zOwie Omega Discussion Forum

Thank you, John: My point exactly. If Omega sells an AD a quantity of watches w/ official serial numbers, it seems to me to be a simple matter of closing the loop via audit at the end of the year. Which were sold (require AD to confirm via warranty cards), which are still in inventory. End of story.

Only it's not. There IS a little more than just volume, in my opinion. It seems to me that the "margin" on a gray market watch for the OEM is higher than that of a watch legitimately sold through an AD, since there is no longer a warranty obligation.

Two reasons to support gray market for the OEM. You've discussed incentive(s) to AD. But the ultimate consumer's loss is in depreciation.

One of the things we all buy, whether it be watches or cars or whatnot, is "residual value." Market forces come into play on that. I expect my Seamaster 2531.80 to depreciate from what I paid, MSRP or the discounts you and others have discussed. But gray market watches lower the starting point directly, and in terms of flooding the market w/ watches at that price point.

As I mentioned w/ my Hasselblad experience, I see a big difference between the gray market watch purchaser and the "used" purchaser. I see nothing wrong w/ purchasing a used watch, and I encourage it. Selling my used watch frees me to move up. It lowers the barrier to entry for the consumer try out Omega and work toward improving that position w/ a "new" watch later (like we did in high school, starting out w/ used cars first, then a new car purchase marked the point at which we called ourselves "established").

But when gray market watches are put so directly on Omega, as I think has emerged here, John, I think it simply becomes an alternative distribution channel. Nothing more, nothing less. Let the buyer purchase a watch w/ less "bells and whistles" (in this case, "warranty"), if it's available and he wants it.

In my (tentative) opinion.