Rolex New World

[coloradojs]

Originally Posted by gesus

The current Rolex situation is not the same as those other companies you mentioned. The demand is completely different. The people who can afford a $15k watch vs a $200k+ car are not the same, therefore the effects on the supply side will be completely different.

To translate into the real world, anyone with an extra $300k lying around can walk into a Beverly Hills Ferrari dealership and have access to purchase essentially any model in their lineup with first class service. If that same person walked into a Rolex AD and asked for a SS Daytona, they'd be laughed out of the store, or be asked to purchase $100K worth of crap first.
The current model is broken, and IMO the AD's are more to blame than Rolex.

With all due respect... You couldn't be further from the truth. I'll use the brands you mentioned as I have experience with them all :

Try buying a 488 Pista without 1-2M in previous purchases with Ferarri. That isn't even talking about the the hypercar levels like a LaFerrari. Try 10-20M at that point. They are possibly the most VIP level driven brand in the world. Same rules apply for Mclaren , Lambo, Porsche high end models, etc.

Try buying a 50k birkin bag from Hermes. You will be laughed out of the store just like at Rolex. It's basically unobtainable unless you are one of their very best clients or personally offered the bag from Hermes Corporate.


I don't think you have a full perspective on how much this is common practice within luxury brands . There are 100's of examples of MUCH more expensive brands than Rolex that follow the same practices.. some with same or worse customer service. There's dozens just in watches alone. Richard Mille, Patek, Lange, etc.

There's so much wealth out there that most of us can even comprehend and they spend what they need to get what they want and don't bat an eye.

ROLEX IS NO DIFFERENT as a brand and in some ways even worse. It's a very accessible lower-level luxury brand that a million + people buy every single year. College students , corporate drones, sheikhs , billionaires, everyday folks. It's price actually works against it's availability. It's akin to LV in it's mainstream accessibility.

No doubt Rolex can improve in their AD and supply chain practices, but to think that it's just a Rolex issue is asinine.


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[Fleetlord]

Originally Posted by coloradojs

With all due respect... You couldn't be further from the truth. I'll use the brands you mentioned as I have experience with them all :

Try buying a 488 Pista without 1-2M in previous purchases with Ferarri. That isn't even talking about the the hypercar levels like a LaFerrari. Try 10-20M at that point. They are possibly the most VIP level driven brand in the world. Same rules apply for Mclaren , Lambo, Porsche high end models, etc.

Try buying a 50k birkin bag from Hermes. You will be laughed out of the store just like at Rolex. It's basically unobtainable unless you are one of their very best clients or personally offered the bag from Hermes Corporate.


I don't think you have a full perspective on how much this is common practice within luxury brands . There are 100's of examples of MUCH more expensive brands than Rolex that follow the same practices.. some with same or worse customer service. There's dozens just in watches alone. Richard Mille, Patek, Lange, etc.

There's so much wealth out there that most of us can even comprehend and they spend what they need to get what they want and don't bat an eye.

ROLEX IS NO DIFFERENT as a brand and in some ways even worse. It's a very accessible lower-level luxury brand that a million + people buy every single year. College students , corporate drones, sheikhs , billionaires, everyday folks. It's price actually works against it's availability. It's akin to LV in it's mainstream accessibility.

No doubt Rolex can improve in their AD and supply chain practices, but to think that it's just a Rolex issue is asinine.


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Absolutely right.

[BradSomrak]

Originally Posted by coloradojs

but to think that it's just a Rolex issue is asinine.


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Co-sign.

[time_and_cars]

Originally Posted by Rodolfo_4

The lack of inventory is a selling strategy, to maje the product more exclusive

Is the same strategy used by companies like

FERRARI
PORSCHE
HERMES

And a few other

Were they prevent a first time customer of getting one of their exclusive items, before becoming a usual buyer of their not so exclusive models

Seems like people like to be treated bad, in order to desire it more


Something like having trouble to get in a club


Some of Us dont seem to like this kind of games

Hahaha so true

[tallroller]

Originally Posted by Rodolfo_4

The lack of inventory is a selling strategy, to maje the product more exclusive

Is the same strategy used by companies like

FERRARI
PORSCHE
HERMES

And a few other

Were they prevent a first time customer of getting one of their exclusive items, before becoming a usual buyer of their not so exclusive models

Seems like people like to be treated bad, in order to desire it more

Something like having trouble to get in a club

Some of Us dont seem to like this kind of games

It sure looks like it, doesn't it. But, ummm NO. You realize it takes a year plus to make one, ONE Rolex watch! LOL. Second, Rolex is not a greedy company. In fact it may come as a surprise to many here to know that they are legit Charitable Org. Sure they churn profit, but portion goes to good causes - makes you like Rolex more now eh?

