Reputable grey market watch dealers12/25/2022 ![]() Buyers willing to pay for a warranty and AD service get one price. It is basically a price discrimination model. Some of the below MSRP grey inventory is coming from retailers and distributors, but some of it is also coming directly from manufacturers. The vast majority of grey sales are below MSRP to move inventory, and that is what Watch Pro is talking about here. Peacock allegations involve the very small (and only recent) amount of grey sales that are above MSRP. Peacock has been cowardly garbage, but I will take a more charitable view toward this article. Watch Pro’s recent direct coverage of C.D. Corder’s column is a deliberately obtuse defense of the status quo, which benefits the industry at the expense of the consumer. You buy new inventory and STFU about online sales. We’ll keep turning a blind eye to the gray market sales. Richemont “saves” the dealer’s 40 percent markup and establishes a direct relationship with the customer for future sales. You want to trade your watch towards a new IWC? You do that through Watchfinder, not an IWC authorized dealer. ![]() Corder fails to mention that Richemont’s acquisition of Watchfinder (for example) is a direct threat to the mothership’s AD’s. According to The Financial Times, 20 percent of all luxury watch sales take place in the ‘grey market.’Īt the same time, manufacturers are moving to online sales. So manufacturers turn a blind eye to out-the-back-door sales, letting their AD’s enjoy “hidden” spiffs and churn unwanted inventory. Allowing AD’s to price watches to satisfy demand would ruin the manufacturer’s overall marketing strategy. Killing gray market watches would force AD’s to stock unloved inventory, preventing them from ordering the new product that keeps factories humming. They could terminate errant AD’s’ contracts and/or allow AD’s to add a dealer markup to hot watches and publicly discount slow moving stock. Peacock case highlights the Swiss watch industry’s dirty little secret: manufacturers are unwilling to take the simple steps needed to crush the gray market. I see this column as another attempt to soften a potential blow. In his recent post examining ’s coverage of the case, RF asked what Rob Corder wasn’t saying about the wrongful dismissal lawsuit threatening to reveal the Chicago retailer’s policy of reselling Rolex abroad, and, perhaps, Rolex’s knowledge thereof. Peacock in specific, the Swiss watch industry in general. Why this piece? Why now? Why does the Swiss watch industry’s semi-official mouthpiece want to semi-legitimize gray market watches? Simple. All of the benefits he cited are available on the secondary (preowned) market. He didn’t even articulate why it needs to exist. Corder singularly, spectacularly failed engage with the legal and commercial issues raised by the gray market. We may not like it, but the grey market is too valuable to be ostracized.” Step 4: Defend the indefensible: “There are too many shady characters breaking tax and other laws to expunge its record, but that is a reason for the industry to engage more, not less. Step 3: Equate gray and secondary markets throughout the piece (“the transparency that the grey/secondary market delivers”) Step 2: Mix true claims (Richemont bought Watchfinder) with speculation (the transaction “legitimized the secondary market”) Step 1: Make some fairly innocuous arguments about the benefits of secondary markets in general, such as price transparency and customer data Corder was engaging in a bit of sophistry: The first time I read his column, I thought it was just sloppiness. Corder’s arguments apply to the secondary market, not the gray market. The secondary watch market is a market for preowned pieces individuals or dealers selling previously owned watches. Gray market watch sales are in direct competition with primary market sales. ![]() One way or another, they were originally purchased from an AD (as opposed to the black market, which sells counterfeit or stolen watches). The gray market sells brand new watches outside of the authorized dealer (AD) network. ![]() Corder’s casual equivalence of gray and secondary markets. His vague reference to Chrono24’s “artificial intelligence” was also a bit of a reach. “Luxury watches have been elevated as investment-class assets because of the transparency that the grey/secondary market delivers.” Luxury watches are not an asset, and price transparency does not an asset make. The breezy bromide gives a thumbs up to gray market watches with unsupported assertions, lazy language and wishful thinking. Corder argues that gray and secondary markets provide benefits to the watch industry, such as price discovery and geographic redistribution of supply. In Why grey market is the friend we have to hate, Mr. Watchpro’s Rob Corder is a Swiss watch industry mouthpiece: the consummate insider-outsider. ![]()
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