Doomsday Coming For Wrist Watch Retailers?

Then came the Internet. At first, the one dimensional virtual world was merely a place for information dissemination. Fans might discuss watches in primitive forums, and some enthusiast communities sprouted. At some point after that in the mid to late 1990s, people started to buy and sell watches online. The borderless Internet didn't care about things like territory or manufacturer restrictions on prices. People bought and sold pre-owned watches, retailers sold hard to sell watches online at a discount, and the gray market which existed outside of the authorized dealer / watch brand relationship flourished. Then also came the sophistication of the replica market. Able to offer goods that used to be only available in seedy areas, online to compete with authentic items, and confuse consumers.Things started to get bad for retailers who initially were excited about the prospects of the Internet. Not only were they barred by the brands from selling online, but online shops were undercutting their prices (an profits). Online retailers experienced lower cost businesses without the traditional overhead costs, and gray market goods could be cost at almost any price over cost, with no brand restrictions. This made doing business online very attractive.Watch brands are systematically killing off their network of authorized dealers that historically have helped them so much. One by one, retailers get ominous letters in the mail informing them that a long-term partner will no longer be sending them inventory. Why are the major watch brands doing this? And what does this mean for the future? Read on...After years of struggle, and a complex accumulation of factors, the industry of selling watch is about to rapidly change. It isn't so much a matter of a black and white distinction (in terms of one thing is totally in and another thing is totally out), but the old business model is more or less - dying a slow, painful, and less than quiet death. Here is how it used to be - for well over 100 years. Watch brand sells watch at wholesale rate to watch retailer (known as the authorized dealer). Watch retailer sells the watch for the retail price and keeps the difference as its profit (usually about 50%). In exchange for buying watches from the factory before they are sold to consumers, retailers often (but not all the time) get exclusive rights in a particular area or territory in which to sell the watch. It was a win-win situation for people *** watches and people who have the ability to sell the watches. This is the way it was, and people were happy (as long and consumers were buying watches that is).