Like any healthy ecosystem, it’s good for the luxury watch space to have different types of players that stimulate business. This yields liquidity which generates more profit and more happy owners. From original manufacturers, to dealers, jewelers, wholesalers, brokers, end-users, retail buyers, and watch repair techs, they all keep the industry chugging along.
But the times are ever-changing, and the counter-parties with the greediest appetites are the ones who are starting to be exposed by the era of information, new business models that shake the status-quo, and communities like Watch Trading Academy that unveil the inner workings of the industry behind the curtain to the masses.
For decades, luxury watch dealers and jewelers have been playing games with consumers to manipulate the prices of watches, extort buyers for maximum profits, and keep end-users in the dark about what goes on in the “Boys’ Club” to absolutely take people for all their worth.
The purpose of this article is to expose some of these trade secrets and games they run so you can become aware of them yourself, and at least know what you’re getting into when you source your own timepieces.
For the record, there are plenty of luxury watch dealers and jewelers who do solid business and aren’t out to crush consumers by playing games. There are enough bad eggs out there though still that it’s worth shedding some light on these.
- Bait and switch listings – Bait and switch listings are essentially watches that are left up as For Sale on retail platforms and grey market sites like Chrono24, Jomashop, and Google that show the watch is available for a price now. The only thing is, the watch actually isn’t available and/or in the dealers’ possession usually. They are keeping these listings up as a way to get a buyer commitment and then go source the watch. The downsides here are they can play games. Meaning they don’t have to honor anything you commit to buying. Also, there’s usually a wait time until they can get the watch shipped to their location. Usually, the actual watch is coming from another dealer they know, or a different country. The bait & switch technique isn’t so detrimental to consumers until it comes to realistic price expectations. Consumers believe that they can get a watch for way less than possible for example when they view old listings that have gone stale. Or they think that a comp on the market is valid even though it’s a bait & switch listing that has been left up to skew the pricing erroneously. This can also hurt some sellers too as they are trying to get a fair market price for their piece and come up against friction because of bait & switch listings. You can usually tell a watch is a bait & switch if it’s a stock photo. Typically it’s just one photo and looks like minimal effort was put into it. So keep that in mind
- Tandem Price Market Manipulation – This is a term that isn’t coined much in the industry but I use it to describe what was banned in free markets long ago to prevent monopolies from taking full power over the people. This Price Manipulation comes from dealers who all know each other playing a strategy where they know they have all of or most of one watch model typically that’s very in demand. Then, they all set the price of the market so consumers are forced to buy at the mercy of their request even if the pricing is hyper-inflated. This happens with sport model Rolexes, Patek Philippe, Richard Mille, and Audemars Piguet predominantly, but it’s also been done for limited edition pieces like the Omega Silver Snoopy. When dealers all call the shots and set prices, they’ll pay each other out a portion of the profit as each unit sells so they all make more money together. This isn’t always the case, but it’s been done frequently. Especially if the dealers are all in the same regional proximity. This happens on 47th street in New York City and the Seybold Building in Miami for example. So take the asking prices with a grain of salt when they’re all being held by the same dealers as they know what they’re doing, and will pull strings accordingly
- Non-commitment Deals – What do I mean by this? Sometimes when you are trying to buy a watch from a dealer, they’ll start the discussion with you like everything is normal. But after a while, when you come to an agreement on price, they’ll magically back out of the deal. Or sometimes they’ll make up an excuse as to why they now can’t honor that price. For example, you are trying to buy an Audemars Piguet Royal Oak Offshore rose gold diver, and you get one to $38K. This is a really good price in the market at the time of this writing. So the dealer who may have the inventory or may be brokering it says he’ll try to make it work. Then the next day when you’re ready to pay an excuse comes up. “Oh the customer no longer wants to sell the watch”. “I thought it was going to work, but my manager said we can only do an in-person pickup transaction”. “The market moved so that price is no longer valid”. All besides the last one are totally scams. In the final example, the market can move that quickly and it behooves sellers to pay attention as to not miss out on money but once a verbal commitment is made, word is bond in this industry. You won’t’ find many authorized dealers or large big-box retail giants pulling this stunt. This is more of a wholesaler/ grey market dealer tactic to hustle to make more money. Most would sell their own mother at the chance to scalp an extra grand, so it’s no surprise it does happen.
So these are the types of schemes, strategies, and dealers to keep an eye out for. I bet if you pay close attention when you’re scouting for your next luxury timepiece you’ll see some of these forces at work. If you want to learn more about all the shenanigans that go on in the market, and how to not only avoid them, but take advantage of the loopholes around them, I highly suggest you check out our A-to-Z educational community and courses at Watch Trading Academy. We’re always aiming to protect people from being screwed over and learning how to get great deals on luxury watches so they can enjoy them as assets, not liabilities.
Cheers Watch Clique!