The Truth About Watch Gang's Rolex Giveaway (and How They Make Money)

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The Kavalier is an independent review network presented by Jon Shanahan for men’s lifestyle products from online only retailers including Everlane, Beckett and Simonon, Frank and Oak, Bonobos, Five Four Club, Mizzen and Main, Trunk Club, Fashion Stork, Bombfell, threads for gents, bespoke post, Jack Erwin, Foremost Edition, Dollar Shave Club, Mack Weldon, MeUndies, Satchel and Page, Dapper Classics, Hall and Madden, Suitable, Indochino, and Gustin. Including products from companies from Casper & Leesa Mattresses, Calvin Klein, Ledbury, Burberry, Banana Republic, Charles Tyrwhitt, J Crew, Marine Layer, Stitch Fix, Barbour, Orvis, Baxter of California, and more! Suggestions for products and companies are always appreciated- Comment below

[@DanHughesNC]

There are several monthly mystery boxes that offer a Grand prize of some kind. If anything, watches make it easier to offer. The margin in jewelry is vast. Selling End of Life / Overstock / otherwise grey goods will increase their margins. The Rolex is *used* and valued at $2500. With 1100 customers (for example), they only need to use $10 of your $100 for prizes. They'll also tax you on the watch. That turns the taxable transaction into a tax deductible promotion. What I don't understand is how they get around the FTC Illegal Lotteries laws because Watchgang require a purchase in order to enter.

[@bruhdabones]

Yeah, how do they do that...?

[@thomasharrick]

I am here way too late....but to answer your question, WatchGang provides entry forms to enter their weekly giveaways at no cost...buried deep in their TOS (www.watchgang.com/rules). This is the only way they can legally run this promotion.

[@MeetTheSLAYER]

Because it is offered as a raffle.

[@sgtredrhino2009]

You pay for a good/service and your entered in to a contest where you could possibly win a prize. I don't see anything illegal about that or maybe im missing something.

[@DanHughesNC]

​@@sgtredrhino2009 There is a 3 part test. 1) Consideration - Did you pay something? 2) Prize - Can you win something? 3) Chance - Is winning based on luck and not skill? If the answer is yes to all three, it's considered a lottery and therefore gambling. Gambling in the US is heavily regulated or illegal. For it not to be considered a lottery the company has to offer an "alternative means of entry" that is free. This is usually done by mailing a postcard with your name and address to a special address hidden in the terms and conditions.

[@woof106]

Super interesting! I've always wondered how that worked, thanks for the amazing videos

[@jello022170]

Great info. Really appreciate it.😀

[@CarlMurawski]

This is exactly the kind of content I tune in to your channel for, truly excellent video my friend. I'd be interested to see what models of Rolex they give away, as you know there is quite a difference between a Datejust and Yachtmaster.

[@ln4531]

Another great video!

[@mikeacord5329]

Love your "mini classroom" Wednesday videos! You have an impressive knowledge of the retail industry and economics in general! And don't even get me started on the yodeling at the end--icing on the cake!!

[@EkTheGr8]

I actually learned a few things in this video.. Smart man 👍

[@dhaynes1048]

Watch gang is such a bad idea. You are getting the left over inventory noone else bought. The best styles and colors sell for full retail and then the manufacturers dump the leftover inventory on to watch gang subscribers and try to convince you that you're getting a deal

[@CasualWatchReviews]

Very informative thanks for the detailed video

[@sukhdarshansinghsehmbi8607]

Wow was just about to head to bed for a goodnight sleep& your informative video has Made me go to sleep, such beautiful analysis you've given on your Rolex

[@domodepiano]

Well done!!!

[@seppiluthold5014]

Thanks man. Great video. I had watch gang for 3 months. I ended up cancelling to fund a Seiko Alpinist. However I have to join again. Especially after seeing that heritor.

[@alandean9291]

I’m wondering if you think watch gang is a good business model and or how would you do it?

[@markoduvall]

I love to hear people's takes on business models. Also, since they're vintage, they could buy the Rolex cheap, because it may need a new crystal, which would ultimately reduce their wholesale cost of the watch they give away.

[@kongmw]

I got suckered into giving Beckertime a click and boy do they have some gaudy mid-2000's design elements and color schemes.

[@Pyridius]

I saw this really interesting crate called Basic Man which just gives a t-shirt, a pair of boxer briefs, and a pair of socks for $20 a month. They have "expiration dates" tagged on the clothes and it seems pretty unusual in terms of what it provides.

