What are grey market watches? How it works

Are you new to the watch world? You heard the watch people talking about “grey market watches”. So, what is this grey market? Should you buy watches from grey market dealers? Let’s dive deeper into this market segment to find the answer for you.

Grey Market Watch Definition

The grey market, by definition, is a sale of a luxury watch through a seller that hasn’t been approved by the manufacturer.

Grey market watches are sold outside the distribution channels that the brands and authorized dealers (ADs) have agreed upon.

It happens when an independent dealer gets a watch from an authorized distributor and then sells it from his independent shop.

The grey market sales are not authorized by the product brand. However, it is important to note that the grey market is not illegal.

An example of a grey market watch dealer: Roman Sharf Luxury Bazaar with a tagline that speaks for the segment “At Prices You Have To See To Believe”.

How The Grey Watch Market works

Often times, the ADs are not able to sell an entire stock of watches distributed to them. And ADs cannot go ahead with accommodating new collections until and unless they get rid of their old stocks.

An easy solution to this problem is the sale of these old stock watches to the grey market dealers even if it is not profitable to the authorized dealers.

In a rare scenario, the brands themselves sell obsolete stock to the grey market dealers.

The grey market dealers then resell these authentic luxury watches at a much-discounted rate.

For customers, buying a luxury watch at a lower price than Manufacturer Suggested Retail Price (MSRP) is obviously more attractive. Hence, the grey market watch business is continuously growing. And the brands are upset about it.

WATCH: Super simple illustration and explanation from Atelier De Griff

Benefits and Risks for buyers

Benefits

• You can purchase an authentic luxury watch at a steep discount. (Sometimes for just a fraction of the price listed by the brand)

• The grey market dealers also couple the low price with attractive offers to either trade in an old watch or to finance the purchase.

• You can also purchase a rare watch from the grey market that generally requires some waiting time from the ADs.

Risks

• However, one must be cautious when buying watches from the grey market since they do not come with a warranty.

•  You can never be sure of the authenticity of the watch. Since there are a lot of unscrupulous folks who pretend to be grey market dealers in order to sell fake watches.

• Also, inferior quality parts maybe used to repair the grey market watch in case your watch needs servicing.

So now that you know how this segment works. If it sounds good to you, make sure you always do a lot of research about the dealers before buying one.

If you are buying your first luxury watch, avoid the vintage and the grey market. Find out why: Top 5 Tips For Buying Your First Luxury Watch That You Won’t Regret