Solutions to Rolex Prices, Availability and Grey Market? (Soap Box)

[tjs00]

So everyone here has read the many theories on why Rolex prices and availability are what they are. The Grey Market has come about to resolve those issues, bringing with it all the well known downsides.

However, there seems to be better ways. I am curious to see what others think as I hadn't seen anything similar come up in the last few months.

First, I believe these ways work regardless of Rolex's desire for changing brand reputation (for those that believe Rolex is choking supply to boost brand prestige / exclusivity). In fact, these methods could work well for Rolex if that is indeed their goal.

Second, these two methods are related.

Third, these are both better than the Grey Market in every way.

Idea 1: Give in to supply and demand. Rolex, for whatever supply you are willing to create, price the product accordingly at retail stores. If blue Sky-Dwellers are in demand, set retail price accordingly, in this case, at $22K. You will boost your profits instead of ADs only getting a partial cut and Grey Market friends the rest of the profit.

Idea 2: Allow ADs to negotiate. If you want to keep retail price on the Sky-Dweller at $14.4K for example, fine. However, allow ADs to sell at whatever price makes them happy. Supply and demand will set the price for the market - again, just as it has in the Grey Market already.

As mentioned, this is already happening in the Grey Market. Except you don't get the Rolex experience, you don't have 100% faith your product is genuine, your name isn't on the card, you don't know if your warranty is really going to be valid, scammers are tricking some folks, etc, etc.

Rolex, why do you continue to let your brand be tarnished by this poor acquisition experience?

Rolex, if you want prestige and exclusivity, make some models PM only - forever. Don't rollout previous PM models out in SS later. The rich don't like looking like the middle class.

Rant over... thanks for reading!

[lawrence1]

the only way to fix it is to let the market dictate the price straight from the AD. This means that ADs should be allowed to sell for what the market will bear. Adjusting production to match demand by reallocating capacity from models with less demand to those with high demand would also help tremendously.

By capping ADs at MSRP, Rolex is effectively encouraging the arbitrage that happens currently via the trusted scalpers and other flippers. Those than have the opportunity to source from an AD have every incentive to buy even if they don't need or like a particular model, since they can re-sell for a profit immediately. And many of these people do just that, because the market is willing to pay over MSRP for certain references. Scalpers have a constant stream of merchandise from both flippers and ADs willing to sell under the table for over retail.

[tjs00]

Originally Posted by lawrence1

the only way to fix it is to let the market dictate the price straight from the AD. This means that ADs should be allowed to sell for what the market will bear. Adjusting production to match demand by reallocating capacity from models with less demand to those with high demand would also help tremendously.

By capping ADs at MSRP, Rolex is effectively encouraging the arbitrage that happens currently via the trusted scalpers and other flippers. Those than have the opportunity to source from an AD have every incentive to buy even if they don't need or like a particular model, since they can re-sell for a profit immediately. And many of these people do just that, because the market is willing to pay over MSRP for certain references. Scalpers have a constant stream of merchandise from both flippers and ADs willing to sell under the table for over retail.

Completely agree, and you said it in a much shorter fashion than I did!

[Johndong888]

Originally Posted by lawrence1

the only way to fix it is to let the market dictate the price straight from the AD. This means that ADs should be allowed to sell for what the market will bear. Adjusting production to match demand by reallocating capacity from models with less demand to those with high demand would also help tremendously.

By capping ADs at MSRP, Rolex is effectively encouraging the arbitrage that happens currently via the trusted scalpers and other flippers. Those than have the opportunity to source from an AD have every incentive to buy even if they don't need or like a particular model, since they can re-sell for a profit immediately. And many of these people do just that, because the market is willing to pay over MSRP for certain references. Scalpers have a constant stream of merchandise from both flippers and ADs willing to sell under the table for over retail.

I do like the idea of capping at msrp even if there’s no inventory. What if all the AD band together and jack up all the pricing? Buying over msrp would sour an AD experience for me. Bundling isn’t so bad these day as long as it’s not something useless.