[@robertmontgomery7133]

How would you know what the R&D Costs are? Likely they were amortized a long time ago. The actual cost to make your watch is less than $500.

[@EscobarStyle]

Super informative and down to the ankles with details! I am still waiting for you to win 1 Rolex hopefully soon because a year subscription and nothing yet!? I think YOU’RE in their cue for the next winner 👍🏻🙏🏼

[@MrJim1952]

Thank you for this insite. I enjoy the thought but into your words.

[@sbhimji4568]

Great post! I just started following you on ig.

[@sukhdarshansinghsehmbi8607]

Would love to own one can't afford it there a horrendous amount guessing I could spread the cost monthly as from my employment income

[@bruhdabones]

Sounds really good at 2x speed!!

[@dannythetroll7614]

In regards to to everything you are right on the Rolex market, but in regards to watches they are micro brands that have a inflated msrp. And the Rolex giveaway with beckertime , beckertime will give them a watch a they’re price (dirt cheap)

[@ordinary_]

The watch I received was a very cheap quality deporte from the standard package, also they dont allow you to cancel your subscription. You have to email them personally to cancel...

[@randyvanraden3115]

Very good breakdown on the business model of a brick and mortar type small business. There seems to be a large disconnect to what being a small business actually means.

[@michaelgale1238]

YES, I AM WATCHING UNTIL THE END!!!! :)

[@pstamaria]

Thx for the video. It’s a contrary opinion on Watchgang (to what some other watch reviewers give). Much appreciated! So intake it you are happy with your subscription to Watchgang then?

[@realtalk1368]

Very interesting. You broke it down so it’s easy to understand . Do you think you could break down someone starting an auto detail business. Chemicals used verse cost, gas, equipment etc. good stuff.

[@The_Kavalier]

Not something I focus on my channel but check out Valutainment

[@skipalvarez5483]

Growing out the beard huh 👍👍👍👍

[@DKarkarov]

I hate to tell you but that Heritor watch is not whole sale at 200, that's the real price. Watch gang used to give away 500 dollar watches when they started to get a rep, not anymore. Everything they offer now is just higher end fashion brands that have ridiculous mark ups like Heritor and Out Of Order.

[@sukhdarshansinghsehmbi8607]

Rolex& Omega two very good companies so big& famous & you own a Seamaster by Omega couldn't get better lol

[@sukhdarshansinghsehmbi8607]

I'm one of your awesome fans not going anywhere now eyes fixated to your company/ channel, a really nice watch review you've done+ your even wearing my favourite watch from yesterday the Heritor, love the colour/make everything, 10/10 from me excellent, love everything, your amazing you really are, + love the jumper& shirt too

[@goaztecs7549]

Whoa, bro! You just dropped a heavy dose of knowledge on my melon!!! Seriously, that was really fascinating and very cool. Makes me glad I'm in education and not business. I'd get eaten alive! lol, Thanks! :)

[@PointNemo9]

Why would we want people who can't understand business to be in the business of teaching?

[@Sean-lf8oq]

Fj fj that's none of your business 😂😂😂

[@sbla5507]

Can you do a video next week on Massdrop?

[@The_Kavalier]

First I've heard of them but it sounds a lot like quirky?

[@thatoenguy62]

I'm curious, many of the clothing subscription services you've covered will allow customers to decide the frequency of the shipments, such as every other month. Can you do the same with Watch Gang or does it have to be every month? I'm not really in the market for new sweaters, but i'm curious where your sweater is from. It seems to have a great color and looks very luxurious and comfortable.

[@what7945]

Nice video quality

[@Melkor54]

a rolex bought used is well worth the money, love my 112600

[@SexyMistaMustard]

Where are you finding an AD selling explorer ii for 5k lol, I’m seeing 8k plus.

[@Austin_033]

Great video. Rolex is one of the only companies that will shut down Authorized Dealers if they are caught overly discounting watches. So they can’t be caught selling for much under the retail price. That’s what’s so neat about Rolex and why they hold their value. If you compare it to say Omega- the watches tend be discounted by as much as 30% on the grey market. The most you’ll see off a Rolex is 20-25% and that’s if it’s a model that didn’t sell well. It’s funny that you mentioned the marketing helping Beckertime. I actually got the idea to buy my Rolex from Beckertime after seeing a watch gang ad. Beckertime is a great company that does something like $10m+ in revenue per year

[@djairjordan]

I've watched alot of watch gang unboxings and year reviews and most of the watches I've seen on the black level look like something you would see at tj maxx or ross for around $50 so most likely they buy in bulk and give you some what of a discount

[@azynstyles6025]

It is simple. Watchgang is a basically an online grey market dealer who have set up partnerships/ whole sale accounts with microbrands and other branda to get the best wholesale prices. Buying 100 peices from watch manufacturw will always give you a better price than buying 10. The revenue alone from their monthly subscription is more than enough to cover its operational costa, keep profit and be able to give away a pre-owned rolex/ tag or seiko. Let's say at 5,000 subscribers paying the lost tier membership nets them almost 250k a month in revenue which is roughly 3 million a year. Which is more than enough to pay for a rolex to give away each month.

