Paying a premium for a Rolex.....why not?

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Only one truly non-renewable resource that we know of... time.

Though, weirdly, it may be that time doesn't actually pass... it's just that for whatever idiosyncratic reason, we experience it as passing...

https://www.youtube.com/watch?v=GwzN5YwMzv0

There are people that get all upset about counterfeit watches. I guess I have something similar where I find funding flippers unconscionable. At least counterfeiters produce something.

My demand for a Rolex will likely never match the cost of one. It's that simple.

Also, my budget will never match the cost of one.

Another way to think about it:

Let’s take the current Rolex X price as $10,000.

The grey market currently wants $12,000 for the Rolex X.

Because you refuse to pay above retail, you put your name down on a waiting list, which realistically means you’ll be waiting two years.

Rolex does an annual 7% price hike.

In two year’s time, you’ll pay approximately $11,500 for the watch.

So, in reality, you’re paying $500 for the benefit of getting what you want now, rather than in two years.

I have a bit of a crush on Sabine....

Good read! I don't have an issue with the premiums paid, but often wonder... If Rolex's and other desirable watches are unobtainable already and watches on the secondary market obtain a premium, isn't there a pricing increase opportunity for those brands? The danger is that secondary market premiums might increase as well, but maybe this would spur more makers to come to market and offer designs that are well priced from high to low. I'm really liking so much of the microbrand offerings and surely there is more amazing stuff to come...

That’s an interesting my perspective, and makes the premium more palatable. But I think for many it’s about the game. Rolex, ADs, and flippers are playing a game and the customer is the mark. Many people don’t like feeling like a mark.

I suspect Rolex have transitioned to being Veblen goods; so the laws of supply-and-demand no longer apply…

Still need to take into account production year, wear and tear, and warranty status. Those matter, to varying degrees, to some. Everything is an opportunity cost of some sort.

Regardless of how one wants to proceed, the only thing that one will almost inevitably regret is buying something to “replace” the Rolex. The most common example is buying a Tudor because I can’t get a Rolex or will not wait.

I bought a BB58 because I found it unique. I have my reference 15210 Rolex and a vintage from 1941 that was my grandfather’s. I’d love to buy a Submariner. Right now I’m saving money for it, but also put my name on a waitlist. If the latter happens before the savings hit the second hand price, I’ll finance the new one. Regardless, I’m keeping the Tudor.

Wow that’s a great point. I’m into sneakers and it’s the same thing. If it sells out and I cant get them I have to buy from the secondary market. But worst case it’s a couple hundred dollars.

The reason I have such a hard time buying watches grey market, as someone else mentioned, is authenticity. For something I’m paying 10k+ for I need to know which out a doubt the entire watch is authentic.

This is exactly why Rolex’s CPO program is going to make a killing. You’d pay more than grey market at the prices I’ve seen but with the piece of mind it’s been serviced and it’s real.

Watches are only investments when your buying them with the intention on selling them. And as my family has been in the watch business for many years, I can tell you that selling and trading watches has its own share of stresses and headaches. Only in recent years have a few watches ( like sport model Rolex, AP, VC) are trading for premiums above retail. And this is a small amount of time in the grand scheme of the watch selling and trading market. In fact, prices are going down again. Point being, buy what you want, what you can afford, and what has good value for dollar. There’s a small percentage of folks that will snag a sub, newer GMT, or even a Daytona at retail and not loose money; maybe gain a few bucks, but this is not the normal. There are a lot of gray market dealers out here that are stuck with some watches they bought or traded at high value. But cash is always king! Often times a low offer on a piece is taken because of the need to replenish inventory even at a loss. Decide what you want. Find it. Make offers. Just get value for your dollar.

Watch valuation is based on consumers. If someone really loves a specific watch and is willing to pay the price for then all the power to them. No justification needed. A company will never over price their product to be out of reach for consumption or they will go out of business. In calculus, a graph is always driven by X and Y which will produce a certain projection, and they all have an upper limit... These watch companies have consumers at X and competition as Y. All prices are adjustable with time.

I thought I was the only person who used the term Veblen in any WC thread

Let's face it, all watches are a luxury aka Veblen purchase (to high jack @English_archer ). We don't need them to tell time or perform any secondary function a watch may offer in a complication. For you it's ok to "Pay Gray" . True Rolex values have historically climbed. A watch as an investment is different from the example of a stock. Watches are like buying precious metals as an investment = you don't realize a gain until you sell the underlying asset. Stocks give you all sorts of investment variations. The list is long and kind of boring compared to discussing Watches 😀! I do love the term Dead Cat Bounce! The actual investment is way less interesting than the name... then there's trading naked puts.... I digress. My whole point is buy what you live & enjoy!

Because you forget the time when Rolex watches were sold with strong discounts in the grey market. This wasn't ages ago...and it can come back.

With so many amazing options in the watch market, I choose not to participate in waiting games, favoritism, over paying, etc. Having Rolex on the dial isn't worth all that to me.

Many people don't want to pay a premium for Rolex watches because they are sick on how Rolex (but also Royal Oak and Nautilus) became a stonk instead of a watch.

I have a friend who doesn't know anything about watches and 1 year and an half ago bought an Hulk for 30k€ to put it in a bank.

Now you can buy the same watch for 20k.

If those people will exist luxury watch market (and this is happening) there will be no more need to pay a premium.

I hope you’re right.