When we buy cars, the enthusiast shun all those dealers that charge a market adjustment cost aka mark up fees. I will never pay markup for a car. Granted a waitlist on a car is much shorter than that of a watch.


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[illiguy]

I am in philosophical agreement with you. I do think, in fairness, that folks on this forum are a group brought together by self-selection. By that, I mean that we are much more into the brand and watches than the average Rolex buyer.

So, I would venture to guess (anecdotal, at best) that most people who buy from an AD aren't looking to "flip" and make a profit via arbitrage, but they just want a watch that catches their eye and looks good on the wrist from a brand with impeccable reputation, advertising and brand ambassadors.

[Harry-57]

Originally Posted by tjs00

Rolex, why do you continue to let your brand be tarnished by this poor acquisition experience?

Tarnished how? Because you can't buy what you want? Join the club. I don't see how this tarnishes Rolex's reputation.

Originally Posted by tjs00

The rich don't like looking like the middle class.

Are you sure? Do you speak for the rich as their appointed representative?

I hope you feel better for getting it off your chest. It doesn't hurt to have a non toxic rant occasionally, but in the interests of propagating the discussion, I have to say that in my (subjective) view, you haven't made a strong argument. Rolex are in the business of brand positioning and development. Emotional arguments, however heartfelt, won't get in done. Personally, I would not like to see modulation of supply as a knee jerk. I think that does have a potential to tarnish the brand. I think that jacking up prices will just jack up the grey market.

Our WIS perspective is probably not the same as that of Rolex. We have specific needs and wants. Happily for Rolex, we're not running Rolex!

[subcsteve]

great in the short term "good" times...see what happens long term with that strategy. If you outsource your retail pricing...good luck with that!

[lawrence1]

Originally Posted by Johndong888

I do like the idea of capping at msrp even if there’s no inventory. What if all the AD band together and jack up all the pricing? Buying over msrp would sour an AD experience for me. Bundling isn’t so bad these day as long as it’s not something useless.

When we buy cars, the enthusiast shun all those dealers that charge a market adjustment cost aka mark up fees. I will never pay markup for a car. Granted a waitlist on a car is much shorter than that of a watch.


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first bolded statement - not going to happen. too many ADs out there. Just like car dealers, all independently owned. if they could, they would all "band" together now and tell Rolex they will be selling at above MSRP.

second bolded statement - see above, and you are free to shop around and buy from those dealers that do no have mark ups. there are some cars where the waitlists are too long to ever get one before the model is out of production, but that's not germane to this conversation.

[BLNR Nairobi]

Originally Posted by Harry-57

Tarnished how? Because you can't buy what you want? Join the club. I don't see how this tarnishes Rolex's reputation.



Are you sure? Do you speak for the rich as their appointed representative?

I hope you feel better for getting it off your chest. It doesn't hurt to have a non toxic rant occasionally, but in the interests of propagating the discussion, I have to say that in my (subjective) view, you haven't made a strong argument. Rolex are in the business of brand positioning and development. Emotional arguments, however heartfelt, won't get in done. Personally, I would not like to see modulation of supply as a knee jerk. I think that does have a potential to tarnish the brand. I think that jacking up prices will just jack up the grey market.

Our WIS perspective is probably not the same as that of Rolex. We have specific needs and wants. Happily for Rolex, we're not running Rolex!

Thank you. It needed to be said.

[tjs00]

Originally Posted by Harry-57

Tarnished how? Because you can't buy what you want? Join the club. I don't see how this tarnishes Rolex's reputation.



Are you sure? Do you speak for the rich as their appointed representative?

I hope you feel better for getting it off your chest. It doesn't hurt to have a non toxic rant occasionally, but in the interests of propagating the discussion, I have to say that in my (subjective) view, you haven't made a strong argument. Rolex are in the business of brand positioning and development. Emotional arguments, however heartfelt, won't get in done. Personally, I would not like to see modulation of supply as a knee jerk. I think that does have a potential to tarnish the brand. I think that jacking up prices will just jack up the grey market.

