If you’re even remotely into watches, you would know that there has been an overall “shortage” of stainless steel models. This rings true especially for, what I would call, the 3 pinnacles of watch collecting, Rolex, Audemars Piguet (AP), and Patek Philippe. A few years ago, you would walk into Rolex and easily be able to purchase a Stainless Steel GMT or submariner, but now-a-days, authorized dealers (AD) will simply smirk and nod “sorry, no stainless steel sports models, only Datejusts.” Keep in mind most of the stainless steel Rolexes retail under $10,000. What about AP’s and Patek’s though; many of those stainless watches retail for $20,000+? Why can’t we get our hands on those models?! Are there really that many people out there with hundreds of thousands of dollars liquid that they can afford to buy out all these stainless steel models? But will happen now with the coronavirus outbreak, with the whole world under quarantine? So many people have been laid off or are on furlough, this will change life as we know it… rather knew it for the past few years.
It has been rumored that in recent years, Rolex has sent out letters to their dealers on how to prevent selling to grey market (non-AD) dealers in addition to holding back inventory. Drying out the grey market by not delivering watches to dealers might be a solution, but, in my opinion, these watch companies have only helped business for these grey market dealers. I also don’t necessarily believe that these watches weren’t shipped to dealers, I believe that these dealers used these rumors to their advantage.
Let’s talk figures. Back in the day (like 3 years ago) you were able to get your hands on an excellent condition pre-owned subs for like $6000 – $7000 from a grey market dealer. Today, those same models in the same condition will get upwards of $7000 – $10,000. Let’s talk all-stainless steel Rolex Submariners, which retails for $7500 – $9050, will fetch anywhere from $10,000 – $20,000 through the grey and resale market! Let’s talk AP and Patek. Patek Philippe’s Nautilus retails $35,000+ and pre-COVID19 were selling from $80,000+ on the grey/resell market; I had even seen some pieces over $100,000, like a Patek 5980! AP, watches that retail in the $20k’s were re-selling in the $40k’s. With those prices, many of the grey market dealers are paying people retail or a little above retail to purchase said models and then jacking up the resell prices!
What’s happening during and what will happen post-COVID19?
Watches I’ve had difficulty getting, watches I’ve been told that I wouldn’t get unless I dropped $50-$75k on OTHER pieces I didn’t necessarily want just to get the chance to purchase those coveted models, have suddenly appeared and are now available. For example, the Rolex GMTII Root Beer and GMTII Pepsi I have been trying to get my hands on since their release, through my AD’s where I have what they call “buying power” (spent thousands on watches in their boutiques) still wouldn’t sell me those damn watches. NOW, suddenly, not only have I been offered both watches, I have been offered not one, but TWO Root Beers and one Pepsi! Naturally I purchased 1 Root Beer and the Pepsi, but I’ve been so tempted to grab the 2nd Root Beer because I truly believe the price will not only go up to where it was post COVID19, but shoot up even higher and here’s why.
This Quarantine period has completely reshaped the way in which people will spend money. For years, we have been accustomed to a bullish market, low unemployment rates, higher incomes etc. Suddenly, out of nowhere, our markets crashed and now it’s a bit volatile, millions of people have been furloughed or laid off, on the real estate side of things we’re sorta at a stalemate, all retail has been shutdown and stores/companies have had to adapt and will have to figure out a way to make up for lost revenue. Let’s talk Rolex as the example for what will potentially happen across the board. Rolex has closed their factories during the pandemic to which they have shipped out whatever inventory they had to which the AD’s magically have stock. Now, instead of pressuring clients to spend a certain dollar amount to get the chance to buy the coveted stainless steel (and other) models, AD’s will reach out to clients with established rep-ore and finally offer up those special pieces such as the Root Beer and Pepsi. By doing that, the stores will not only maintain some sort of inventory in their stores for when they open, but they will be making sales during these uncertain times. So what does this mean post-pandemic? Well, brands will truly not have that much inventory, AD’s will really struggle getting new pieces to which grey market prices will starting creeping up once again; however, theres a good chance that they will go even higher than they were before.
Okay, my rambling is over, let’s take a look at some of the pieces in our collection.