Patek Philippe

I was recently in New York and was just walking and browsing in the Diamond District.  To my surprise, I saw at least six 5070's. three 5970's, several 3970's, 5960's, and many other complications displayed in various shops.  When asked, they were all roughly priced at retail and included all papers.

I also went in to several large Patek authorized dealers including the Patek Store in Tiffany and only saw basic Calatravas and annual calenders.

I would never purchase these watches through a grey dealer as for me the risk is way too high .  It really is a shame that real genuine buyers do not get a chance to buy such watches directly from authorized deals - I think Patek needs to address this. 

Why is it that almost every other brand has their complications available through their retailers?  The more Patek tries to restrict access....the bigger the grey market demand gets.

Real Shame.

You should adress your complaints directly to PP Geneva.

I am not sure if PP employees read the purists forum.

Only if they receive A LOT of similar letters in Geneva - maybe they will think over their sales policies...

best

erich

 

I'm afraid that is correct. But what can they do ? Most (maybe all) dealers won't sell a sought-after watch to a grey market dealer but they can't exclude the flippers.  I'm pretty sure a lot of guys ordered a Nautilus chrono 2 years ago. When they saw the grey market price a lot of them probably sold those watches to grey market dealers.

Those persons can buy the same watch again 2 years later, the premium will be gone and with the profit they made from their first Nautilus they get the second one a lot cheaper.

 

 

Many of the pieces I see in those same areas have issues..  Wrong color, used quality or way overpriced new resale stuff.  The problem is Patek's popularity worldwide and short of ramping up production or destroying demand somehow, I don't see much that anyone can do.  This post is like complaining that you can't buy a Rolls Phantom Drophead-coup or Bentley Brooklands from your local dealer while passing two or three of them for sale at premium prices on boutique dealer lots in Newport Beach..  It simply is, what it is.

are you referring the prices to the current "gray market prices"?  If such is the case, it's not surprising.  I'm sure some collectors will happily part with their watch for some profit.  On the other hand, if priced at the last MSRP of each watch, then it's surprising. 

The gentleman that posted his faboulous colleciton of multiple datographs and and an incredible collection of Patek Chronos is indeed a very lucky man.  He mentioned that out of all his superb collection, the Patek slpit second Chrono ( 5004 ) and the Lange double split are very close .  However, I could NEVER go out any buy a Patek chrono...not because of the price...but because of non availablity at any dealer.  However, I saw the double split ( which is arguably one of the best chronos around ) at multiple dealers in several countries.  In fact, several dealers had multiple double spits on display!  Now, does the Lange produce the double split in much higher numbers than the Patek?  Like I said earlier, I saw the same amount ( if not more! )  of Patek chronos and other complications this summer - although not at authorized retailers.  So the supply is obviously there....but, the distribution is the problem and I believe Patek needs to address this.

Similarly, the Vacheron Skelleton Tourbillon is also available at many dealers....so, if all these other manufactures can supplythe demand...why can not Patek?  I believe that Patek can and just chooses not too.  It is a family run business so I guess they have the right to do anything. 

Another strange thing I saw twice - at the Patek Tifany store in NYC - they had a 5980 displayed.  When I asked about it - they said it is NOT for sale as there is a long waitlist!!  Of course there will be a waitlist if people just display them!!  Similarly, I was in Thailand and there was a massive watch exibition at Paragon Dept store,,,and the Patek dealer had 5070P, 5970, 5960, 5159, 5980 all diplayed proudly...but again only for display and not for sale!!!  Too funny.

I am really fed up with this habit of Patek ADs.

I even stop purchasing their watch for 2 years after my AD took my 100% down payment
on 5712/1A and promised my delivery within 2 years.
I paid and accepted that condition fully, but 1 year later that AD just called me and asked to return my money back saying that
they could not ensure the delivery within 2 years, though i am  the next one on their queue.

