Luxury watches, homes, cars, boats, and other jewelry, are all major purchases. Although the definition of what a luxury watch is may vary, it’s safe to say that watches starting in the range of $5000.00 and up are a luxury for most people. Interestingly, when compared to things like homes and cars, watches are a considerably more controlled commodity even when the price for a given watch may cost considerably less than your home or car.
So, what’s the big deal? Well, luxury watch manufacturers frequently have rules against selling their products online for their authorized dealers. Not only that, but if you go to the website of many watch manufacturers, the first thing you’ll see is, “DO NOT BUY OUR PRODUCTS ON THE INTERNET.”
“So what?” you may ask. Well, in the eyes of this author, that rule flies in the face some basic practices that are part of the world of commerce and capitalism in most other industries.
Let’s take the example of automobiles, for instance. According to the Federal Trade Commission, the average price of a new car in 2009 was nearly thirty thousand dollars. A typical price for a well-known Swiss made diver’s watch will start at around $1500.00 or so and go upwards to $5000.00 and beyond. You might think that a luxury car would be more difficult to buy online than a watch costing considerably less, wouldn’t you? Yet, at the time of the writing of this article, there are over 2600 NEW vehicles priced from $30,000 or more for sale on a popular internet auction site.
In part One of our series, Luxury Watches – Why You Should Buy Your Next One Online we’re going to consider the following question:
1) Why do many watch manufacturers prohibit their authorized dealers from selling online?
So, Why DO many watch manufacturers prohibit their authorized dealers from selling online?
1) There may be several reasons for this rule, but by far the most obvious one is…drumroll please…you guessed it, price control! What is the number one effect manufacturers hate caused by selling products online? Price competition. After all, which of the following scenarios is going to result in the best deal for you, the consumer?
a) You get one local dealer to choose from who sells his product at the manufacturer’s required minimum price and with a limited selection,
b) You can choose from 10 dealers from all over the country who compete with one another to offer you the best price, selection, and service. (However, if luxury watch manufacturers allowed this practice, the monetary value of their product might drop.)
2) Manufacturers may claim that they want only the most qualified, authorized dealers selling and servicing your watch. This rule helps ensure you get good service from a knowledgeable, professional watch dealer.
3) Replica, or Fake watches abound on the internet. It is possible that you could think you’re buying a genuine article and end up with a fake. (Ocassionaly, you’ll see fake watches listed as real ones on that popular auction website mentioned above.) Additionaly, buying a watch sight unseen means you won’t know you’re getting a fake until it’s delivered to your home.
4) Support for the “little guy” local watch dealer. Out of the goodness of their hearts, the manufacturers want to support the local watch dealers they’ve had long trusting relationships with. (Yeah, right.)
Are these rules what stand between you, the deserving watch buyer, and the ability to find the watch you want at the best possible price?
In our next article, we’ll examine whether this policy is reasonable and fair, or simply an unfair plot against the unwitting masses.