What Are Grey Market Watches and Where Do They Come From?

You may think you know watches well. You know what a dive watch is, and how aviation watches came into fashion. You know about the decline of the pocket watch and you may have invested in a few luxury watches over the years. But do you know what grey market watches are? Maybe you, in fact, do know about the watch grey market, and you’re considering dipping your toe into this market for the first time.

Whether you’re a new watch collector or a longtime aficionado, if you’re brand new to this world, you’re in the right place. BriteCo founder and CEO Dustin Lemick, a major watch enthusiast, has tips to share on navigating the fine points of gray market watches.

Keep Reading to Find Out…

We’re answering all your need-to-know questions about grey market watches. Find out:

• What are gray market watches?
• Where do grey market watches come from?
• What are the benefits of buying from gray market dealers?
• What are the drawbacks of buying from a grey dealer?

And more!

What Is a Grey Market Watch?

First and foremost, let’s dig into the bare basics. What is a grey market watch?

Luckily, the gray market isn’t as scary as the “black market,” where you might find illegal and illicit substances and products. The gray watch market simply refers to the buying and selling of luxury watches through distribution channels not authorized by the luxury brand.

Typically, authorized dealers are jewelry stores or similar luxury retailers. The luxury brand has deemed them suitable to sell their products, and the brand oversees how much of that product, and which versions of that product, the retailer receives.

In contrast, the gray watch market encompasses any other sales channels that are not officially authorized. The brand does not give these sales channels its stamp of approval. Still, this doesn’t mean that you’re buying your luxury watch in some back alley or on a shady website. You can find many gray market storefronts, both in-person and online, that operate very similarly to authorized retailers.

“It’s kind of the Wild West. There are good grey market dealers, 100%. There are very trustworthy grey market dealers,” Lemick says.  “But there are a lot of shady ones too.”

As with any business, it pays to do your homework. “You need to network with people that know the space,” Lemick says. “Do research online, read reviews, all those kinds of things.”

Where Do Gray Market Watches Come From?

So if the gray watch market does not get its watches directly from the brand, where do the watches come from? There are a few options and some may surprise you.

Gray market dealers can sometimes actually purchase their inventory directly from authorized dealers. This might be the case if the authorized dealer has some inventory that it needs to be rid of, because it’s not selling, or to make room for new products.

Or a grey market dealer may sense that it could resell an authorized dealer’s watch for a profit. “There is massive demand for certain high-end brands — Rolex, Paddock, Audemars Piguet — because on the gray market, these things go for huge premiums above retail,” Lemick says. “If a Rolex dealer sells you a watch, you could literally turn it around the same day and make $10,000 on that watch or more.”

Again, this isn’t illegal or shady, but it does move the timepieces outside the manufacturer’s authorized sales channels.

In other instances, these unauthorized sellers might purchase watches directly from consumers. If you’re looking to resell a watch that you’ve had in your collection for a while, you might go to a gray market dealer.

Then, of course, a gray market dealer might also simply go to a country where the watches are less expensive, buy the watches, and then return to their home country to resell them.

What Happens to a Gray Market Watch’s Manufacturer's Warranty?

One of the big downsides to buying a gray market watch is that, when the watch is moved outside of authorized sales channels, the watch loses its manufacturer’s warranty. Often, when trying to use a watch warranty, luxury watch brands will only honor that warranty if you can prove that you purchased the watch from one of their authorized dealers.

Whereas on the gray market, “sometimes you get a watch naked — no box, no papers,” Lemick says. “That’s shady.”

The good news in all this? If you purchase your watch from a larger gray market dealer, such as an online marketplace, that dealer may offer its own warranty. While it will differ from the manufacturer’s warranty, it may still allow you to have your watch repaired under certain circumstances.

Benefits of Buying Gray Market Luxury Watches

But what are the benefits of buying gray market watches, vs. buying new watches directly through authorized dealers approved by the luxury watch industry?

There are a few stand-out benefits.