This is almost the end of that 2 years, i went to two other ADs and each of them had sold more than 5 pieces of that 5712/1A in the past year
Tons of people already have it. Grey market displayed it everywhere.
My own brother even bought a piece of that ref. through a grey dealer and have worn it for about a year.
Not even a call from my ADs for me. :-(

I used to be a proud owner of  3970, 3940, 3710, 3711,3919, 5110, 5146, 5100.
I still own those fabulous pieces as of today, but not in the same level of happiness in this brand like i used to be.

I know that there are still so many PP lovers, "considered rich", and "wanna-have one PP in my box" in this world for PP to threat  their customer like this.
We cannot do anything about this alone. and We have to buy another PP anyway.
because it's just Patek Phillipe.
It is what it is.

Just my two cents.

If you can see a lot of these hot watches in the grey dealers, it does not mean that Patek made a lot of these.

It just happens that the grey dealers have collected a lot of these from various channels;
It also means that the grey dealers can sell these watches (probably with great profit) easily;
It also means that the previous "owner" of the watch want to flip it for immediate money too;
It also means that most of these hot models are in the hands of grey dealers instead of the end-users or ADs..

One important thing you have to remember, the grey dealers have a total control in selecting the watches they would like to stock... In constract, ADs don't have a TOTAL control.

Similarly, if you can see a lot of complicated watches from other brands in the ADs, it DOES NOT mean that the other brands made a lot of these...

It just happens that the grey dealers have no interest in these watches;
It also means that the grey dealers cannot sell these watches easily;
It also means that no that many people would like to buy these from ADs and flip it to the grey dealers;
It also means that most of these models are in the hands of AD instead of grey dealers (and probably end users).

In short, if you can see a watch in grey dealers, it means there is a market (i.e. demand) for the watch.

The more pieces for the same model you see in the grey market, the higher the demand it is. It has NOTHING to do with the absolute number of the watches were ever made.

It is also true for the "reverse"....
i.e. the more pieces for the same model you see in ADs, the less the demand it is. It has NOTHING to to with the absolute number of the watches were ever made.

The fact that someone get it from AD and somone don't get it has nothing to do with the availability too... it is ALL BECAUSE of that particular AD.

Hi,

I don't agree to everything but indeed the main point IMO too is that we see many looked after PPs on the grey market because there is a high demand for these watches.

The PP management has been very successful to defend (no longer establish, it has been so long established...) the value and love/appeal of the PP brand in the last 2 decades and it has found a very receptive market demand. This demand now means that PP can't apparently produce enough hot sellers to lower the demand on the short term.

Please keep in mind that there are something like 500 PP ADs in the world. PP makes around 40 000 watches a year. I don't know exactly how many but I think that's around plus or minus 5 000 from the 40 000.  Among these 500 there are many important point of sale that sell watches every week, if not every day!

PP's production has not increased a lot in the last 2 decades, at least compared to the demand on the world watch market.

Obviously with PP being a #1 brand, if not the #1 brand  in the upscale  market, in terms of brand image, you can easily imagine that as a customer you are not assured to easily find any model, specially the hot models.

With the uncertainties on the future of the market (and the difficulties to hire qualified people) I don't see PP doubling its production to avoid waiting lists and stop speculation. There is speculation (grey market as an example) because some people are ready to pay more than msrp to get a watch right away. Keep in mind that it is a recent phenomenon for PP and there is no certainty that it will last!

Certainly if you are a true PP and watch lover that general love around PP is no good for you! Still you can't say that it is PP's fault if their watches are great, their marketing is efficient. They are just successful, that's their role!

Cheers

Dje

of which 12K quartz, so 'only' 28K mechanical

And probably 15-20K of those mechanicals are simple watches like Calatrava's, 3 hands Gondolo's, Aquanauts, 3 hands Nautilus.

A few thousand annual calendars + nautilus 5712 and 5980

So there won't be very much 5070-5970-5004- 5959  - perpetuals - tourbillons - minute repeaters and super complications left

 

 

You said you see Dato's and double split Langes at your dealer. Same with Vacheron Toubillons, chronographs.