Our WIS perspective is probably not the same as that of Rolex. We have specific needs and wants. Happily for Rolex, we're not running Rolex!

My apologies that I wasn't clear - tarnished experience in that if I want to get a Sub, I have to go to the Grey Market to get it which I am sure isn't the experience Rolex wants its customers to have.

Clearly not, otherwise the AD would be calling me! However, we know exclusivity drives high end purchasing.

It wasn't heartfelt, it was microeconomics. Rolex not understanding their market is driving the Grey Market. The Grey Market would largely dry up if the gap in price with ADs went down. That will happen with my two ideas above.

Thanks for reading!

[Brew]

Sorry you're not able to get a watch on demand.

[lawrence1]

you can get a Sub from an AD, just takes a bit of legwork. call around and visit a few of them. likely you'll get one within a month or two.

[tjs00]

Originally Posted by lawrence1

first bolded statement - not going to happen. too many ADs out there. Just like car dealers, all independently owned. if they could, they would all "band" together now and tell Rolex they will be selling at above MSRP.

second bolded statement - see above, and you are free to shop around and buy from those dealers that do no have mark ups. there are some cars where the waitlists are too long to ever get one before the model is out of production, but that's not germane to this conversation.

And to add, Market Price is Market Price. They can jack up the price together all they want, but then demand will shrink and supply will sit in store display cabinets.

Supply and Demand curves are the fundamentals. Price increases, demand falls, supply increases, price falls. There is an optimal supply and demand per region and product (avoid macroeconomics for now).
https://en.wikipedia.org/wiki/Microeconomics

[tjs00]

Originally Posted by lawrence1

you can get a Sub from an AD, just takes a bit of legwork. call around and visit a few of them. likely you'll get one within a month or two.

I haven't seen evidence of that based on the "Incoming" posts here. Long wait times being listed or not even being added to the list. Probably depends on where you live and how much time you have to invest in building a relationship or cold calling around.

[tjs00]

Originally Posted by Brew

Sorry you're not able to get a watch on demand.

Thank you for reading!

I can get a watch on demand, that isn't the point. Go to DavidSW.com, I can get my grail watch today. It is listed there right now and they continue to be available regularly.

That said, I am betting prices will come down (not rich here) and two, I want a Rolex store experience. So instead of David buying the watch via his ADs, let's dry up that market and let those be sold at market price by Rolex to end customers instead of middle-persons.

That is all I am saying.

[Brew]

Originally Posted by tjs00

Thank you for reading!

I can get a watch on demand, that isn't the point. Go to DavidSW.com, I can get my grail watch today. It is listed there right now and they continue to be available regularly.

That said, I am betting prices will come down (not rich here) and two, I want a Rolex store experience. So instead of David buying the watch via his ADs, let's dry up that market and let those be sold at market price by Rolex to end customers instead of middle-persons.

That is all I am saying.

Rolex makes its money selling DJs. I don't think it has any need to make the suggested changes, and I don't think it cares if it sells another submariner to most of us. That these threads exist, because WISs can't get what they want on demand, only drives more folks to the other pieces that Rolex is very happy to sell.

[Sprta]

Originally Posted by tjs00

My apologies that I wasn't clear - tarnished experience in that if I want to get a Sub, I have to go to the Grey Market to get it which I am sure isn't the experience Rolex wants its customers to have.

Clearly not, otherwise the AD would be calling me! However, we know exclusivity drives high end purchasing.

It wasn't heartfelt, it was microeconomics. Rolex not understanding their market is driving the Grey Market. The Grey Market would largely dry up if the gap in price with ADs went down. That will happen with my two ideas above.

Thanks for reading!

After all these years and success with their products, you really think Rolex does not understand theit market?

