There are some watches in current production which are very desirable. Some of these have astronomical price tags. But there are some which have more modest price tags. Today we focus on the latter. But only those which are very difficult to get. Of the six on this list, only one is a limited edition, and only one retailing above S$20,000. But all have long wait lists, and almost all have appeared in the grey market at above retail price.
Leaving out the expensive and those with very small limited editions, we look at six which are difficult to get. They are the Rolex Cosmograph Daytona in SS with ceramic bezel, the Rolex GMT-Master II in SS “Pepsi”, the Omega Speedmaster Professional “Ultraman” (Limited edition of 2012 pieces), the Patek Philippe Ref. 5711/1A in SS, the Tudor Black Bay Bronze Blue Bucherer edition, and the Citizen Chronomaster.
The grey situation
We start with the unsavoury business of the grey market retailer. Some of these are the so called gentleman dealer, a term coined perhaps by our friends at Watchonista. These flip watches because of an ad hoc opportunity, but do not pursue it on a consistent basis. But also increasingly, used market dealers have added BNIB (Brand New in Box) to their inventory. And we see the emergence of a new breed of professional grey dealers who specialize on capitalizing on the market demand/supply arbitrage. For us, we find the grey market distasteful and abhorrent for the following reasons:
- The grey market does not contribute to brand development in any way. The only reason why these dealers exist is because there are some collectors who are prepared to pay a premium over difficult to obtain watches. Their motivation is pure profit, and they are able to arbitrage the difference because of under the table tactics they employ to obtain the watches. This may involve the illegal offering of cash bonuses to the sales people who work at Authorized Dealers. On the Authorized Dealer books, the watches are sold at retail prices, but the sales people are motivated to prefer to sell to grey dealers due to this under the table bonus. As a result #2 happens.
- The grey market prevent real collectors from gaining access to these desirable pieces. We have, however seen some positive changes which suggests that some retailers are trying to control this situation. One recent example is what is practiced by Max How, the owner of Kee Hing Hung in Singapore. Max ensures that each of the rare pieces are sold at full retail to real collectors by a detailed review process which frequently involves background checks and interviews. In a recent conversation with Cortina Watch Executive Director, Jeremy Lim, he told Deployant that he personally approves each client which these watches get sold to at retail. We have also seen Omega acting to delete duplicates from the list of applicants for the recent Speedy Tuesday release, and offering these to names on the waitlist. Are these methods and actions fool proof? Perhaps not, but we support it because it limits the extend in which the watches end up in the wrong hands.
As a site for collectors by collectors, Deployant urge our readers not to pay above retail for any watch. Cultivate a relationship with the right Authorized Dealer. The word customer is a derivative meaning “one who purchases goods or supplies, one who customarily buys from the same tradesman or guild,” from Anglo-French custumer.
In the meantime, let’s take a look at the six watches which make this list.
As described, the criteria we apply are the following:
- Highly desirable watches but difficult to get.
- Modestly priced. We understand this is a difficult line to draw. So arbitrarily, we draw this line at S$20,000 retail. This excludes the mega buck pieces like the Richard Milles. But we do make one exception in our list: to allow for a watch retailing just below S$40,000.
- Not limited editions. In our list, we make one exception to this rule. Only one watch is a limited edition of 2012 pieces, which in our minds is a mitigation as this is a rather sizable number.
- Sold above retail in the secondary market. Again we make one exception to this in our list.
We will not be describing each watch in any detail. Full reviews of each is found by clicking on the link in the sub-titles of each watch. Grey market prices are roughly estimated by quick searches on Chrono24 for BNIB watches.
Retail price: S$16,600 inclusive of GST.
The Rolex Daytona was released in Baselworld 2016 to great applause. The ceramic bezel, previously only available in precious metal, has arrived at the stainless steel version, and the aesthetics are very attractive. The Daytona, particularly in steel has been the elusive watch for the last couple of decades (at least). All versions of the watch have consistently achieved prices which are above retail in the secondary market. The latest Daytona is no different. The waiting list on many Authorized Dealers for the regular Joe collector is anywhere up to 10 years, often more.
For almost all collectors, being allocated a Daytona and not to have to pay above retail is like winning the lottery. And while most have a preference of either the white dial or the black dial, almost all are just happy to buy whichever is available.