And you said 'if those brands can produce enough watches to supply demand, why can't Patek'

Well, that is simple, Lange and VC can only dream of this situation. While everybody wants the hard to get Pateks, Panerai's Limited AP ROO's and new Rolexes nobody seems to care about a new Lange or VC or Breguet.  Patek, Panerai, Rolex, AP has waitinglists because the demand is several times bigger. When Lange launches a new watch like for example the dato perpetual you can go to your dealer and you can buy it within a short time, try to have a 5970 which is a comparable watch and you dealer will probably have 7 clients who want that 5970.

If Omega would make a diver like the Rolexv deepsea and limit it to 5000 pce it would not be difficult to get one. If Rolex would limit the deepsea to 5000 pce, they would all be sold within 24 hours.

 

 

I can't say anything about the Tiffany store but what you said about the exibition in Thailand, this happens all the time. The thing is that those watches are not for sale. Patek (and other brands) want to show those pieces to the public, that way you get the chance to see a 5070P because like you know you'll NEVER see it at your AD.  After the fair those watches go back to Patek Switserland or to an AD, in the last case the watch is 100% sure already reserved for the lucky one on top of the waitinglist.

Hi.  I agree with all of you.  I am one of those suckers that truly appreciate the Patek quality and it's superior watches and the reason why I am complaining is that I can't get my hands on their nice pieces.   It is not the price I am complaining about - it is the availability which is clearly not the problem.  The problem is that even if a grey market dealer is selling a watch for half of the retail - I would NOT buy it due to the many risks involved.  However,  when I inquired all the grey dealers...the prices they quoted were very close to retail or a small amount over retail .  My question is this....if people are willing to pay a higher price for these watches - then why doesn't Patek just raise the prices?  Why not price them at Market value?  I would much rather pay a higher price ( which I always do ) and get it from the authorized dealer.   The supply is there - just in the wrong hands.  Many of you said, that some people buy from authorized dealers...and then "flip" them to a grey market dealer for a higher price.....which clearly shows that these watches are under priced.  Let Patek raise the prices to the market level so all of us have a chance to buy them.  If we buy them at market value - we would not flip them and basically eliminate the grey market.

This is the same question I ask about professional sports league owners.  For example....why do the Yankees sell tickets at lower the market price?  By doing this - they feed the "scalpers" .  So, for me to go to a game....I have to wheel and deal outside the stadium and risk getting arrested!  I would much rather have the Yankees raise the price - and I buy directly from them!

The more these people try to control price....the bigger the black market becomes!  Capitolism!  Let the market forces control price and supply and demand will even out!

 

Ever since passing the diamond district shops in NYC I have been going back and forth deciding whether or not to by from Grey Market or AD.   I would like to share with you what I decided:
I am going to buy Grey Market, because the price was about 25% less than AD and it comes with papers and box (Annual Calender).  If it breaks, it does have a warranty, I just have to bring it back to the Grey Market dealer to send to where they got it from.  Even if I  decide to have it fixed myself by Patek, I will just have to pay to have it fixed, surely it won't cost 25% of the purchase price.  So the worst that happens is that I paid a little less or I break even.  Taking this chance seems worth it considering the long wait and nonsense I have to go through to get it from the AD.   Not to mention the money saved on paying tax.  Just have to use a very reliable Grey Market Dealer.

What do you guys think?

Market values, price justifications etc.are all irrelevant issues as so called "aspiration brands" are concerned. For many of us, the holy suffering of waiting for the uncertain delivery through the AD, worths above anything. Whereas for many of us, worldly power of paying more for the immediate excitement worths what we paid for. Actually it is suffering either ways. The only one who doesn't suffer is the Patek Philippe brand. Either its watches are sold through ADs or Grey Market, out-of-the-factory price doesn't change. And here we discuss and try to justify our desicions whether we buy them from here or there. We are even offering Patek to raise the prices as a solution to GM issue. Why? Over the last decade, it has been raising them beyond justification anyway; and so are the grey market dealers.