[dwjez14]

Let’s keep it just the way it is. Retail prices down and hard to acquire watches can still keep a premium unless you have a very good AD. Let’s not complicate it with market prices up and down from an AD etc. I am fine with the supply and demand pricing. I believe with exception of the Daytona stainless prices will come down on the hot watches now and new hot watches will come out .

[Bigblu10]

Originally Posted by Johndong888

I do like the idea of capping at msrp even if there’s no inventory. What if all the AD band together and jack up all the pricing? Buying over msrp would sour an AD experience for me. Bundling isn’t so bad these day as long as it’s not something useless.

When we buy cars, the enthusiast shun all those dealers that charge a market adjustment cost aka mark up fees. I will never pay markup for a car. Granted a waitlist on a car is much shorter than that of a watch.


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There are also more new cars on lots just in the USA alone than new watches made in a whole year by R.W.C.

[904VT]

I think ideas 1 and 2 are both bad ideas. In scenario 1, we all know that a SS Sky Dweller will not sell at $22k. You see them listed at that and occasionally someone is crazy enough to pay that price, but the mass majority of purchasers pay MSRP. I doubt those same purchasers would be lining up to purchase at $22k when they are only paying MSRP now. The watch would be a dud at that MSRP

Idea 2 is even worst imo. If you allow ADs to price this way in stable currency markets, then you have destroyed what makes Rolex so valuable in the secondary market i.e. all watches are sold at consistent MSRPs, allowing the valuation to be standardized. Once you have MSRPs all over the place then demand, and valuations become a nightmare. For free markets to work, you need transparency in markets, and there is no transparency in the primary market at what you suggest.

Rolex SA is different in markets with volatile and non-major currencies it has historically made sense, but once you start looking the USD, the Yen, the Euro, or even the Pound you cause major havoc on markets if you have each AD just selling at their preference (I say even the GBP, only bc of recent vol leading up to and post-Brexit, but for all intent it is a major market developed currency).

Effectively you create built in depreciation at MSRP in this scenario and you just successfully made Rolex turn into Omega and Breitling

[TK116710]

Originally Posted by tjs00

I haven't seen evidence of that based on the "Incoming" posts here. Long wait times being listed or not even being added to the list. Probably depends on where you live and how much time you have to invest in building a relationship or cold calling around.

My anecdotal experience tells me that a little bit of time calling around to various ADs for a Sub or GMT will produce one within a few weeks. I called about 12 ADs within 3 hours driving distance of me (between Houston, Austin and Dallas, for those who are interested), of which I was allowed to have my name on the lists of about 8 of them right over the phone. Additionally, 2-3 of the ADs I called offered Subs that were sitting in their display cases on these original calls. My last call of the day was to an AD that had the LN GMT that I wanted in stock and I picked it up the following morning. Now while I don't expect everyone to have same-day luck like myself, 4 of the 8 ADs I was on lists for called me within a month offering either an LN or a BLNR GMT. All 4 of them were in either Austin or Dallas and they knew that I was in Houston with no buying history and likely not great odds of future buying due to not being close by. This was all done in November of 2018 and took about 3 hours of my time.

Anecdotal? Sure. But I think a little time on the cell phone to cast your net wide enough will obtain some solid results, at least for the more "typical" SS professional models such as the LN sub or GMT.

[enjoythemusic]

I vote for option 3: Crash worldwide stock markets and highly devalue currencies faster than they are now. That should fix it.

[Johndong888]

Originally Posted by Bigblu10

There are also more new cars on lots just in the USA alone than new watches made in a whole year by R.W.C.

Originally Posted by lawrence1

first bolded statement - not going to happen. too many ADs out there. Just like car dealers, all independently owned. if they could, they would all "band" together now and tell Rolex they will be selling at above MSRP.

second bolded statement - see above, and you are free to shop around and buy from those dealers that do no have mark ups. there are some cars where the waitlists are too long to ever get one before the model is out of production, but that's not germane to this conversation.

