A common question from newbies on the watch forums is what exactly is a gray market watch? They see the term thrown around on the boards and probably wonder what in the world the watch geeks are talking about. So if you always wanted to know but were afraid to ask, read on… In the watch world, just as with other commercial products like electronics, there is a gray market. Just so we’re clear right up front, we’re not talking about stolen goods. That’s called the black market. The gray market is composed of legit stuff that you’re getting from somebody other than an authorized dealer.
In the luxury watch industry the major players like Rolex and Omega rigorously control their network of dealers and regulate what they can and cannot charge for their products. Some would say the big boys can in fact be fairly ruthless with their dealers. If you don’t produce sales at a certain expected level for instance, you won’t stay a stocking dealer for long with one of the majors. More on that point later…
So what is a gray market watch and are they good or bad things? Basically it’s a new watch you got from an un-authorized dealer for (hopefully) a significant savings. This is sometimes as high as 30-40% off the retail price. Most authorized dealers will not discount more than 20% so you might have saved a pretty good amount of cash with your purchase from the gray market. What’s the downside? Well, the manufacturer’s warranty is non-existent when you buy outside their authorized network. In terms of Rolex that means the factory two year warranty is void. Many gray dealers have their own warranties, so this may or may not be a big deal to you. It’s pretty rare to have a problem with a brand new Rolex in the first year or two anyway, but it is food for thought.
Some gray market watches have the serial number on the outside of the watch case removed. This is said to prevent it being easily traced by the manufacturer. Remember when I said the big boys could be fairly ruthless with their dealers? The dealers sometimes move product (watches) to the gray market dealers and don’t want their actions getting found out by the company HQ. That could cost a dealer their franchise. Frankly, I wouldn’t buy a watch without its serial number. It hurts the resale value and my advice is to steer clear of such defaced watches. There are plenty out there that still have the numbers.
So, is a gray market watch a good or a bad thing? I’d say it just depends on what you want. If you’re looking for top value, it can be a very good thing. Just buy from a reputable seller and like I said before, avoid the watches with no serial numbers. The good sellers will stand behind their products with a warranty. The boxes and papers are another issue. If the watch comes with them, great, but if it doesn’t I don’t really care. Although it can enhance value down the road to have “all the goodies,” the box and papers usually end up sitting on a closet shelf collecting dust. I know mine do. Paying full retail or even close to it for a new luxury watch is pretty much like buying a new car: fun but financially unrewarding. They lose SO much value the minute you drive off with one or in the case of the watch, wear it out of the store. Gray market watches can be smart choices. So get educated about what you’re buying and buy smart.
Interesting article particularly since I've bee trying to search for the answer how do individuals or jewlry businesses (not authorized dealers) get new watches? Is getting them from an authorized dealer the only way they can get a NEW AUTHENTIC Rolex? Like you said Rolex runs a tight ship...don't they keep track of the serial numbers? I want to go gray market in order to save money but don't want to get ripped off!! I believe some of these guys/businesses are for real...but curious how the
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