Please do not take my above words as critisism to PP or any of you. Contrary, I respect PP for making one of the most successful marketing cases of our times. PP was experiencing the pleasure of being an "aspiration brand" long before the marketing gurus discovered the concept. Aspiration brands are the brands who have the power to make their enthusiasts suffer; very much like an aspirational woman. It is by nature a female; mysthical, uncertain and unreachable. Reachability will definitely destroy her aspiration. Grey market is one of her many legitimate playgrounds to create speculations about herself, thus confirming her existence. And "for the ones like us who are oppressed by the figures of beauty" there is no way but to suffer.

I'm in advertising business for over 2 decades. Among all the pshycological brand analyses I worked on professionally, Patek Philippe is a case on its own. Maybe as a respect to the case, I buy my PP watches from a certain AD. From the financial point of view it is not logical. But we human beings are always and subconsciously impressed by intelligence and intellect, very much like in the Patek case. 

Sincerely

Ahmet

PP is one case of its own.

It actually describes everything here, so folks let's go suffering more.

you don't have to take it back to the gray market dealer if you have valid signed/stamped papers

Do you mean to say you found a Patek 5970 for close to the retail price of the authorized dealer - the price it was sold before it was discontinued, which I believe was $105K?  If it were really selling for that low, when they are selling for close to $200K, some person would have bought it already.
Eric von Schonberg

No message body

You may not agree with them but Patek is addressing the fact that you can buy these watches from grey dealers in their own way.  First, one must understand that Patek can easily sell all of the high end pieces that they can make ... and in fact, they have lengthy waiting lists.  And that is exactly why they require that if you want to obtain one of these pieces you must file an application at an authorized dealer and wait.  Patek believes that in this way they can better identify true collectors as opposed to people who will flip watches to the grey dealers.  So, in effect what they are trying to do is substantially cut down the number of watches available to grey market dealers.  I think Patek believes that there will never be enough of the complicated watches to satisfy demand.  So what they try to do is be very picky about to whom they sell one of these.  Will this eliminate watches in the grey market?.... obviously not.  But they are trying to limit grey market supply by not selling to those who they believe are likely to re-sell the watch.  Unfortunately, the only way that you will see complicated Pateks at AD's is if the supply exceeds the demand....a not likely scenario in the forseeable future.

Glenn

          

This message has been edited by Duke2Earl on 2008-08-22 14:50:48

Maybe PP watches at a price point over $150,000 need to be applied for and all that nonsense.  But that's just mind games that they play with rich people.  However, just check any of the most popular gray market sites and you'll find that the most plentiful brand they offer is PP.  As simple as that.  Rolex, which manufactures many more watches than PP has a pretty tight grip on gray market divertion.  If PP really wanted to cut the presence of their watches in the gray market, they could get it done in no time.  Hell, even mass consumption products such as so-called professional hair-care products excercise gray market control when they want to.  There is absolutely nothing romantic nor sacred about PP, they are driven merchants out to get the largest margin possible at the least possible cost, and they are about the best is the world at it with the exception of cigarette companies and cocaine dealers. 

The gray market is simply a way of moving merchandise that is not moving at the outlets where it's supposed to be sold.  Moreover, some years ago PP tightened their quota requirements for retailers which resulted in more watches on the gray market.  Now, the high ticket watches are the ones that create the mystical image of PP.   If there are people willing to pay more than $150,000 for a wrist watch, hummm, that watch must be something.  It's all pretty basic consumer psychology really; except, that it takes a lot of time and money to reach that level of so-called prestige where people loose their heads and pay the yearly salaries of 200 people in Haiti or somewhere else for a watch.  And as long as there are people who feel the need to be so special that they must own such special watch, well, Stern laughs his way to the bank.

