Why I think rolex should NOT produce more steel sportswatches

[zion_rasta]

1. I am not paying for something more than it’s worth
2. This strategy is killing the Rolex brand; it has become juvenile: Batman, Hulk, Pepsi, whatever.
3. Omega and Panerai realeasing great alternatives
4. Rolex is actually losing its seriousness as a brand
5. I have moved on to other brands; JLC and Panerai in particular

[Quamby]

But SS tool watches are the legacy of Rolex. Hans Wilsdorf will be turning in his grave if Rolex stop making SS watches.

[unknown]

Originally Posted by zion_rasta

5. I have moved on to other brands; JLC and Panerai in particular

Every serious collector does or should
Rolex is nice but you do need more brands if you want to buy multiple watches

Lange, Patek, AP, Tudor, Zenith, JLC, UN, GP, Omega, Panerai ...
have or had them all , but still want to keep and buy some extra rolexes.

Never understood people that buy only 1 brand and it doesn't matter if it's Panerai, Rolex, Patek or whatever.
If you want to buy several watches you just need more brands, not one single brand offers enough diversity.
a Submariner, a Patek chrono, a speedy, a Luminor, Navitimer, Reverso, Tank, El Primero chrono, Royal Oak .. and many other icons.
I believe everybody will love some of these icons and them are all made by different brands

[Mephist]

Originally Posted by normalboywatches

Just because you limit your product and increase the price, that doesn't make it better. Kinda obvious.

I agree, however why do it need to be "better" and what is "better" in your opinion? It is all about marketing and judging by the gray market people are obviously willing to pay more for a Rolex watch then today's AD prices.

[Burlington]

Originally Posted by zion_rasta

1. I am not paying for something more than it’s worth

If there is a downswing in demand / uplift of availability of the hot pieces - will be interesting to see how many still perceive the value at the current prices.

[oldman2005]

Originally Posted by Mephist

I partly agree. However Rolex is moving up to a higher level then what they are at now, and the prices will be much higher. By cutting the amounts of AD's, limiting the supply as much as they do and positioning Tudor as aggressively as they do. It is obviously to me that Rolex wants to move the Rolex brand up a notch and position Tudor to catch all the customers who Rolex now leaves behind. And I think they are executing this perfectly.

IMO the name of the game is up sale not down sale, you have higher profit margin with Rolex DJ/TT/PM than a SS Sport or Tudor (even lower). Your potential customer walked in the dealer to buy an Audi A8, you have partially failed when you tried to sell him VW Passat instead...Tudor isn't Rolex and profit margin on these are undoubtably lower than Rolex

[GBD]

Although I find the waiting game a bit tiresome, I do have patience...up to a point. If the situation became such that buying a basic ss model (like a sub) was virtually impossible, I would definitely stop considering Rolex as a purchase. I'm a watch enthusiast before a Rolex enthusiast, so I'm happy to move on to other brands.

[rtalk]

What we don't talk enough about though, is that by Rolex limiting the supply of their SS Professional models, they are driving up the soon to be vintage market. 16610 Subs are pretty much at par with brand new subs.

This benefits anyone with a SS model. I think we would be more disappointed if our resale values fell off a cliff. We need to pick our poisions.

[rgwarden]

Originally Posted by Quamby

But SS tool watches are the legacy of Rolex. Hans Wilsdorf will be turning in his grave if Rolex stop making SS watches.

This ☝️
I don’t think I could disagree more with the OP if I tried. Perhaps Rolex should cease all its charitable foundation. No money in it right. ‘Bad’ for business.
The fact that the OP can’t see that Rolex has an extraordinary market position in part because of its history, that legacy is pretty core, that the brand was built to a large extent on SS, disproves the OP theory. My feelings are that if Rolex abandoned SS it would lose hand over fist in a very short space of time.

