When?

[MikeHendrick1978]

When did Rolex change their business model? I remember up to at least to 2010 you could still walk in and buy any piece pretty much or get any piece pretty much on a walk in basis. Just curious....

[Bstewart]

Late 2017, early 2018 when it began, covid made it go absolutely nuts though.

[HogwldFLTR]

Curious as to what you believe their business model is? IMHO they are producing all the product they can. The only change that can have an effect on supply and demand is for them to increase supply or demand decrease. I understand they have a new plant underway but that is five years out. That might be the time frame you are looking for. Curious as to what you think Rolex is doing to constrain supply?

[123Blueface]

Originally Posted by HogwldFLTR

Curious as to what you believe their business model is? IMHO they are producing all the product they can. The only change that can have an effect on supply and demand is for them to increase supply or demand decrease. I understand they have a new plant underway but that is five years out. That might be the time frame you are looking for. Curious as to what you think Rolex is doing to constrain supply?

Agree.
I just can’t understand these types of comments made by OP.

[Chester01]

Rolex did not change. Others figured out there is much $$$$ to be made by pinching supply using lots of insta hype and hacking people's psychological weaknesses to create extra demand. Rolex just benefits from what has been created. Chalk it up to yet another thing that tech has "improved"

[waterking]

Originally Posted by MikeHendrick1978

When did Rolex change their business model? I remember up to at least to 2010 you could still walk in and buy any piece pretty much or get any piece pretty much on a walk in basis. Just curious....

Might want to Google "events of the last 12 years". I suspect this may clear up your questions.

[MikeHendrick1978]

Originally Posted by HogwldFLTR

Curious as to what you believe their business model is? IMHO they are producing all the product they can. The only change that can have an effect on supply and demand is for them to increase supply or demand decrease. I understand they have a new plant underway but that is five years out. That might be the time frame you are looking for. Curious as to what you think Rolex is doing to constrain supply?

I assumed that it was Rolex who changed the business model for having the AD's not keeping stock anymore or just having stock in the back for preferred customers. I was just used to being able to look at pieces a few years back and go in and buy the piece I was interested in. Of course there were exceptions to it but for the most part I still remember from 2003-2010ish I remember you could go in get a sub or an explorer or Oyster Perpetual or Datejust with relative ease.

[VerticalClutch]

Take a look at the flex culture that happened on social media. Clowns on Instagram posts pictures of their expensive things, so then lemmings go out and copy. The demand for Rolex has simply exploded. Rolex hasn't changed.

Heck, it wasn't that long ago no one knew what an AP Royal Oak was except true watch fans. Now the guy in Echo 3 on Apple TV is wearing one and they're all over social media.

[173rdabn]

Really no particular issues until Covid struck. Just after February 2020, it all imploded. Nothing remotely normal since. ARRRRRRRGH

[WatchGuy1966]

Originally Posted by MikeHendrick1978

When did Rolex change their business model? I remember up to at least to 2010 you could still walk in and buy any piece pretty much or get any piece pretty much on a walk in basis. Just curious....

Mike, you've been in this group for several years now and initiated dozens of posts, and responded to over a hundred. This supply and demand issue is nothing new to you. What's the intent of your post, please?

If you are just venting, just say that.

[bluestreak]

Originally Posted by VerticalClutch

Take a look at the flex culture that happened on social media. Clowns on Instagram posts pictures of their expensive things, so then lemmings go out and copy. The demand for Rolex has simply exploded. Rolex hasn't changed.

Heck, it wasn't that long ago no one knew what an AP Royal Oak was except true watch fans. Now the guy in Echo 3 on Apple TV is wearing one and they're all over social media.

I love it. There are hundreds if not thousands of people on this board saying they want these watches.
But somehow the demand problem is all caused by “instagram flex culture.”
Also, if people here want the watch, they are enthusiasts. If they are on another platform, they’re “lemmings.”

Literal LOL

[RoRoRo]

1M Supply
100M Demand
Simple

More people with more money in this generation than ever before wanting luxury goods with free printed money by governments during covid. Everyone couldn’t go on holiday, buy a car, had mortgage holidays so decided let’s go buy watches instead.

Demand went up and so did price.

[Tim Plains]

Originally Posted by MikeHendrick1978

I assumed that it was Rolex who changed the business model for having the AD's not keeping stock anymore or just having stock in the back for preferred customers.

How exactly does Rolex benefit from its ADs selling other brands and loads of jewelry to those preferred customers?

[DoctorsOrders]

Demand increased, supply stayed the same. It's as simple as that. I wish that supply would increase as well, but I don't see that happening any time soon.

[DJ2020]

Originally Posted by bluestreak

I love it. There are hundreds if not thousands of people on this board saying they want these watches.
But somehow the demand problem is all caused by “instagram flex culture.”
Also, if people here want the watch, they are enthusiasts. If they are on another platform, they’re “lemmings.”

Literal LOL

You just hit the nail on the head. Instagram, social media created a culture that has never existed for Rolex watches. Now due to the above mentioned, This group wants them for flexing and keeping up with the Jone's . Rolex hasn't changed, The type of buyers have changed. Created the want for the purpose of flexing and fast cash. This is where the " Demand" has come from. The AD'S are just cashing in on the greed and the must have a particular watch crowd. Subs, GMT's and Daytona. Now every new kid on the block has one of these on there list. Wasting money on things they don't need just to have the opportunity to buy one. This is how the world is.... For now.

Just look at any post, most replies are about resale value or on the list for a Sub, GMT etc. What happened to just buying a watch and enjoying it?