No, it is not a selling strategy - now that would be an oxymoron. Hardly marketing either. COVID, which also affected Rolex production oh BTW, somewhat worsened the situation.

The supply will go back to some balance but not before several years are yet to pass. And New Sub Line? Short of white gold batmanlike GMT they nailed it 1000% Brilliant as always. Who doesn't see it yet? Well no sense of explaining then.

Enjoy your tiktok

[zewill]

Originally Posted by tallroller

It sure looks like it, doesn't it. But, ummm NO. You realize it takes a year plus to make one, ONE Rolex watch! LOL. Second, Rolex is not a greedy company. In fact it may come as a surprise to many here to know that they are legit Charitable Org. Sure they churn profit, but portion goes to good causes - makes you like Rolex more now eh?

No, it is not a selling strategy - now that would be an oxymoron. Hardly marketing either. COVID, which also affected Rolex production oh BTW, somewhat worsened the situation.

The supply will go back to some balance but not before several years are yet to pass. And New Sub Line? Short of white gold batmanlike GMT they nailed it 1000% Brilliant as always. Who doesn't see it yet? Well no sense of explaining then.

Enjoy your tiktok

Wow, someone Listened hard to his ad salesperson :D
Charitable and yearly to make a watch are too often thrown around with Rolex.
It's like a parrot repeating what he read....
Doesn't take a year to make a Rolex, period. Unless you believe it indeed takes 10 years to produce a year 2010 wine.

[tallroller]

Originally Posted by zewill

Wow, someone Listened hard to his ad salesperson :D
Charitable and yearly to make a watch are too often thrown around with Rolex.
It's like a parrot repeating what he read....
Doesn't take a year to make a Rolex, period. Unless you believe it indeed takes 10 years to produce a year 2010 wine.

you got me. WOW! Brilliant. And thanks for the insult.

[faimag]

I didn't know that the current status of Rolex is "being in the mud"

[Nixshah]

Some of you may be missing the OP’s point...by standardizing aspects of the product offering (dials, cases, etc) if Rolex chooses to do so, they could ramp up production to meet the demand. OP - your statement assumes Rolex is interested in doing this, when in fact, that may not be true.

[Casey VP-26]

Originally Posted by Nixshah

Some of you may be missing the OP’s point...by standardizing aspects of the product offering (dials, cases, etc) if Rolex chooses to do so, they could ramp up production to meet the demand. OP - your statement assumes Rolex is interested in doing this, when in fact, that may not be true.

Thanks Nixshah
Just to add,
I also don't believe that Rolex has been going around the world putting existing AD's out of the Rolex business unless they agree to build a $300,000.00 plus boutique in their stores. I am sure Rolex does not intend to keep those new showcases empty for long.
Like I said before, Rolex is too smart of a company. They have a plan.

[brandog]

Rolex is a marketing genius, everything they've done is done purposely and working perfectly.

[TheVTCGuy]

All I can say is I hope you’re right.

[slus]

I remember thinking I wanted a nice watch, so I went to a Rolex store to browse while my wife shopped elsewhere. They had multiple Submariners with dates, without dates, in two tone or SS, Sea Dwellers, DeepSeas, multiple black bezel GMTs in the case. A rainbow of OPs and DateJusts. They were also one of the only dealers in California for a recently reintroduced to the US brand called Tudor. I tried on watches for about an hour, had a nice conversation with the SA, and left for the night to think it over. The next day I offered ~20% less than MSRP on a Pelagos, which they accepted, and I left feeling like I picked the best watch for me and my budget. It was a great experience.

This sounds like ancient history or an alternate reality, but it was actually only like 6 years ago at Fashion Island Sad to see the waitlists, FOMO, bundling and flipping the Rolex "buying experience" has become. ADs sure seemed a lot healthier at that time too. I definitely don't understand the hype.

[BillA]

Really?
Go take a look at the Hulks on Chrono24. $24-$25K
Will someone pay that? Time will tell.

[AK797]

Rolex are not stuck in the mud, the punters are as there are ten times as many as there is product, and the last few days have shown the hype factory is only getting more insania.

[Deroya]

one can hope

[vinny84]

The only way this can be cured is if people stop paying grey market prices. When demand dies, so does business and those businesses would look elsewhere for the next cash cow.

I don't see this happening anytime soon unless a 2008 scenario unravels, which doesn't seem likely at this point.

[TheVTCGuy]

Someone school me please.....

