Rolex SA allowed to trade watched while working for Rolex Shops?

[apache0909]

I was just wondering if Rolex SAs allowed to be involved in watch trading as part time while working in Rolex ADs? Anybody has any infos?

[W3ll]

I know the SAs are not allow to purchase hot models themselves. I not sure what you mean by trade watches, but of course i personally know many insiders in ADs that doing side deals with grey markets for all the hot models..

there is no better reason than how all this grey keep getting supplies of brand new unworn hot models if there is no insider working with them in ADs.

[apache0909]

 This is so unfair for the regular rolex collectors or enthusiasts out there. The system is supposed to prevent watches from getting to flippers, but based on what youve just said, it looks like the system is backfiring. Sad to hear.

[W3ll]

This is so unfair for the regular rolex collectors or enthusiasts out there. The system is supposed to prevent watches from getting to flippers, but based on what youve just said, it looks like the system is backfiring. Sad to hear.

Well, like someone has mention before, ADs has to have this system because everyone coming in for a rolex hot models, they need to sell their other brands as well for profit.. someone need to pay the bills and if is a public listed company they need to show profit for their investors

[dpkong]

I was just wondering if Rolex SAs allowed to be involved in watch trading as part time while working in Rolex ADs? Anybody has any infos?

As a rule, I'm sure they're not supposed to do that so obviously they're not going to do it openly. And those who do deal with them obviously won't spill the beans.

This is so unfair for the regular rolex collectors or enthusiasts out there. The system is supposed to prevent watches from getting to flippers, but based on what youve just said, it looks like the system is backfiring. Sad to hear.

Ever heard of "All is fair in love and war" ??

The real issue is that there is a secondary market out there for watches that are willing to pay way over retail price for a watch. Who created that market and why does it exist? What makes any buyer who walks into a store different from any other grey dealer?

You can even see on these FS section is this forum relatively new watches for sale at over RRP. Almost everyone wants to cash in on the this market.

You buy a steel Daytona for RM50k.. walk out the door and a grey dealer offers you RM80k immediately because he can ask RM100k for it on the market. You're not tempted? RM30k cash...

So to an AD who doesn't know you, you're just another person eager to cash in on the market.

Better I, the business owner cash in rather than you right?

[Potential_Highlight]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

[W3ll]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

[dpkong]

The manufacturer has no reason to create a scarcity. Why should I change my production patterns and allocate more resources to to make cheap steel watches at the cost of producing less gold watches with higher RRP? I'd have to make 2 or more steel watches for every gold watch I did not make to maintain my gross sales.

Or should I double production rates and let everyone who wants to buy a steel watch to get one within the next 5 years. Then what happens after that? These watches last forever. Suddenly nobody wants to buy a steel Daytona anymore because everybody has one already.

Remember watches are luxury items and the market could crumble without warning. Think of the quartz era.

The AD definitely did not dictate the prices on the grey market, we the buyers do. No one can blame the AD for using the demand to their advantage.

[Potential_Highlight]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

[W3ll]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

I still could not see any substantial proof that points to the manufacturers intentionally scarce their watches. Watches we are talking here are not something that can be increase production by just adding more machines, the movement especially requires human touch and intervention which is not something you easily can just increase as much as you like by adding more "workers"  and isn't that the main reason why certain brands are so sought after and command the prestige they are today which is due to the level of watchmaking skills involve and how tedious it is to produce one.

Besides on the topic of price increase, didn't every watch manufacturers increase their prices regardless of whether they are in demand or not in demand?

[Chuan]

If my memory serves me right, I read somewhere that Rolex as a matter of fact 'controls' the output of their production. I'll try to find the source where I read it again

[apache0909]

On the issue of false scarcity, i do believe that Rolex do have the option of focusing their manpower into the few sought after models, but they choose not to. Else the hot models will lose its exclusitivity. And once these hot models loses its exclusitivity, it will affect Rolex as a whole. However this is only my cents. I dont have any proof either. 

[Potential_Highlight]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

I still could not see any substantial proof that points to the manufacturers intentionally scarce their watches. Watches we are talking here are not something that can be increase production by just adding more machines, the movement especially requires human touch and intervention which is not something you easily can just increase as much as you like by adding more "workers"  and isn't that the main reason why certain brands are so sought after and command the prestige they are today which is due to the level of watchmaking skills involve and how tedious it is to produce one.