Just an opinion


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[tudorbaja27]

................um no
I won't even bother explaining why, some have done it ahead of me

[Jocke]

Both Rolex, PP & AP have lost me long time ago. I never beg to buy their products and will never pay over list.

There is a lot of great brands out there that knows they live on their customers and appreiciate them and are not arrogant against them.

It's funny when people congrats a guy that pay double list, I feel sorry for him.

But so long there are people that is ready to pay up it will countinue and I will never be a part of it.

[nektar]

Originally Posted by Jocke

Both Rolex, PP & AP have lost me long time ago. I never beg to buy their products and will never pay over list.

There is a lot of great brands out there that knows they live on their customers and appreiciate them and are not arrogant against them.

It's funny when people congrats a guy that pay double list, I feel sorry for him.

But so long there are people that is ready to pay up it will countinue and I will never be a part of it.

Well, there is no way I would pay double the price for a Rolex. But on the other hand, for that person, money may not be a problem. Good for him

[Raku]

Originally Posted by OJONES

I think anyone who compares Rolex to PP, ALS etc simply in terms of desirability as a byproduct of production numbers simply don’t understand what separates these tiers of watches.

Rolex make a fantastic product, but it’s doesnt compete with the likes of the trinity. It’s like comparing Lexus to Rolls Royce. One is mass produced and almost certainly more reliable but the premium and appeal comes from the artisans who’ve mastered their craft.

This sums it up pretty well, I can't find any valid points in the original post I'm afraid because:
1. As others mentioned SS is part of the Rolex legacy and will never go away
2. You can't move a product upmarket over night, especially when making around 1 million every year. The quality must be way higher, ALS make every bridge decoration by hand, taking hundreds of hours to complete - this simply does not fit the Rolex ethos of SS sports watches as tools.

What I believe happened is this: Rolex slowed down production around 2 years ago because of the global economy wasn't doing too well, we all know it's bad for any business to have too much stock lying around unsold.
But the economies of some countries recovered sooner than expected (especially USA and some Asian countries) and Rolex has fallen behind and got overwhelmed by demand.

[101031-28]

I don't know how things are going to pan out but I do know the Daytona SS (and sports models in general) hysteria has been going on for decades where I come from (Italy): as early as 1988 you could not get your hands on a 16520 if you traveled across the entire peninsula and visited every AD! Other SS professionals were distributed to ADs very sparsely as well. This situation is nothing new to me. I am glad I aquired just about every model I wanted before the drought went full on.. Could use a SS BLRO but not paying over retail and I do understand the frustration of those of us starting out that are experiencing long wait times, long lists or pay a premium in order to wear their SS professional of choice. Sucks but it's the name of the game right now.

[GB-man]

I honestly believe it’s mainly a demand issue with inexplicably high equities markets. When they recede so will demand and supply will normalize on standard offerings. Eventually ADs will want to sell their products and bring them out from the safe.

[G.D.BeanCounter]

Originally Posted by Mephist

I partly agree. However Rolex is moving up to a higher level then what they are at now, and the prices will be much higher. By cutting the amounts of AD's, limiting the supply as much as they do and positioning Tudor as aggressively as they do. It is obviously to me that Rolex wants to move the Rolex brand up a notch and position Tudor to catch all the customers who Rolex now leaves behind. And I think they are executing this perfectly.

I personally feel, Tudor is where Rolex was about a decade ago, and as Rolex moves up the ladder in pricing, Tudor will begin to fill the entry- mid level positions. As some Rolex become harder to get, many are beginning to at least consider alternatives, and building up the brand recognition, model lines, relationship to Rolex quality, at a lower price point, becomes a win win for the sister brand. I was ready to pull the trigger on a BB Red, but the SD43 came through on a whim, and voided the plan.

[fskywalker]

Originally Posted by GSBC

Can’t agree more with the OP.
Rolex knows exactly what they’re doing.

[Wahlberg]

1. 'Yeah but the market is there and people are willing to pay twice as much''.

