natesen wrote:
Roffensian wrote:
lsaenz wrote:
I would bet that Breitling is well aware and has no issues with Costco selling their watches, just think how much more money they are making from them, the bottom line with any business.
They are making precisely $0 from Costco.
Breitling makes money when the watch is sold to the AD, when the AD sells to someone else it is the AD that makes money. Breitling simply doesn't seem to care about grey market sellers, whether that is an appropriate response is a different debate.
They aren't making any money from Costco directly, but they are no doubt increasing their overall sales and indirectly making more money by not cracking down on grey dealers such as Costco. Allowing the grey market channel in turn allows Breitling to sell more watches to the AD's who are dumping watches into the grey and then purchasing different or additional watch from Breitling that they may not have been able to buy if slower selling watches just sat in their displays. So indirectly, Costco allows Breitling to make more money. Breitling doesn't seem to care because they already made their profit from the AD which as you said is a completely different debate.
This isn't COSTCO specific; it's gray market in general. And COSTCO is by no means a major player in Breitling gray sales.
Further, most luxury brands feel gray market sales undercut their pricing schemes and AD contracts. Some, like Omega(Swatch), have fought this battle and won (Omega/Swatch V. Costco, United States Supreme Court). Swatch is a large enough conglomerate to wage that legal battle. Breitling prefers to wage war with their ADs, which they do on both discounting and gray market dumps. Plenty of Breitling ADs have lost their contracts in these areas, which Breitling would not do if the practices were viewed as beneficial.
ADs dump to the gray market when they have difficulty moving inventory. Breitling would prefer strong ADs over weak ADs who must make inventory dumps.
So, no, Costco displaying a couple Breitlings in most stores and the gray market in general, do not benefit Breitling.
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