We’re in the middle of the greatest watch shortage in modern memory. It’s basically impossible to get any almost any current Rolex (and many OMEGAs, Pateks, Vacherons, etc.) from an Authorized Dealer (AD). The cupboards are bare. We can argue about why that’s happening, but the fact remains: there’s a massive mismatch between supply and demand. And there is an answer: watch dealer markups . . .
Authorized dealers who add to the manufacturer’s suggested retail price rub a lot of people the wrong way. Want to become The Internet’s Most Hated for an hour? Just be a car dealer who puts an absurd markup on a new car and the vitriol comes pouring forth. It’s a well worn trope. Everyone agrees: the Authorized dealer markup (ADM) is an evil, evil, thing.
Wrong. the ADM is good for the consumer. In fact, watch manufacturers should take a page from the car industry and encourage their dealers to mark up desirable watches to the moon.
If manufacturers allow dealers to mark up watches to what the market will bear it would solve the current shortage in one fell swoop. Suddenly, instead of buying a new-in-box gray market Rolex Daytona on Chrono24, you could walk in to your local watch store and buy it yourself.
As a buyer, you’d get all the benefits of purchasing an authorized watch, with full manufacturer support and known provenance. The dealers would make more money – a most welcome shot in the arm after the Coronageddon lockdown and the supply drought.
The manufacturers? They seem OK with yearslong waiting lists, screwing over their customers and vendors while enriching secondhand dealers. Apparently they’re profitable enough. But unhappy dealers and frustrated customers do not a long term future make.
Allowing stratospheric watch dealer markups is fundamentally unfair! Desirable pieces will only go to people who will pay for them! That goes against everything that we care about as watch collectors!
I understand. I really do. But face the facts: how do you think it works today? If you want a desirable timepiece right now and you’re not somebody whom the manufacturer wants to use for marketing (hello Kardashians), you can do one of three things:
Get on a waitlist and wait – If you think you’re ever going to get a Audemars Piguet Royal Oak because you rolled into an AD and asked to be on the waitlist without a pre-existing relationship, you’re a mook.
Buy a bunch of stuff at the AD – Buy watches from your dealer that you probably neither want nor need, a practice that establishes a “relationship” with the authorized dealer that secures the watch you really, really want. This is an authorized watch dealer markup by another name. The only difference? There’s no price transparency.
Buy from a secondhand site – At least your soul is pure, given that you paid a markup to an anonymous Internet Person! How do you think those pieces are getting on Chrono24 anyway? It’s either people who have “great relationships” with the ADs, or those who are kicking some of their profits back (likely both). Do we really want to encourage these assholes? Why is putting third parties in the middle and making them money any better than making the dealers money?
An unrestricted watch dealer markup policy would make the transaction transparent. Do you know how things get allocated in markets (watches, COVID-19 vaccines, etc) when there’s no price transparency? Any way the sellers want. Maybe it’s their friends. Maybe it’s people who bribe them. Maybe it’s only “desirable customers” (i.e. rich and white).
Dealer markups create an equitable system. They reduce access to a simple metric that everybody can understand. Every other way of selling sought-after watches is cronyism of the worst sort. It’s beneath us as an industry.
I also support limitless watch dealer markups because they’d strip away the false veneer of culture and sophistication that grifters have slathered on this hobby. They’d reveal the industry for the money-grubbing conspicuous-consumption rathole that it is. Unrestricted watch dealer markups are the purest, fairest method of allocation. All of us – from the manufacturer to the consumer – should embrace it.