Remember when the government of an Asian country went after corruption and the market went down? What if this is happening again and all that money will fade away in 5 years. You got got higher prices, do you think Rolex will adjust on the spot and cut the price in half again?



2. I don't get the entitlement of some people. Or is my perception skewed?

Do you think this brand got this big or this popular because only wealthy people bought these watches? All the heritage and stories people adore, go take a look where they came from.

Wire me anywhere from 1-5 million USD and I still wouldn't pay 20k for a SS Daytona.

[77T]

An item isn’t more desirable due to its lack of availability-

If Rolex made 10 Million 116500’s it would still appeal to the same number of buyers. And conversely, those who dislike it would feel no difference in their disdain.

You are confusing desire with availability. Desire comes from design, features and brand positioning - tempered by price.

[kegan]

Originally Posted by Wahlberg

1. 'Yeah but the market is there and people are willing to pay twice as much''.

Remember when the government of an Asian country went after corruption and the market went down? What if this is happening again and all that money will fade away in 5 years. You got got higher prices, do you think Rolex will adjust on the spot and cut the price in half again?



2. I don't get the entitlement of some people. Or is my perception skewed?

Do you think this brand got this big or this popular because only wealthy people bought these watches? All the heritage and stories people adore, go take a look where they came from.

Wire me anywhere from 1-5 million USD and I still wouldn't pay 20k for a SS Daytona.

Don’t know if your perception is skewed or not but I see it the same way

[VicLeChic]

I also believe every steel model produced by Rolex dilutes the brand equity. But I only really like or plan on buying steel models so I've got a conflict of interest there. Ultimately I'm not into Rolex to make money even if value retention is a nice bonus, but because I appreciate the quality. Therefore a return to a business model where supply meets demand wouldn't bother me that much. I can be patient when it comes to wait for a hot model, but within reason.

[JohnnyNoDate]

Rolex appears to be setting a new tone and standard for their brand.

The current stainless steel struggle now will only be a blip in time. We won’t even remember the days when we could walk-in and walk-out with a submariner.

It’s mostly annoying, but also exciting from a collectors point of view...

[WJGESQ]

Originally Posted by Wahlberg

Why do you care if they should produce more or less?

If you own a few, it would drive the SS demand through the roof.

[jrs146]

The only people who are really hurt by the current Rolex SS business model are the occasions customers who try to buy a popular model as their one and only. There’s enough supply to keep the loyal customers happy and that’s what Rolex wants.

I’m not suggesting that one should buy a Platinum DD just to acquire the watch they really want. But instead, the buyer who has enough interest (and enough money) IS going to spend enough to eventually be offered the in-demand SS models at retail from their AD. It’s win-win for everyone. Loyalty between customer and AD... repeat business for Rolex... collectors able to maintain equity as they grow their collection... the benefit of the allure of scarcity... all good things.

Really the only losers are the folks looking to score a daytona/Pepsi etc. without investing in a collection. But they certainly can pay over msrp and have one any day. And that’s cheaper than buying multiple watches if that’s not what they desire, so no big deal in my book.


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[SomeEngineer]

Originally Posted by unknown

Ever gone into a Hermes shop and asked if you could buy 5 Birkin bags?
Same story.... and they would be stupid if the increased supply cause if they would become too way to get customers would start looking at other brands.
That’s reality in the luxury market.

Yeah see the problem here is that the birkin bag is a top-of-the-line model. The steel rolexes are the entry point.

Fashion definitely produces goods at lower price points to meet demand for more sought after and costly pieces. This is called diffusion and practically every brand has it. D&G, Emporio Armani, Armani Exchange, Versus Versace, Rick Owens DRKSHDW, etc etc.

If you ask any high fashion retailer they will tell you that the profit margins for diffusion lines are outrageous and they definitely do not cheapen the prestige of the main lines.

