Hello there
Just wondering if the prices in your country are increasing from August as well? In Poland it’s about 5% basically of all the available Omega watches

 

I read somewhere that the wholesale price to dealers was going to increase but not the retail price. The net result is probably smaller discounts than in the past.
Don’t know if this is true, I read it on the internet.

 

It is true, I had it confirmed by an AD yesterday.

 

Yes, I was told this by my AD in Canada a while back and posted about it here. His feeling was that these lower margins would mean reduced discounts and none at all on popular models, since anything in store stock would not be covered under these new arrangements. I have since been offered minimal "courtesy" discounts on two new models, closer to what one might have expected from an OB.

It does make for a different calculation when considering an Omega purchase for those who have long read about and now expects the mythical (but perhaps not realistic) "30% off" permanent Omega sale.

 

Cartier also had a recent 5% increase.

 

Decreased margins are, in effect, a price increase on the end price because of lower, or no, discounts.

 

That is a one sided view. Decreased margins lead to higher theoretical resale values in the longer term. Which is a good thing for the brand appreciation and us consumers too.

 

Is it regular thing to happen in august every year? That happend to me last year when I ordered my GM one day after proce increase

 

While there may be some Omega marketing/pricing strategy lurking in the 5% increase, I believe it is mostly Post-Pandemic Inflation at work. We're likely to see more of it in the coming days. Since I'm retired and on a fixed (broken) income now I likely won't be able to make many future purchases. I think my collection is topped out at 80 watches now. (Only three Omegas though).

 

Gee that’s kinda sad. I mean I never bought from an AD but the way these price increases affect people in different situations you don’t think about until someone tells their story. In the US I’m noticing significant inflation on numerous goods. Perhaps with omega it has to do with the increase of costs in the supply chain of materials or employee wages or they just want to make another 5%

 

I think they are trying to move the brand upmarket, reduce and eliminate the discounts. Everyone wants a 30% discount, but you have to look at what it does to the long term value of your watch. Would you rather pay retail and have your watch be worth more than you paid, or get a 30% percent discount but have your watch be worth 60% of list.

 

Yep, according to my AD no more 15% discounts on regular models come august.

 

Normally if trade price goes up there is expectation that it will increase consumer price allowing the businesses maintain their margins.

So does Omega set the RRP ?

 

Yes, they do. Some brands do not allow retailers to advertise their products below RRP.

 

They always set the RRP, but legally in some countries, they are not able to tell retailers "you will sell for this price"... that's price fixing (here in the UK at least).

By cutting margins, they're getting as close as they legally can in some locations, to forcing retailers to charge RRP.

I worked in the software industry as physical product was coming to an end, and part of the big push to digital for us, was to stop dealers burning their margins to attract customers, as this just served to devalue our products. In the last year before we ditched box product all together, we cut dealer margins from 30% to 3% - they just gave away the entire margin, as they were often able to make profit in selling ancillary packages or accessories.

It looks like Omega if doing everything it can to force dealers to "behave"... will be interesting to watch.