Really glad you got the watch you wanted when you wanted it and are enjoying it ,I've bought 2 rolexes from grey dealers, sometimes it's not worth playing the games and as somebody stated you have probably had 2 price increases in the time your waiting for the watch

I've posted this here before, but since you are asking specifically: this is a video I did on an alternative method to the AD waitlist vs grey prices. I'm working to spread the word so that true collectors can ease their frustration.

https://youtu.be/yw3PT5WVxrs

Hope it's helpful.

But it and don’t look back! Consider mint used, and you will pay 1-2k premium. F it! If you want it and can afford it do it. The bay sayers wouldn’t even pay msrp anyways and suggest some homages design that will just remind you that you didn’t purchase the submariner. Save the loss on sale of your surrogate Rolex and just do it right the first time

Hey, it's only money. Give it away.

I often see the argument that you might regret getting a Tudor instead of a Sub. Of course you will. It’s not nearly as great a watch. You only spent less than half the money and got your money’s worth on that amount.

As a short term flip, a Rolex at MSRP is a great deal. As a watch to wear and keep, Rolex is just OK at MSRP. I don’t see much value in Rolex above MSRP. When you start looking at other watches at the Rolex grey market price, there’s a whole new world that opens up.

I’m certain that if you have Rolex grey market money, you will not have buyers remorse if you spend the same money on Blancpain, GO, JLC, Zenith and a bunch of others that actually compete with Rolex and in many ways are better watches and better value.

Again, before paying grey market for a Rolex that’s only marginally a good deal at MSRP, have a look at what other brands and models are available for the same money as that aftermarket Rolex. You may just have your mind blown.

Actually, most people overthink this, and I usually do as well. It really boils down to a fundamentally simple question, is the gray market price being asked for a particular watch worth it to you or not? The answer for me would probably be no. For me there is no factoring in this or that variable. The fact that the price is inflated by the gray market to me is irrelevant. The Rolex AD’s rewards-based business model has manifested itself in the form of a hierarchical wait list. I view this as the watch is simply unavailable. Here’s to making your view of the watch collecting hobby less complicated! 🍻😊

I have no issue with people paying a premium for anything. Whether a watch, a games console like you mention, or anything else. It always boils down to a war of 'haves' and 'have nots' which I find very boring. People try and wedge an audience using jealousy, class, and whatever other emotions they can weaponise in people. They know it's incredibly easy to stir people up if they don't have much to begin with. Just give them a little nudge and say, "Look at that guy! More money than sense! Encouraging scalpers! Arrrgghh!" and just watch the masses throw themselves into a fury. It's the same tactic tabloid newspapers use every day in various ways. Push the right buttons and... whoosh. And again, I find it boring. I don't let myself get wound up. If you have the money, and you want to buy something, then enjoy it. You've earned it.

I agree with you but it is different now than a few years ago when the $10,000 watch was $20,000+ on the grey. I am happy to pay over retail to avoid all the ad shenanigans but I can’t afford to pay well over in my personal circumstance

I am relatively opposed to paying high secondary market markups often. The reason for this becomes clear once you spend time with a watch in the tier(s) above Rolex. If you pay $15K for a $9K submariner, you at the end still get a watch that retails for $9K. After that, go buy an H. Moser Pioneer on the bracelet for $14K and you’ll never want to wear the Rolex again - there is a higher level of quality in every regard. That’s the core issue I see with very high secondary markups. A lot of people might think they would buy X iconic watch for much higher than retail so they don’t care, but they forget that there are some incredible watches at a much higher level of quality at those higher price points.

All that said - I do own a submariner that I bought literally at the height of the market for almost double retail. At the time I thought it would be my only watch and I’d be a one watch guy. Since then I have become a more serious collector and consider it a lesson learned.

But I do think it’s of course fine and your choice to pay the markup if you really want a piece - but my point is that I don’t think it is advisable to this repeatedly and instead look at higher end pieces.

It’s the artificial scarcity. That’s what pissed people off. The company artificially limits the amount and creates a grey market for goods that are not readily available. If you want to pay the premium do it. I won’t 1) because the law of diminishing returns is real and at one point of you can notice the difference is microscopic (if you are over 40, the difference is just brand at this point) 2) it’s not a essential thing to own. I won’t play the grey market because the company simply refuses to produce more to artificially inntlate the price and the brands percived value (which is all that rolex has going for it, you can’t fir rolex and value in the same sentence)

Personally, I decided long ago I would not pay above retail for a new watch, regardless of brand. But for years I’d wanted an Explorer Ref 124270. I watched with interest as Rolex grey market prices fell for all models thinking if the grey market 124270s fell below retail I’d get one. However the grey market price seemed to get sticky about $2K above retail. I considered vintage 36mm (not a fan of the 39mm) but even those were running close to or higher in some cases to the price of a new watch.

Since I had the money, and waiting for grey to drop below retail wasn’t panning out, back in January I went to the one nearby AD to see an exhibition model and register my interest. Granted, the Explorer isn’t a Pepsi GMT, Sub, or Daytona which they did have exhibition models for, but it’s still a waitlist watch…and they didn’t even have an exhibition model to show me! Still, got on the list and settled down for a nice long wait. But not too long…my plan was if I didn’t get an Explorer by the end of the year to bump to Plan B and spend the price of the Explorer, and a little more probably, on a new Grand Seiko hi-beat (to round out a Grand Seiko movement collection trifecta).

As luck would have it, I got the call less than 4 months later and have the Explorer on my wrist as I type this.

The older I get the more and more convinced I am that timing is everything in life. If I were to walk back into the same AD today and get on the list for a 124270 again I may well wind up waiting two years or more. Some times it just be like that. Now my “Plan B” watch is my “Plan A” watch, so watch this space for a GS hi-beat sometime next year!