In the case of rolex, just walk into any AD and look at their case. How many PM's do you see sitting there? I sincerely doubt smurfs are flying out the doors because your average first timer cant get a steel subC.

The entire point of an entry level or diffusion item is to satisfy demand for higher end items that you just cant move in the same numbers. Take the Birkin. Yes, I'm sure that if hermes made them more easy to obtain Physically (higher production but same price point) they would probably move more units but would still reach a point where sales would normalize based on the fact that its a $16k purse.

For example, anyone who has the money can walk in to a mclaren, lamborghini, rolls royce, aston martin, and, within limit, ferrari dealership, and have one if not that day then within the year. Does that stop people from wanting ferraris and lamborghinis? Absolutely not.

If aston martin stopped selling cars to anyone with the money, that would definitely drive up demand, but this tactic is only going to work in the short term. Eventually people are just going to go buy a lamborghini instead. This has already happened with ferrari.

So what do you do? You raise the price. Raising the price allows you to adjust production levels with demand while still satisfying customers that have the money. Its no coincidence that, only four years on, the base model ferrari 488 is $100k more than the 458 was in 2015.

Im willing to bet dollars to pesos we will see a double digit percentage increase on the MSRP for Rolex steel pro models coming in the next couple of years, as has been speculated time and time again.

[marc2828]

Originally Posted by SomeEngineer

Yeah see the problem here is that the birkin bag is a top-of-the-line model. The steel rolexes are the entry point.

Fashion definitely produces goods at lower price points to meet demand for more sought after and costly pieces. This is called diffusion and practically every brand has it. D&G, Emporio Armani, Armani Exchange, Versus Versace, Rick Owens DRKSHDW, etc etc.

If you ask any high fashion retailer they will tell you that the profit margins for diffusion lines are outrageous and they definitely do not cheapen the prestige of the main lines.

In the case of rolex, just walk into any AD and look at their case. How many PM's do you see sitting there? I sincerely doubt smurfs are flying out the doors because your average first timer cant get a steel subC.

The entire point of an entry level or diffusion item is to satisfy demand for higher end items that you just cant move in the same numbers. Take the Birkin. Yes, I'm sure that if hermes made them more easy to obtain Physically (higher production but same price point) they would probably move more units but would still reach a point where sales would normalize based on the fact that its a $16k purse.

For example, anyone who has the money can walk in to a mclaren, lamborghini, rolls royce, aston martin, and, within limit, ferrari dealership, and have one if not that day then within the year. Does that stop people from wanting ferraris and lamborghinis? Absolutely not.

If aston martin stopped selling cars to anyone with the money, that would definitely drive up demand, but this tactic is only going to work in the short term. Eventually people are just going to go buy a lamborghini instead. This has already happened with ferrari.

So what do you do? You raise the price. Raising the price allows you to adjust production levels with demand while still satisfying customers that have the money. Its no coincidence that, only four years on, the base model ferrari 488 is $100k more than the 458 was in 2015.

Im willing to bet dollars to pesos we will see a double digit percentage increase on the MSRP for Rolex steel pro models coming in the next couple of years, as has been speculated time and time again.

I agree with much of this but think some of the shortage is unintentional. The worldwide economy caused the shortage of SS models (Asia demand, etc). The mere fact that a couple years ago, you could easily obtain most SS models is evidence of that.

However, the SS Daytona has always been hard to get at an AD which may give credence to the above Rolex marketing strategy...and now it just applies to all SS models. When this cyclical economy falls, the truth will become apparent.

I think Rolex is smart not to raise prices too much in light of many wearing technological wrist computers, and most millennials having no interest in high end mechanical watches. Rolex needs to keep the allure, but sell watches.

And lastly, I don't think Rolex is the Cadillac and ALS is the Rolls Royce. I think Rolex is the Porsche of mechanical watches. Reliable, durable, cutting edge technology. My new SD43 is my first Rolex. The 70 hour power reserve and multiple patents attracted me to it. Tudor is the Audi.

