Is it time for watch manufacturers to start working with the grey market rather than against it?
There has been public hostility between luxury watch manufacturers and the grey market for a number of years now, but one thing that cannot be ignored is that both sides of the luxury watch industry have a symbiotic relationship. Where there's one, the other isn't far away.
The grey market is the largest source for luxury used watches, with customers often selling in order to "flip" for a different model, usually an upgrade of sorts.
We are seeing a rise in watches being sold to to the grey market because new pieces have landed with authorised dealers and people need to release funds from their current watch in order to purchase the new arrival. This kind of activity increases when releases from shows like Basel World and SIHH unveil their novelties. One of the realities of watch collecting and enjoyment is that while there are some people who can afford to purchase new watches without selling, many cannot, and there is very much an ethos of "one in, one out" to balance.
There are a couple of singularly unhelpful myths circulating about grey dealers which deserve to be addressed:
"The grey market "profiteers" by selling sought after watches far above RRP."
There's no denying that popular watches far exceed their retail prices on the grey and private markets. We see it most often with professional and sports watches such as the steel Rolex Daytona 116500LN, GMT-Master II 116710BLNR/BLRO, and Patek Philippe's Nautilus and Aquanaut Variants. The 5711 in blue being the most notable candidate. However, the idea that grey dealers get hold of these pieces at retail and then proceed to relieve customers of £10,000+ is, in fairness, pretty laughable. There isn't a large margin in these pieces. They are purchased at prices dictated by customers who have bought at RRP and wish to sell at profit while the models are hot. If dealers want to bring these pieces into stock, they can pay double and over. One of the statements that we hear most often is "but RRP is £xxxx. I could buy one from <insert brand>." You could, but due to spectacularly restricted supply, you'd be waiting for ten years if you weren't politely advised that the waiting lists were closed.
"Fly-by-night wheeler dealers."
Not so. Many of the well established and market leading grey dealers were born though watch obsessives building a business from their passion.
The wealth of knowledge and downright geekery is unsurpassed, particularly when comparing to spotlessly turned out high street staff who have been known to advise a customer against a Datejust because "they don't have a battery so sometimes stop" (true story). If there is one thing that we know, it's our watches and all the minutiae that this familiarity involves. Some grey dealers have been in the position of advising authorised staff on how to spot replicas and fakes, and yet...
Keeping Watches Alive and Ticking
The other issue which creates numerous clashes between manufacturers, their agents, and the wider market is servicing. Many people choose to have their watches serviced and repaired by independent centres. Waiting times for brand attention can span from 8 weeks to 6 months, and servicing is undertaken production line style with a watch passing through many pairs of hands from disassembly to final polishing on completion. It can also be eye-wateringly expensive. More to the point, we have seen a number of brand serviced watches coming through our doors which have leaked, failed, and on one occasion arrived with a chunk of metal missing from the case and a rightly furious customer who was advised that it was "already there" despite it being a dazzling bit of damage on an otherwise thoroughly mellow titanium watch, with a crown guard, in case you were wondering which umbrella such horror stories are emerging from.
You pay for the name, not the expertise, as with many things in life. Independent servicing tends to ensure that watches are taken care of from start to finish by one pair of equally well trained and experienced hands. No brainer right?
This is where strangling the supply of parts comes into play, to maintain serving revenue.
I have to say at this point that I DO understand the move. Brands want to protect their income, but at times this level of dogmatic preservation comes at the expense of both the customer and the watches.
People come by their possessions in different ways. Outright purchase, flipping and trading, inheritance, gifting, all sorts. A good automatic watch should last a lifetime, if not several which is why they're so often handed down from parents and grandparents.
So what happens if in the course of 5,10,20 years financial circumstances change? It isn't like we find ourselves in the most stable of economic climates.
Would people prioritise spending £500-2000 on servicing a watch at its point of manufacture? Would they dump it in a box in a broken state? Would they look for affordable and reliable servicing with equal guarantees? Bit of an obvious answer there.
The obstructive practice of rendering watches obsolete in order to maximise profit isn't a pleasant one. Fortunately with modern marvels such as 3D printing and high grade unbranded parts, it isn't blocking people from extending the lives of their watches, and that has to be considered a positive for the consumer.
Would it not be infinitely better all round if manufacturers, independents, and greys worked together to keep the watch wheels turning?
There is enough knowledge and skill across the industry to collaborate under a ceasefire to benefit ALL watch lovers and their collections.