[WilsdorfNDavis]

Originally Posted by waterking

Might want to Google "events of the last 12 years". I suspect this may clear up your questions.

My thoughts exactly...

[RyanJ]

All because of hype. People did not wake up one day and want a Rolex. Demand increased because people could flip for profit and the watches disappeared from shelves. When shelves are full, less people want. When shelves are empty, people want what they can't have.

Hype increased demand and ADs perpetuated this by starting to hide watches in the back. They say it is to stop flippers, which is probably partially true, but it also serves to make it look like these watches are really hard to get which further increases demand.

So yes, ADs 100% changed and are 100% perpetuating the hype. I mean hey, it's good for sales so why not. I can't blame them.

Is it supply and demand, yes. However, there are also some puppet masters artificially controlling the supply to help perpetuate demand.

No way I would ever have the data to prove this but if ADs just put the watches on the shelves and let anyone buy them, I bet we would have way way more watches going secondary than actually people wanting them to wear.

[Harry-57]

Welcome back from your coma.

[MikeHendrick1978]

I know the supply/demand is nothing new i was just wondering when it started that's all....I am not venting in any way.

Originally Posted by WatchGuy1966

Mike, you've been in this group for several years now and initiated dozens of posts, and responded to over a hundred. This supply and demand issue is nothing new to you. What's the intent of your post, please?

If you are just venting, just say that.

[VerticalClutch]

Originally Posted by bluestreak

I love it. There are hundreds if not thousands of people on this board saying they want these watches.
But somehow the demand problem is all caused by “instagram flex culture.”
Also, if people here want the watch, they are enthusiasts. If they are on another platform, they’re “lemmings.”

Literal LOL

I’m confused as to how you don’t see social media driving demand in ways it never used to be. Companies literally give products to “influencers” because they know it drives demand. They literally have videos out there just talking about how much each item in their outfit costs…flex culture. Then people want what they have…influencers. Then they go buy it…supply issues.

The reach of influencers is far beyond what TV and magazine adds could ever have accomplished. From my experience, the supply issues started when posting watches on social media became big.

[GGGMT]

I think their business model has always been to construct, high-end watches and sell them


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[Fleetlord]

IMHO Rolex not ramping up production to meet demand in itself is a strategy contrary to the usual methods of the watch industry. I understand part of this is because they don't want to get caught producing too many watches if the economy tanks...but I think once Rolex saw the effect production restraints had on FOMO elevating the brand to arguably the strongest luxury brand name in the world, it reinforced this position.

Also it's no secret that Rolex has been closing AD doors during this era. Closing a lot of AD doors. That's controlling and consolidating distribution. Also contrary to the usual practices.

The way it usually goes is if a luxury watch brand gained popularity (Panerai here's looking at you) it's time to capitalize! Raise prices bigly! More production. More Distribution. More References. More "limited" editions. MORE MORE MORE.

Well, that's not what the luxury market wants and that's easy to tell by which brands currently dominate the market...the brands that control their distribution and production.

I remember a letter that Rolex sent out to their AD network back in 2017/2018 (no I don't have a copy of it), but I was shown it. It essentially stated that demand for Rolex was increasing and don't expect any more to be produced to meet this demand, so reserving the key references for their key clients would be in the AD best interests.

I understand this is a very, very controversial stance to take...and many here will argue that Rolex wouldn't DARE do anything of the sort, but there are precedents of other high end watch and luxury brands (Patek, AP, Hermes..etc) controlling distribution and production of certain products in their range...so I'm not sure why Rolex wouldn't be capable of capitalizing on such dastardly strategies?

[alphadweller]

Originally Posted by bluestreak

I love it. There are hundreds if not thousands of people on this board saying they want these watches.
But somehow the demand problem is all caused by “instagram flex culture.”
Also, if people here want the watch, they are enthusiasts. If they are on another platform, they’re “lemmings.”

Literal LOL

I did laugh at his clown and lemmings comment, I must admit .

[1William]

I started to see the shift when Rolex introduced the Daytona-C in SS in 2016. It went forward and then we hit covid and off to the races. Many factors play into it but it is not just Rolex it is PP/AP and to a lesser extent VC. Like everything else it will change as we go forward. For the better or the worse, depends on how you want to look at it.

[EEpro]

Originally Posted by bluestreak

I love it. There are hundreds if not thousands of people on this board saying they want these watches.
But somehow the demand problem is all caused by “instagram flex culture.”
Also, if people here want the watch, they are enthusiasts. If they are on another platform, they’re “lemmings.”

Literal LOL

The second they are in cases nobody will be buying. $16,000 for Daytona? No way man.

[fskywalker]

Originally Posted by waterking

Might want to Google "events of the last 12 years". I suspect this may clear up your questions.

+1


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[clubrcr]

I have bought several Rolexes over the years. In the past, ADs would not give discounts on their most popular watches and the grey market would have watches but had paperwork from non-USA Rolex dealers. You could get most any watch, and you didn't pay a premium, most of the resellers were selling lower than MSRP. Now, there are many US grey market dealers that are able to get BNIB watches (while we are waiting in line) and sell them at a massive premiums. It is easy money for these dealers if you can get the inventory. People had more money through COVID, check out M2 money supply. So where is the demand? I believe it is from this business model. If you want it now, you'll pay a premium. We live in a society where waiting is a hassle and if we want it, even with a premium, we buy it. Add that to ROLEX creating boutiques that give you the perception that you are lucky to get a watch in 2 years?? This business model worked for years for Harley Davidson and Ferrari. It is working for ROLEX, but even better for the resellers.