Right out of the gate.....New Sub $20,000!

Discussion of Rolex Watches.
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Ryeguy
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Re: Right out of the gate.....New Sub $20,000!

Post by Ryeguy » Mon Sep 21, 2020 4:37 am

I think the tracking of serial numbers is a bit of a fool’s errand. If a Rolex investigator finds a Sub on the secondary market and traces it back to a specific AD, it is only a singular event and not likely enough to cause a pulling of the franchise. They would have to find multiple examples (I would think) to take this action.

I think the only reasonable action Rolex could take is to find ways to make it less optimal for the consumer to purchase outside the AD process.

For example, make it so only the original buyer and appropriately registered secondary buyers are covered under warranty. The original buyer must fill out their registration form at the AD (with an AD unique code so Rolex can know exactly who sold the watch). If the watch is sold, Rolex could strongly urge sellers to do so at an AD (like a firearms transfer). Rolex could offer a authentication service (confirming the watch was not stolen, etc.) and transfer the warranty from owner A to owner B.

It would be a PITA, but Rolex already has the infrastructure in place with a global AD network, a robust serialization process, and a lockdown on service parts availability.

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sierra11b
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Re: Right out of the gate.....New Sub $20,000!

Post by sierra11b » Fri Sep 25, 2020 7:44 pm

Why doesn’t Rolex buy from DSW and the others? Seems like it would instantly expose the crooked ADs.

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flyskate
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Re: Right out of the gate.....New Sub $20,000!

Post by flyskate » Mon Oct 05, 2020 3:29 am

I don't understand why ADs are selling to grey market right now, you'd think they'd have no trouble selling every watch they get in....
Stephen

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Ryeguy
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Re: Right out of the gate.....New Sub $20,000!

Post by Ryeguy » Mon Oct 05, 2020 4:40 am

flyskate wrote:
Mon Oct 05, 2020 3:29 am
I don't understand why ADs are selling to grey market right now, you'd think they'd have no trouble selling every watch they get in....
Maybe they are and these are getting to the greys through opportunistic buyers looking to make a profit.

For example, DavidSW has a new model Sub for sale right now priced at $15,575. MSRP is $9,150. This means there is about $6,500 of margin in that watch.

You’ve got to assume the buyer of that watch paid MSRP and probably wanted to make a profit when selling it to DavidSW. DavidSW also needs to make a profit.

The way I’m guessing it works is the buyer of that Sub from the AD may not be a watch guy at all. They may be a jewelry person who is partially funding their collection through flipping watches (for example). They buy enough jewelry to maintain a priority position on the AD list, flip the watch for a $2K profit, then spend that money back at the jewelry store. Everybody’s happy. The AD is selling watches and jewelry. The jewelry buyer is building their collection at a nice discount. David is building his inventory.

The only way I can see this ending would be for Rolex to raise their prices to $15,500 for the Sub and just take away any grey market margin.

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Re: Right out of the gate.....New Sub $20,000!

Post by Chocodove » Mon Oct 05, 2020 4:52 am

I’ve read on other forums a few instances of AD’s offering to sell watches directly through a grey. AD sells to a middle man at MSRP, middle man sells to final consumer at grey prices, AD gets kickback from the middleman. Don’t know how true it is, but it’s entirely plausible in my mind.
- Todd

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logan2z
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Re: Right out of the gate.....New Sub $20,000!

Post by logan2z » Mon Oct 05, 2020 5:22 am

Ryeguy wrote:
Mon Oct 05, 2020 4:40 am
flyskate wrote:
Mon Oct 05, 2020 3:29 am
I don't understand why ADs are selling to grey market right now, you'd think they'd have no trouble selling every watch they get in....
Maybe they are and these are getting to the greys through opportunistic buyers looking to make a profit.

For example, DavidSW has a new model Sub for sale right now priced at $15,575. MSRP is $9,150. This means there is about $6,500 of margin in that watch.

You’ve got to assume the buyer of that watch paid MSRP and probably wanted to make a profit when selling it to DavidSW. DavidSW also needs to make a profit.

The way I’m guessing it works is the buyer of that Sub from the AD may not be a watch guy at all. They may be a jewelry person who is partially funding their collection through flipping watches (for example). They buy enough jewelry to maintain a priority position on the AD list, flip the watch for a $2K profit, then spend that money back at the jewelry store. Everybody’s happy. The AD is selling watches and jewelry. The jewelry buyer is building their collection at a nice discount. David is building his inventory.

