The Watch Appreciation Thread - Part two (Rolex, Patek Philippe, Audemars Piguet, Jaeger LeCoultre,

[WSW]

I'm taking a perverse pleasure in the back-and-forth sniping on Rolexforums between those who already own desirable SS sports models and want to see prices remain constant and those who want to buy desirable SS sports models and want to see prices fall.

I think everyone is bored at home thus we all have nothing better to do than to watch the market fall and argue about it. There will always be people in denial about reality.

 

[Ambulance Chaser]

Haven't been tracking this thread very closely, but I do see that SS rolex prices have begun to come down a bit. Do you all anticipate them coming back to right at MSRP in the next few months?

Perception is becoming reality. A lot of people are not in a position to buy, and those who are in a position to buy are holding out believing prices are going to fall further.

The sellers are playing a game of chicken. Nobody wants to be the first to lower prices, but nobody wants to be late in lowering prices when they're already headed downward. At some point, rent and credit card bills will come due and the private sellers and smaller grays will have to face reality. Then the other sellers will fall like dominoes. My completely speculative guess is that we'll see prices close to MSRP in six months for everything except the Daytona, which might be able to hold out a bit longer.

 

[double00]

smart seller takes earnest money now, imo.

 

[Texasmade]

I would say Daytona and the Hulk will stay above MSRP. Almost everything else will fall. That’s just my guess so who knows what will happen.

 

[Ebitdaddy]

I think they will crash pretty hard just like anything else people living paycheck to paycheck yet make 6 figures tend to buy. BMW/Audi, etc... will all start popping up cheap too.

 

[Ambulance Chaser]

Yeah, I suspect there are a lot of people out there who make a good living but are financially overextended due to a desire to keep up with the Joneses. Buying a McMansion with an ARM, leasing a fancy car, buying designer clothing and nice watches on credit, etc.

 

[Dino944]

I would say Daytona and the Hulk will stay above MSRP. Almost everything else will fall. That’s just my guess so who knows what will happen.

My guess is only the Daytona will stay above MSRP. It has had a few brief dips in value, but for the majority of the last 30 years the steel ones have been selling for more than MSRP.

People arguing that prices should stay above MSRP, probably paid too much or bought them just to flip. I'd prefer prices to be back to normal so actual enthusiasts can buy them again. Anyone, who paid over MSRP is an idiot, and anyone with the connections to buy a bunch with the intent to flip should be at least a little worried.

 

[mak1277]

My guess is only the Daytona will stay above MSRP. It has had a few brief dips in value, but for the majority of the last 30 years the steel ones have been selling for more than MSRP.

People arguing that prices should stay above MSRP, probably paid too much or bought them just to flip. I'd prefer prices to be back to normal so actual enthusiasts can buy them again. Anyone, who paid over MSRP is an idiot, and anyone with the connections to buy a bunch with the intent to flip should be at least a little worried.

I have never understood the idea that people buying for over MSRP can’t be enthusiasts. I know a handful of people who have bought Daytona’s and GMTs from GM dealers for more than retail. None are speculators. All are enthusiasts who happen to have enough money not to wait forever at ADs.

 

[Ambulance Chaser]

Does anybody know how the situation got out of control in the first place? Some people say that Rolex is artificially limiting supply of popular models. I would have thought that Rolex's goal is to sell as many watches as possible at MSRP, so they would try to produce enough watches to meet demand. It's not like Rolex is getting a cut of the amount their watches are selling above MSRP.

 

[madhat]

Does anybody know how the situation got out of control in the first place? Some people say that Rolex is artificially limiting supply of popular models. I would have thought that Rolex's goal is to sell as many watches as possible at MSRP, so they would try to produce enough watches to meet demand. It's not Rolex is getting a cut of the amount their watches are selling above MSRP.

Brand exclusivity stays up if they're selling over MSRP and limited supply, I'd assume.
I assume Rolex doesn't do this, but some manufacturers take a cut when sold over the prescribed pricing. My parent company is a Carrier (HVAC) distributor, and when they sell over their margin cap they have to split the extra margins with Carrier.

 

[Texasmade]

Does anybody know how the situation got out of control in the first place? Some people say that Rolex is artificially limiting supply of popular models. I would have thought that Rolex's goal is to sell as many watches as possible at MSRP, so they would try to produce enough watches to meet demand. It's not like Rolex is getting a cut of the amount their watches are selling above MSRP.

Brexit started it with the $ strengthening against the GBP. This created a scarcity in the UK which eventually spread to Europe. This created scarcity in Europe while the US and Asian was relatively well stocked. People in the US freaked out and started buying everything to try to make a few $. Rolex saw what was happening and decided to just limit production on all of the popular sports models across the world to create even more hype.

 

[mak1277]

Does anybody know how the situation got out of control in the first place? Some people say that Rolex is artificially limiting supply of popular models. I would have thought that Rolex's goal is to sell as many watches as possible at MSRP, so they would try to produce enough watches to meet demand. It's not like Rolex is getting a cut of the amount their watches are selling above MSRP.

I think that Rolex makes a better margin on a two tone ladies date just than they do on a Daytona. So they keep making those instead of ramping up production on the hot SS models. They know exactly how many total watches they want to make annually and they have chosen not to adjust the mix of models just because there’s a spike in demand for certain things. If you say that’s “artificially limiting supply” well I won’t argue. But I don’t think it’s some nefarious plot.

 

[Phileas Fogg]

Does anybody know how the situation got out of control in the first place? Some people say that Rolex is artificially limiting supply of popular models. I would have thought that Rolex's goal is to sell as many watches as possible at MSRP, so they would try to produce enough watches to meet demand. It's not like Rolex is getting a cut of the amount their watches are selling above MSRP.

I’m sure some economics professor can cite a game theory equation that holds an answer.

My own thinking is as follows:
- Rolex makes many different models of watches.
- Not all of those watches are big sellers or sought after. The competition at those price points is pretty stiff.
- For some reason, some models have become even more desirable. This could be a combination of aesthetic appeal and cache
- Knowing this, Rolex holds back those models from AD’s unless and until they sell some predetermined volume of other models.
- AD’s know this and hence the hoarding of said models for their premium customers.

If Rolex were to produce more of these models, then they wouldn’t be so sought after. Let’s face it, a big part of the appeal is the exclusivity. Their would likely be a surge initially and then it would die out. They’d become as common as the DJ.

 

[FibroblastsMakeLeather]

Yes, it is fine to do so. Just be sure it is a hardier watch like a Sub since you will be primarily using that hand and it will be dinged and scratched much more so than if it were on your passive hand.

thanks for the answer!

 

[bespoken pa]

This also is happening in the world of cigars. At one point I could just purchase a box of Andalusian Bulls now the majority of the time shops get their allocated inventory and dice them up into "sampler" packs to offload the stuff that doesn't sell.