Rolex Dumping their AD's?

[Cavester]

There seems to be a consensus between some that Rolex are dumping their AD's to bring sales in house.

What are people's opinions on here of this, truth or slander?

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[-Ally-]

Consensus between some?

Nonsense.

[ChipotleBanana]

Originally Posted by Cavester

There seems to be a consensus between some that Rolex are dumping their AD's to bring sales in house.

What are people's opinions on here of this, truth or slander?

Sent from my SM-G991B using Tapatalk

Rolex will not dump all of their AD's. Many of these retailers are directly responsible for the success that the brand has had. Rolex does NOT partake in the retail side of their business whatsoever.

[Cavester]

Originally Posted by -Ally-

Consensus between some?

Yes, I've heard of various people now commenting on this due to "leaks" coming out of Rolex.

Just trying to understand how much of a consensus people think this is.

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[GB-man]

They’d be better for it but it would be cold blooded and would require a lot of work. Depends how ambitious the CEO is. My guess is they don’t do that but rather cull the herd.

[SDR581]

Originally Posted by Cavester

There seems to be a consensus between some that Rolex are dumping their AD's to bring sales in house.

What are people's opinions on here of this, truth or slander?

Sent from my SM-G991B using Tapatalk

Rolex is definitely trimming down and consolidating ADs to have a more streamlined logistics due to the high demand. However, I think some of the rumors are due to some YouTube channels pushing this theory (Paul Thorpe).

Nothing he has said has ever come to term.

[SDGT3]

I could see it happening in order to control rogue dealers who are selling out the back door. One could make the argument that this environment has helped Rolex, but it's simply not sustainable and better to get out in front of it and control distribution directly than experience the alternative.

[mbalmz]

Originally Posted by Cavester

There seems to be a consensus between some that Rolex are dumping their AD's to bring sales in house.

What are people's opinions on here of this, truth or slander?

Sent from my SM-G991B using Tapatalk

They do seem to be actively opening more "rolex boutiques", but in the US the "boutiques" are all run by large ADs (wempe, watches of switzerland, etc).

If your point is that they’re moving to boutiques only vs multi-brand stores, I could see that being the plan long term.

If you literally mean Rolex exclusively running their own retail (a la Apple) and not using the AD brand names at all, there is zero chance of this.

[RolexSimon]

Originally Posted by SDGT3

I could see it happening in order to control rogue dealers who are selling out the back door. One could make the argument that this environment has helped Rolex, but it's simply not sustainable and better to get out in front of it and control distribution directly than experience the alternative.

Agree - Rolex is trying to get a handle on this. Perhaps ADs they aren't 100% sure about are in the firing line. As big multiple-franchise dealers have so much more to loose, perhaps Rolex feels they can apply the pressure to them a bit more (stopping sales to known flippers, releasing data on individuals and watch purchases etc.). See it happening with Rolex (only in some countries I accept) wanting a form filled out with individuals' name / occupation and purchase history for allocation of top-end watches now.

[whiskyrolex]

Originally Posted by RolexSimon

releasing data on individuals and watch purchases etc.).

Highly doubtful as it would would violate privacy laws in many of the regions Rolex operates in.

[absoluteczech]

If you think Rolex doing direct to consumer would benefit distribution and supply you'll be sorely mistaken. It will be scalped by the individuals online using bots, etc. I for one hope that they don't go down that road

[UK AP]

Rolex are wholesalers, who sell their products through retailers, I don’t see that changing any time soon, they may however going forward be more particular with whom they partner.

[Laszlo]

I am ignorant to the insides of how the watch world functions, but as an outsider, or an outside-in perspective, other major luxury brands changed their business strategy and models many years ago and sell exclusively online and through their own stores. 80% of luxury customers prefer online discovery, purchase, and/or drivers to the brand store. Who really wants to go to a jewelry store (AD) anymore and beg for a watch or have to establish a relationship? Really? That's crazy old school and borderline mafia tactics. It might work for customers who've been conditioned to this over the past 20-years, but the young money won't buy into that at all. It's a turn off for them. This Rolex model doesn't cut it in today's luxury good commerce. The current Rolex model is dated and old fashioned. It's time to evolve like everyone else has and I believe they're very much engaged in this strategy and change now.

[RolexSimon]

Originally Posted by whiskyrolex

Highly doubtful as it would would violate privacy laws in many of the regions Rolex operates in.

