Patek Philippe

Ads do it becuase there know they can get away with it... how do they know... some for reasons known to them will pay X% over list for whatever and hence they have bred and encouraged that practice and if this makes the buyer happy (it sure makes the seller happy than I am happy for the buyer.

For me personally, I will never pay even list for a watch. Just the idiosyncratic scrooge in me and why?  Becuase ADs have also bred the behavior that heavy discounts off list are possible even at the top of the Lange range.  I enjoyed a lot of that last year when well.. things could have been much better economically for everyone.  But the bigger truth for me is... as much as I am watch crazed, there is not a watch in this world that I would die much much less pay list.  If it means I can;t have it.. so be it.  That's very fine with me.  I do a lot of research on the watches that interest me, speak to whom I deem as points of references, research the prices and then set a target price which I very very very rarely breach.  Again, if I get it at the price I have set (and if I get it, the seller must have also deemed it a fair price) than good... if not... that is tough for me.

I guess this approach keeps my sanity intact and me from going bankrupt

So, not a case of right or wrong for me.. just a case of my personal principles in watch collecting... for the sake of my bank account, I hope I never change this part of my collecting philosophy and I hope there will never ever be a watch that I will die for.

Hi, Arthur,

Because it requires a "leap of faith" which fundamentally refuses to be boxed in by reason or rationality.

"value" and "price" are similar.

I feel a Lange Turbograph is worth $1000 to me (I can't wear it, it is too big)

Others feel it is worth more.

A transaction will take place when the action strike range overlap between the potential buyer and seller.

Where it gets muddy is that "leap of faith" start point called the MSRP.

And all around that many many people are more than willing to play games, just like organized religion.

I understand your point, Arthur, and I, in practice, do like you do. (again, see my other comments, I hate hypocrisy so I feel I have to disclose the preceeding)

But I don't heckle, harangue, or judge dealers who ask over retail, I just walk away.

Or risk being a hyprocrite.

TM

that's actually the best way to deal with them and I do tell friends as well and whatever happens after happens...   At the end of the day, buyer and seller decide and both have to be willing and if that is at list of X% above list... so be it... both are (or rather should be) happy.

 

JS

It is correct that you do not have to buy the watch from the AD. You have the right to go to another AD and buy elsewhere. You will, of course, do that if you can get the watch elsewhere for the list price. But IF the watch is selling at a premium elsewhere or is virtually impossible to get, then all the AD is doing is reflecting the market price of the watch, and I actually do not think there is anything wrong in that.

But I am shocked at some of the comments here.

An authorised dealer is not an auction house. They have certain responsibilities associated with that function - such as, for example, an agreement with Patek Philippe to make a certain profit from watch sales. Punto basta.

Any suggestion that there is nothing wrong with shifting their prices either up or down due to percieved market demand is both wrong by contract - and by any normal person's understanding of the way to do business.

you may be right...if there is a specified contract that states a specific profit margin, then you ARE right. However, I do not know that to be the case. If its loose, then by implication that leaves room for the AD to adjust as he sees fit. I just dont know the intricacies of the contract between AD and PP....clearly you may be right.

MSRP is only a sugessted list price. I had many debates on the subject and here is the bottom line. Any AD ( Rolex, is the exception, most of the time) can charge whatever they decide and do not have to answer to anyone. So it is up to the buyer to pay, walk away, or shop around. I would like to hear some real life experiances from members.

A.

They are no business contracts by which an AD must obey to a price structure.  Of course MSRP or Suggested retail prices are published, but an authorized dealer can chose to ignore all of it and set his own prices. 
If the authorized dealer decides to sell below (too below) MSRP, it often leads to animated debates with the manufacturer, but if he sells above, they are no regulations by which anyone can legally stop him to do so. 

However, prices must be displayed, and payments must be received in honest and lawful manners.

This message has been edited by PoyFR on 2010-04-07 08:11:41

to be given (not sure) but whether they are adhered to or not is another story.  I don't think there is any guideline preventing an AD from selling at any level above the max discount level and since thsi is in the Patek forum, I'll cite Patek and if I donlt think they will mind it if ADs sell above list. It adds to the aura of PP of possibly being onf of 2 brands that are best for defensive acquisitions from a resale point of view?

that I am aware of.

There are other carrots and sticks to "manage" street price, but I'm not sure contractual stipulations are one of them.

ADVERTISING certain discounted prices is prohibited in certain markets.

Cheers,

TM

?

been an AD for 27 years until Jan '08, it was never my policy to charge in excess of suggested list price on any piece, limited editions, hard to get pieces, etc. but at the same time, I did not discount the watches either.  In fact, I would not accept any orders for watches outside of my demographic area and there were many who were willing to pay more, but that did not matter. I was a dealer for a specific demographic area and I respected the other demographic areas for the other dealers.

