Tag Archives: luxury watches
You would think that buying a luxury watch wouldn’t be difficult or complicated. At least, it wouldn’t be any more complicated than buying a refrigerator, a TV or a car.
That’s not the case, however, and shopping for a watch can be as difficult as shopping for healthcare, and is often accompanied by the same pressing question – “What, exactly, is the price?”
There are three basic places where luxury watches get sold in the marketplace:
- The primary market – This is where luxury brands sell to the public either directly, through their own Website or network of stores, or through authorized retailers who sell at company mandated prices.
- The gray market – This is where new watches are sold through unauthorized retailers, usually at discounted prices.
- The secondary market – This is where second hand watches change hands.
You’d think that most watches sold new would come through authorized dealers, but that’s often not the case. Authorized dealers will give you access to the best selection, and if you’re looking for that ultra-limited production model, it may be the only way to buy.
The gray market is where things get fuzzy. Watches aren’t like books; when a company finds that they’ve made too many $25,000 watches, they’re not going to be remaindered and sold in a discount bin at 10¢ on the dollar. Officially, those watches are in the hands of retailers, but those retailers who have watches to sell that they can’t get rid of might want to sell them, quietly, to a third party for a quick infusion of cash.
Third parties can’t offer a manufacturer warranty, but they can offer lower prices than the authorized retailers. That’s pretty enticing for many buyers, as they’re not overly concerned about a warranty when they’re buying a Rolex or an Omega.
The secondary market has some overlap with the gray market. This is theoretically where you’ll be buying second hand or pre-owned watches, but some of them may actually be new watches that are being sold as pre-owned in order to avoid the scrutiny of the manufacturers, who don’t want to see their brand name diluted or the perceived value of their products reduced in the marketplace.
These three areas of marketing are not known to most buyers, and making matters worse is the fact that a lot of counterfeit or replica watches are making their way into the mix, as well. Most buyers want the real thing, but the only way to guarantee that you’re getting the real thing is to buy from the manufacturer.
Most sellers of gray market watches are legit, but the manufacturers would have you think otherwise. That’s how they keep their prices up. “You want the real thing? Then you must buy from us.”
The biggest problem, of course, is that there’s a glut of high end watches on the market. A 20 year old Rolex likely works just as well as a new one. Most luxury watches don’t wear out and most consumers don’t buy a new one every year. Yet high end watchmakers are cranking out more watches every year, mostly to keep their stockholders happy.
After all, the stockholders are interested in the bottom line, and that means selling watches.
What does this mean for the average consumer? It means that if you want a nice luxury watch and you don’t insist on having some ultra-limited model, you can likely save thousands of dollars by making your purchase through a gray market or second hand dealer.