[SomeEngineer]

Originally Posted by marc2828

I think Rolex is the Porsche of mechanical watches. Reliable, durable, cutting edge technology.

And think how screwed they would be if you couldnt just walk up and buy a 718. Though lets keep in mind that the 718, optioned out with a nice stereo and the active suspension etc is now into the $100k club. This is definitely not entry level, and these days performance wise you can get a looot more car for the money, even within porsches own model line about 20-30k more can get you a loaded out carrera s with the 450hp power bump. But its porsche and there will always be someone who wants one so badly that they stretch to the very ends or their budget to get one, so seriously doubt they've seen a significant reduction in sales, or even any reduction at all.

I think a msrp 11k Subc/ 15k daytona steel future is nearer than alot think.

[Wahlberg]

Originally Posted by WJGESQ

If you own a few, it would drive the SS demand through the roof.

Yet I keep hearing people say: ''I'm not in in it for the money'' ''It's not an investment''.

But boy do they love it when this happens and the prices go up. Either you want to make money or appreciate whatever is on your wrist if you say you are ''watch lover/enthusiast/connaisseur''.

[hai.tranhr]

Then SS Rolex price will increase sharply

[unknown]

Originally Posted by SomeEngineer

Yeah see the problem here is that the birkin bag is a top-of-the-line model. The steel rolexes are the entry point.

Fashion definitely produces goods at lower price points to meet demand for more sought after and costly pieces. This is called diffusion and practically every brand has it. D&G, Emporio Armani, Armani Exchange, Versus Versace, Rick Owens DRKSHDW, etc etc.

If you ask any high fashion retailer they will tell you that the profit margins for diffusion lines are outrageous and they definitely do not cheapen the prestige of the main lines.

In the case of rolex, just walk into any AD and look at their case. How many PM's do you see sitting there? I sincerely doubt smurfs are flying out the doors because your average first timer cant get a steel subC.

The entire point of an entry level or diffusion item is to satisfy demand for higher end items that you just cant move in the same numbers. Take the Birkin. Yes, I'm sure that if hermes made them more easy to obtain Physically (higher production but same price point) they would probably move more units but would still reach a point where sales would normalize based on the fact that its a $16k purse.

For example, anyone who has the money can walk in to a mclaren, lamborghini, rolls royce, aston martin, and, within limit, ferrari dealership, and have one if not that day then within the year. Does that stop people from wanting ferraris and lamborghinis? Absolutely not.

If aston martin stopped selling cars to anyone with the money, that would definitely drive up demand, but this tactic is only going to work in the short term. Eventually people are just going to go buy a lamborghini instead. This has already happened with ferrari.

So what do you do? You raise the price. Raising the price allows you to adjust production levels with demand while still satisfying customers that have the money. Its no coincidence that, only four years on, the base model ferrari 488 is $100k more than the 458 was in 2015.

Im willing to bet dollars to pesos we will see a double digit percentage increase on the MSRP for Rolex steel pro models coming in the next couple of years, as has been speculated time and time again.

I agree but the SS SUB , GMT and Daytona represent maybe 10% of their production, in fact it could be quite lower like 5 % or so
Best seller still is a bicolor Datejust for woman. And I'm sure those for men don't sell bad either. The status symbol and probably best known Rolex is the 18K Day-Date so you can bet on it these do sell a lot too.
Regarding the sports watches or professional line I do see quite a lot bicolor and full gold pieces.

Probably collectors and watch enthusiast like us do prefer the SS GMT, Sub and Daytona.

So in fact 90 or 95% of the average customers can still walk into a shop and buy their datejust or day date.

Birkin might be the top while a SS sub is not the Rolex top but is that important? The Patek 5711 is in fact the entry level Patek and it's the same situation in that case. Can't get them and secondhand price is nuts.


As for the double digit price increase I agree. Like said in my first post quite q few other brands did they same with their sought after porducts