It’s the pikers who piled in and are small time that will get washed out, just like real estate agents and property flippers did in 2009.

The professionals know how to weather economic cycles.

[Philadelphialawyer1]

well said

[amh]

Originally Posted by BroncoOne

Established Gray’s will be fine. It’s the pikers who piled in and are small time that will get washed out, just like real estate agents and property flippers did in 2009.

The professionals know how to weather economic cycles.

Absolutely.

Greys will always be a better place to shop compared to ADs:
- Back in the "good old days" prices were at least 15% lower than at the AD. Visiting the AD was only to try on the watch... then go home and order from DavidSW
- Now ADs have alienated much of their customer base. The grey markup is actually modest compared to what many ADs require.

[Philadelphialawyer1]

A+

[SoylentGreenChi]

Based on my recent (November 2023) experiences selling to grey dealers, my current best guesses are:

*prices at the major grey dealers will drop about 15% across the board in the winter and spring of 2024.
* more so-called dealers close shop, while the established businesses (eg DavidSw, European Watch Co) get back to usual pre-Covid business.
*There will likely be a marginally stronger overall market than pre pandemic, as some of the hype attention of the past three years transitions into a larger base of enthusiasts (some hype attention becomes enthusiast, some hype attention moves on to the next thing). This means the days of walking in and getting any Rolex you want are gone.
*Rolex will continue to position itself up-market (eg cutoff mom and pop shops, particularly in mid to small cities; focus on prestige locations in major metropolitan areas; position Tudor to compete directly with Omega, Grand Seiko, etc)

Trends I am watching:
*if the war in Russia/Ukraine ends and economic relations normalize with Russia
*the Chinese economy recovers and gets back to high growth
*the crypto market goes off again
*US interest rates drop

Any combination of the above factors can get the insanity rolling again.

My 2 cents.

[majidessa]

Rolex SS sport models such as Subs, GMTs, and Daytonas will always stay on the top of the food chain and will suffer the least due to their huge popularity way before the Covid hype.

As for PM, TT, and other high end swiss watch brands like RM, APs and PP they will continue to suffer and drop in price by a significant margin.

[jb335]

It’s crazy to me that some people in this thread think inventory isn’t moving and greys are sitting on most of their watches for months at a time.

That has not been my experience monitoring the market, feedback from the greys I speak with in a social setting or my personal experience on the random watch or two I have sold.


Sent from my iPhone using Tapatalk

[inadeje]

Originally Posted by SoylentGreenChi

Based on my recent (November 2023) experiences selling to grey dealers, my current best guesses are:

*prices at the major grey dealers will drop about 15% across the board in the winter and spring of 2024.
* more so-called dealers close shop, while the established businesses (eg DavidSw, European Watch Co) get back to usual pre-Covid business.
*There will likely be a marginally stronger overall market than pre pandemic, as some of the hype attention of the past three years transitions into a larger base of enthusiasts (some hype attention becomes enthusiast, some hype attention moves on to the next thing). This means the days of walking in and getting any Rolex you want are gone.
*Rolex will continue to position itself up-market (eg cutoff mom and pop shops, particularly in mid to small cities; focus on prestige locations in major metropolitan areas; position Tudor to compete directly with Omega, Grand Seiko, etc)

Trends I am watching:
*if the war in Russia/Ukraine ends and economic relations normalize with Russia
*the Chinese economy recovers and gets back to high growth
*the crypto market goes off again
*US interest rates drop

Any combination of the above factors can get the insanity rolling again.

My 2 cents.

Insightful synopsis

[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.






Sent from my iPhone using Tapatalk

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

[Gaussian]

Originally Posted by hambone1983

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

Anytime!

The thing I know the most is how little I actually do know but I’m also anxious to experience and learn everything that I can. We can all learn from one another.

Life is just too short to accomplish our potential and there is never enough time to balance our aspirations between our family and our friends.

I guess I need to just be satisfied that I’m experiencing the ride.




Sent from my iPhone using Tapatalk

[fsprow]

The perception that resellers are desperate and have great inventory to unload is not true for the several I know. They made a great deal of money over the last three years and have inventories under control. Those who have been in business a long time have learned to handle market swings-as all good business people do.

[amh]

Originally Posted by fsprow

The perception that resellers are desperate and have great inventory to unload is not true for the several I know. They made a great deal of money over the last three years and have inventories under control. Those who have been in business a long time have learned to handle market swings-as all good business people do.

That's the most plausible explanation. We've reached a new equilibrium.