Starving the market to put greys under

[AK797]

Originally Posted by Egelber

Sorry if it's been asked, but are Rolex watches consigned from Rolex to the AD? If so then I don't understand how this works ...

Not consigned, they are sold up front to ADs, so Rolex didn't much care what happened to the watches afterwards and that is how the relationship between greys and ADs was allowed to work, and up until last year it worked out very well for all parties, consumers too.

Originally Posted by harvey

the grey dealers over here must be getting all their stock from abroad?

I say this as the AD at where I purchased the LVc and SD43 copied the receipts (showing no discount) and put them in a pile for the Rolex rep to randomly check when s/he is over.

Surely ADs here can't be providing stock for greys...or could they?

Initially ADs sold D500s directly to greys, who were often VIPs as well, usually in a profit sharing scheme, making £2/3K each on top of retail, and then you also had customers buying and flipping for an easy profit so the grey's built up stock. Earlier this year Rolex realised the greys were benefiting mostly from this policy of low supply, which also spread to LVc, BLNR, DB, etc and so they have clamped down hard on any ADs selling to flippers or greys and this policy will spread to other countries too as Rolex tries to wrestle back control of these markets.

[Mangas]

Originally Posted by Esoteric

I spoke recently with an AD that I know in Europe about this very issue. He gets numerous offers, from various grey market dealers, to purchase his entire stock.
He claimed that he wouldn't do it out of fear of loosing his AD status.

That's how they get the SS Daytona's!

And LOSE his AD Status he would if Rolex got 'wind' of any such practices

[morimotom]

Originally Posted by Shaky

That’s like car manufacturers stopping making cars to drive the secondhand car dealers out of business. Don’t think that would work either.

This is a terrible analogy.

[stylinleems]

Just saw this in insta.. No wonder why there is a shortage of watches (Hulks, 116610LNs, Sky-Ds)

https://www.instagram.com/watchtradingco/

Now don't get me wrong, it does not bother me, but for others that are looking for these watches to enjoy and wear and to pay MSRP, it is very difficult when pics like these show up. I'm sure Rolex sees/notices them as well.

[DuncanInLeeds]

Originally Posted by stylinleems

Just saw this in insta.. No wonder why there is a shortage of watches (Hulks, 116610LNs, Sky-Ds)

https://www.instagram.com/watchtradingco/

Now don't get me wrong, it does not bother me, but for others that are looking for these watches to enjoy and wear and to pay MSRP, it is very difficult when pics like these show up. I'm sure Rolex sees/notices them as well.

Got to be fakes, surely?

[stylinleems]

Originally Posted by DuncanInLeeds

Got to be fakes, surely?

Does not look like it, page states three retail stores. (non-AD of course)

[DocHorton]

If you starve the market then the AD's will go out of business long before the grey sellers. The AD's are the ones with the high overhead. Most grey dealers can operate with very little overhead.

[HogwldFLTR]

Originally Posted by stylinleems

Just saw this in insta.. No wonder why there is a shortage of watches (Hulks, 116610LNs, Sky-Ds)

https://www.instagram.com/watchtradingco/

Now don't get me wrong, it does not bother me, but for others that are looking for these watches to enjoy and wear and to pay MSRP, it is very difficult when pics like these show up. I'm sure Rolex sees/notices them as well.

Originally Posted by DuncanInLeeds

Got to be fakes, surely?

They have two 116500s for sale; one black and one white. Doesn't seem improbable at all, imho. Prices are very high as well.

[harvey]

Originally Posted by AK797

Not consigned, they are sold up front to ADs, so Rolex didn't much care what happened to the watches afterwards and that is how the relationship between greys and ADs was allowed to work, and up until last year it worked out very well for all parties, consumers too.



Initially ADs sold D500s directly to greys, who were often VIPs as well, usually in a profit sharing scheme, making £2/3K each on top of retail, and then you also had customers buying and flipping for an easy profit so the grey's built up stock. Earlier this year Rolex realised the greys were benefiting mostly from this policy of low supply, which also spread to LVc, BLNR, DB, etc and so they have clamped down hard on any ADs selling to flippers or greys and this policy will spread to other countries too as Rolex tries to wrestle back control of these markets.

