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The Grey Market Rolex Discount

Today, I happened to notice that Jomashop is selling a large number of Rolex references, many at a discount relative to the official price.
My subjective impression is that this does not happen very frequently, so I wanted to more formally tease out some implications of this development. I assembled a spreadsheet of the listings and ran some numbers.

For this discussion, I will focus on the references which Jomashop identifies as "Men's" (due to the fact that I am unfamiliar with the other references which are listed). Jomashop lists 197 references for sale at a discount relative to list. This is a remarkable variety of watches on the grey market, expecially considering that Rolex contracts likely penalize ADs who resell through third party dealers. The average discount across these references is 10% with a minimum discount of 1% (mostly 36mm Datejusts in precious metals with unique dials) and a maximum discount of 31% (Cellini Pink Dial Automatic Men's 18kt Everose Gold Watch ref 50705RBR). Please note that the average I'm reporting is not weighted by the inventory of each reference (in fact, nothing here will involve such weighting since Jomashop doesn't reveal its stock numbers).

I was curious if the discount was constant across all price points.
Scatterplot of Jomashop Rolex discounts.
The answer is no. Discounts are typically higher for higher priced references, as shown by the figure here. I ran the numbers and, for every $10k increase in price, Jomashop increases its discount by .46% (approximately half of one percent, this result is statistically significant).

Next, I was curious if the discounted references were connected to materials, in some way. The answer is yes. Approximately 85% of the discounted references (168) were in gold or platinum.

Finally, let's turn to the topic of which models are discounted and by how much.
Discount amount by model.
Approximately 91% of the discounted references were one of three models. There were 22 Cellini references, 55 Datejust references, and 102 Day-Date references. The Cellini had the highest discount, at 14.2%. As the figure shows, the Day-Date has the widest range of discounts, with an average of roughly 11.6%. The Datejust had the lowest average discount, at 5.4%.

In summary, these listings on Jomashop suggest that buyers should carefully consider whether they are willing to pay full retail for certain references. At higher price points, they should likely expect a lower price from sellers. I'll also note that the overrepresentation of precious metal references in these discounted listings is consistent with my last piece, where I noted that Rolex' costly foundry may not presently generate the type of revenue the brand expects (hence gold reaching its tendrils into the Explorer 1 design, in a coming piece I will share feedback I received suggesting this may not be the case).

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