1. Some gray market watches come at significantly lower prices. If you’re just trying to start building your watch collection, the gray market is an attractive option. Oftentimes, Lemick says, “they sell watches that are still high-end, but mid. They’re not the most in-demand watches. So you will get discounts.”
2. The gray market usually offers authentic watches. While there’s always a risk of running across a fake when you move outside the luxury watch industry’s authorized sales channels, by and large, reputable gray market dealers take great care to authenticate their wares. “If you’re buying it from an unknown watch dealer, it could be a 20% chance that you end up with a fake watch. Maybe higher than that even,” Lemick says. “But if you buy from a good quality dealer, the chances are very low.”
3. You may find watches difficult to source traditionally. This might include watches no longer being produced and that are only available pre-owned.
4. Buying gray market watches is often convenient. Since so many gray market dealers operate online, there’s no need to go to a boutique retail location, in person, to do your shopping.

It’s easy to see why the gray watch market has become popular!

Downsides to Buying Gray Market Watches

In contrast, what are the downsides to buying a gray market watch? We already discussed that you’ll lose the manufacturer’s warranty, but are there other things that may dissuade you from buying a luxury watch this way?

Here are a few of the downsides.

1. You might not find a great price on every single model. While most watches are significantly cheaper on the gray market, some models retain their value so well that you might not always get an astonishingly cheap deal. This is the case, for example, with many Rolex models, including the Rolex Daytona. “The green Rolex Submariner, a.k.a. The Hulk, is one of the most popular watches on the planet,” Lemick says. “You have to go to the gray market if you want to buy it. If you want to wait two or three years, maybe you can go to a Rolex dealer and get on a list, and then you’re going to pay, say, $15,000. If you want to buy it today, you go to the grey market, and you’re going to spend $25,000.”
2. You lose out on the special perks that you can get by establishing a relationship with an authorized dealer. As is the case with many luxury brands, if you establish rapport with your local retailer, you may find that they keep an eye out for special models you’re specifically keen to buy, provide you with exclusive insights gained from their extensive knowledge, and even give you luxury perks such as access to exclusive brand events or deals. “Ultimately,” Lemick says, “if you can forge a relationship with an authorized dealer, who trusts you and who will work with you and help you, in a timely fashion, to purchase what you’re trying to purchase, that’s the best way to go about it.”

Additionally, some shoppers and collectors just prefer the peace of mind, as well as the luxurious experience, that you get when buying directly from a luxury brand. You obviously lose out on this when buying from a gray market dealer.

Certified Pre-Owned Watches: A Gray Market Alternative?

If you want a watch at a more affordable price, and you don’t mind buying pre-owned, as so many gray market watches are, you may consider shopping for a certified pre-owned watch directly from an authorized retailer.

Many luxury watch brands now purchase pre-owned watches back from their customers. They then refurbish the watch as much as possible, and then sell the watch back to the public with a new manufacturer’s warranty, at a cheaper price than what the watch sold for originally. You can buy pre-owned Rolex watches this way, for example.

“It’s similar to cars. where they will be reconditioned, they will have a service guarantee, they’ll be in great condition,” Lemick says.

Protect Your Luxury Watches — No Matter Where You Purchased Them

Regardless of where you purchased your luxury watch, the gray market or an authorized dealer, be sure that your watch’s full value is protected. With BriteCo, you can obtain an easy appraisal to determine your piece’s full worth, and then insure your luxury watch against loss, theft, damage, and more.

Learn more and get a free quote now.

Gray Market Watches FAQs

What are the grey market watch pros and cons?

The pros include a more convenient shopping experience, cheaper price, and access to difficult-to-find models. The cons include lack of a manufacturer’s warranty and a less-luxurious and special shopping experience.

Is it illegal to buy a watch on the gray market?

Not at all! While it may sound frighteningly close to the illegal black market, the high end of the gray market does not use illegal means of sourcing and does not sell illegal products.

Should you buy a watch on the gray market?

It depends on your priorities. If you like the peace of mind that you’ll get from having a manufacturer’s warranty and the support of an authorized retailer, maybe avoid the gray market. If, though, you value a cheap price overall, you may prefer the gray market.

Are gray market watches real watches?

Yes! While there’s always a slight chance of running into a scam, the large majority of gray market watches are authenticated and completely real.

Are gray market watches always pre-owned?

No! In fact, gray market dealers may purchase brand-new watches directly from authorized dealers, at a discount, or from other countries where the watches are cheaper, and then turn around and sell these new watches to you.

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