The Breitling Watch Source Forums

Hi all,

What with one thing and another, I'm seriously considering going back to being a 'one watch man' and selling my SOH 46. I am waiting for a call back from my local AD (Watches of Switzerland at the Royal Exchange) about a price. I got it in February and have all of the original paperwork, box etc.

Has anyone else sold anything to their AD? I am probably answering my own question by saying that they'll probably try and give me as low a price as possible to maximise their resale profit? I'm curious as I've never 'dealt' in high-end things before but I guess that they are in the business of making money.

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Hercules

Haven't tried it but I suspect that you will get a better price here / TZ / WUS than from an AD - though the AD obviously offers immediate payment and no risk.

they will probably give you 33% of MSRP

From what I have heard, they pay 50% of MSRP when buying new directly from Breitling

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Rolex DeepSea, GMT Master II TT, Pres 18038, DJ TT 16013
Breitling Chronomat 39mm (bullet+UTC), Starliner SS/MOP (wife)

back with ROLEX

It actually varies a lot from market to market, generally between 45% and 55%.

In almost every market, it is more efficient to sell directly. Any form of middle man adds friction to the transaction, both on the buying and selling side.

You will almost certainly get more for your watch on one of the WIS sites, and will likely get more for it on eBay. As a seller, you are relatively safe if you take certain precautions.

33%? They can poke that then. I'll get some decent pictures and see if anyone on here is interested.

Thanks guys.

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Hercules

Wow – you’ve answered a question I’ve long had. I appreciate the range of 45%-55%, but for discussion sake, if we say 50%, that’s a key piece of information. I had guessed that AD’s pay around 60% - so they’re even more of a rip off than I had thought (when they don’t know what they’re talking about, which is often).

I just don’t think that game can last – honestly, to suggest the role of the AD is equivalent in value to the watch itself…no way. However, perhaps such margins are the norm in high end jewellery? I don’t know, but it seems excessive to me, from an economic point of view. I must admit that ADs are more important for first/second time watch buyers than more seasoned aficionados.

What I would be interested in is the extent to which the ADs contribute to Breitling’s marketing budget. Perhaps some of that 50% goes into catalogues, advertisements, events etc? If not, and the various marketing costs are all in addition to that 50%, then it seems you’re looking at items whose physical value (in terms of the materials, labour, capital costs, corporate overhead required for production, rudimentary distribution etc.) is maybe 25% of what you pay?

Hmmm – it’s tempting to be cynical about that. No doubt, there is true “brand value” in a Breitling, and the image is part of what attracted me, but I just can’t see half of that in the AD!

Sorry, don't agree with that logic at all, at least for North America.

Purchasers expect 30%+ off retail, so the margin is immediately down to around 20%. That 20% has to cover store overhead (rent, taxes, utilities, carrying costs, salaries, etc), commission and profit.

In Europe it's a different story, though there the dealer costs tend to be to the higher end and they generally have more qualified (and therefore more expensive) staff. Not sure what profit margins are like, but as someone who has been looking into the business in North America, the profits are not great on things like Breitling. Get into higher end brands and the math can be easier, but Breitling only works with volume.

Guys the margin is not 50%... Trust me on that one!

Word problem here... Let's say you are fortunate enough to get a 30% discount from an AD. You want to run a business from a Bricks and Mortar store (which BTW a B&M store is required by all major brands to have) and pay the rent, utilities, payroll, and product inventory. Then after the discount, you make a profit of 13% "GROSS" profit, not net. What was the cost of the product percentage wise to the jeweler?

See how long you can jeep the doors open!

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BC

The average markup on most things sold at retail is 2x. Some things are even worse. A bottle of wine at a restaurant is usually marked up about 3.5x. Retailers have a big cost overhead. The best way to avoid it is to buy private party used items, but even then, you're still paying some residual cost for it.

The watch industry is worse than most because the watch manufacturers seem to dislike internet sales in the hopes of 'maintaining their brand'. I think this is foolish in the long term. You can look at plenty of other 'luxury' markets that have been changed by the internet and the removal of friction. How many travel agents are still in business?

Many other niche luxury items are sold online. I can go on B&H's site and order camera equipment that costs more than most of the watches people on here own.

I don't really understand why the watch industry continues to hold on to their old ways. As I mentioned, the travel industry has been transformed. Ask the newspapers and record companies how it is going. Things will change.

Interesting comment Dhalem... While the internet has been the answer for many industries and the death of many suppliers, it cannot be the lone source of direct distribution for many items.

As it relates to the Luxury watch business, if a consumer cannot look, touch, and feel the product they are spending thousands of their hard earned dollars on, they might not develop the required desire to purchase the watch.

Question... Where do the consumers go to see, touch, and feel the product? New product innovations and models are introduced each year.

Answer... Bricks and Mortar retailers.

The major watch brands know this and realize they must get the consumer to see, touch, and feel their product in order to develop the desire to purchase.

How do you think the B&M stores would feel if the brand by-passed their distribution channel and sold direct to the consumer?

As far as the brands not letting the B&M stores sell their product on the internet, this is to protect the investments of the local B&M stores by hopefully keeping the sales local to the store where the product was viewed. Good AD's do get referrals from people all over the world. At that point, they can sell their product to whoever they choose as long as it's the end user thus guaranteeing a valid warranty. The idea of not letting B&M sell luxury watches via the internet helps to maintain profit margins for the B&M stores, thus helping them keep their doors open and continue to purchasing the brands products.

Most folks on this board are savy enough at getting the best deals available.

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BC

+1 on all counts.

Ask George at Govberg (or maybe in fact someone a little closer to this thread) whether the internet has helped his business and I think I know the answer.

You only have to look at the number of threads on here about how people feel differently when they see a watch in person - look at the advice that we always give people lookign for their first watch and asking for opinions - "go to an AD, try one on and see which speaks to you".

Ask George at Govberg (or maybe in fact someone a little closer to this thread) whether the internet has helped his business and I think I know the answer.

You only have to look at the number of threads on here about how people feel differently when they see a watch in person - look at the advice that we always give people lookign for their first watch and asking for opinions - "go to an AD, try one on and see which speaks to you".[/quote]


Agreed...

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BC

Interestingly enough, many high end brands are opening their own retail locations. Apple stores have been hugely successful. Sony has stores. IWC has boutiques etc. Those locations don't always sell that much product, but they do allow the consumers to touch and feel the products.



I've been working in online commerce for 15 years, almost since the beginning. This has always been a concern. Many many brands resisted being sold online. What has happened in most sectors is that one brand has decided to take the risk and sell online, had huge success, and forced the other brands to follow suit. Photography equipment is a good example of this.


This paragraph almost contradicts itself. The B&M's keep the sales local, but then sell all over the world?



True. Also, FWIW, I've bought most of my watches sight unseen, without seeing, touching, or licking it. It's been ok so far.

I will give you 34% of RRP

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"It's not how it's written it's how it's read"