The only way I can see this ending would be for Rolex to raise their prices to $15,500 for the Sub and just take away any grey market margin.
I was going to say that the problem with this logic is that there are probably Rolex buyers out there willing to pay $20K plus for a Sub so the cycle would continue. However, I see the watch in the original post dropped to about $15K before it sold. Obviously the seller was overly optimistic at the $20K price point.

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Ryeguy
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Re: Right out of the gate.....New Sub $20,000!

Post by Ryeguy » Mon Oct 05, 2020 7:40 am

logan2z wrote:
Mon Oct 05, 2020 5:22 am
Ryeguy wrote:
Mon Oct 05, 2020 4:40 am
flyskate wrote:
Mon Oct 05, 2020 3:29 am
I don't understand why ADs are selling to grey market right now, you'd think they'd have no trouble selling every watch they get in....
Maybe they are and these are getting to the greys through opportunistic buyers looking to make a profit.

For example, DavidSW has a new model Sub for sale right now priced at $15,575. MSRP is $9,150. This means there is about $6,500 of margin in that watch.

You’ve got to assume the buyer of that watch paid MSRP and probably wanted to make a profit when selling it to DavidSW. DavidSW also needs to make a profit.

The way I’m guessing it works is the buyer of that Sub from the AD may not be a watch guy at all. They may be a jewelry person who is partially funding their collection through flipping watches (for example). They buy enough jewelry to maintain a priority position on the AD list, flip the watch for a $2K profit, then spend that money back at the jewelry store. Everybody’s happy. The AD is selling watches and jewelry. The jewelry buyer is building their collection at a nice discount. David is building his inventory.

The only way I can see this ending would be for Rolex to raise their prices to $15,500 for the Sub and just take away any grey market margin.
I was going to say that the problem with this logic is that there are probably Rolex buyers out there willing to pay $20K plus for a Sub so the cycle would continue. However, I see the watch in the original post dropped to about $15K before it sold. Obviously the seller was overly optimistic at the $20K price point.
Well, I think this tells us there is a market for at SS Sub at $15K, but not at $20K.

I really think the only implementable ways Rolex has to kill the grey market (assuming they want to) are:
1) raise retail to $15K. This would box out the grey market by removing the margin. If I were an AD, I would rather have this profit than some random grey market seller.
2) make the warranty transferable only if done at an AD (current warranty holder provides authorization to the new to-be owner). Rolex could call this kind of an "authentication" service where they could track the chain of custody of the watch. Rolex already has the lock on service parts, so if you buy grey market, you would essentially have no warranty coverage.

To be honest, though, I'm not certain Rolex really cares all that much. There is a healthy margin in selling a SS Sub at $9,150 and it looks like they are selling all they can make. The grey dealers make buying at full list from an AD sound like a bargain.

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toxicavenger
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Re: Right out of the gate.....New Sub $20,000!

Post by toxicavenger » Tue Oct 06, 2020 7:45 pm

logan2z wrote:
Mon Oct 05, 2020 5:22 am
Ryeguy wrote:
Mon Oct 05, 2020 4:40 am
flyskate wrote:
Mon Oct 05, 2020 3:29 am
I don't understand why ADs are selling to grey market right now, you'd think they'd have no trouble selling every watch they get in....
Maybe they are and these are getting to the greys through opportunistic buyers looking to make a profit.

For example, DavidSW has a new model Sub for sale right now priced at $15,575. MSRP is $9,150. This means there is about $6,500 of margin in that watch.

You’ve got to assume the buyer of that watch paid MSRP and probably wanted to make a profit when selling it to DavidSW. DavidSW also needs to make a profit.

The way I’m guessing it works is the buyer of that Sub from the AD may not be a watch guy at all. They may be a jewelry person who is partially funding their collection through flipping watches (for example). They buy enough jewelry to maintain a priority position on the AD list, flip the watch for a $2K profit, then spend that money back at the jewelry store. Everybody’s happy. The AD is selling watches and jewelry. The jewelry buyer is building their collection at a nice discount. David is building his inventory.

The only way I can see this ending would be for Rolex to raise their prices to $15,500 for the Sub and just take away any grey market margin.
I was going to say that the problem with this logic is that there are probably Rolex buyers out there willing to pay $20K plus for a Sub so the cycle would continue. However, I see the watch in the original post dropped to about $15K before it sold. Obviously the seller was overly optimistic at the $20K price point.
i know someone who just sold a 41mm Sub for $21k. :monkeypiss:

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Steelman
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Re: Right out of the gate.....New Sub $20,000!

