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Rolex fined $100M for preventing its watches being sold online
- deleted 3y ago[deleted]
- dsgnr 3y ago[dead]
- mc32 3y agoI dont see a problem with it. Moreover it improves their employment numbers, lest these clerks go unemployed and “automated” out of a job. It’s a luxury item, who cares? They could require a two year advance appointment and visit to HQ before buying, for all I care. They should put their nose in Amazon’s business of commingling and allowing fakes and swapping products on reviews and that bullshit that does affect the Joels et Maries.
- djoletina 3y agoI agree, the bottom line should be: they should be able to make this decision.
- I_Am_Nous 3y agoThere was (is?) a huge problem with Rolex watches being listed online for scalping prices by authorized dealers so that they would be sold before they were ever even really in the store. It was really hard to just buy a Rolex officially.
- Marsymars 3y agoI'm not really following. Scalping prices = market value. The "problem" is that authorized dealers were selling watches at market value rather than at some other price at retail?
- I_Am_Nous 3y agoStuff like this: https://atelierdegriff.com/2021/02/14/breaking-major-rolex-ad-sued-by-former-employee-for-racketeering-and-selling-directly-to-grey-market/ https://atelierdegriff.com/2021/02/14/breaking-major-rolex-a...
- Marsymars 3y agoThere's a bunch of stuff alleged there, but I'm still not clear on what you think the "problem" is? As this piece about the dismissal of the first case notes: https://nationaljeweler.com/articles/10782-former-employees-file-new-lawsuit-against-cd-peacock https://nationaljeweler.com/articles/10782-former-employees-... "[...] it is not illegal to violate Rolex policies or to sell watches on the gray market." The other allegations (immigration fraud, income tax evasion, etc.) don't seem to be especially related to the market price of watches. If the market value of watches is actually much higher than what they go for at retail, the "problem" of lack of availability is effectively being caused by watchmakers a) making too few watches and/or b) not setting the retail price of their watches high enough.
- I_Am_Nous 3y agoIt's against the Rolex Authorized Dealer terms. Authorized Dealers are supposed to sell the watches retail only. It not being illegal doesn't have much to do with it.
- turquoisevar 3y ago> The allegations made in this case are just about as juicy as they get and puts the spotlight dead center on the terrible practice of Authorized Dealers directly selling popular watch models into the grey market. This practice of course artificially increases the rather silly prices customers have to pay on the grey market in order to avoid decades long waiting lists. I had to chuckle at this. You’d think they’d be talking about loafs of bread in the USSR, the way they describe it.
- I_Am_Nous 3y ago
- bongodongobob 3y agoI think the catch is it's not Rolex that isn't selling the watches online, it's preventing affiliated dealers from doing it. They are controlling other people's business interests. I can see both sides on this one. Rolex feels like it could devalue the brand exclusivity and the dealers feel that it impedes them from doing legal business. I'm not sure how I feel about this one.
- deleted 3y ago[deleted]
- gbacon 3y agoHere’s how to feel about it: MYOB. If the dealers don’t like the terms, they can sell other brands and need to stop tattling to Maman. Of all the problems, busybodies decided this was the important one to make a stand on. Fixing potholes in the roads would be more worthwhile. Kids are sleeping cold and hungry in the streets, but sacré bleu at not being able to point-and-drool for a fancy watch. So-called Competition “Authorities” everywhere can go pound sand.
- bongodongobob 3y agoYeah that's where I lean. I don't think these dealers have a "right" to sell Rolex's. If they don't like the terms set forth by Rolex, don't sell them.
- malablaster 3y agoUnless there’s some evidence that the legal system (which isn’t responsible for homelessness) is enforcing business rules instead of helping starving, cold children… then that’s a false dichotomy.
- SteveGerencser 3y agoAnd that's what we did. I was working for a Rolex AD for about 10 years, and they were an AD for decades. One day they got fed up with the 'rules' and dropped their AD status and started selling Rolex on the "secondary" market. These were never worn watches in original boxes and papers and in no way different than the watch we sold as an AD. Just second-hand. We suddenly had access to the inventory that our customers wanted when they wanted it, and told Rolex to get stuffed. And yes, watching objectively well off people argue about luxury items as if it's important is always entertaining to me.