I accept this is a legal issue. I'd imagine there may be some way of doing this for warranty registration? Also, if you want a particular top end watch and by agreeing for your details to be provided to Rolex is the only way to even be considered, I suppose it's a personal choice whether you want that Meteorite Daytona or not.......
Rolex has tried the warranty withholding method before, but failed due to legal requirements, I'd imagine they're trying to close the holes by other methods now......Getting rid of dodgy ADs might be one of them.

[JPARICE]

My humble opinion I believe this is history repeating itself based on the strong demand in China and Southeast Asia it appears Rolex will shift some of their resources there. It is common knowledge that Rolex only produce and are only able to produce about 900,000 watches a year. But there's nothing to dictate what kind of watch are to be manufacture, in my humble opinion they will manufacture high value watches and send to South East Asia.

[dannyp]

To paraphrase William H. Macy in Wag The Dog:

Rolex know's two things to be true: Owning one of the world's most coveted trademarks and being the sole producer of products bearing it is awesome, and being in retail sucks.

[Chiboy]

Originally Posted by dannyp

To paraphrase William H. Macy in Wag The Dog:

Rolex know's two things to be true: Owning one of the world's most coveted trademarks and being the sole producer of products bearing it is awesome, and being in retail sucks.

Being in Rolex retail sure doesn't suck these days. They have lines for virtually everything, so all they have to do to make a 4 or 5 digit margin is call the next in line. As if that wasn't enough, the retailers can even leverage that more by requiring customers to buy some non-Rolex stuff in order to get that call.

The downside? They have to waste a bunch of retail square footage on empty, Rolex-ordered and sold display cases.

[Harry-57]

Originally Posted by RolexSimon

I accept this is a legal issue. I'd imagine there may be some way of doing this for warranty registration? Also, if you want a particular top end watch and by agreeing for your details to be provided to Rolex is the only way to even be considered, I suppose it's a personal choice whether you want that Meteorite Daytona or not.

In the UK this would be illegal. If Rolex could somehow gain an individual's, private agreement to store such data, said individual could require Rolex to wipe their file clean at any time post purchase. Rolex would be breaking the law if they refused. Data protection legislation ain't got a whole lot of loop holes in it. Rolex would be playing with expensive fire. Or rather they wouldn't - I suspect they know the score as well as anyone. Probably better than many.

To the wider question. Rolex do seem to be slimming down their AD population. But this has been going on for years. In the city where my AD is located (who has been a Rolex AD for the greater part of their 120 year existence), there was another big chain Rolex AD. This was reduced to one AD years ago.

Setting up a direct to customer model would require a huge investment in infrastructure and logistics, cost a fortune to run, and an even bigger fortune to run to Rolex's high standards. It is more a (faint) possibility that they could make limited edition specials which could be bought online and collected from ADs. This would cut down the instance of multiple scalper purchases but probably not prevent it entirely. If anything was sold online and sent direct to customers, scalping bots would grab the lot - as already alluded to earlier in the thread.

However inconvenient and outmoded the wholesaler to AD model may appear, it has been profitable and the profit margins have steadily increased. Many customers prefer this model and the thing to remember about young money is that it soon becomes middle age money and old money. People's preferences and habits change accordingly. Besides which, Rolex won't be slow in adapting if they have to, but they wouldn't destroy one successful model of sales and marketing to accommodate a new sector, because they will still have tons of customers who prefer, for want of a better word, the "traditional" AD experience. Maybe over time a balance will evolve to address a different market dynamic? Since Rolex can still sell everything they make and increase profits year on year, as can their ADs, it is understandable that will not bin this model.

Anyone who believes they know how to market Rolex better than Rolex should get those CVs in. And who knows, maybe they just might bite your arm off? Nothing ventured....

[dannyp]

Originally Posted by Chiboy

Being in Rolex retail sure doesn't suck these days. They have lines for virtually everything, so all they have to do to make a 4 or 5 digit margin is call the next in line. As if that wasn't enough, the retailers can even leverage that more by requiring customers to buy some non-Rolex stuff in order to get that call.

The downside? They have to waste a bunch of retail square footage on empty, Rolex-ordered and sold display cases.

There’s a difference between “it doesn’t suck to be in retail” and “it doesn’t suck to have the Rolex line if you’re in retail”

It still sucks to be in retail, some retail just sucks less.

[misterpeanut]

I welcome the change as distribution will be more straightforward, but this doesn't mean watches will become cheaper or more available, especially for average joes like us. It will likely be similar to the distribution for Hermes and Birkin bags. Still some gray selling but they have more control, and waitlists will still be a thing.