The incredible demand for Models, empty display cases, how does that help Rolex? Of course I understand that a high demand for your product is good for any manufacturer, but every page on the website says: “Contact your nearest Rolex Dealer” If you buy a Rolex through a dealer you pay MSRP. How does the lack of inventory help the AD? You have 10 Watches, sell 10 watches and get 10 watches worth of profit. Have one watch, sell one watch and get one watch worth of profit. And Rolex doesn’t make money when ADs don’t sell watches(?).

The only way I see the ADs benefitting is if they sell a watch to a Gray at above MSRP. I am not saying this is how it’s done, but that way, the AD would make more, but again, Rolex itself would still make the same amount; their price to the AD.

So for the company Rolex, how does low-availability translate to higher profits?

[Fleetlord]

Originally Posted by TheVTCGuy

Someone school me please.....

The incredible demand for Models, empty display cases, how does that help Rolex? Of course I understand that a high demand for your product is good for any manufacturer, but every page on the website says: “Contact your nearest Rolex Dealer” If you buy a Rolex through a dealer you pay MSRP. How does the lack of inventory help the AD? You have 10 Watches, sell 10 watches and get 10 watches worth of profit. Have one watch, sell one watch and get one watch worth of profit. And Rolex doesn’t make money when ADs don’t sell watches(?).

The only way I see the ADs benefitting is if they sell a watch to a Gray at above MSRP. I am not saying this is how it’s done, but that way, the AD would make more, but again, Rolex itself would still make the same amount; their price to the AD.

So for the company Rolex, how does low-availability translate to higher profits?

Rolex sells almost every watch they make to the authorized dealers. They only have (1) actual factory store in Geneva in which they are accountable for the inventory. All the other AD's and "Boutiques" own their inventory 100%. No consignment. No Floorplan. The watches are SOLD to them by Rolex. The dealers have a min purchase commitment whether they sell a watch out of their door or not. Now of course if the dealer sells more watches, there are more orders to replace them, but there still is a minimum just to be a Rolex dealer...so Rolex factors that in..so Rolex still "makes" money organically.

As for the profits in comparison to low availability, Rolex will actually make more margin @ the factory level by pushing TT and PM references to the dealers. SS watches are lower margin, so the limited distribution of those references drives the sales of the higher margin references to the general public consumer who in the past would have UNDER-BOUGHT themselves into a SS sub, when they prepared to spend TT money.

This is a classic retail marketing strategy to upsell into higher margin through a distribution / merchandising adjustement. Works with everything from Garbage Disposers to luxury watches...

[GSDLover]

Originally Posted by Fleetlord

Rolex sells almost every watch they make to the authorized dealers. They only have (1) actual factory store in Geneva in which they are accountable for the inventory. All the other AD's and "Boutiques" own their inventory 100%. No consignment. No Floorplan. The watches are SOLD to them by Rolex. The dealers have a min purchase commitment whether they sell a watch out of their door or not. Now of course if the dealer sells more watches, there are more orders to replace them, but there still is a minimum just to be a Rolex dealer...so Rolex factors that in..so Rolex still "makes" money organically.

As for the profits in comparison to low availability, Rolex will actually make more margin @ the factory level by pushing TT and PM references to the dealers. SS watches are lower margin, so the limited distribution of those references drives the sales of the higher margin references to the general public consumer who in the past would have UNDER-BOUGHT themselves into a SS sub, when they prepared to spend TT money.

This is a classic retail marketing strategy to upsell into higher margin through a distribution / merchandising adjustement. Works with everything from Garbage Disposers to luxury watches...

This actually makes a lot of sense.

[TheVTCGuy]

Originally Posted by GSDLover

This actually makes a lot of sense.

I am still not getting it, the watches they sell to the ADs are at the same price, like..

Let’s say, the cost of a Sub from Rolex to an AD is $5,000. I have no idea but work with me on this.

The AD sells it to me when I walk in, the AD charges me $10,000, MSRP, and they make $5,000. Now, if they sell it out the back door, to a Gray, for $12,000, then they make an additional $2,000 or about $7,000 profit. This all makes sense.

But the price Rolex sells it to the AD is still fixed (I think) so by selling the ADs less watches, ROLEX makes less profit.

What am I missing?

[Fleetlord]

Originally Posted by TheVTCGuy

I am still not getting it, the watches they sell to the ADs are at the same price, like..

Let’s say, the cost of a Sub from Rolex to an AD is $5,000. I have no idea but work with me on this.

The AD sells it to me when I walk in, the AD charges me $10,000, MSRP, and they make $5,000. Now, if they sell it out the back door, to a Gray, for $12,000, then they make an additional $2,000 or about $7,000 profit. This all makes sense.