To control the divertion of watches to the gray market, all PP needs to do is buy one or two from any of the abundant and well known gray market sites, read the serial number of the watch, check which was the retailer that originally bought the watch from PP, and not sell him watches anymore.  End of story.  You cut two or three retailers off, the word spreads and the rest will get the message very quickly.  Why doesn't PP do it?  Because they don't want to.  A sale is a sale and the gray market represents a lot of money for them.  After all, gray market or not, they make the same money no matter where or how the watch is eventually sold. 

You want a good watch?  One that will last you until you die?  Then buy a Rolex or an Omega.  The difference split it in two: half for savings, and the other half for charity.  Be smart.

 

  

If they double the list price of their watches, then no one can make a tiny profit by flipping their watches *FRESH* from AD...

In that case, only people who really love the watch will buy it because they have to lose money if they flip it right the way.

Then, we will not see those NIB (or New In Plastic) watches in the grey markets. You will only see used 2nd hand watches (with great discount from the doubled list price). The used market will be heathy again.

However, I doubt it will happen... because it is not something PP would like to see....

Anyone who has been to lots of Patek ADs will notice that you rarely ever see a hot Patek in their front display.  The pieces they have in their front display  languish for months, but many end up getting bought by some naive customers who think buying anything with "Patek" on it will be a good investment.   The rest are typically sent to grey market dealers who sell the not-so-hot Patek pieces at huge discounts,  with the stamp of the actual AD! The grey market customer ends up getting all the benefits of buying from an AD, but at a substantial discount.  Those customers don't really get pieces with much investment potential, but they buy them at such discounts that in a few years they are ahead.

The truly successful ADs figure out pretty quickly that by moving lots of  not-so-hot junk for Patek, they are rewarded with greater allocations of the hot pieces.  So they partner with a grey dealer to move the junk Pateks.  They are resigned to selling these junk Pateks to the grey market dealers for little or no profit over their cost from Patek, because it allows them to be allocated lots of  hot pieces.

But, such successful Patek ADs don't put the hot pieces in the front display.  Such pieces are already spoken for, and puting them in the front display would just anger potential future customers who have to be told someone else gets to buy them.  If you ask most ADs to see the really good stuff, most will not admit that they have such stuff, because, once again, they don't want to upset you when you're told that they will sell it to someone else.

So, how do you get the really hot stuff?  You don't sign up to be added to a list!  Showing that you are willing to be added to a list demonstrates patience, and ADs then know they can please you LAST.  Unfortunately, when something gets discontinued, lots of the folks on the lists  end up disappointed.  That's what happened with the 5970.

When a dealer mentions a list, I make it clear, that I know how the game is played, and that if they want to be the one to sell me the hot piece, they had better hurry up, because I'm going to buy it from the first place that offers it to me.  That's how I bought my 5970.  I went into an AD, looked at a 5970 and expressed an interest in possibly getting one.  I made it clear that I was not going to join a list of sheep, and that if they wanted to sell it to me, they had better hurry up.  Then, I further elaborated about patience not being one of my virtues.  Thet did the trick.  The next time I was in the shop, a few weeks later, I was offered a 5970, which I bought on the spot.

I like working with smart ADs who know how the game is played, and who work hard to secure hot watches like 5970s for their impatient clients.  A few times when I've ecountered less successful ADs who tell me that they will sell me the good stuff if I pay my dues buying the junk.  I tell them directly that they need to be using the grey markets to unload the junk.

By the way, as others have responded, the grey markets often have the good stuff too.  They get it from people who flipt it their way.  Smart ADs know this, and when you make it clear to an AD that you have no problem buying a hot piece from a grey dealer, they  hurry up and get you what you want quickly.

I encourage everyone to play the game and secure the hot pieces they really want, and remember life is too short for Calatravas.
Eric von Schonberg

Eric,

Thank you for your simply awesome explanation!  This was the best I have ever read.