[Method] How Rolex Made Me €11k

 

This is something quite different as it doesn't have anything to do with online marketing or e-commerce in general, and it's something everyone could do BUT it definitely requires having some savings.

How do you make money?

The money-making principle is extremely simple, all you need to do is purchase a Rolex watch from an AD (authorized dealer) and sell it a couple of hours or days later to a grey-market-dealer (non-authorized dealer), or to a final customer, for a much higher price, and enjoy your profit.

Why is this a thing and how does it work?

Since the COVID started, there's been a constantly rising demand for Rolex sports models (those that are made out of steel), which happens to be their cheapest range, anywhere from €5000+ to €15000+ in retail value. Considering the rising demand, and the constant yearly production, ADs (authorized dealers) could no longer fulfill the demand.
There were more and more clients coming to their stores with money in their pocket, ready to buy watches, but no watches in stocks.

As a consequence of that, those cash-ready clients went online and started purchasing pre-owned watches from grey market dealers (non-authorized) or from individuals or collectors who wanted to sell their watches, for a much higher price compared to their original retail value.

In fact, some Rolex watches were trading over retail value since 2015, but the recent demand massively increased the margins between the retail value and the resell value.

If you think that there's only a little bit of speculative profit to be made, let me give you some examples:

• Rolex Submariner (ref. 126610LN) retails for €9500 and sells for €14000
• Rolex GMT Master (ref. 126710BNLR) retails for €10100 and sells for €23000
• Rolex Explorer 2 White (ref. 226570) retails for €8900 and sells for €13500
• Rolex Daytona (ref. 116500LN) retails for €13700 and sells for €35000

These were just some examples great-performing that came into my mind but there's recently been a trend for one of the turquoise dial watches that actually got discontinued, which had been available for close to €6000 and it was reselling for €35000, but from my experience, this was quite a rare bubble effect.

Where do you get a watch for retail that could be flipped for profit?

You can only get a Rolex at its retail value from an AD, but the fun doesn't stop here.
In order to keep clients hooked, ADs created these internal waiting lists. Although these are not an official thing, all dealers are allowed to allocate the watches they receive (which must be sold for retail value) to the clients they pick.

So if you call or visit a Rolex dealer right now, you'll see that most of their display cases or they have some models that are marked with the display-only tag, which means you can't simply walk in and buy one. If you express your intention to purchase a watch, they will tell you that they need to put you on a list and they will let you know once your watch is available.

This purchase-allocation principle is quite common in the luxury goods market. It's the same if you want to buy a Mercedes G63, a Ferrari, a Lamborghini, or an expensive Hermes bag, you won't find one in stock, so you'll have to wait for one to be allocated to you.

How to you get a watch allocated to you?

This is called playing the AD game, and many people have different strategies when it comes to convincing a dealer to allocate you a watch as soon as possible, but the core principle is to look like you are interested using them to make money. You need to look like you are a watch aficionado who just wants to add one or more watches to his collection, not a desperate instant flipper.
The most accurate term to describe this, is that you need to build up a relationship with the AD.

Here's what I did:

I've never been in a Rolex store before. I found my closest AD's contact information online and due to COVID, I had to set an appointment to visit the store, and the closest date available was the end of the next week, so I had 8 days to prepare my strategy.
The reson why I didn't just simply sent them an email or a text, was because I wanted to do something to try and stand out from the crowd and make a good first impression. I wanted to meet them in persion, and clearly express my intentions.

I called one friend which I knew he had a great Rolex replica (so a Chinese fake watch yet really accurate) that was worth probably $500, which he had for 3 or 4 years and it was very beat up, and I asked him if I could borrow his watch for one week.

When the appointment day came, I put on a nice t-shirt, some quality leather sneakers, sprayed on some Bleu de Chanel, put on the beat up fake Rolex Submariner, grabbed a bottle of some decent $50 wine & gift bag, and headed over to the store.

Although I was quite amazed by how great the store looked, I tried to keep my poker face while being politely, and I handed over the gift wine to Maria (the sales manager) and she looked really impressed. Then we started to talk about watches. I mentioned that I've just started getting into watches more seriously, and that I want to add some new pieces from my collection and that Rolex has always been the brand I resonate the most with.