Thanks Neil for explaining. That makes sense.

[Ad11wrd]

Originally Posted by Shaky

That’s like car manufacturers stopping making cars to drive the secondhand car dealers out of business. Don’t think that would work either.

Agree makes no sense

[The Libertine]

Originally Posted by Ad11wrd

Agree makes no sense

Agree as well.

So much conjecture and speculation going around now. Amusing at first, now beyond redundant.

[Bigblu10]

Originally Posted by DocHorton

If you starve the market then the AD's will go out of business long before the grey sellers. The AD's are the ones with the high overhead. Most grey dealers can operate with very little overhead.

Exactly! A grey dealer or trusted seller from the forum here can run their business out of their house. AD's have huge operating costs. I can't even imagine the rent some pay in the upscale malls they are located in.

[Wildy]

I think Rolex are waiting to see the full effect of Brexit before showing their hand. They are fortunate enough to be in a position where they can watch patiently the markets. Currency fluctuation has yet to settle. There are still too many variables which could effect the future currencies including the Swiss franc. I am not saying they are stock piling watches but are not allowing speculators to buy up all their stock. I think we will be waiting till after 2019 before production goes back to normal.

[Shaky]

Originally Posted by morimotom

This is a terrible analogy.

Many thanks for your words of wisdom.

If you are going to slag people off evidence it or keep your opinions to yourself !!! :-)


Sent from my iPhone using Tapatalk

[tomchicago]

This is a ridiculous suggestion. Rollie need grey market dealers and they know it. There are only so many MSRP "AD Experience" suckers out there. Grey market dealers funnel watches at the right price to customers in the know and clear inventory which otherwise languishes at MSRP and chokes AD's working capital.

Also, the term "what-if analysis" is not unique to finance. It exists in nearly every single field.

[justdate]

Originally Posted by Wildy

I think Rolex are waiting to see the full effect of Brexit before showing their hand. They are fortunate enough to be in a position where they can watch patiently the markets. Currency fluctuation has yet to settle. There are still too many variables which could effect the future currencies including the Swiss franc. I am not saying they are stock piling watches but are not allowing speculators to buy up all their stock. I think we will be waiting till after 2019 before production goes back to normal.

Brexit will only really be a major consideration for their U.K. strategy, of course it’s an uncertainty and a risk, but a relatively minor one for for a business as global as Rolex are.

[artschool]

[Bigblu10]

Originally Posted by stylinleems

Just saw this in insta.. No wonder why there is a shortage of watches (Hulks, 116610LNs, Sky-Ds)

https://www.instagram.com/watchtradingco/

Now don't get me wrong, it does not bother me, but for others that are looking for these watches to enjoy and wear and to pay MSRP, it is very difficult when pics like these show up. I'm sure Rolex sees/notices them as well.

It is called capitalism, and there really is no way to stop it. Rolex is in business to sell their watches bottom line.

[aquatimerfla]

Originally Posted by Bigblu10

It is called capitalism, and there really is no way to stop it. Rolex is in business to sell their watches bottom line.

well than Rolex should be listing MSRP on daytonas at $18500 us and not restrict supply

[yxc145]

Originally Posted by aquatimerfla

well than Rolex should be listing MSRP on daytonas at $18500 us and not restrict supply

I don't think people will buy a stainless steel Daytona at $18k if there are an abundant of them.

[Vetracer]

I used to buy watches because I primarily enjoyed the design, movement and feel of the watch. Now value retention is my first priority. Prices have inflated so much recently that I need to protect my spend. I don’t think it’s just me either.

[aquatimerfla]

Originally Posted by Vetracer

I used to buy watches because I primarily enjoyed the design, movement and feel of the watch. Now value retention is my first priority. Prices have inflated so much recently that I need to protect my spend. I don’t think it’s just me either.

well if value retention is so important every single person who paid the daytona 'premium' over msrp from a grey like Davidsw has lost $$

david sells bnib daytona c's for around 18500 and sells pre-owned daytona c's for around 16500

it will take years for rolex msrp on daytona c's to creep anywhere close to these ridiculous premiums.

