Obligatory Wristwatch Thread

[BillSWPA]

Although those watches are not what one might expect to find at Costco, it is certainly not their first venture into high end, gray market watches. Several years ago, Costco was selling Omega watches when Omega decided to go after the gray market. They did so by placing an original ornamental design on the baseplate of their watches, registering the copyright, and then suing Costco for copyright infringement when Costco sold the watches. This resulted in some interesting rulings from the Ninth Circuit as well as the Supreme Court on the issue of whether the first sale doctrine (first legitimate sale of a copyrighted iitem extinguishes the rights of the copyright holder with respect to that item) applies to any first sale, or only the first sale in the US, Originally, the courts held that the doctrine applies only to the first sale in the US, so Costco's foreign legitimate purchase of genuine watches did not count. This was ultimately reversed, in part due to another case involving imported textbooks, and Omega was ultimately found to have abused its copyright in the image.

[GardoneVT]

I bought my new stainless gmt last week from a trusted seller on watchuseek because the stainless rolexes are unavailable at authorized retailers. I almost bought a Batman gmt but didn’t want to pay $13k for a 10k watch. I ended up with an unworn black gmt at retail, but without the warrantee. It’s crazy that the stainless rolexes are unobtainium.

I was told essentially this by the Rolex sales guy at Mayors; that the price on my watch was so and so ‘if they were available.’ Apparently they are hard to come by, which puzzled me.

Anecdotal RUMINT states Rolex is deliberately limiting supply to combat grey market sales & “improve” the exclusivity of their product.

[BillSWPA]

Anecdotal RUMINT states Rolex is deliberately limiting supply to combat grey market sales & “improve” the exclusivity of their product.

Except that it doesn’t seem to be limiting gray market sales. Instead, it is forcing people who would have preferred to go to a authorized dealer to go to a gray market dealer or to buy a used watch.


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[fuse]

Except that it doesn’t seem to be limiting gray market sales. Instead, it is forcing people who would have preferred to go to a authorized dealer to go to a gray market dealer or to buy a used watch.


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Rolex are not exactly available on the grey market. They are certainly available on the 'used' market (someone who buys a gmt and immediately flips it for twice retail price is technically selling used, and not a grey market seller)

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[BillSWPA]

Rolex are not exactly available on the grey market. They are certainly available on the 'used' market (someone who buys a gmt and immediately flips it for twice retail price is technically selling used, and not a grey market seller)

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I just checked four gray market dealer websites. Three had a number of new Rolexes in stock. The fourth just has pre-owned.

At least according to some threads on Watchuseek, authorized dealers are selling to gray market dealers because they can make more $ than by selling to individual customers. Gray market dealers are then able to sell for a higher than suggested retail price due to the real or perceived shortage.

One thread described an attempted purchase from an authorized dealer, who said they did not have the watch in stock. The buyer went to a gray market dealer and bought the watch - with a warranty card stamped by the same dealer who claimed not to have it in stock.

If the goal is limiting the gray market, they are failing miserably.



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[11B10]

Kevin, I just saw this post and the only thing left out was the fact that you never have to charge it, put batteries in it - a true lazy man's (I confess) watch. Also saw your location and I just drove through there yesterday. I'm a part time driver for a rental company and go all through Pa/Md/NJ quite frequently. Thanks for the video!

[JodyH]

If the goal is limiting the gray market, they are failing miserably.

The goal is to bump the Rolex name up another notch in an attempt to join the "Holy Trinity" Audemars, Vacheron, Patek ("Big 4" if you add Lange) so they can charge "Holy Trinity" prices.
In order to join that club they have to generate exclusivity.
By limiting availability of their most popular lines while maintaining (or actually increasing demand) they are building "cachet" and exclusivity.
I expect their next move to be a cull of their "lower end" watches like the Oyster Perpetual, Air-King, Milgauss, many of the Datejust models etc. and an expansion of the "complication" and "grand complication" watches like the Sky Dweller, Cellini and Day Date "Presidential" line in their catalog.
They'll backfill the missing lower end watches with Tudor versions and then try to drag the Tudor brand name up into the price range of current Rolexes.

BTW: I'm placing a few bets on the above scenario by buying a few of the "basic" Rolexes and Tudors to stash and flip in a few years. For example the Tudor Black Bay Black I have stashed has already almost doubled in the current market frenzy of limited Rolex no-date Submariner availability.

[mtnbkr]

I expect their next move to be a cull of their "lower end" watches like the Oyster Perpetual, Air-King, Milgauss, many of the Datejust models etc.

The only Rolex I have a desire to own is an Oyster Perpetual (stainless steel 36mm or 39mm with Dark Rhodium or Red Grape dial). Unfortunately, I can't justify $6k on a watch.

Chris

[BillSWPA]

The goal is to bump the Rolex name up another notch in an attempt to join the "Holy Trinity" Audemars, Vacheron, Patek ("Big 4" if you add Lange) so they can charge "Holy Trinity" prices.
In order to join that club they have to generate exclusivity.
By limiting availability of their most popular lines while maintaining (or actually increasing demand) they are building "cachet" and exclusivity.
I expect their next move to be a cull of their "lower end" watches like the Oyster Perpetual, Air-King, Milgauss, many of the Datejust models etc. and an expansion of the "complication" and "grand complication" watches like the Sky Dweller, Cellini and Day Date "Presidential" line in their catalog.
They'll backfill the missing lower end watches with Tudor versions and then try to drag the Tudor brand name up into the price range of current Rolexes.

Increasing the appearance of exclusivity may be a goal, but it still makes no sense. Rolex already has far more brand recognition than any of those more expensive, more exclusive brands. Jewelers I know who deal in preowned Rolexes tell me that people insist on Rolex because that is the brand non-watch people will recognize.

If the product is watches, one makes money by selling watches. Their previous price points were such that a person could potentially save up for awhile and buy one. For a very long time, they have sold every watch they made at prices higher than arguably comparable watches. Some of the “exclusive” brands sell at prices higher than I paid for my car or in a few cases even my house. There is a serious limit to the number of watches that can be sold at the really high price points. Rolex had previously hit the point where the watches were priced high enough to be desirable but still obtainable.

So far, smart watches have not made a dent in the luxury watch market, but the danger of that changing is real. Making the product unobtainable doesn’t help.

Complications are neat, but the cost of the service every 5-10 years makes owning them unwise. I wouldn’t buy a mechanical chronograph unless I had a real need for that function.

You may be right about their goal, but if so, I would not predict good things about their future.

Tudor has really been coming out with some nice watches, but their appeal is different from those sold under the Rolex brand.


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[JodyH]

Rolex wants to sell $10k watches for $50k.
Tudor wants to sell $2k watches for $10k.

In the current market they can't do that.
I think they are making deliberate moves towards that long term goal.
Remember that Rolex is a private "charity" with huge cash reserves that answers to no one, hence they can and do think long term.
Weakness in the ultra high end market due to the Chinese market downturn which is hurting the "Holy Trinity" sales along with pressure from LVMH brands like Tag, Hublot and Zenith as well as SWATCH brands like Omega and Blancpain at their current price point makes it a great time for Rolex to try and move upscale and position Tudor to compete directly with Omega and Hublot.

Rolex is very conservative with their designs, that plays well with the ultra high end market.
Tudor is more flexible and willing to take trendy design risks to better compete against Tag, Omega and Hublot.