Post by oldhippy on Nov 1, 2019 10:56:41 GMT
On a websites for a grey market watch dealer they sold high-end (Tag Heuer $1,000)
to extremely high-end (Patek Philippe $40,000) watches online at a significant discount.
Notably, their business model was not trying to sell counterfeit watches. Here's how they worked:
Retail markup on watches is very high, there is a lot of room for the retailer to discount and still make a good profit. Let's call it 50-100% markup from cost. Much of the expense of running a high end jewelry/watch store is in the fixed cost - sales people, security guard, high end retail space, lighting, and especially inventory carrying cost (what they pay in interest to borrow money to buy the stock on hand). The retailer would be happy to sell the watch at a much lower markup to a customer, since it's still cash in the door.
So, why does the retailer not discount? Because the brand requires the retailer to maintain a minimum price. This allows the brand to protect their own extremely high margins. If the brand finds out that a retailer is discounting, they will stop selling inventory to that dealer. High-end watches have serial numbers for this exact purpose. The brand knows which dealer was given which watch, and if they find it on sale at a discount, even through a third party, they clobber the dealer.
So, my client's business was to work all over the world buying watches under the table at various dealers at a substantial discount from retail, but still substantially over cost. Then, they would open it up and polish off the serial number so it could not be traced back. Everyone wins, the dealer gets a profitable sale, my client gets a sale, and somebody gets a discounted watch.
1) If you have the cash, and want to impress high-end hookers, buy a $10,000 watch. 95% of the rest of the world won't notice.
2) If you want a watch to tell time accurately, get a quartz watch. Mechanical watches are by definition prone to inaccuracy. The movement starts off fast or slow by a little bit, and as it wears over time it only gets worse. Maybe 1/100 of a second per day to begin with, but worse over time until you might be resetting it a couple of times per year. Quartz is by definition always accurate.
3) If you want a great looking watch that tells time well, get a high quality knockoff. Counterfeit watches in Hong Kong come in two flavors. Really cheap chinese mechanisms which can usually be identified by poor quality in the case and band and should cost under $5, and knockoffs with good quartz movements that should cost you $30-$100 depending on the quality of the case. It turns out it's cheaper to buy a ton of quality movements (mostly Seiko) on the grey market and drop them in counterfeit cases, than it is to make movements yourself at a lower quality. Someone well educated in these things will notice that your fake Swiss watch doesn't have a mechanical "smooth" second hand but instead has a "click" quartz second hand. Some very well educated in these things will appreciate your wisdom. :-)