Black Market Watches vs Grey Market Watches
We recently received an interesting email from a client, who asked:
“When purchasing new wristwatches online, are they fake? I have heard the word “grey market” used to describe many watches sold online. What does grey market mean?”
It’s a great question!
There are three terms we should explore to understand the issues encapsulated in this question. The first is fakes. The second is grey market. The black market is the third.
Fakes are watches who originate from any source other than the factory where the brand produced their timepieces. Fakes and/or replicas do hurt the industry but there are deeper problems at stake. Most are poorly produced in terrible conditions and often, hazardous materials are used. Also child labour is often being exploited to create the fake watches.
As most fakes are produced in the far east, there is little can we can do to stop production other than purchasing a timepiece from trusted retailers after conducting independent research and reporting any business that may be dealing in fake watches to the police.
The Swiss watch federation [FHS] have responded to fakes by working with governments globally to stop production and to seize fakes, through their stop the fakes program. The most common fake are Rolex, Audemars Piguet and Breitling.
Both fakes and stolen genuine watches are often sold on the black market. While it’s often impossible to know if the watch you’ve been offered is stolen, it is likely that if the price is too good to be true, then you could be viewing a stolen or fake watch.
By purchasing a watch on the black market, taxes are avoided, regulations are undermined and illicit activities including drug trafficking, illegal gambling, money laundering and human trafficking are funded.
The grey market completely different from the black market, but is often confused with it.
A watch traded on the grey market will have been produced by the brand but will have been retailed by a partner who hasn’t been approved by the manufacture and therefore the manufactures warranty might be voided. Therefore, a grey market watch will often come with the retailers own warranty.
A good example of the grey market, is some brands work on a new collection each year and therefore it’s likely that some old stock will be left over after the release of the new collection. Brands therefore either heavily discount the remaining stock, use it for promotions or sell on to a third party distributor who then resell the stock to their network of retail partners. None of retailers are authorised and thus are grey market sellers.
Another example is an authorised retailer who is subject to annual minimum stock purchase, fulfilling their quota by selling some of this stock onto a third party. The most notable version of this is Costco v.s. Omega, in which a judge ruled it was legal for Costco to buy Omega watches on the grey market and sell them through their retail stores.
Unlike the Black market, the Grey market pay taxes, follows the spirit of the law and are not involved in or finance illicit activities.
How does that effect you?
Purchasing fakes or from the Black market is not only illegal, but those who do are helping fund a number of illicit activities. It is therefore advisable to research any retailer before you purchase.
Most watches sold online are not fake, but might be grey market, which are perfectly fine to purchase, considering that this term has now been demystified.
Shop safely online!
It is always recommend that you try to call the business and see how they react. Is the phone answered? Is the person you speak to, helpful, polite and knowledgeable? Did they give you their name [important if you need to follow up]?
Do have they glowing feedback which seems fake? Or does it seem that in spite of the odd issue, they are a good company?
With certain brands, is the retailer listed on the manufactures website as approved? If not it could be worth contacting the local country distributor to see if that retailer is authorised.
Also, if the price looks to good to be true, it probably is!