Diving Into The Grey Watch Market
2020-12-22

Diving Into The Grey Watch Market

 

Most luxury timepieces sold on the grey market are priced between 20% - 30% less of the original luxury watch’s retails value. For instance, even the highly-rated Omega Speedmaster Pro, can be purchased at a 15% discount on the grey market! As such, due to the incredible cost savings for any budding or experienced watch collector, we decided to dive into what this watch market is and how exactly it functions.

 

When it comes to the grey market, it is comprised of luxury timepieces that are sold by circumventing the approved sales channels. And while most luxury watchmakers like Rolex, try to keep control over their products as much as possible, that proves to be a tricky thing to manage. This is because manufacturers usually end up delivering their products only to authorized retailers and jewelers. These are normally the only companies or brands that are legally allowed to sell their timepieces in online websites or physical outlets.

 

When a shipment is being sent out those watches are usually being shipped out in bulk orders. So, if the retailers receive a bulk order full of models that don’t sell, they have to hold onto the excess stock. As a result, what these retailers do to help alleviate their inventory problems is to off-set this extra stock to other watch dealers, who do not have official licensing agreements with the brand manufacturers. As a result, these dealers end up selling these unsold timepieces at much cheaper prices, through their own sales channels.

 

Most of these retailers often outsource these watches from licensed retailers that are based abroad. This is because it offers significant benefits such as lower VAT, which means the product ends up costing less to import it from abroad than acquiring them locally. Moreover, this watch market is largely unregulated, as even famous watchmaking brands like Audemars Piguet end up buying back used timepieces and servicing them to sell them as official pre-owned products. It is a similar process to how the used-car industry functions.

 

However, you need to understand that the grey market is not the black market. All the products being sold here are authentic and legally obtained. Moreover, these timepieces usually come in their original packaging and with the proper certifications. However, in some cases, especially when it comes to used watches, some components may have been switched out over the years, so not every watch set is fully whole. As such, you need to make sure that you ask your dealer all the right questions, before making that final purchase. As we said, the grey market doesn’t handle any fake or illegally obtained products. However, it’s always better to be fully informed about any prior changes made to the original components.

 

How Do The Manufacturers Deal With This Market?

 

As we mentioned before, most major manufacturers refer having total control of how their watches are distributed and sold and the large price instabilities that come with the grey market are often inconveniencing to watchmakers. As such, the grey markets tends to be a sore subject for them, although they are partially to blame, since they are the ones who control production.

 

However, some leading brands have come up with unique tactics to try and regulate the growth of the grey market in respect to their watches. For instance, Audemars Piguet recently started opening their outlet stores to combat unauthorized distribution chains. Moreover, some brands blacklist some authorized retailers, if they are found guilty of reselling their new timepieces.

 

Can I Purchase A Timepiece From The Grey Market?

 

Yes, you still can! As we stated before, all watches that are sold on the grey market are authentic and legal. However, you should always take your time and do thorough research before purchasing a vintage timepiece. This involves making sure that the watch’s case, strap, dial etc are all in original condition. It’s also possible that the vintage watch may have had some of its components replaced over time due to wear & tear or damage.

 

This is something to consider, especially if you are someone who prefers to purchase a watch that is 100% fully original. Additionally, you can always opt to purchase a custom timepiece from a manufacture that designs OEM watches. These are custom and unique timepieces that are designed by watch manufacturers, based on the client's preferences. This helps avoid spending thousands of dollars on an original vintage watch when you can get the same design at a much more affordable price, or even better, one that suits your personal preferences. In summary, while most people at first glance may be skeptical of the grey market, the fact is that you shouldn’t be. Yes, it may not be authorized in the eyes of the respective luxury brand. However, that doesn’t mean that the timepieces sold are any less authentic.

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