Friday 8 September 2023

Luxury Watch Brands Begin Officially Certifying Pre-Owned Watches.


Whether you noticed it or not, luxury watch brands have just started lowering the metaphorical bar to ownership with certified pre-owned watch programmes.  Rolex is already on the bandwagon, as is Audemar's Piguet, and industry rumours indicate this move will be followed by many other brands also.

The marketing around this move suggests it is an altruistic measure to help those who want a luxury watch but can't get one due to excessive demand.  See Rolex who said it was a "tangible and immediate opportunity to become part of the world of Rolex for consumers".  That's all well and good, but we suspect the true motivations are different.

Most luxury watch brands create artificial scarcity, as do most luxury brands generally.  They restrict the supply to ensure demand always outstrips it, and have devious sales practices like minimum spending thresholds before buyers can easily access a model, and extraordinary wait lists of years in some cases.

This presents a problem for these brands, who no doubt have asked themselves "how can we monetise this army of devotees waiting for our products while also retaining the exclusivity of retail stores"?  the answer we suggest they have come up with is a new racket, certification of pre-owned watches.  They get to charge certain authorised dealers a fee to "certify" the watches, which then allows the dealers to charge more to consumers.  And thus, a new money making scheme is born.

Consumers should take this as a bad sign.  There has always been a second hand market, this will not bolster it, it will challenge it, and seek to extinguish it.  Expect prices to rise, and possibly, at some point in the future, the resale of watches not "certified" to be forbidden.

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