2nd-Hand Market Learns Gouging Lessons

Luxury and Independent Watch brands
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TemerityB
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2nd-Hand Market Learns Gouging Lessons

Post by TemerityB » October 15th 2021, 7:15pm

...and it's the usual suspects. It's madness out there; from CNBC:

Demand for high-end watches exploded during the Covid-19 pandemic. But the Big Four watch brands — Rolex, Patek Philippe, Audemars Piguet and Richard Mille — are holding firm on the limited production runs that make their timepieces so rare. The result is an online boom in the business of buying, selling and flipping pre-owned and vintage watches and a growing number of start-ups competing to become the dominant digital marketplace.

McKinsey estimates that pre-owned watch sales hit $18 billion in 2019, and could top $30 billion by 2025. Pre-owned watch sales will be about half the size of the market for new, retail watches by 2025, up from about a third today, according to the consulting firm.


https://www.cnbc.com/2021/10/13/luxury- ... r=sharebar
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by 3Flushes » October 16th 2021, 3:26am

From the link:
The Big Four watch brands that drive most of the high-end collecting are all privately owned and have maintained their low production numbers despite huge demand, in order to preserve their storied quality and exclusivity. According to a report from Morgan Stanley, Rolex sold 810,000 watches last year, while Patek sold 53,000 watches, Audemars 40,000 and Richard Mille 4,300.
Which one of the big four named above is not like the others despite the characterization of the piece?

Why Rolex of course, the only mass produced watch of the lot. Patek, Audemars, and other haute horological stalwarts including, Brequet, GP, VC, and JLC, have held more to the traditional crafts of the masters like hand engine turned guillochè dials, hand finishing, enameling, and the hand engraved decoration of movements. Such techniques don't lend themselves to Rolex's scale of production, and these other haute manufactures are producing at their usual scale. And at least as of last year, despite widely held perceptions otherwise, so is Rolex.

If the Morgan Stanley report is correct, Rolex produced numbers - including several new models - commensurate with longstanding industry estimates that the tight-lipped Crown produces between 800,000 to 1,000,000 watches per year. In their recently released statement regarding shortages, Rolex said: “The scarcity of our products is not a strategy on our part." Such is not the case; no longer hindered by the pandemic, Rolex is again producing at their customary scale of underproduction to meet demand, a decades long strategy indeed.

So, while the cuts in production due to the pandemic led to the Rolex feeding frenzy, restored customary underproduction levels now exponentially fail to meet demand, more a perfect storm than a contrivance.

What then, are we to make of bare Rolex showcases in some markets, including the US, that haven't received watches in more than 18 months, while others, primarily in Asia and Europe, including the Middle East, are flush with pre-pandemic supply levels, or nearly so?

What else could we make of it other than Rolex is manipulating distribution to preferred markets and AD's.
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by Datsun240Z71 » October 16th 2021, 1:41pm

I was in two Rolex ADs in the Washington DC area in the last two days. Both had no more than 5 or 6 new Rolex in stock, and about 8 to 10 pre-owned. Most of the other high end brands were more plentiful, and the number of shoppers seemed high. I heard one salesman trying to explain the "Rolex shortage" to a customer who was not happy with the explanation. The guy finally told him he'd put him on the wait list but had no ETA on delivery. He told the guy if he got 50 watches tomorrow they'd be sold within a few days. The empty cases did look bad.
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by 3Flushes » October 17th 2021, 3:34am

TemerityB wrote:
October 16th 2021, 9:11pm
iwasbanned wrote:
October 16th 2021, 6:08pm
Found this interesting

That clip was great.
Great take, indeed.

One advantage Rolex seekers have is that most Rolex AD's are jewelry stores where the aggregate purchases that build a customer's preferred status are not limited to the watch floor.

Over the next couple of years, I think Rolex will take steps to mitigate the building resentment of dealers and much of the Rolex buying public.