Besides on the topic of price increase, didn't every watch manufacturers increase their prices regardless of whether they are in demand or not in demand?

You need to deprogram yourself from the Swiss watch industry myth

Rolex produces about 1 million watches each year

When your product is rolling off the assembly line in that kind of quantity, your product is absolutely capable of being mass produced

For reference, Perodua produces about 200,000 vehicles annually

Source:
"https://www.theedgemarkets.com/article/perodua-eyes-annual-production-80000-units-thirdgeneration-myvi"

[W3ll]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

I still could not see any substantial proof that points to the manufacturers intentionally scarce their watches. Watches we are talking here are not something that can be increase production by just adding more machines, the movement especially requires human touch and intervention which is not something you easily can just increase as much as you like by adding more "workers"  and isn't that the main reason why certain brands are so sought after and command the prestige they are today which is due to the level of watchmaking skills involve and how tedious it is to produce one.

Besides on the topic of price increase, didn't every watch manufacturers increase their prices regardless of whether they are in demand or not in demand?

You need to deprogram yourself from the Swiss watch industry myth

Rolex produces about 1 million watches each year

When your product is rolling off the assembly line in that kind of quantity, your product is absolutely capable of being mass produced

For reference, Perodua produces about 200,000 vehicles annually

Source:
"https://www.theedgemarkets.com/article/perodua-eyes-annual-production-80000-units-thirdgeneration-myvi"

I am asking you to proof your statement and you couldn’t. But now you use perodua as comaparison? Got to be kidding me.. lets drop this discussion

[dpkong]

You can demand and compare and criticise production all you want but ultimately they decide what is best for their business.

And you simply cannot compare Perodua with Swiss luxury watch industry. You should probably compare to Ferrari, Bugatti or Koenigsegg production...

 

[Potential_Highlight]

You can demand and compare and criticise production all you want but ultimately they decide what is best for their business.

And you simply cannot compare Perodua with Swiss luxury watch industry. You should probably compare to Ferrari, Bugatti or Koenigsegg production...

 

The point is, if something is being produced in the hundreds of thousands each year, it is being mass manufactured

[Potential_Highlight]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

I still could not see any substantial proof that points to the manufacturers intentionally scarce their watches. Watches we are talking here are not something that can be increase production by just adding more machines, the movement especially requires human touch and intervention which is not something you easily can just increase as much as you like by adding more "workers"  and isn't that the main reason why certain brands are so sought after and command the prestige they are today which is due to the level of watchmaking skills involve and how tedious it is to produce one.

Besides on the topic of price increase, didn't every watch manufacturers increase their prices regardless of whether they are in demand or not in demand?

You need to deprogram yourself from the Swiss watch industry myth

Rolex produces about 1 million watches each year

When your product is rolling off the assembly line in that kind of quantity, your product is absolutely capable of being mass produced

For reference, Perodua produces about 200,000 vehicles annually

Source:
"https://www.theedgemarkets.com/article/perodua-eyes-annual-production-80000-units-thirdgeneration-myvi"

I am asking you to proof your statement and you couldn’t. But now you use perodua as comaparison? Got to be kidding me.. lets drop this discussion

I'm not here to prove anything to you - you are free to believe in what you want to believe in

If you want to believe in something like the "every piece handcrafted by master artisans individually" myth, you are free to do so

I am only pointing out to you what many others in the hobby have already pointed out - that if watch manufacturers can produce their watches by the hundreds of thousand each year (rivaling the output of car factories), they definitely can scale up production if they wanted to; they just choose not to

Enjoy the rest of your week

[dpkong]

Basically, your argument is that if they can make 1 million then it's mass produced and they can make 2 million?

While a lot of the parts could be mass produced, they still need hand assembly and the screws aren't exactly the same size as those you see on cars. It does need a lot more time and skill to put a watch together and getting it to work to strict standards.

Quite a few arguments have been put forward in this thread although most, if not all of it is merely speculation from available information, as neither of us here actually work for ROLEX. Whether you choose to ponder on them or keep insisting that ROLEX can easily boost production is entirely up to you.

If you had a product with a healthy demand, would you invest hundreds of millions into new facilities to boost production which could actually harm that demand because everyone will have one and suddenly that demand disappears?

My simple take is that it's not easy for them to boost production if they wanted to and even if they could, they would have to consider if doing so is actually beneficial for them in the long term.

