Rolex PRICE INCREASE JAN 1ST 2022- USA

[Kyle3130]

Originally Posted by Pouring2010

I’m trying to and failing to do math here…

Is this dealer margin or Rolex’s margin..

What is breakdown on a $9,000 watch….

Thks


Sent from my iPhone using Tapatalk

Rolex sells it to AD for $5,760 (64% of $9,000) then AD sells it to customers for $9,000 (36% margin) $3,240 profit for AD

[norcalctr]

Thanks for sharing! Can't say that I'm surprised.

[thenewrick]

I read this as their old margin was 37.6% and now it's 36%

Example:

2021 prices:
Wholesale price to AD $10,000
Price to customer $13,760
Net profit of $3,760

2022 prices:
Wholesale price to AD $10,500
Price to customer $14,280
Net profit of $3,780

Increased profit by Rolex $500
Increase profit by AD $20

Basically a wash for AD's and small increase in profits for Rolex. Maybe an expert can chime in on my math.

[Laszlo]

Originally Posted by Pouring2010

I’m trying to and failing to do math here…

Is this dealer margin or Rolex’s margin..

What is breakdown on a $9,000 watch….

Thks


Sent from my iPhone using Tapatalk

That was government math.

But as a rule of thumb a typical hard goods supplier would expect a 50% margin over what it would cost to make a product. If you’re suggested MSRP is $1.00, you would sell your product (wholesale) at $.50 cents, which is typically a 50% margin above COGs of $.25 cents. The retailer would get the remaining $.50 cents as profit if sold at MSRP, but pricing elasticity would built into that to leave room for the seller to reduce MSRP (via sale, discount etc.) and still retain a profits for both. So based on this baseline rule of thumb a $10,000 MSRP product would cost ~$2,500 to make.

[NiceLittleThings]

Curious how this number compares to other watch brands? Would we expect a similar profit margin for Tudor?

[thenewrick]

There's zero chance Rolex is talking about Rolex's manufacturing>wholesale margins. That's very private, and complicated. But an AD can disclose their numbers if they like, or we can get these leaked letters no problem.

[Seddyspaghetti]

Thanks

[nosignalbmwdriver]

Whos the italian and why’s the dog trainer there?

[MangBr25]

Thanks for the info!

[MJZRolex]

Wow, I didn't expect 36%. Imagine having a product that everyone wants and you sell every watch that comes in the door as soon as it is received. I know it hasn't always been the case, but the AD's are doing quite well at this time.

[noshake]

Hold up, is that letter signed by Mark Goldberg from YouTube?

[Driver8]

Originally Posted by Kyle3130

Rolex sells it to AD for $5,760 (64% of $9,000) then AD sells it to customers for $9,000 (36% margin) $3,240 profit for AD

...and then the flipper (sorry, I mean the "customer") sells it immediately for $18,000 and makes 100% profit. So that's more than Rolex makes and they actually have to build the damn thing in the first place!

[Ferrari308]

This has been the most useful my work toward an accounting degree has been!!



PDG

[thenewrick]

It's very expensive for AD's to carry Rolex. There are strict requirements including massively expensive renovations. Not saying they're hurting.. but it isn't easy being an AD most of the time.

Right now, it's great; for sure.

[Daytonaman799]

Thank you

[samuel019]

What I find wild that no one has commented on, as of yet is the juice David has.

We all know he seems to be the king in the Grey market but this is just another example. I wonder if my guy even knows yet.

[nr1416]

Originally Posted by noshake

Hold up, is that letter signed by Mark Goldberg from YouTube?

Lol. The first thing I saw too

Sent from my SM-G975W using Tapatalk

[ryangambrill]

Any word on an increase from Tudor?


Current:
- 16622 & 18078
- Tudor GMT - 79830
Past:
- Sub Serti Silver 16613
- Sub SS w/Date

[Rolesor_66]

Curious how DavidSW got this information, thanks for sharing though. It makes me wonder is it now up to the consumers to separate the good vs. bad ADs based on where we live? I went to a few ADs while I'm a trip, all SA said they required an in-person for the first purchase.

[Danny83]

Still cheap

[Koolpep]

Originally Posted by Laszlo

Thank you, David.

What’s interesting about the 36% margin, is that a $9K MSRP watch, the COG is about ~$2,900 dollars.

Rule of thumb in the watch business was always around 1/4th of retail price is the cost of goods. You sell the watch to the retailer for 2k (your price 1k) the retailer sells it for 4k (retailer makes 2k, but has to finance the goods sell-in vs sell-through, sit on inventory for a while, etc.etc.)?

[Koolpep]

Originally Posted by Benzsiam

Only 3.4% increase, it seems less than most people was expected.

Thanks for info.

Average is the magic word. In Germany the Submariner Date steel will go up 11% and so did the GMT Master II.

Across all models, the average increase might have been 3.4% but that doesn’t mean some models get a bigger hike….

The official price list is available on the interwebs since yesterday.

[Laszlo]

Originally Posted by Koolpep

Rule of thumb in the watch business was always around 1/4th of retail price is the cost of goods. You sell the watch to the retailer for 2k (your price 1k) the retailer sells it for 4k (retailer makes 2k, but has to finance the goods sell-in vs sell-through, sit on inventory for a while, etc.etc.)?

Sounds about right.

[donas]

Thanks for posting, yet somehow I bet there will still be 3-4 new daily threads of "speculation" lol. I think I let out an audible sigh and rolled my eyes until I saw who the OP was and then felt obligated to click on it!

[ugoblue]

Originally Posted by Pouring2010

I’m trying to and failing to do math here…

Is this dealer margin or Rolex’s margin..

What is breakdown on a $9,000 watch….

Thks


Sent from my iPhone using Tapatalk

Rolex would not send ADs a letter that states Rolex's gross margin they receive from the wholesale price of the watch.

Most likely, the 36% margin is the AD's margin in the MSRP from their wholesale price. So for a $9,000 watch the AD has $3,240 potential profit from a product Rolex invoices at wholesale for $5,760.

A company like Rolex would aim to have 60% gross margin over cost of goods sold (COGS) - their production costs. So the watch might cost Rolex $2,304 to make.

[BaselWorld]

One thing is for sure, the AD that leaked this information to DavidSW has a margin of well over 36 percent…

[EdwardC]

I’ll use my 2000th post to thank you DavidSW

[TswaneNguni]

3.4% is too low for the US of A.
Very disappointing .

(Local increase will be higher .Decrease in local currency value .)

MRSP must be raised significantly .Balance needs to be restored .
Currently its a circus,with empty displays .

How on earth will the first time Sub buyer ever get a chance at the AD ?

[Joearch]

David, thx for sharing. Seems odd the wholesale prices will be mkre than retail.

[Boopie]

David, thanks for sharing!