- LanceH 3y agoAfter extensive judicial proceedings it was found that Rolex wasn't French.
- throwme_123 3y agoThat's a legitimately good use case for NFTs. When you sell valuable physical objects that have a high risk of counterfeiting, the secure way is to associate a "digital twin" of the object that has verifiable provenance and this is exactly what NFTs as a technology are good at. edit: Thanks to everyone that downvoted this to -4 despite the numerous good remarks in comment that spark a solely technical discussion on the topic. Please come over your hate.
- ToucanLoucan 3y agoWe already solved this problem decades ago with certificates of authenticity and standard record-keeping, which if I understand correctly, Rolex (and a number of other high-end watch companies) already employs.
- treyd 3y agoYou don't need NFTs to do this though, you can just use signed commitments stored in some public log.
- humanizersequel 3y agoYeah, doesn't even make sense for something like this to be decentralized, it should be run by Rolex so they can catch edge cases and correct them by fiat
- greiskul 3y agoYup. If your father dies, and leaves you a Rolex, but does make a way to give you access to the keys to the nft, would the Rolex stop being authentic? When we are talking about digital proof of ownership of physical goods, any solution that can fail synchronization of the record due to entirely foreseeable events like death, ownership disputes, etc is a failed solution.
- throwme_123 3y agoGood remark. I think it is simpler to just use a public blockchain that having Rolex properly build "open" cloud services to do that and maintain it themselves over the long run.
- pulse7 3y ago[flagged]
- bongodongobob 3y agoDid you read the article? It's not Rolex, it's the affiliates. Rolex isn't being forced to sell online, they are preventing dealers from doing it.
- rmbyrro 3y agoIt's worse, they're forced to sell in a channel they don't want
- ForHackernews 3y agoFirst sale doctrine presumably applies? If the retailers have purchased stock from a manufacturer, then they own it and they can do whatever the heck they want with it. I think we should be extremely sceptical of any definition of "freedom" that prioritizes the ability of big, wealthy companies to restrict the actions of smaller firms and individuals.
- RajT88 3y ago> First sale doctrine presumably applies? Not a thing in France. Even if it was a case in the US, it is their resellers who are fighting the requirement of B&M-only sales. Not sure where that falls in the "first sale" doctrine because presumably there are contracts involved for resellers. This case is not about owners selling their used watches on eBay or something.
- jrockway 3y agoI don't think "first sale" doctrine applies here. The retailers sign a contract with Rolex in order to buy watches; Rolex argues that the contract can say whatever they want. Since you didn't sign any contract with Rolex, you can sell as many of their watches online as you like. Many people buy Rolexes online.
- deleted 3y ago[deleted]
- hayksaakian 3y agoFor those who skipped to the comments: They tried to prevent retailers from selling products first purchased from Rolex, and then sold online. "preventing its authorized dealers selling new watches online." First paragraph of the article
- fbdab103 3y agoIn America, there is the First Sale Doctrine, which mostly(?) lets me do whatever I want with a product in my possession. What is preventing some nobody from going to these authorized dealers (presumably with no-online-sales agreements), buying up their entire inventory, and then personally offering that online? Just the threat of fakes?
- crazygringo 3y agoThe lack of a profit margin. An authorized dealer will sell the watch to you for retail value, not wholesale value. You can go ahead and resell those online as much as you want. I don't see how you'll turn a profit though.
- tormeh 3y agoGood point. You could probably charge a premium for convenience, but would be hard to make it worth it.
- fbdab103 3y agoBah. Especially for a veblen good where they can trivially institute huge price swings. This site (https://millenarywatches.com/rolex-markup/ https://millenarywatches.com/rolex-markup/) claims Rolex has a 40% margin. I suppose it only works if you can make a deal with the authorized seller to split the online proceeds.
- Blackthorn 3y agoThe dealer is unlikely to sell to such a person. It's an authorized dealer. They don't want to lose that status.
- deleted 3y ago[deleted]
- makeitdouble 3y ago> Rolex’s competitors have not used the same tactics despite facing similar risks. It's interesting that competitors can be used in such a case as a benchmark of what is a legitimate strategy. Which makes it all the worse when they collude or fix a market.