Those who say "But but it's so profitable now!! Why would they change?!?!!" are missing the mark. They are getting 60% of a $9600 of MSRP but 25% of the watch's market price, when they could be getting 100% of a $23,000 pie. Don't think that number has been lost on them.

[johnwigan]

Originally Posted by Cavester

There seems to be a consensus between some that Rolex are dumping their AD's to bring sales in house.

What are people's opinions on here of this, truth or slander?

Sent from my SM-G991B using Tapatalk

Don't believe this for one minute and I have seen no evidence for it. There is a shortage of watches and high demand for watches, due to COVID-19 and fiscal stimulus. This is true for lots of other products as well, it is not just Rolex watches.

Rolex will not change a winning business strategy because we are experiencing a once in a lifetime pendemic for a couple of years, which is causing problems such as empty display cases for a short period.

We are now recovering from COVID due to the vaccination drive, and things will slowly return to boring normality. You will be able to buy most Rolexes again from ADs with minimal waiting times. The flippers/grey market will make this process slower but they will not stop it. I would expect PS5s, new cars and everything else to return to normal as well i.e. if you want one you will be able to get one.

I can't wait, bring on boring normality, holidays, nightclubs, no petrol shortages, energy costs back to normal, government stops handing out vast sums of free money driving up inflation, reality returns and the bill for all this arrives on people's doormats.

[teck21]

Originally Posted by misterpeanut

I welcome the change as distribution will be more straightforward, but this doesn't mean watches will become cheaper or more available, especially for average joes like us. It will likely be similar to the distribution for Hermes and Birkin bags. Still some gray selling but they have more control, and waitlists will still be a thing.

Those who say "But but it's so profitable now!! Why would they change?!?!!" are missing the mark. They are getting 60% of a $9600 of MSRP but 25% of the watch's market price, when they could be getting 100% of a $23,000 pie. Don't think that number has been lost on them.

They are absolutely comfortable with the number.

They have many ways of increasing revenue if they want to without changing their entire business model.

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[amanbra]

In Sydney / Aus I think there might be a bit of a push to go Rolex only boutqiues and get rewarded for this. We have a few ADs now that have split off their Rolex showroom to an entirely new premises. I do wonder if the small ones who just have a separate Rolex section in the store are now feeling nervous. Wouldn't shock me if in the coming years if they get cut. I'm pretty sure it annoys Rolex when ADs suggest other brands when people ask for certain hot models.

[173rdabn]

Highly unlikely. Need ADs to support volume and geographical coverage.

[WatchGuy1966]

Originally Posted by SDR581

(Paul Thorpe).

Nothing he has said has ever come to term.

^^^ this^^^

He's nothing but click-bait

[WatchGuy1966]

Originally Posted by Laszlo

borderline mafia tactics.

This is where I abandon reading your post and toss it all out as hyperbole

[Kevin of Larchmont]

Originally Posted by Cavester

Yes, I've heard of various people now commenting on this due to "leaks" coming out of Rolex.

Just trying to understand how much of a consensus people think this is.

“Many people are saying….” Yeah no, never gonna happen. The illusion of exclusivity is reinforced by ADs and their empty cases. Retail is an entirely different business than manufacturing and marketing and Rolex has no interest in upending their entire business model especially when they are destroying their competitors with it. Sure, Rolex is cleaning house and tightening their distribution but this is to better control that distribution, not to eliminate it.

This is all my opinion of course based on life experience beyond watches. Of course I can’t prove or support it but I know it.

[Timetracker]

Rolex is just another manufacturer.

There isn’t a single manufacturer that wouldn’t love to do the same, or more business with FEWER dealers. Not one, not ever. The end.

Rolex is not one bit different in this regard.

[vh2k]

Originally Posted by SDR581

I think some of the rumors are due to some YouTube channels pushing this theory (Paul Thorpe).

Nothing he has said has ever come to term.

Originally Posted by WatchGuy1966

^^^ this^^^

He's nothing but click-bait

He has ZERO credible sources and is consistently wrong more than any other watch industry prognosticator.

ROLEX IS NOT GOING DIRECT. PERIOD!

[joejet]

If Rolex want a loyalty scheme just look at the airlines. BA is a good example with its yearly tier points and Milage collection. If you get enough tier points you progress up the scale Don’t get enough for gold one year you drop to silver.

I propose the Rolex tiers as
Twotone - basic level
All Gold
Stainless
and
platinum - top level
Masterpiece - bit like BA Premier invite only

Or
Date just
Op
Yacht master / Millguass
Full sports.

The groups are earned by types of watches bought and mileage the amount spent.