[G.MAC]

I think this link will explain the situation very well;

https://www.watchpro.com/authorised-dealer-says-rolex-hysteria-is-being-driven-by-flippers-and-internet-forums/

So the take-away is Rolex may likely have produced the same amount of watches annually over the past 5 years or so but changes in the consumer preference means more people are aiming for the steel sports model as opposed to the datejusts. This was not the case in the earlier years. Should they produce only or more steel sports model to meet the current surge in demand? The short answer is no. The Rolex S.A company is not making more money when Rolex stainless steel sports prices are exorbitant in the secondary market. The company would rather leave the current situation be to protect the level of demand or to see a change in consumer preference again. IMO any scarcity is not and never created by Rolex but by grey market dealers snapping up all available pieces through whatever means.

[W3ll]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

I still could not see any substantial proof that points to the manufacturers intentionally scarce their watches. Watches we are talking here are not something that can be increase production by just adding more machines, the movement especially requires human touch and intervention which is not something you easily can just increase as much as you like by adding more "workers"  and isn't that the main reason why certain brands are so sought after and command the prestige they are today which is due to the level of watchmaking skills involve and how tedious it is to produce one.

Besides on the topic of price increase, didn't every watch manufacturers increase their prices regardless of whether they are in demand or not in demand?

You need to deprogram yourself from the Swiss watch industry myth

Rolex produces about 1 million watches each year

When your product is rolling off the assembly line in that kind of quantity, your product is absolutely capable of being mass produced

For reference, Perodua produces about 200,000 vehicles annually

Source:
"https://www.theedgemarkets.com/article/perodua-eyes-annual-production-80000-units-thirdgeneration-myvi"

I am asking you to proof your statement and you couldn’t. But now you use perodua as comaparison? Got to be kidding me.. lets drop this discussion

I'm not here to prove anything to you - you are free to believe in what you want to believe in

If you want to believe in something like the "every piece handcrafted by master artisans individually" myth, you are free to do so

I am only pointing out to you what many others in the hobby have already pointed out - that if watch manufacturers can produce their watches by the hundreds of thousand each year (rivaling the output of car factories), they definitely can scale up production if they wanted to; they just choose not to

Enjoy the rest of your week

Pointing out what others in the hobby already pointed out? means you are so gullible to believe those who can't attain the watches themselves and blame the manufacturers for not increasing production?

Find out more information buddy, it don't work to think or even equate swiss watchmaking with perodua, as DPkong rightfully pointed out why not you start finding out how much production capacity the car brands that he mention can produce in a year and yes they hand build most of their parts.

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Basically, your argument is that if they can make 1 million then it's mass produced and they can make 2 million?

While a lot of the parts could be mass produced, they still need hand assembly and the screws aren't exactly the same size as those you see on cars. It does need a lot more time and skill to put a watch together and getting it to work to strict standards.

Quite a few arguments have been put forward in this thread although most, if not all of it is merely speculation from available information, as neither of us here actually work for ROLEX. Whether you choose to ponder on them or keep insisting that ROLEX can easily boost production is entirely up to you.

If you had a product with a healthy demand, would you invest hundreds of millions into new facilities to boost production which could actually harm that demand because everyone will have one and suddenly that demand disappears?

My simple take is that it's not easy for them to boost production if they wanted to and even if they could, they would have to consider if doing so is actually beneficial for them in the long term.

You are right of course, you are free to believe what you want to, and I won't say that you are wrong

As for watches being hand assembled - take IPhones as an example. Human assembly is also very much a key part of the manufacturing process. Yet Apple produced 215 million IPhones in 2016

Like any products that are manufactured in a factory: precision measuring instruments, consumer electronics, medical instruments, optical devices, etc - manufacturers absolutely are able to scale their production up or down

Some manufacturers, when launching new models, even clarified that they will not be playing the artificial scarcity game (implying that others do)

But like I said, if you choose to believe that watchmaking is special and exempt from this, then that is your prerogative

[Potential_Highlight]

I'm not a dealer, so I cannot say with 100% certainty, but I think it's obvious to all of us that there is strict price control for most established watch brands

That is to say, dealers are not allowed to arbitrarily price the watches they are trying to sell however they want, they have to follow the MSRP given by the manufacturers

But if you're a dealer, and you find yourself in possession of a hot model that you know can fetch up to twice the MSRP on the secondary market, ask yourself, what would you do?