I caught her looking at my beat up fake Rolex a couple of times, and then I mentioned the fact that I'm not really interested in the resell value of the watches, and their store-of-value aspect, as I buy watches to wear them everyday, at work, at home, at the gym, and she said: "yeah, I can see that you did enjoy your Rolex Submariner and that you don't baby it" and then she recommended me to maybe send it for a complete service and get it polished. Yeah, lol.

Then I expressed my intent to purchase any of the 3 models I was interested in (newer version of "my Submariner", an Explorer 2, or the Air-King model), tried on some display-only models, got served a glass of champagne, and then left.

So how did that go?

1) I almost forgot about this for some time, and then, after 3 months, I received a text message from Maria saying that they have a Rolex Explorer 2 in stock, and that I should let them know if I'm still interested in getting it.

I probably replied to that text message in 3 seconds saying that I'm definitely getting it, so once again we set an appointment for my visit. The previous time, as we were talking Maria mentioned a local cigar lounge's name and I found out that she was into cigars. Before arriving, I stopped by a cigar shop and brought her 3 mild cuban cigars for like $20 each.
As for the actual purchase, everything went really smooth with the purchase and I even got a Rolex box of chocolate as a gift.

I've got the Rolex Explorer 2 for €8050 (it was cheaper in 2021 than it is right now) and I solid it to an end-customer via Chrono24 (after 3 and a hafl weeks) platform for €11835 (after fees) so I already made €3785 in profit with the first watch.

2) Almost 2 months after my initial purchase, so 5 months after getting on the list, I got another text message from her, and I purchased my second watch, the Rolex Air-King, for €6050 and sold that after 5 weeks for €8700 via a FB group so there were no fees this time, so I got €2650 in profit.

3) In the meantime, I expressed my intention to purchase a more expensive Rolex Submariner (steel & yellow gold) version as I was pretty sure that for the steel version I had to wait many months.
Only 2 weeks after I put my name on the list for the steel & yellow gold one, I got a text message from her, telling me that one of their clients was no longer interested in getting his watch and that I can come and purchase it, so I was like hell yeah!

I purchased that for €13850 and I sold it for €18800 almost 6 weeks later. This one took a bit more time to sell as gold & steel models are as desirable as the steel models, so it's harder to find someone to pay the premium, but even though I had to wait for a bit, I still got the highest profit so far, of €4950.

So, a total of €11385 so far, in less than 1 year.
Is this good money? Definitely. Could have been better? For sure.

Tips, Tricks & Things I've considered

Here's a list of things I've considered relevant during my research, my store visit, and the overall relationship with the AD.

• In order to find the models that can generate the highest profits, you can simply visit Rolex's website and then compare the prices with the ones from Chrono24.
  To be 100% accurate, you should deduct 6.5% from the Chrono24 pricing (their transaction fees). Make sure to check the watch via its reference number, and always filter watches to "brand new" condition, current year of production, and local markets only as the Asian and the US market tend to have lower prices.
• Don't try to look desperate. Be professional about it, firmly express your purchase intention but don't go over the top with convincing them to give you a watch, because as far as I know they have no control over the stocks they receive, but they do have control over the way they allocate watches.
• Don't just walk in asking for a model that will get you the highest return, because everyone does that, and it will be impossible to get that without a purchase history (previous transactions with that AD), so I would definitely recommend you to start with the pieces that are less popular and slowly build your way up to the unicorns.
• Don't be a Karen, and don't overreact. I heard a lot of stories of ADs that were kind of not very polite with new customers asking to purchase a popular model, which is not ok, but also overreacting to something that say or do will blow away the chances of you getting a watch from them, so you'll only walk out of the store with your big ego but no green bags.
• BE EXTRA CAREFUL when you walk out of the store with your new watch. Especially if you live in London, or Western Europe, as there are considerably large chances of getting robbed when walking out of the store with a €10k watch on your wrist, so always take an uber home right away.
• When you purchase the watch, the most of the dealers will take out the plastic stickers from the watch, and that's just so you won't be able to sell it as "brand new, fully stickered" but once again, let them do their job and be cool with it.

TL;DR

• I made €11385 in less than an year, but purchasing 3 Rolex watches at retail and flipping them for profit.
• You can only purchase watches at retail price from ADs (authorized dealers), and due to the high demand and limited supply they have internal waiting lists where clients wait to get the watch allocated to them.
• In order to maximize your chances of skipping the wait, you must build up a relationship with your local AD and try to convince them you are a true collector not just a desperate flipper.
• I consider I made a good impression by wearing a fake $500 Rolex to the official Rolex store and be cool with it.