Paying retail is a good thing
Let’s face it, this isn’t a cheap hobby. We all tend to flex our budgets to make that next step in adding something to our collections.
Sometimes buying from the pre-owned market is a good way to buy a piece we really want, other times we try to seek a better deal from the retailers.
I see more and more people say “I wouldn’t pay retail” for particular watches, and I understand the motivation. But I‘d like to suggest that this may work against us in many respects for a number of reasons:
- A strong AD network benefits us all in terms of access and service needs - if they are not sustainable, ultimately we will all lose
- The more we push for discounts, the greater the pressure to push up the MSRP for dealers to maintain a margin - it becomes counter productive
- Discounting at retail ultimately reduces the resale value of certain models - this leads to some people thinking unfavourably about adding otherwise fantastic models to their collections
- We ultimately damage brand value by turning them into ‘discount brands’, not entirely but to some extent, this has been a driver of brand declination for the likes of TAG Heuer in the past
None of these points will change our purchasing behaviours overall, but I think it’s worth discussing. Those companies that jealously manage their brands and don’t allow discounting (eg Louis Vuitton and Hermes) tend to secure greater long term customer satisfaction over time.
Thoughts?
Watch nerd with a small collection from New Zealand.
Paying retail is only a good thing if the MSRP is realistic to start with, and commensurate with what the watch offers. If a watch is priced well above comparable pieces from other brands, that will be reflected in secondary market prices, which can be a better indication of the true "worth" of a watch. I'm willing to pay a premium to buy from an AD (I feel that a good AD adds value), but the premium needs to be reasonable.
I think you are spot on. Watches are luxury purchases in a time when they are completely unnecessary. Luxury aka Veblen purchases should be cash only & responsible in regards to budget IMO. Having said this, I've spent when I shouldn't have & made purchases too quickly. I think buying this way is all part of Veblen purchases; retailers are counting on it.
There are many brands I will gladly pay retail for and many I will not. For example, would I pay retail for a Rolex, GS, Tudor, or other hard to get models. Absolutely. However, would I pay retail on any traditional Omega, IWC, Tag, etc? No way. For example, for a while the hot Omega was the SMP 300 with the white dial, ref 210.30.42.20.04.001. A Omega dealer is going to start and may insist on MSRP of $5400 as many ADs have been told to not discount:
Or, I can buy the same exact watch new from Jomashop for almost $1100 less, before any promotional coupons or discounts. If the AD will not budge or match, why would I opt to buy from them?
Personally, I do not believe buying some brands from the AD will solve the price issue. The fact is, most brands make too many watches and since ADs cannot have all their capital tied up in undesirable watches, they unload them to grey dealers like Jomashop at wholesale prices. The fix for the AD is to have less inventory or the AD would need to option to return the excess inventory for full payment with interest and that is not going to happen. They can only let things sit for so long before they need to get that money back, even if it means breaking even. Luxury brands like Hermes, Ferrari, Porcshe, and yes Rolex, do not have that issue as they tightly control inventory to not allow an excess number of their products to sit around waiting for a buyer to discover them.
Ultimately, the market will determine what the product is worth and despite the last three years, traditionally most watches lose a significant amount of value once they leave the store. The idea of making money on the broader watch market is a recent phenomenon. Does that make brands like Omega, Tag, IWC, etc discount brands? I would argue not, but if prior to COVID it was a known fact that you begin negotiating with the AD at 40% off the starting price and usually settle for 25%-30%, I would put that on the brand for mis-valuing their product.
It depends what the "D" in AD means. There are the Authorized Dealers and the Authorized Douchebags. If ADs are going to force you to buy watches you don't want in order to buy one you do want, we may be better without them.
As for consumers, I believe there is a price for every piece of merchandise and it is just as much set by what the consumer will pay as by what the MSRP is set at. If a manufacturer can't sell watches at the price they want or need to, they need to reevaluate what they are doing.
This game is the least desirable thing about buying watches. I wish the price was the price and that was it. Wondering before, during, and after a purchase if I should be haggling keeps me away altogether. Even now I really have no clue if I ”should” be asking for discounts and if the response from an AD is real or BS.
This game is the least desirable thing about buying watches. I wish the price was the price and that was it. Wondering before, during, and after a purchase if I should be haggling keeps me away altogether. Even now I really have no clue if I ”should” be asking for discounts and if the response from an AD is real or BS.
I agree, finding out after buying that someone else got a better deal is disappointing, and puts people off buying.
I mostly buy direct from brands, but I also don't buy luxury watches... So the "AD experience" isn't a factor in my purchases.
I would love to live in a world where the price is the price. No games.
I've only ever purchased watches from ADs. I paid precisely MSRP for my Rolex, Tudor, and Grand Seiko, and a significant discount for everything else.
Ideally Rolex would raise their prices, and most others would lower theirs, and we could all feel good about buying watches at the correct price.
I'm in the process of buying a new car at the moment, and it's actually somewhat of a relief that there really aren't any discounts to be had due to an incredibly scarce supply. I feel alright about paying MSRP for once, even though I have to wait a bit for delivery.
Support your local, physical, AD as much you can. You will be sorry when they are no more. Buying watches over the web is not fun in the long run.
Here’s one for you. I’ve only made one purchase at an AD. I don’t like looking at watches in stores. Actually I do, what I don’t like is salespeople around while I’m looking at watches. Yes it’s nice to get information, but I don’t want your opinion…I don’t want you to try to talk me into/out of anything. I want to decide what I want and what I’m willing to pay.
People keep saying it’s great to have a relationship with an AD, but why? I don’t buy enough watches to impress anyone. I won’t be the guy getting a call because they have 1 Rolex to sell. So what’s the point?
Sorry, but I'm poor & cheap. Not in my DNA to willingly pay more when I don't have to. Like comparing AD to car dealership: I don't think they're looking out for MY best interest when I walk into a lot / store.
I get what you are saying but the ADs are grown ups and know how much of a discount they can give and still make money. It's how it has always worked in retail (not only for watches) and we still have a robust AD network.
The only time I paid retail without even asking about a discount was at the AD where I am on the waiting list for a Rolex GMT thinking that it might give me a little more credit on the necessary "relationship".
2 watches purchased at retail and 3+ years on the waiting list and counting. 😜
All good points, but buying second hand watches also helps the ADs and brands. Knowing that there is a market for your used watch makes it easier to buy at retail with confidence.
Hmmm, sounds like something an undercover AD would say... 😜