I should have clarified. I meant regional ADs. And sometimes the dealer would own a few ADs in the area. Like Mayors down in FL. I like to try out my watches in person. The ones I didn't, they always get traded back.

My recent experience with trying to order the new G63. Everyone wanted a markup from 20k to 60k. Even dealers with existing relationships. I believe one marked up in MD for almost 100k

Like you said, you're free to shop around for those dealers without markup. But if you allow AD to start this upcharging practice, it's going to spread. Car dealers aren't currently regulated.

Originally Posted by dwjez14

Let’s keep it just the way it is. Retail prices down and hard to acquire watches can still keep a premium unless you have a very good AD. Let’s not complicate it with market prices up and down from an AD etc. I am fine with the supply and demand pricing. I believe with exception of the Daytona stainless prices will come down on the hot watches now and new hot watches will come out .

+1 It's a crappy game to play already.

Originally Posted by enjoythemusic

I vote for option 3: Crash worldwide stock markets and highly devalue currencies faster than they are now. That should fix it.

LOLOL this is true

[904VT]

Originally Posted by enjoythemusic

I vote for option 3: Crash worldwide stock markets and highly devalue currencies faster than they are now. That should fix it.

Perhaps we're already in a global recession and we just haven't hit the technicals yet. Regardless, I don't think Rolex is too interested in selling anything in depreciating currency markets, but the Precious Metal and maybe TT options with puffed up margins.

Soon enough it will be a buyers market again. Always cyclical and Rolex is smart to be doing what they're doing and to not oversaturate the market. Still frustrating in the meanwhile

[Roll X]

Originally Posted by lawrence1

you can get a Sub from an AD, just takes a bit of legwork. call around and visit a few of them. likely you'll get one within a month or two.

I considered going that route but ultimately decided to buy new watches from an AD rather than used watches from grey dealers.

[Calatrava r]

I agree bringing out the Pepsi in SS where folks had bought the same watch in WG as that was all that was available was not very nice. Seems like the steel should have come first. That's a good way to end the Rolex mania.

I do not like the idea of ADs selling for whatever the market will bear but it would end the flipping that is for sure.

Just saw a SS Daytona white dial go for 25.500 USD, new and unworn. You could have bought a PM model for that slightly used.

[Calatrava r]

Originally Posted by 904VT

Perhaps we're already in a global recession and we just haven't hit the technicals yet. Regardless, I don't think Rolex is too interested in selling anything in depreciating currency markets, but the Precious Metal and maybe TT options with puffed up margins.

Soon enough it will be a buyers market again. Always cyclical and Rolex is smart to be doing what they're doing and to not oversaturate the market. Still frustrating in the meanwhile

I agree completely that this nonsense will end and the folks who bought at the top will see half their money gone on many models. It will not take a worldwide collapse as people suggest just a subtle change of mood.

[AK797]

The Market decides everything in a free market, even Rolex have had almost no say in the matter, except a little interfering around the edges of this tsunami.

[uhren917]

Originally Posted by lawrence1

By capping ADs at MSRP, Rolex is effectively encouraging the arbitrage that happens currently via the trusted scalpers and other flippers. Those than have the opportunity to source from an AD have every incentive to buy even if they don't need or like a particular model, since they can re-sell for a profit immediately. And many of these people do just that, because the market is willing to pay over MSRP for certain references. Scalpers have a constant stream of merchandise from both flippers and ADs willing to sell under the table for over retail.

By letting ADs charge whatever they want you are creating an artificial arbitrage situation. An AD in Utah has a lower cost of business than AD in NYC.

Not a good idea.

[uhren917]

Originally Posted by AK797

The Market decides everything in a free market, even Rolex have had almost no say in the matter, except a little interfering around the edges of this tsunami.

This IS NOT a free market, this IS a luxury market where Supply and Demand are not allowed to reach market equilibrium.