[@MattTonite]

Without even watching this video, I know. I’ve seen a few watch gang box openings and vloggers who love the watches. But as a watch collector and enthusiast, myself, I have yet to see a brand that I’ve even heard of. Never mind a brand that has a tried and true reputation for quality. They find junk brands, convince them to set an outrageously high MSRP, all while paying market value and then und up sending out a $60 watch with an inflated MSRP of $600 and make $200 off each subscription, each month. It’s a scam. It sucks that I didn’t think of it first. By the way, if you want any of the watches that watch gang offers, look on eBay 60 days later. They’re generally listed at about 20% of the MSRP on eBay.

[@abeed87]

Holy shit I never knew about Becker time! Is this selling real Rolex’s?

[@Lanhoj]

I wish there was a Smartwatch subscription service, I own over 60 Smartwatches & would rather not having to search for what's new... sigh. Great channel by the way!

[@MrDAvIx63]

If you own more than one smart watch you definitely have a problem

[@josephpelaez3993]

Who needs more then 1 smartwatch 🤮

[@XxDoomxBestxX]

@@josephpelaez3993 people without a brain

[@sukhdarshansinghsehmbi8607]

Have seen banners of Rolex on golf& cricket as their a large sponsor as well a well renowned company& a big name everywhere will have to save up& treat myself to a Rolex definitely, spoilt for choice lol but great Watches can't decide which to buy, lots of makes

[@Nothingtoya]

The Invicta Pro Diver also has a MSRP of $800 and you can pick those up for under $60. The watch on this guys wrist is a $30 watch that he paid $100 for, thats how they make their money, they suck the life out of people who don't know any better.

[@TheMensch]

The only downside to this type of subscription is that you end up getting a lot of mid-tier watches that accumulate to a lot of $ for the subscriber. From my little experience and what ive been reading online, a lot of watch people end up getting too many watches in the mid-tier range and rather a grail watch, say a rolex or omega instead of 10 watches in that $200-500 range. Love your videos and enjoyed hearing your business side of things analysis! Would love to hear your thoughts

[@real_fjcalabrese]

I love the quest. Subscription services cut this out.

[@TopSecretVid]

“Developement” costis a none issue as 95% of this cost has already been done long time ago in Rolex’s case ...so therefore that cost should not even be factored into the retail price at this point. And most watch companies will use a generic movement from ETA or Seiko..

[@715SF]

That’s why they amortize the cost

[@u.u.upatreonrequests8679]

Seems like they only send off brand watches. No Seikos, Oris, Hamilton ect. Have you ever received a known name brand?

[@The_Kavalier]

I've receive a Citizen but they also just did a partnership with Seiko so I think you'll see more very soon

[@u.u.upatreonrequests8679]

The Kavalier Getting familiar names is big. Thanks

[@ackleyengineering4366]

They have nicer watches at marshalls half a platinum membership. Ive found watches there ive made up to $200 profit on after wearing a few times. Its not constant but better hunting than going this way. Retail vs actual value is a huge difference.

[@jamesarthur6962]

Good video very close, but the reality is that Heritor on your wrist I could get it made for under $20 boxed & customised, so WG would be paying watch companies to clear dormant stock to reinfect capital back into there Micro Brand to keep coming up with new collectors to keep the company viable. so the stock or colour variations that aren't moving & gaining dust on the shelf they would be just as likely to sell to WG at the landed cost or below to get some ROI to boot capital to create a new collection. Because it is a Mystery Box they can basically pack any colour or design in your monthly subscription, I believe that last year WG had 29000+ active subscription after fall out not including those that jump in & out all the time as well as the CENTUM subscription base which would be highly profitable for them as this is the real market tp pick up dormant stock, and lots of it - average cost of $200 for a time piece for that subscription to clear stocks that would of sold for 1500-5000 but certain models or colours don't sell as well as others as we know. WG is a great business model. But you should check out what the guys are doing at Zew Box as this concept will grow rapidly over the next 12 months & mostly likely hurt the WG subscriptions taking the value of the reoccurring revenue down considerably.

