Unless you actually walked into a grey market watch dealer’s store, it was highly unlikely you would ever know they existed or that you could purchase watches at highly discounted prices. These transactions made little difference on the typical authorized retail channels.
Pre-internet, grey market retailers often existed in major cities and had a storefront where they could display the watches and sell them at highly discounted prices. The grey dealer then sells these discounted watches through their own channels and passes on big savings to their clients, which can include wholesale or retail customers. That is unless they have access to a grey market dealer that is willing to make large volume orders in exchange for low prices. It’s not hard to see how this strategy from the top can lead to bloated inventories for ADs that can be hard to move. Plus, when business is slow for ADs, the manufacturers do not allow them to cut retail prices, fearing that this may damage the brand’s reputation and value in their customers’ eyes. Remember, an authorized retailer is highly controlled by the brand, which means that the AD is often pressured to buy slower-moving watches to gain access to popular watches. It may come as a surprise to some outside the industry, but it’s uncommon for authorized retailers to reach out to grey market dealers with deeply discounted bulk offers when they have excess inventory.
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