- paulpauper 3y agoAre people still impressed by Rolexes? This is not the 90s or 80s anymore when dropping $10k on a watch was a big move. Things have really exploded post-Covid with influencer culture and wealth appearing seemingly ex nihilo. These nobody, no-name kids seem to have so much money, even.
- kshahkshah 3y agoThink it is having the opposite effect you’re assuming. You might have just gotten older…
- Andrex 3y agoIt all depends on who you're trying to appeal to. There's a big segment of the (male) population that's really, really into watches. Kevin Rose famously got distracted by the vertical for a good few years (I think it was "Hodinkee?" or something equally unserious.)
- metaphor 3y ago> This is not the 90s or 80s anymore when dropping $10k on a watch was a big move. To be fair, you're disconnected from economic reality if you think dropping $10k on a watch today isn't a big financial move.
- deleted 3y ago[deleted]
- seattle_spring 3y agoI interpreted “big” to mean “impressive to your neighbors”, not “big” as in “financially significant.”
- roflchoppa 3y agoI’m impressed with the engineering. But not so much as a “flaunt it” item.
- jurassic 3y agoI don't know about Rolexes specifically, but there is definitely a male subculture of people obsessed with watches who will be impressed by somebody sporting the right bling. I'm not into it, but I can see why many people are given they roll art, engineering, collecting, and conspicuous display of power/wealth all into one.
- sunpazed 3y agoRolex are the De Beers of the mechanical watch world. Scarcity and exclusivity is a great way to market luxury. A Rolex Submariner in the 80s was about $1,000 — these days it’s closer to $12,000. A new Daytona is twice that. While they were never cheap, they were affordable for a working professional.
- paulpauper 3y agobut there are many suppliers of luxury watches
- quickthrower2 3y agoYes it is more like Rolex are the Apple of the watch world.
- sunpazed 3y agoI would argue that they used to be. Back in the 70s a Rolex was seen and marketed as more of a “tool watch” than a luxury item.
- mperham 3y agoApple is the Apple of the watch world. Apple sold 54m watches last year, Rolex an estimated 1m. Apple sells more watches than every other luxury watch brand combined.
- causality0 3y agoSeems ass-backwards to me. Enforcing a specific type of sales experience is much more reasonable than forcing prices.
- quickthrower2 3y agoRolex will need it's watches to phone home then, so they can remote-brick a watch that was sold online. Cough.. Sorry... did I say brick? I mean end the free included SaaS subscription.
- poundtown 3y agodont be a rolex dealer then..pound sand..they should be able to control their brands exclusivity.
- ryanSrich 3y agoThis is why I've always liked Omega. Not as high status as Rolex, but a luxury watch nonetheless, and one you can easily purchase direct online.
- dboreham 3y agoSometimes even from Costco.
- Loughla 3y agoI've had a mechanical Timex camper for years. Legitimately, I think I've had it for 25 years. It has never lost time that I can tell. It was $75? Watches are fascinating to me, because the high status watches are so gaudy and HUGE.
- alpaca128 3y ago> the high status watches are so gaudy and HUGE The ones you noticed
- Loughla 3y agoHow's this for a hot take: Any watch over 38mm is meant to attract attention to itself first, and look proportional on a large wrist second.
- seattle_spring 3y ago> Watches are fascinating to me, because the high status watches are so gaudy and HUGE. This trend has infected shoes for a while too. Have you seen some of the popular Balenciaga shoes? [1][2] They look like absolute joke clown shoes to me, but people pay thousands for them new, and even more resale if they’re rare. [1] https://www.balenciaga.com/en-us/hardcrocs™-mule-black-810531912.html https://www.balenciaga.com/en-us/hardcrocs™-mule-black-81053... [2] https://footwearnews.com/business/business/balenciaga-triple-s-sales-dad-shoes-ugly-sneakers-1202566492/ https://footwearnews.com/business/business/balenciaga-triple...
- 3y ago
- tsunamifury 3y agoRolex, LVMH, Ferrari, and those who try to falsely limit distribution are the path forward for luxury. It’s clear that main stream culture eats up a canvas bag with no defining quality features or a machine made watch that can be copied for 200$ nearly perfectly as long as they feel it’s exclusive. It’s a bit of a bummer because several other brands have tried to sell on actual quality struggle. Artificial scarcity is just too strong a draw.