Post by Steelman » Fri Dec 18, 2020 8:19 pm

Hans Wilsdorf designed the Rolex sport watches for sportsmen and industry to USE as a dependable tool.

My dad bought his steel Submariner in 1978 for $500. No waiting, haggling - no drama. I still wear that watch today and it runs +4 sec/day

Hans Wilsdorf is probably rolling in his grave, along with our Founding Fathers

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jimyritz
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Re: Right out of the gate.....New Sub $20,000!

Post by jimyritz » Sat Dec 19, 2020 6:39 am

SoCal C4S wrote:
Wed Sep 09, 2020 7:30 pm
I’m sure it all hinges on just how good your relationship is with the AD/salesman.
Absolutely right- The ADs don’t have a choice- play by Rolex rules or lose Rolex..

Rolex could increase supply to help their ADs..

I wonder how Orlando gets his watches because many well known grey mkt dealers have nothing..

I have a friend who is supposed to be opening a new Rolex boutique- very interested in seeing what he has and how he sells it.

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dnslater
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Re: Right out of the gate.....New Sub $20,000!

Post by dnslater » Sat Dec 19, 2020 12:53 pm

Steelman wrote:
Fri Dec 18, 2020 8:19 pm
Hans Wilsdorf designed the Rolex sport watches for sportsmen and industry to USE as a dependable tool.

My dad bought his steel Submariner in 1978 for $500. No waiting, haggling - no drama. I still wear that watch today and it runs +4 sec/day

Hans Wilsdorf is probably rolling in his grave, along with our Founding Fathers
The modern AD experience is silly, but they were always a luxury watch. $500 in 1978 is worth about $5k now when you factor in buying power of the dollar and not just inflation. Not quite the $8500 cost of a new Sub but still a substantial price- more than my dad could afford. You could buy a new Honda Civic for $3k in 78.

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Re: Right out of the gate.....New Sub $20,000!

Post by jimyritz » Sat Dec 19, 2020 2:37 pm

Ryeguy wrote:
Mon Sep 21, 2020 4:37 am
I think the tracking of serial numbers is a bit of a fool’s errand. If a Rolex investigator finds a Sub on the secondary market and traces it back to a specific AD, it is only a singular event and not likely enough to cause a pulling of the franchise. They would have to find multiple examples (I would think) to take this action.


===============
What they do is not pull the franchise but punish them by what they give them to sell- for example, limit certain models--

I'm not sure Rolex will ever change because now buyers are so desperate for a Rolex that they are buying anything in the case.

The best part is watching a buyer see a Rolex and then say to the Salesperson, " so what can you for me?".... ummm, nothing...classic...

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toxicavenger
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Re: Right out of the gate.....New Sub $20,000!

Post by toxicavenger » Sat Dec 19, 2020 7:39 pm

dnslater wrote:
Sat Dec 19, 2020 12:53 pm
Steelman wrote:
Fri Dec 18, 2020 8:19 pm
Hans Wilsdorf designed the Rolex sport watches for sportsmen and industry to USE as a dependable tool.

My dad bought his steel Submariner in 1978 for $500. No waiting, haggling - no drama. I still wear that watch today and it runs +4 sec/day

Hans Wilsdorf is probably rolling in his grave, along with our Founding Fathers
The modern AD experience is silly, but they were always a luxury watch. $500 in 1978 is worth about $5k now when you factor in buying power of the dollar and not just inflation. Not quite the $8500 cost of a new Sub but still a substantial price- more than my dad could afford. You could buy a new Honda Civic for $3k in 78.
and they have always been a marketing machine who doesn't pay taxes. :popcorn:

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poppydog
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Re: Right out of the gate.....New Sub $20,000!

Post by poppydog » Sat Dec 19, 2020 9:44 pm

Rolex prices are crazy. I gifted my kids my Rolex last Christmas, a Sub and an SD, and told them they could do as they wish with them. They both still sit in the safe, but my son has been talking about selling his. As things are, I'd probably just buy it from him so he has the money and will still end up with the watch in the long run. Used one from dealers are going for almost 3x what I paid, so couldn't bear the thought of either of them not having them for the future.
Regards

Steve

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