I was never told or was there anything written in my contract that I was aware of as a policy regarding pricing, frankly I never checked because of my selling policy.  I felt it was an honor and a privilege to be a dealer, and I was looking at the long term not the financially rewarding short-term, so I never felt it was right to make ridiculous demands of my clients. Simply, I would not want to be treated in such a way under any circumstance...I feel it's distasteful, insulting and truly uncalled for.

Philippe Stern gave an interview and this subject came up and his response was that the watches are priced fairly and there is no need for there to be any deviation... and I agree with that point.  Clearly, the are a lot of folks who think differently on how to do things and that is their decision.  Money has a lot of influence.

it seems we are in a minority.

And of course, so as NOT to be a hypocrite, I do admit that I do avail myself of discounts, hence I have no grounds to bemoan dealers asking above MSRP.

In that context, it is a "free market" for sellers to ask what they will and buyers to negotiate.

I'd PREFER it be a more "civilized" market where everyone pays the same, but then, I'd hope people only buy if they want one for themselves, and not to speculate or flip.

But we know THAT ain't going to happen.

Being that in many ways I have for a long time be around watches, I can tell you that you are an exception, reading your lines makes me regret not have been a resident of your area.  Thank you for your post here and thank you for your 27 years of service.

 

Let's remember the past, but look to the future!

and to prove it, here is an offer for you, if you do miss that 195 (or any form of regret...) , here is my offer to you, you can have mine for however long you wish to enjoy or amuse yourself with.  Take me on this, anytime.

when I "help someone out" and leave 8 thousand dollars on the table (the retail price, which is what I paid, and EXACTLY what I sold it for, and mostly because the buyer "was too late" and begged me to help him find one, vs then market price) and all I ask in return is that it not come back and cause me grief to have "done something nice" and then it does, because the buyer did specifically something I asked him not to do, and then to not bother keeping in touch as a friend, then that tells me all I need to know about that individual.

On the other hand, I did it for my principles, which, at the end of the day, is all I need to sleep well at night.

So, no regrets.

But thank you kindly for your generous offer!

Hope to see you again soon,

TM 

The very same type of experiences. Kindness
is often rewarded with a punches in our faces.  Better be nasty ;-) till we
find our likes… 


This message has been edited by PoyFR on 2010-04-07 12:15:48

Who I can say has always been very fair to my knowledge...

The only guy I could get a PP at list price when everybody was excited by Speculation...

My Dédé...

Best,

Nicolas

This message has been edited by amanico on 2010-04-07 11:52:37

So I can apply for a PP Dealership and you will vouch for me?... anyway anything will be better than your local salon.

This message has been edited by PoyFR on 2010-04-07 11:55:42

No message body

No message body

Now that is just my very short experience.  Unfortunately, there are too many ADs that have very different pricing structures for the SAME WATCH depending on the customer, time of the month/year, whether they will be able to extend their exclusive distribution or not etc... that force the buyer side of the equation to look for the most fair deal which may not need to be the cheapest in dollar sense but admittedly, price has a very large part to play.

I'm much more sensitive to price now... why? My experience with a high end lange... bought end of 08 at $X.  Today, it is priced about $10k lower in list terms.  Yes, that may be brought about by Lange and not the ADs per se.. but the reality.... I got stuffed.  Again, not due to AD practices perhaps but the same watch today can also have a $7K swing between competing ADs.  So in my case, that difference in the list and what I would have paid could easily have paid for a say.. Rolex Sub and the current discounted price swing example of $7K for someone looking to buy, a Rolex Sub as well.  Just as ADs have to survive and thrive by looking after their margins, I've learnt that as a buyer, I have to look out for me as well as the AD is not going to look out for me.  I consider the excess I paid for my lange as tuition and learning fees for entering this hobby (it was the 2nd watch I bought) and consider it dues paid and undertake that I won;t have to pay unnecessary excess again or at least not consciously.

Just sharing my perspective of the buyer side of the equation.  It would be much easier and less tiresome for the entire equation IF ALL ADs consistently had your pricing practice.

else, but as a dealer, I felt obligated to provide a level of service beyond the price of the watch alone, service that should be expected from a such a luxury product .  Service that I, myself would expect had I paid the type of money for these watches... as well as represent the line accordingly (not in the sense of how watches you keep in stock)

When I buy something expensive, and my passions range from watches to guns to cameras and on and on....like a lot of others here, I don't mind paying the price but what I do expect is, if I have a problem,and when I walk in that there is someone who will take care of me  instead of walking in and seeing a cloud of dust from everyone leaving or running for cover. So, I don't have a problem at all with paying list as long as I am taken care of.

An exception to the rule? Seems so.  I wanted every one of my Patek clients to have a great experience with us and their Patek and for the most part, I think that was accomplished.  But at the end of the day, it was more about my clients, not how many 5070's or 5970's we sold or how much money we generated but that the whole process was done the right way. I don't know if that perspective is where the industry is headed.  It has certainly changed as Patek themselves have changed over the years...good? bad? some of both.  But, you know, I am glad to have been a part of it all.