- deleted 3y ago[deleted]
- wdb 3y agoNever experienced issues getting anything from LVMH. What's scarce there? If you message your sales person they will have it next time you visit the store.
- koyote 3y agoIt's the same thing as the OP isn't it? Try buying the LV tote online. You can't. You have to call to be put on an artificial waitlist to spend $2000 on a bag.
- wdb 3y agoI never experienced a waiting list for LV. I can happily buy a Neverfull Tote bag online. If I order it today I have it on time for Christmas. Definitely not the Rolex experience of years long waiting list. Maybe it's because I message the sales person ahead of time when I go to the store and indicate what I want to see so they get it in the store for me. That's not even possible with Rolex.
- sotix 3y agoThe Hermès Birkin bag[0] is probably a better example. [0] https://en.wikipedia.org/wiki/Birkin_bag https://en.wikipedia.org/wiki/Birkin_bag
- Sohcahtoa82 3y ago
- neighbour 3y agoI own a couple of Rolexes, neither were purchased from an AD simply because I live in a place that has no ADs and I'm not travelling hours to play the AD waitlist game. I say this is a good move. You should be able to sell them online. The second-hand dealers do it and it works fine. This also doesn't really affect the exclusivity of the product either. The ADs still get to control supply and will still probably not sell to people unless they know them (which sucks).
- whycome 3y agoI had to look up AD (authorized dealer). Is it just a watch-world thing to not write it out in full? I’ve only seen it with other tech products and it’s usually written out.
- luxuryballs 3y agoIt’s kinda crazy if they can cite you for not selling your product on a platform that didn’t even exist 100 years ago. I bet the reasoning is going to be very rich and well articulated.
- CrazyStat 3y agoThey’re not being cited for not selling on the internet. They’re being cited for forbidding other people from selling on the internet.
- SmartJerry 3y agoOther people being their watch dealers though. The people who have an agreement with them on things like how they can be sold and at what price.
- TrackerFF 3y agoI have a couple of colleagues that collect watches - and one of them brought in a high-end replica, think he paid around $500 or so for it, and compared it to the real deal - which he also had. Some kind of Rolex submariner, don't remember what exact model. To me, they looked identical. Felt identical. If you mixed them up and asked me which one was which, I'd be completely lost. He then pointed me to some youtube vids of people dissecting them, and it seems like you really have to bring out the microscope to tell. I don't know much about watches, but I'm just thinking that if they are getting so accurate...why would regular people shell out 5 figures for a real one, when you can get those for a couple of hundred bucks? Don't get me wrong - I like artisanry, but at this point it seems like you're paying the biggest upcharge for name, and nothing much else. (As for why my colleague bought replicas, apparently he'd wear those while traveling, in case he got robbed or whatever. Even though insurance would cover the original watch, just getting a legit one from stores/dealers has been a huge hassle. Months of wait time, etc.)
- phamilton 3y agoDid he have some way to keep them straight? Seems like a recipe for forgetting which one is real and which one is fake.
- tedivm 3y agoPresumably they don't have matching serial numbers.
- NhanH 3y agoGood replica is nigh impossible to distinguish with real one without a real one to compare. But they are not identical to the real one. In fact each good replica is manually assembled and you get to QC your actual watch when order (via photos). That is to say if you have a real and a replica to compare, there is no risk of mistaken between them. There would be difference which you could easily recognize.
- krisoft 3y ago> why would regular people shell out 5 figures for a real one I assure you that “regular” people don’t shell out 5 figures for any watch. > you're paying the biggest upcharge for name, and nothing much else Of course.
- jmyeet 3y agoThis is a silly decision and should be overturned on appeal. Who knows if it will be. Manufacturers place conditions on how their products are sold, at what price and to whom. "No online sales" is no different to requiring an authorized retailer to sell something at MSRP or no more than 1 or 2 or 3 per customer or only to local residents.
- dkjaudyeqooe 3y ago> requiring an authorized retailer to sell something at MSRP That's also illegal in most jurisdictions. It's called "restraint of trade" and it's illegal because it interferes with the normal functioning of a free market and disadvantages consumers.
- crazygringo 3y agoIllegal where specifically? It's extremely common, so I don't where it's illegal. There are limitations if you're in a monopoly situation, but Rolex is not that.