Retail price: S$12, 430 inclusive of GST.
The second entry from Rolex. The Pepsi is also considerably constrained that the grey market prices hover at about 2X above retail. The watch was released relatively recently at Baselworld 2018, and limited stocks have been released into the market steadily since August this year, but the demand outstrip supply and there is a rather long waiting list.
We could, perhaps have filled the entire list of 6 watches with the Rolex sports models, but we stop at two to illustrate. Truth be told, the Rolex Sky Dweller, Sea Dweller, GMT Master II in two tone “Root Beer”, the GMT Master II “Batman” are further candidates which meet all the criteria we set out.
Retail price: S$9.180 inclusive of GST.
This is the only limited edition (2012 pieces) watch in the list. And it open for sale by application at the Omega site on the internet on a first come first served basis at 6pm Singapore time on July 10, 2018. The waiting list started at about 6:45pm the same day. Official Omega communication states that applications closed after 1 hour, 53 minutes and 17 seconds. The same night, various online sources were advertising the Ultraman at up to 100% over retail. But the grey market prices have settled somewhat. Omega has started delivery of the watches in late August.
We carried an opinion piece on the previous Speedy Tuesday, the first offered by application in 2017. Here is our opinion piece.
Retail Price: S$39,300 inclusive of GST.
The Nautilus is perhaps the most special on the list. As it is also the most expensive timepiece, we have to make an exception on the price ceiling.
The demand for the stainless steel Nautilus is so high, that some Authorized Dealers have taken it off their waiting list, as they do not know when they can fulfill it. We understand that Wempe in Germany is one such retailer.
As a result of the high demand and low supply, secondary market prices have shot up. This phenomena is relatively new. Prior to 2016/17, steel Nautilus were hard to come by, and were trading above retail, albeit hovering at about 50% above retail prices. From the 2017 Patek Philippe price increase in April/May, the demand has apparently shot up, and grey market prices rose to more than 100% premium. This subsequently settled a bit, but the watch still frequently trade for 2X above retail, at a price which is approximately the retail price for the gold version. Though that too is trading in the grey market at a premium.
To this end, we have seen other stainless steel Patek Philippes, especially the latest Aquanaut Chronograph and other Nautilus models also fit our classification except that all are more than S$40,000 retail.
Retail price: CHF3,800 inclusive of VAT.
The Tudor BBBBB is perhaps unique in this list that it is only available through one retailer – Bucherer in Switzerland. Typical grey market trades are offered at about 50% above retail. A similar Black Bay is also offered by Harrods in a stainless steel case with the Harrods green dial, and is also commanding similarly high premiums in the grey market.
Retail: ¥ 330,000 excl Japanese VAT.
This is a remarkable watch, which we think is perhaps the most advanced quartz watch in the world today. Read our full review to appreciate the excellent qualities offered.
Our final selection is also a unique situation. It is not typically found in the grey market at a premium, as perhaps the demand is not as high, but we think this is a highly desirable quartz watch.
While not typically constrained, it is offered by Citizen only in the Japanese domestic market. The company is reluctant to release the watch, which is offered with a rather long 10 year warranty period, outside of the home country. Perhaps we should not blame them for rewarding their home market who have supported them over thick and thin. But these JDM watches have become treasured by collectors worldwide and are difficult to obtain.
We are not picking on Citizen for this practice. Almost all the Japanese manufacturers practice this JDM (Japanese Domestic Model) philosophy. Seiko and Grand Seiko are also in a similar position. Seiko have also previously only made Grand Seiko and Credor for the domestic market, but have begun to internationalize these brands circa 2006. The latest is the branding of Grand Seiko as a standalone brand in 2017. And the establishment of Grand Seiko USA as a independent company as recent as October this year. Bravo to Seiko for taking these steps.
This list is offered to provoke the collector. It is meant as a conversation starter on whether one should pay a premium over retail for a watch which is currently available from the manufacturer’s catalog. And we hope that you will think about why the grey market exists, what it is doing to the industry, and if its desirable from your point of view. Of course, it already clear that from our point of view, the grey market does not offer any value to the collector. And we should shun this market. Please do not pay above retail. Support the brands.
What do you think? Let us know your thoughts in the comments section.