But the price Rolex sells it to the AD is still fixed (I think) so by selling the ADs less watches, ROLEX makes less profit.

What am I missing?

They are selling less lower factory margin references and more higher factory margin references.

Plus, they sell 99% of what they make...guaranteed sale no question about it...so it’s the same number sold to AD regardless of distribution.

They make xxxxxxx watches...they sell xxxxxxx watches TO the dealer network, but the margin is higher with more TT and PM...which now have a much healthier environment for the dealers to sell and get reorders...of higher factory margin references.

In Asia most AD don’t want anything to do with SS Sports. It’s too low $$$ for hassle. Pkg them up and dump them on the greys to deal with. Then they focus on fat, high ticket PM pieces for their VIP

Rolex is fine with that as it creates another distribution channel while clearing out the low margin pieces allowing the dealer to improve the factory margin blend via PM references and their reorders.

[grimps]

Originally Posted by TheVTCGuy

Someone school me please.....

The incredible demand for Models, empty display cases, how does that help Rolex? Of course I understand that a high demand for your product is good for any manufacturer, but every page on the website says: “Contact your nearest Rolex Dealer” If you buy a Rolex through a dealer you pay MSRP. How does the lack of inventory help the AD? You have 10 Watches, sell 10 watches and get 10 watches worth of profit. Have one watch, sell one watch and get one watch worth of profit. And Rolex doesn’t make money when ADs don’t sell watches(?).

The only way I see the ADs benefitting is if they sell a watch to a Gray at above MSRP. I am not saying this is how it’s done, but that way, the AD would make more, but again, Rolex itself would still make the same amount; their price to the AD.

So for the company Rolex, how does low-availability translate to higher profits?

ADs are getting the same amount of watches they've always had except they're selling them all at full retail price and many of them as soon as they come into the store.
Don't worry about how ADs are doing.
I have a feeling that the new OP line will be a lot more available than other models which will at least mean some steel models are able to be purchased by walk in customers.
I expect that the lack of complications and simplicity of the OP will mean its easier to manufacturer than many of the sports models and PM models

[superpop]

The issue I have with Rolex is that they are not doing anything about the buying experience. They could modestly increase production on the hot models and drive the flippers and greys out. Everyone seems to think they are brilliant but they are not when it comes to the customer buying experience, which is critical to long term success. Nobody dropping 10K plus on a luxury bauble wants to purchase from a back alley huckster with all of the risks involved. They would also be far better off by just letting the AD add "Additional Dealer Markup" to the hot models, just like the car dealers do. The local Porsche dealer is going to slap a fat markup on a new GT3 to prevent someone else from profiting off of their dealership. Thus keeping these cars going to the true owner and not some flipper. Sure it still happens but it is the exception, not the rule. Rolex is being very short sighted in my mind.

[drfrankenstein]

I'm new to this forum -

How does one explain the 811 Batman's currently listed on Chrono24, the cheapest of which is going for $12k USD. I don't think there are that many people looking for a Batman at this point, let alone at these inflated prices.

[Fleetlord]

Originally Posted by drfrankenstein

I'm new to this forum -

How does one explain the 811 Batman's currently listed on Chrono24, the cheapest of which is going for $12k USD. I don't think there are that many people looking for a Batman at this point, let alone at these inflated prices.

Chrono 24 is full of phantom listings.

They don't have the watch. They take your "order" then scramble to source it.

[mwatchguy]

Originally Posted by Fleetlord

Chrono 24 is full of phantom listings.



They don't have the watch. They take your "order" then scramble to source it.

This is absolutely the case. Just call a few of the dealers and they will tell you that the watch is sold, however they have another one coming. I am curious why Chrono24 doesn't require the dealers to post actual photos of the watch similar to what they ask of the private sellers.

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[Fleetlord]

Originally Posted by ip20171

This is absolutely the case. Just call a few of the dealers and they will tell you that the watch is sold, however they have another one coming. I am curious why Chrono24 doesn't require the dealers to post actual photos of the watch similar to what they ask of the private sellers.

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Chrono 24 pretty much sucks imho.

Just full of fakers playing the system. I don’t blame them, but the real dealers have stock, with real photos and would never post something they didn’t really have in their possession.

[brucethemanlee]

Originally Posted by Casey VP-26

I predict that in very short order we will be seeing plenty of new Rolex watches on display in Rolex AD's and boutique's.
Rolex is too good of a company to be stuck in the mud much longer, with no supply for their AD's.
Their new releases offer many models to be available with minor changes at the factory or RSC centers capable of making matching papers.

good luck thinking that will happen

[amh]

I'm with Casey, fatty sub will become the red headed step child