Paying retail prices for luxury watches suck. Paying over retail sucks even more! Should you do it?
When a luxury watch like a Rolex or Patek Philippe sells for a higher price than retail price, it's obviously because the demand is higher than the supply for that particular model. Nevertheless, I broke up the categories into two:
Discontinued Watches
Low-Supply, High-Demand Watches
A perfect example of discontinued luxury watch models that sell over retail is the Patek Philippe 5711 in stainless steel. Even though the watch has a retail price of $24,700, the watch now fetches close to $50,000 in the secondary (or gray) market. That's steep!
If you want to buy a 5711 right now, you have to pay over retail. The thing is that, in my opinion, the price of that watch will probably just continue going up over time, so if you're interested in getting it, you gotta ask yourself, “How much do I really want it?”
Another example I use on the video is the Patek Philippe Nautilus 5980 in steel.
An example of a new watch in the low-supply, high-demand category is the ceramic Rolex Daytona. You know, the one with the 5-year waiting list!?
People are currently paying $5,000 over retail for that watch! They are also getting on that 5-year waiting list. For Christ sake, the watch might actually be cheaper in 5 years!
Would you really accept a market price of $19,000 to $20,000 for a ceramic, stainless steel Daytona?!
For watches in the second category, the possibility of prices dropping over time is very real (unlike for the discontinued category).
Another two examples I use on this video for watches in the low-supply, high-demand category are the Rolex Hulk and the Rolex Batman.
So back to the question, “Should you pay over retail for a watch?”
In my opinion, it depends. If you're obsessed with the watch and really want it, I say go for it. You only live once, right?
If you're more prudent when it comes to buying your watches and see things more from the point of view of a watch investor, then you might want to hold off before pulling the trigger – especially if the watch is in the second category above.
But what's your personal opinion when it comes to paying above retail for certain pieces? Let me know in the comments below and make sure to share this video with someone that loves high-end watches.
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