[@themattissue]

Founder Timless Capital where could you possibly get a Heritor for 20$ ??

[@jackk6728]

are u affiliated with watch gang? if not any chance they know u review them and because of that send u better watches, then say I would get, in an effort to look better to your viewers?

[@g59suicideshawty]

Jack K This has to be what happens.

[@x83_t76Y]

He has link for a discount in the description. He is affiliated.

[@alangordon8190]

Rolex buying back hundreds of unsold watches from ADs - I don't think so.....

[@sukhdarshansinghsehmbi8607]

Rolex is a big company not surprised how many they give away every week, must have 1000s+ & for you& me as watch lovers we love the brand, will have to speak more about it later so fascinating, + an excellent video keep up the good wrk, see you later

[@reinhartgregory]

Recommend Watch Gang alternatives especially those with a cheaper price and worldwide shipping please

[@JonasNeumann6]

There are factories that produce cheap watches for a number of watch brands. Sometimes one model can be sold by multiple watch brands. These watch brands are nothing but one-office-room-companies ordering from the cheap factory with their logo on it. No money put into development or anything. They exist for a couple years and when the reputation goes away or legal problems occur because too many complains about their product pop up, they go "bankrupt". The owner terminates the company and the next day he creates a new one. Even if the watch gang doesnt have the storage problem, giving away watches that are double to five times the value is simply a lie. Because value is not a real objective metric. A rolex craftmansship is not what makes the value, it is the brand itself, tradition etc. The value of the watches on watch gang is determined by the amount of stupid people believing that what they have in their hand is quality. Not by high standarts, high quality, reputation or anything else.

[@hambone4728]

I agree. I feel the video is giving them too much credit for having an excellent business model. They are simply buying cheap Chinese mass produced watches, the actual cost being between $7 and $20 to produce, advertising their value as "$150-$500" and then selling this $12 watch for $99 subscriptions. Of course they aren't selling $500 products for $99. Anyone who actually believes that is a complete fool. And yet they continue to make money. All of these modern watch brands are really showing the sucess of brilliant marketing. Not brilliant business or watchmaking.

[@davestradamu]

With all due respect. It sounds like you have a lot to learn about watches and the watch market.

[@martinc.720]

David Fredriksen 🙄🙄

[@brianfuller5868]

He's dead on Sir!!

[@KongBobbyK]

Great video. I was a subscriber for only one month and got just one watch the same TUW Ruhla you have. I like the watch a lot, don't like the lugs and the mash. Well I unsubscribed because i live in Denmark and have to pay duty fee everytime. Not I just safe and buy the watcher I really like.

[@matthowell8985]

It's funny nobody questions the Rolex situation on watch gang. Just take a look around you and you can start to get skeptical. For starters no one is selling their Rolex at a Bargain Bin discount so they're not acquiring them that way beyond that Rolex does not overproduce watches or discount them themselves so they're not getting them that way. I'm guessing these are Rolexes that I've had issues and have been refurbished.

[@bluemystic7501]

The only thing you need to know is that Watch Gang will send you a shitter every month ;)

[@choe69]

The moral of the story is "good watch is not cheap and cheap watch is not good".

[@SilverKeyMan]

I'm wearing a Timex Weekender, which I bought for $30 CAD, and all the reviews I've seen is that it is one of the best watches under $100. I think heavily advertised brands are probably lower quality, but there are a lot of watches I'd never heard of several weeks ago that are held in really high regard.

[@kevinc1001]

To me these subscriptions are not worth it the money you spend per month you could have a GS, Rolex, JLC etc.

[@a97b18b]

Kevin C that’s how I feel. I’d feel like I’m throwing money away. How many watches will I actually like if I do it for a year ? I’d rather buy a Seiko5 every month

[@jordananderson69]

They do not sell discounted watches, they sell watches that would realistically retail for $50 and they sell them for $150. That’s how they make money. Compare their “discounted” $150 watch to a seiko or orient watch that costs $200 retail…watch gang Chinese brands look like toys.