 And, being a lurker here for years before I even signed up, believe me the first post had my hands sweating. 

And IF all ADs had your pricing policy as their business bible, competition on pre and after sales service will then be more important BUT unfortunately for some on both sides of the equation, as Thomas mentioned, its like trying to stop flippers from flipping...

It also does not help the AD's cause, I feel... that servicing of the watch say Patek can be done directly through Pateks authorized service centre at least that's the case where I live... this means the customer is less dependent on AD which given your philosophy, is bad for you but given how many ADs are who sell much more so on "best price" than anything else, its good for the end customer as we are also not held ransom by the AD.  That said, it is also true I am sure that even if the ADs provided the best of service and their is the theority price partiy in the market, there will be more than enough end buyers who will still place too much premium on pricing and haggle... that is not right too I think.. What is the sacred middel ground?  I don;t know... but market forces will dictate in each case and alsmost different in each case and again, at te end of the day, willing buyer, willing seller and we take it from there..

Good to have heard your views Whit and thanks for sharing.

sending the watch in for routine service, at least it wasn't for me.

 Just a few examples of what I'm talking about, in "07, I had three pieces come in for service which were all out of the warranty period, but not by much 6-10 months or so...anyway the three repairs amounted to about $9-10,000.  I called to see if some assistance could be extended to these jobs, but the answer ended up being no, so I absorbed the cost of the service and the clients were never informed about the circumstances and their confidence in the brand untarnished.  I felt it was only the right thing to do, wasn't comfortable believe me, but I placed myself in their shoes as to how they would feel about paying $XXXX for a watch which was so recently out of warranty and the decision was painfully obvious.

The other instance involved a Nautilus which the client owned for 3 years or so, needed to be serviced. Got it back and within 2 months condensation began to form under the crystal, sent it back and within a short period of time the same thing occurred again.  The client was none too happy and wanted a new watch seeing how the service was not taking care of the problem and was upset not with me, but felt that Patek should offer a replacement watch.  It turned out that I replaced the watch with a new one (at my expense) and sent the other back to Geneva where it spent almost a year being corrected which I still have.

I feel certain that other AD's may have had similar experiences but the point is that "service" by an AD can be more than what you might expect and there is value (known or unknown) associated with it.  I do agree that the AD can certainly be bypassed for the service of any watch, but there are some AD's who are more than just merchants, who are passionate about watches and their clients... while I'm sure there are others who don't share that passion but view it in terms of how much amount of money the brand generates for them.

This discussion has been great and I appreciate being allowed to throw my 2 cents in the pot.

once again, I think you stand up in a distribution scenario that sits around.

What you did to absorb the cost is very commendable but for me, I would not have expected you to do that.  Its not good for your business but clearly for you to have done it several times, you have found that it is presumably through repeat sales.  You should make it a note to let your customers know what you have done.  You owe it to yourself and your business.

Whit, one point though.. while you have absorbed some of these costs which the customers should pay for (except the 2nd scenario where it did not function well after service.. the brand should have made good and there should be an after service warranty?), I think you also mentioned you sell at list which also implies to me that you have the "funds to do this" from the lack of discounting.. BUT.. you still did not have to absorb the cost and that is commendable.

And for ADs that sell by discounting, they obviously would not have the margin to absorb any of this but in the cases you mentioned, I do not believe they are obligated to nor should customers expect them to. I would not.. BUT.. and there always is a but .. it would help to establish a deeper and more meaningful and hopefully longer term recurring relationship with that AD and that would justify paying more.. but still not list and above list for me BUT.... that's just scroogie me   Ae speak however in black and white and there are of course many shades in between that considerations will need to be adjusted for.

As for the repair aspect of service, that actually is the most important for me....If I buy something faulty and the manufacturer takes pain to move away from their responsibility (by that I mean taking a silly amount of time to fix it, stone walling, not answering emails etc), it's literally a life long ban... I have had excellent experiences with Chopard and Embassy MIH and they stand by their products 1 million percent.  I have friendly discussion with Embassy still on prices for pieces I am interested in and given how they have served me despite being half way around the world from them, I make it a point that I will always check with them for any pieces I am considering.  It may not be much but that it how I show "loyalty" to ADs from past experiences.

Its been good chatting with you Whit!

Hi,

I have read several of the comments regarding over retail charges for PP. I have a modest collection and have wanted a PP for some years but have constantly been put off by what appears to be price gouging for these watches. I recently looked at 5970R's with a list of $103k selling for 135 up to 150. Is it possible to get a PP like this at list or below as some have commented here?

Dr Palmer

as the ADs that are doing it are probably doing it becuase they know they can do it and it'll still sell.  Perhaps past experiences tell them this?  So its down to you and how much you want it I guess.