Another solution is that instead of dumping their old inventory to the Grey Market, they can sell those same watches to authorized retailers in bulk. This could appeal a lot more to the consumer’s side. Brands can also lower the original price if they’re not selling at current prices. Especially if the demand is of 40,000 watches, instead, making it less than the required amount would be more beneficial. If a large manufacturing company is capable of making 50,000 watches, it doesn’t mean that they should. Usually, these brands cut off their supply from the offending authorized retailers and deprive the market of their goods. Only occasionally, you can find them on the Grey Market, and even those watches are purchased at a suitable discount and then sold at or very close to the original price.
That’s how these brands stay off the Grey Market. If one thing is to be avoided, it has to be over-manufacturing. Secondly, the brand should be loyal to the authorized retail network. Hence, there’s no need for them to sell at discounted prices. The products of these brands aren’t easily accessible the demand will either meet the supply or outweigh the supply. These are rare brands to see on the Grey Market. How Should Brands Avoid Selling to the Grey Market?īrands like Rolex and Patek Philippe have an annual inventory in the 90 percent range. For example, if an authorized retailer sells $100,000 worth of watches to the Grey Market, the profit might only be $5,000 to $10,000, but the advertising will give it an additional $5,000-$10,000 profit. The catch is, no matter where the watch gets sold, it’ll add to the advertisement profit. If you’re browsing online and find a watch with 40 percent or more off, the chances are that it’s probably a product of the Grey Market. Some Grey Market dealers have contacts with authorized dealers and can actually order or demand a specific watch. This is done to get rid of old inventory and to gain short-term money flow. When retailers in foreign countries liquidate their inventory, it ends up in the Grey Market. It’s actually the brands themselves that give the market what they want. The chief executive of Longines, Walter von Kanel, is using a group of private operators to track down the retailers that sell their goods at the Grey Market. Many leading companies are trying to reduce the loss that occurs in the industry. When these brand’s spokesperson walks into the shop of an authorized dealer, the first they get to hear is, “My clients are buying you watches at lower prices online, so I can’t sell these here anymore.” or “Why shouldn’t I buy your watches from the Internet where they’re sold at a much less price?” This causes a great plummet in the sales of the distributor. It also causes issues for the distributors of high-end brands, whose main goal is to make deals with authorized retailers. Although the sound of discounted luxury watches would be like music to the consumers’ ears, these high discounts damage the careful fabrication of the prestige this luxurious industry holds and makes it much harder to sell products at their original price of retail. More timepieces make their way from the Swiss dominated official retail industry to the Grey Market where they’re sold with surprising discounts.
The Internet has given an opportunity to these Grey Market dealers to make a prominent presence. These transactions at that time had almost little to no effect on the authorized retail market, other than that you wouldn’t even know you were purchasing something from the Grey Market.īut now, times are different, and the Internet has a big impact on the transactions of these watches. Before the invention of the Internet, this market existed in major cities and storefronts. Once a retailer has excess inventory, he could make a proposal to the Grey Market dealers, with heavy, daunted prices. This allows consumers to get their hands on products such as a diamond-studded Rolex at a price that’s almost $10,000 cheaper than the original price. Over the years, this industry has bloomed into a multibillion-dollar one. One of the biggest stocks that are traded around in the Grey Market comprises of watches. This market allows trading to take place on suspended stocks or before official trading in the white market starts.
The goods are usually sold at a much lower price than the price they’re sold at by the authorized sales market. These goods are neither illegal nor counterfeit. The first question that arises is, what is grey market anyway? To the unacquianted, a place where the goods or products are traded outside of the original manufacturers authorized distribution channel is called the Grey Market. You must have heard someone advising you to buy grey market watches.
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