- dkjaudyeqooe 3y agoUnited States: Q: One of my suppliers marks its products with a Manufacturer Suggested Retail Price (MSRP). Do I have to charge this price? A: The key word is "suggested." A dealer is free to set the retail price of the products it sells. A dealer can set the price at the MSRP or at a different price, as long as the dealer comes to that decision on its own. However, the manufacturer can decide not to use distributors that do not adhere to its MSRP. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed-requirements https://www.ftc.gov/advice-guidance/competition-guidance/gui... Australia: It's illegal for suppliers to impose minimum prices for the resale of their goods or services. For example, suppliers must not: • set minimum prices in formal policies or agreements offer retailers a discount if they sell at or above a minimum price • refuse to supply retailers that sell below a minimum price • punish retailers for selling below a set price, for example, by taking away a discount or sending a warning. https://www.accc.gov.au/business/competition-and-exemptions/minimum-resale-prices https://www.accc.gov.au/business/competition-and-exemptions/... EU/UK: Generally speaking, suppliers are entitled to recommend retail prices to their suppliers, but any attempt to restrict the price at which products are sold will constitute vertical price-fixing, which is in breach of EU law https://www.howatavraamsolicitors.co.uk/know-illegal-supplier-set-price-products-sold https://www.howatavraamsolicitors.co.uk/know-illegal-supplie...
- mensetmanusman 3y agoThat's so weird. "you must sell online!!!!"
- the_black_hand 3y agoWhy on earth would a Rolex AD want to sell watches online? The regular pieces e.g Submariners are out of stock 99% of the time, and once stock comes in there's waitlist with 500 people. For the more expensive ones that are in stock, I doubt many clients (outside of scalpers) would be purchasing those sight unseen. Doesn't make much sense to me. It bad for ADs and customers, really only benefits scalpers.
- zht 3y agoIt wasn’t always the case. And it won’t always be the case in the future The AD in question lost their status in 2013, way before Rolex mania came about and no one could buy a sub anymore. And given the recent downswing in Rolex prices on secondary markets and the drop in wait time of the hyped watches, it’s quite plausible that soon some models will sit for long periods of time
- deleted 3y ago[deleted]
- iaw 3y agoI had a watch streak. I really like Seiko mechanicals when I need a watch. If I had infinite money I'd get an Omega and then a used F.P. Journe with tourbillon (I found one in Tokyo that was comparable in price to a Rolex). Rolex is the Gucci of watches, every one knows the name but very few people get them because they authentically like the brand (in my opinion)
- nyjah 3y agoIf you haven't heard of The Time Piece Gentlemen, aka Anthony Farer, it's my favorite recent ponzi scheme as he documented the entire thing online. Because of the scarcity of Rolex's there are 'Grey Market' dealers. And one of those dealers just went to jail on $5million worth of fraud, basically stealing consigned watches. What's fascinating about the story is that during Covid the prices of the watches 10x'd for some of them so they were going for insane prices. And this guy vlogged the entire thing all the way up to his bust last month. It's a great way to see and learn about these expensive watches, and knowing the whole thing is bullshit is *chefskiss* https://tv.watchscammer.com https://tv.watchscammer.com https://www.youtube.com/@skerriesrockart https://www.youtube.com/@skerriesrockart https://robbreport.com/style/watch-collector/anthony-farrer-timepiece-gentleman-scam-fbi-1235418450/ https://robbreport.com/style/watch-collector/anthony-farrer-... https://www.latimes.com/california/story/2023-11-08/spending-peoples-money-beverly-hills-luxury-watch-dealer-arrested-by-fbi-for-consignment-scheme https://www.latimes.com/california/story/2023-11-08/spending...
- veblengoods101 3y agoOne thing is clear, don't post about horology or mechanical timepieces here. There's a vocal demographic in HN that does not appreciate them.
- helij 3y agoRolex is seriously overpriced. Not sure why people are so excited about them. Grand Seiko for example has better movements, better Q&A[0]. Is name really worth that much? [0]https://www.youtube.com/watch?v=hKrJOMaFuyA https://www.youtube.com/watch?v=hKrJOMaFuyA
- sonicanatidae 3y agoTo some people, the name is the only part they purchased. The workings could be made of gummy bears and they'd be fine because it's a ROLEX.