Wednesday, February 18, 2009

Let's call Orlando "the beginning"...

The Orlando IWJG Show is usually the biggest of the year. This year it's last day overlapped with the WWT Daytona two day event. I arrived Saturday evening to meet my partner and receive our shipment from Brinks, as is policy for any out of town show. As we walked to our set up it was obvious the show was not a sell out, as is usually the case in Orlando. There was a lot of space between aisles and many "dead zones" of open floor space. IMO, another 50-75 tables could have easily been set up. In defense, tables are very expensive and maybe those who were not "setting up" would be there walking the floor. Many others who have done Orlando for longer than I told me they have never seen it so empty.
The first day was the usual madness. I scoured the room for deals, along with many of whom I like to call "the usual suspects". These are the known dealers from all over the USA, VRF contributers and lurkers. After my first few pass I realized many were lowering prices to compensate for the sagging market, but not much was moving. I sold a few watches and many parts in the first 4 hours but come Sunday afternoon, it was clear the buzz was now all about WWT in Daytona, and not IWJG in Orlando. By Monday morning, many booths were packing and going to the "pre show" in the lobby of the WWT Daytona hotel. Monday ended slowly, but the evening would become very important.
In the weeks following the Miami IWJG January show an email was sent to the membership that we would have a "sit down" of all interested to discuss how the current economy is affecting our shows and business.
Sounds juicy already!!!
I arrived a little late to the meeting but saw that many of the "charter members" were sitting on a panel in front of the room. It was a "who's who" of real heavyweights. The first speaker was the owner of a very large pawn operation in the mid west and his words kind of sent a chill through the room. He said if anyone does not want to lower prices on obviously overpriced stuff it WILL NOT SELL, so why are you carrying it back and forth? Interesting huh? The rest of the panel covered stuff like new show locations, upgrading the Internet presence of IWJG and other related technical stuff. One of the major discussions was the absence of Europeans in attendance lately. Over the years the Munich show and other watch fairs all around the world have made it easier to do business in places other than the USA. The current dollar-EU/GBP rate is not helping either!
The last day of IWJG was Tuesday and actually, I grabbed a car and left early for Daytona to see what was going on over there. I arrived at 9 am and the show was in full swing. There were many different dealers and vintage Rolex and other brands were in abundance. Again, the problem was the pricing, as was with IWJG. It was the usual stuff and plenty of it for unrealistic (IMO) money. I bought some inserts, sold a movement and split after a couple of hours. I made it back to Orlando by 1 PM and walked the IWJG floor for the last couple of hours and waited for Brinks to pack and then caught my plane. I received calls from people at Daytona yesterday, which is the last day and nothing changed. people were not willing to sell coining the now common "I paid more for it than you are offering". No shit!
Here is the bottom line:
We all know the economy is in very bad shape and no stimulus plan will get us back to where we were anytime soon, if ever. What I see is dealers are holding on waiting for a "fish". This means someone who dows not know the current price point and is going to pay more for whatever reason. Problem with that is what happens when the "fish" finds out he overpaid, by alot?
Now I will agree there are some really rare and desireable pieces that will command higher prices, but the majority of stuff I see is just everyday common stuff, and plenty of it with more dealers than collectors. I sat with the biggest dealer in the country who pulled out invoices showing very high priced sales of watches which were not really IMO rare nor desireable. It seems dealers have their people who trust them and money is not an issue so where does this leave the vintage dealer?
Here is the big problem: Dealers want the last dollar from an end user. There is really no reason to bring a watch to a show and sell it short for any other reason but they need cash. I am seeing dealers quoting the same "I'll sell it on ebay" and I say be my guest.
The wholesale dealer for vintage is sliding by the wayside. I am the last of the mohegans.
What will happen is just my opinion so please, no death threats:
The economy will sap the hobby of end users faster than shit through a vintage dealer at the end of a bad show, and rumor has it the IWJG hotel ran out of Charmin. I already see many, many common pieces all over shows and on 47th street. No one is buying as many do not see real profit, or guaranteed profit and do not want to risk their very small bankroll.
I believe watch prices will continue to fall. I am selling and buying more parts, but only at fair prices. The dumping has begun, only prices are not stimulating buyers to bite.

My final word will focus on some "suggestions" made to me by "concerned parties". If you noticed in the above there were no prices quoted on anything. I think it is boring but many are very upset that I am "killing" the market by divulging private dealer to dealer information.
What says you? Please vote on top of the page. I will go by the vote, as appearances to the contrary not withstanding, this is still a democracy and freedom of speech is still guaranteed by our constitution. Please vote...

Tuesday, February 3, 2009

Navigating a fractured market...

With the Miami shows behind us and Orlando looming, we have some choices to make as dealers/collectors. Overall, Miami was a nightmare. The big antique show is one of the most expensive and what I saw was really tough to swallow. You had all the big names with some of the most fantastic inventory out there just "curating". Thank God there were some sporatic heavy sales reported, but overall I am sure many who set up did not cover expenses. There is a serious problem within our little realm. The problem is many watchers are scared to enter the market because of the HUGE grey area in pricing. Let me explain:
In this "two tier" market which has evolved you have huge differences in pricing. Forums and auctions say one thing but Ebay says something else. As much as I do not like to use Ebay as a barometer for pricing, it IS helpful when no reserve auctions run and a price (not value) is determined. Think of the buyer checking Ebay for an item and seeing the same item sold at a show or store with a 100% markup. Now you can justify all you like but when a real ebay seller sells an item cheap, it is hard to justify the "price point" mark up. Hard yes, but it is going on regularly and people are freaked out by it, as they should be. With all the prime inventory sitting in Miami, I did not see many interested parties. I mean, not many even asking pricing as they have seen most of this inventory before and know pricing is way out of whack. I understand dealers bought on 'spec' and have lots of 2007/8 inventory which is perfect and also high priced. What do they do, sell at a loss? Tough call, but as this market continues to "deflate" the dollar you get today is better than the half dollar tomorrow.
It seems a majority of dealers are holding firm waiting for that guy who has to have that one item at their price. Problem is there is a severe lack of "end users" and those who are looking can pick and choose from lots of prime stuff. From where I am standing, vintage Rolex is just not hot because of the crazy hype and subsequent burst of the bubble. It is just risky top pay crazy money for a watch that was $30k in 2008, but in 2002 was only $5k. Will pricing roll back that far??? Do you take a chance on a DRSD at $20-25k?? All we have to do it be realistic in our thinking. With disposable income falling and an overstock of "commercial" collectables I say wait.
That said, I am still getting flack from many dealers who feel I am "destroying" the watch market. Lots of threats, though none physical...yet! I do feel bad for many who are buried in stock. I too have hundreds of thousands in parts which are now worth half of what they were worth last year. It's just amazing that I am the poster child for the down market when there are big dealers who are blowing out inventory on Ebay. What about them?
Oh yeah, they are not posting it online where a whole 1700 people have read it in the last 3 months. Why not tell them to stop selling at no reserve and just post starting bids to give the appearance of a strong market.

Markets go up and they go down. Vintage Rolex has cooled off a bit but has always been my bread and butter. The most freightening part of all this is the lack of interest and there is only one way to combat that. What NEEDS to happen is pricing MUST fall so as to generate an interest/buzz again. Without a buzz and some new blood, we will go the way of the bubbleback. If we take our losses and begin to sell at a more attreactive price point, the market will rebound quicker. If we continue to have some dealers holding on and polluting this fragile market with old pricing it will scare off any new interest and the market will continue to suffer.
Sounds like a true Republican way of thinking, huh???