Would you say "Oh too bad, I have to follow the MSRP", and just sell it at that price to the next person who walks into your store?

Or would you, perhaps, quietly sell it to a secondary market dealer, at a price higher than the MSRP, to maximize your profit?

Or maybe, keep the hot model in a safe behind your store, and dangle it as a "reward" for customers who are willing to buy up your other less sellable pieces?

It's not that complicated

How you would behave in the same situation, is how most other people behave

If you really want to blame someone, then trace it all the way back to the root, and blame the manufacturers for trying to create false scarcity (the thing that drives up prices in the secondary market in the first place) by intentionally manufacturing fewer watches than they know there is demand for

I am intrigue by the "false scarcity" mention here, I've seen it being talk about multiple times and I am curious what are the proof that the manufacturers intentionally produce lesser to make their watches more in demand?

Seeing it from a logical perspective, why would the manufacturer want to do that as it doesn't make business sense, unless it is implying that manufacturers are in a way getting the profit from the grey sales of their hot models, but again logically why would they want to go through such hassle? They could have just mark up their retail prices 20% more at least and yeah that's 20% more margin for them easily.

I honestly think this has nothing to do with the manufacturers, it is the AD leveraging on the hype and demand of these watches and hence created the grey market.

We are talking about products that have very little functional, intrinsic value on its own

These days, no one buys a watch because he wants a device to accurate tell time - well, at least not most of us

Hype/desirability/branding/exclusivity/whatever you want to call it is the number one thing propping up the prices of these luxury watches, by a very wide margin

The manufacturers have every reason to carefully protect and maintain the perceived scarcity of their products; it's what allows them to keep increasing their prices year after year

If a secondary market dealer is able to hike up the price of a watch by 100%, that's because the same watch is on waiting list with the AD's - it's exorbitant, but your choice is to either take it or leave it

Now, year 2021 rolls around, and your AD finally offers you that same watch, but hey, it's going to cost you 10% more than last year, because prices have increased this year

You'll still gladly take it, very happily in fact, because it's "only" a measly 10% increase, compared to if you were to buy it from a secondary market dealer

So yes, by intentionally making their products scarce, the manufacturers are knowingly driving up the prices of their watches on the secondary market, which suits them just fine, as it allows them to, in turn, increase their own prices year after year, while still being confident of being able to sell out their entire inventory

I still could not see any substantial proof that points to the manufacturers intentionally scarce their watches. Watches we are talking here are not something that can be increase production by just adding more machines, the movement especially requires human touch and intervention which is not something you easily can just increase as much as you like by adding more "workers"  and isn't that the main reason why certain brands are so sought after and command the prestige they are today which is due to the level of watchmaking skills involve and how tedious it is to produce one.

Besides on the topic of price increase, didn't every watch manufacturers increase their prices regardless of whether they are in demand or not in demand?

You need to deprogram yourself from the Swiss watch industry myth

Rolex produces about 1 million watches each year

When your product is rolling off the assembly line in that kind of quantity, your product is absolutely capable of being mass produced

For reference, Perodua produces about 200,000 vehicles annually

Source:
"https://www.theedgemarkets.com/article/perodua-eyes-annual-production-80000-units-thirdgeneration-myvi"

I am asking you to proof your statement and you couldn’t. But now you use perodua as comaparison? Got to be kidding me.. lets drop this discussion

I'm not here to prove anything to you - you are free to believe in what you want to believe in

If you want to believe in something like the "every piece handcrafted by master artisans individually" myth, you are free to do so

I am only pointing out to you what many others in the hobby have already pointed out - that if watch manufacturers can produce their watches by the hundreds of thousand each year (rivaling the output of car factories), they definitely can scale up production if they wanted to; they just choose not to

Enjoy the rest of your week

Pointing out what others in the hobby already pointed out? means you are so gullible to believe those who can't attain the watches themselves and blame the manufacturers for not increasing production?

Find out more information buddy, it don't work to think or even equate swiss watchmaking with perodua, as DPkong rightfully pointed out why not you start finding out how much production capacity the car brands that he mention can produce in a year and yes they hand build most of their parts.

I'm not so quick to judge whether others can attain the watches for themselves or not, nor am I even interested to judge them like that

Like I said, you are free to believe in what you want to, I am only pointing out to you what has already been thoroughly discussed, by people who are more knowledgeable than me - make of it what you will