In the near-term, it seems to me that the most effective strategy to put a stake in the heart of the price gouging would be for Rolex to make their warranty clearly, and absolutely, non-transferrable.

While there is debate over the language of the Crown's warranty, the fact is, regardless of the customer's name on the card, if the watch was purchased from an AD, and the warranty card was properly filled out at the time of purchase, in practice, the warranty currently stands with the watch. Limit the warranty to the original purchaser and see how long these jackasses would pay $35,000 for a $13,000 Daytona, etc.

Another easy short-term fix would be to even out distribution. Doing so would go a long way towards solidifying wavering confidence in Rolex's dedication to AD's and loyal customers. Easy to do; go back to the pre-pandemic allotments (perhaps adding enhancements to extended allotment bonuses) with an improved co-op advertising program targeted at trumpeting the Crown's triumph over the flippers, commitment to its customers, and so forth.

In the more long-term, I'd expect to see the Crown ramp up production north of the current estimated upper-limit of 1 million pieces per year, perhaps as much as fifteen to twenty percent. Given Rolex's industry leading technology in automated and mechanized manufacturing processes, incrementally scaling up, without compromise, is quite doable. Again, to the great fanfare and promotion of the icon's commitment to customers by providing more of the very best mass produced luxury product on the face of the earth.

It couldn't hurt.
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by codguy » October 17th 2021, 8:09am

Going out on a limb here.
I find it hard to justify purchasing a Rolex even if/when available, when double barreled METAS certified Omegas are readily available and for less dinero.

For the fans whom quickly remind us that Omegas are not in the same league as Rolex........ ok, fine, whatever. METAS certified Ωs are every-bit as nice imo and again, are available.

M2¢
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by smellody » October 17th 2021, 8:32am

codguy wrote:
October 17th 2021, 8:09am
Going out on a limb here.
I find it hard to justify purchasing a Rolex even if/when available, when double barreled METAS certified Omegas are readily available and for less dinero.

For the fans whom quickly remind us that Omegas are not in the same league as Rolex........ ok, fine, whatever. METAS certified Ωs are every-bit as nice imo and again, are available.

M2¢
I miss old Omega grey market prices. I paid $2,025 for my planet ocean with a $50 coupon and $2,075 for my Railmaster XXL.
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by 3Flushes » October 17th 2021, 3:59pm

smellody wrote:
October 17th 2021, 8:32am
codguy wrote:
October 17th 2021, 8:09am
Going out on a limb here.
I find it hard to justify purchasing a Rolex even if/when available, when double barreled METAS certified Omegas are readily available and for less dinero.

For the fans whom quickly remind us that Omegas are not in the same league as Rolex........ ok, fine, whatever. METAS certified Ωs are every-bit as nice imo and again, are available.

M2¢
I miss old Omega grey market prices. I paid $2,025 for my planet ocean with a $50 coupon and $2,075 for my Railmaster XXL.
Bought a PO instead of a Submariner a few years ago and have never looked back... the Daytona I didn't buy, however...

Maybe I'll do what Pete did and buy a Speedmaster - Pete's thread on the Speedmaster he picked up is a good illustration of the growing frustration with Rolex. viewtopic.php?p=512400#p512400

It will be interesting to see how Rolex responds beyond the sanctimonious statement they recently released.
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Re: 2nd-Hand Market Learns Gouging Lessons

Post by TemerityB » October 17th 2021, 4:09pm

codguy wrote:
October 17th 2021, 8:09am
Going out on a limb here.
I find it hard to justify purchasing a Rolex even if/when available, when double barreled METAS certified Omegas are readily available and for less dinero.

For the fans whom quickly remind us that Omegas are not in the same league as Rolex........ ok, fine, whatever. METAS certified Ωs are every-bit as nice imo and again, are available.

M2¢
I can't argue with a letter of this. I also readily admit that for the price of the cheapest Rolex (Oyster Perpetual), an Omega can be obtained with far more complications, dive specs, and an amazing movement. With change left over.

Facts are facts.
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