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24 April 2024, 12:50 AM | #1 |
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AD Margins
Does anyone know what margins AD's are working with for Rolex? For example Sub No Date is $9100 ish. What are they getting that watch for?
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24 April 2024, 12:54 AM | #2 |
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It's around a 40% profit margin historically.
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24 April 2024, 12:54 AM | #3 |
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Why don't you go ask them?
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24 April 2024, 12:56 AM | #4 |
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42%
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24 April 2024, 01:06 AM | #5 |
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Remember, the wholesale cost is a gross margin, not the net margin that they pocket before income and other taxes.
They have rent, some ADs have much higher than others, some own their buildings etc. sales commissions, salaries, building maintenance, that fines crotch in the back room etc etc |
24 April 2024, 11:34 PM | #6 | |
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25 April 2024, 12:39 AM | #7 |
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25 April 2024, 12:52 AM | #8 |
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25 April 2024, 05:38 PM | #9 |
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24 April 2024, 01:50 AM | #10 |
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Not enough to offer you a discount, if that’s where you’re headed
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24 April 2024, 07:44 AM | #11 |
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24 April 2024, 01:53 AM | #12 |
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I think in the US, the ADs now pay 62% of the MSRP for wholesale, might be 63%.
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24 April 2024, 01:53 AM | #13 |
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Chinese replica factories is making 95% of the same watch for $350, with margin.
All the YouTubers posted about amazing fakes for years for the clout. With an extra couple days of QC, polishing, testing, can probably make the same thing for less than $1000. Remember Rolexes are majority machined. You can also look at Tudor, if they can make pelagos titanium with margin for $4k, they can make your submariner for less than half, that’s with margin. The rest of it is “heritage,” branding, marketing, sales, etc etc. Once you get to a certain level of product that’s mostly what it is anyway. It’s about the way it makes you feel + extra QC, not the actual assembly of materials you are buying |
24 April 2024, 06:53 AM | #14 | |
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But this applies to the margin that Rolex makes, not the ADs, who are Rolex’s actual customers. |
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24 April 2024, 02:37 AM | #15 |
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The percentage that has floated around this place in recent years is 38%.
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24 April 2024, 04:53 AM | #16 |
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40% on Rolex and about 75% on other watches and jewellery
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24 April 2024, 07:58 AM | #17 | |
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They still give the same ‘store enquiries only’ and ‘waitlist’ run around and essentially just say come back in a few months. Which leaves me free to shop around. Ultimately there will be no supply issue with these watches. So in my ‘business’ mind - I would want to be grabbing deposits off every single enquiry so I have secured that business when the watches come in. What am I missing? |
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24 April 2024, 10:17 AM | #18 | |
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24 April 2024, 12:08 PM | #19 | |
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24 April 2024, 03:34 PM | #20 | |
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The other brands are not in demand as much Having Rolex helps them sell/bundle other highly profitable jewellery and watches.
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25 April 2024, 12:14 PM | #21 | |
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24 April 2024, 07:59 AM | #22 |
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Does it really matter how much the crown, the AD and maybe the grey dealer make?
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24 April 2024, 12:47 PM | #23 |
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24 April 2024, 09:05 PM | #24 |
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The thing about valuing Rolex margins inside an AD is that you would need to know their sales mix. I don't - so let's talk industry averages in US. Bear with me as it's a multi-step process.
Rolex sales are a rather small part of the AD's overall jewelry sales. All high-end watch lines contribute as little as 10% to 20% of all jewelry sales. In US, Rolex volume is gated by RUSA. Tag and other brands not as gated. Average GPM on all jewelry sales volume before the pandemic hovered around 45% at high-end shops. Then plummeted at the outset 2020-2021, and has recovered nicely. But not north of 50%. So if you factor the small slice Rolex provides, and its capped GPM around 40-ish%, losing an official AD status isn't all that bad financially. What it does do is lower the jeweler's profile in the WIS community. Now consider the Tara case being discussed...and the prices some have noted for pre-owned on their website. The volume of Rolex sales is unleashed - they now control how many Rolex models they sell. The advantages (+) and tradeoffs (-) below: - RUSA can't gate inventory (+) - Secondary Market inventory (+) - Cost does rise 2x (-) - Margin is squeezed (-) We'll see how it plays out - my guess is their raw volume rises and their GPM dips a bit. But if they click into the online sales channel (which Rolex forbade when they were an AD) and get their prices into line with the market, they are in better shape overall as a jeweler because RUSA no longer demands shop renovations. Sent from my iPhone using Tapatalk Pro
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25 April 2024, 11:17 PM | #25 |
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I think it is now about 37%.
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