[aquatimerfla]

Originally Posted by yxc145

I don't think people will buy a stainless steel Daytona at $18k if there are an abundant of them.

Why not?

If rolex wants to make money why let all the grey dealers rake in 'premiums'?

I do agree with you in the sense that a rolex daytona c as far as the actual watch gos is not an 18K worthy watch.

[yxc145]

Originally Posted by aquatimerfla

Why not?

If rolex wants to make money why let all the grey dealers rake in 'premiums'?

I do agree with you in the sense that a rolex daytona c as far as the actual watch gos is not an 18K worthy watch.

One of the main reasons people are willing to pay $4 to 6k over retail for a Daytona C from Grey dealer is because they are hard to find/get. If there are plenty of them around like the two tones and PM models, and selling at $18k, people will probably pick them over the stainless.

[Tampashooter]

I find it comical that some here believe that Rolex operates on a visceral heart felt level. There are very few more capitalist companies on the planet.

[JUSTIFIED]

Today my AD told me that they'll not be receiving their next shipment until Feb. I've been to that AD many times and today their display case was rather sparse. They also believe prices will increase in 2018.

[JUSTIFIED]

Originally Posted by Tampashooter

I find it comical that some here believe that Rolex operates on a visceral heart felt level. There are very few more capitalist companies on the planet.

Agree, but I don't view Rolex as being more capitalistic than other major brands with wildly popular products.

[HogwldFLTR]

Originally Posted by Dirt

No not kidding.

Of course strike while the iron's hot by all means.
But Rolex plays a very different game and it's all a very long game.
Rolex gets the big picture and they exert more control over their patch than any other company in history throughout the world, and with ever increasing control I might add.

Rolex makes the iron and provides the heat at their own pleasure and they're not beholden to greedy owners or shareholders with short sighted concerns.

Name any other manufacturer of anything in the world that's comparable in that regard.
Some are trying to emulate that model.
Companies such as Porsche and Ferrari come to mind but they are playing in a different space even though the principal is pretty much the same.

If we get into another Global recession Rolex will be wishing they had made their sales while they could have. Operating in a depressed global dystopia won't be near as profitable for them. I think they could do a much better job of reducing grey sales by checking their ADs sales records and finding out who's buying the watches. Large sales to single buyers would be a good clue, kind of like tracking Sudafed sales to prevent use for making meth.

[Rocket_Man]

Originally Posted by Shaky

Many thanks for your words of wisdom.

If you are going to slag people off evidence it or keep your opinions to yourself !!! :-)


Sent from my iPhone using Tapatalk

I'll take a shot... and this is based on how US car manufactures work. It may be different in the UK.

- In the US there are laws that protect car dealerships and make it illegal for manufactures to sell their cars directly to the public.
- The Flip Side of this law is that it is illegal in the US for any one person to buy/sell more than ~5 (it varies by state) cars a year without a dealer license. This also protects car dealerships.
- Car sales are registered with the local government. You either do it in person or the dealership copies your ID and does it for you. This is so they know who owns what cars, but also helps enforce the laws above.
- To get a dealer license to sell a Ford F-150 for example, you need to get it from...... Ford. And that would basically make you a car dealership and just like Rolex that involves a ton of up front capital.
- So the car manufactures figured out how to gain absolute control of the sales chain years ago with help from their elected buddies that I'm sure they paid highly for and in exchange these politicians continue to protect car dealerships and the manufactures. Tesla has been trying to challenge this protection in each State with limited success.

So at least in the car market there are laws that protect the supply and sales channels unlike the luxury watch market.

[hambone1983]

Originally Posted by aquatimerfla

Why not?

If rolex wants to make money why let all the grey dealers rake in 'premiums'?

I do agree with you in the sense that a rolex daytona c as far as the actual watch gos is not an 18K worthy watch.

you are suggesting both an increase in supply and an increase in price. The most basic rule of economics is that consumers buy less of an item at higher prices. A move like this would have an abundant supply of Daytonas available at healthy discounts in no time.