zOwie Omega Discussion Forum

: end to the supply so why do you think that
: Omega tolerate this activity when it would
: be easy for them to stop supplying?

Simple, watch manufacturers do not make any *more* revenue by stopping gray market sellers. Matter of fact, they would make LESS since they would be cutting off a noticeable portion of the market.

Certainly many of the would-be gray consumers would not revert back to the authorized dealers--either because of the usually higher prices or because they would switch to a different brand that was easier to buy in their price range.

Manufacturers like Omega SA make their revenue from the watch when it leaves the factory on its way to an International Distributor (such as Omega USA).

When you buy a watch from a gray market dealer you are taking business away from the Authorized Network of Dealers for that brand. They are the ones who lose out, so are the ones with incentive to try to kill off the unauthorized dealers. But the authorized dealers have no control over OTHER dealers and distributors for the brand.

Authorized dealer contracts with the manufacturer guarantee the manufacturer will provide some protections. But the effort of stopping gray market dealers can be a significant expense to the manufacturer. So it would be a poor business decision financially to aggressively pursue unauthorized dealers given that it would both add costs and reduce revenue for the company!

Further, since most manufacturers disavow warranty coverage for watches bought from unauthorized sellers, they currently save money by not having to provide warranty work on all of their watches.

So the gray market dealers continue to get supplies. While they violate the business ethics of the industry, they also allow the watch selling industry to thrive beyond what the manufacturer's stagnant authorized dealer networks and archaic distribution and marketing channels are currently capable of.