[@a.j.scalzitti1929]

Okay so none of that applies to how Rolex works. First Rolex is not technically a company but a non profit trust that doesn't disclose anything. They manufacture up to 800k movements per year and that translates to whatever models they choose to put them in. An AD of Rolex has no say in what they get BTW, inventory just show up and the AD is charged. No buy backs to Rolex or any of that, and that is why some spill into the grey market. Rolex doesn't like that BTW and if they find out a AD is doing that they are a risk of loosing that AD relationship

[@The_Kavalier]

Thanks

[@adammaisano7962]

And that watch you are wearing you couldn’t resell for $50

[@hambone4728]

I feel the video is giving them too much credit for having an excellent business model. They are simply buying cheap Chinese mass produced watches, the actual cost being between $7 and $20 to produce, advertising their value as "$150-$500" and then selling this $12 watch for $99 subscriptions. Of course they aren't selling $500 products for $99. Anyone who actually believes that is a complete fool. And yet they continue to make money. All of these modern watch brands are really just showing the sucess of brilliant marketing and dim-witted consumers. Not brilliant business or watchmaking.

[@ThePatz29]

That's not how they make their money. I can proof it

[@alikob5410]

Prove it,Share the business model

[@x83_t76Y]

@@alikob5410 they send out cheap watches manufactured specifically for them. They are basically sell crappy Chinese made watches and a chance to win a rolex.

[@ladonnabrady1116]

can i have your watches on your wrist

[@The_Kavalier]

🤷🏻‍♂️

[@excelerater]

Allocation is the capitalism you speak of. However you failed to mention that Rolex and plenty of big brands wont let you as a retailer sell the watches at a discount ,they are price controlled so you as the retailer cant give a 7500 Rolex Submariner away for cost just to ditch your inventory to keep up allocation . Its bullshit really. There are ways around this however,words like BLEM ,I have a Rolex but it has slight markings on it so we have to sell it at a discount and they buyer looks at it and says "i cant see anything wrong with it " and its a win for both parties.....But here is the twist,a MFG can go slap products for sale directly as well and call them blems just so they too can move hardware (I see this a lot on ebay not with Rolex per say but MANY mfgs) . Lets face it we all need high top line numbers,we all want to push stuff out of the door,it makes out books like happy and our business model as well . That being said I signed up yesterday for Watchgangs 99 dollar tier,fingers crossed I dont get some AliExpress POS ...... Take care

[@Artificial-Insanity]

That was 10 minutes of pure BS. The way they make money is by selling mushroom brands like Heritor, which are basically just a front for cheapo Shenzhen watches. That Heritor watch, which supposedly retails for $500 (yeah right) probably cost them about $50 tops, probably more like $25-30. Same with most of the brands they'll ship you, it's all made up nonsense selling Chinese watches. They'll throw in some overstock from decent brands like Citizen every now and again.

[@JoeyBallzMcBigMe]

Garbage watches

[@mannyfresh2deff]

Man watchgang sucks..i wouldnt get this even if were free..all the watches they sell r from 3rd party ..so in other words u better off buyin it cash n for less money...they been known to send ppl the same watch 2 to 3 times in a row..299 a month and u dont even get a watch that over 150.dont.do it..not worth it biggggg rip offfff

[@davejarvis5279]

95% of black tier watches are cheap Chinese quartz junk The odd mechanical watch you may receive can be bought off alli Express £20-£30 cheaper

[@dhakacollege1219]

The title you are using is misleading. Since you are not 100% confident, you cannot claim it to be the truth.

[@The_Kavalier]

Alternate truths

[@Ztinkyy]

Blah blah blah. Answer: CHINA crud quality

[@TexasWarrior313]

I feel sorry for Any1 who cant instsntly recognize this suppsed 'honest' review clearly is trying to sell viewers on watch gang despite presenting 'cons' in his effort to portray himself as unbiassed. Its pretty simle. For 100 a month (their most popular plan) you get a no brand watch that really nobody has ever heard of that is listed with an inflated retal of 500$ or so dollars just to give the watch a perceived value, but certainly nobody in their right mind would or ever has paid those bogus retail prices or anything close to them. And once or twice in a 12 month sub u may get a recognized Affordable brand in invicta or a Seiko leftover model which will be ur only watches worth close to the 100$ monthly value. If u cant see through this chump then u are an easy target

[@The_Kavalier]

I wasn’t reviewing the service I was talking about the giveaway as I’ve been a member for a while and know there’s a lot of interest. Thank you for watching!

[@steven3379]

Rolex are over priced. Watch Gang is a rip off.. I don't agree with your break down either, it is filled with outdated figures.

[@a97b18b]

Steven explain

[@mahmoudahmed2954]

Rolex watches are handmade it takes a year or more to produce one and it is extremely durable(they run various harsh tests before selling one).

[@martinc.720]

“Rolex are overpriced.” - Your opinion “Watch Gang is a rip off” - Don’t subscribe. “I don’t agree with your break down” - Where’s yours? It has to be worth sharing if you know better!