Visited 3 Smaller ADs in NorCal

[AdaWit711]

I was traveling this week for work and stopped in to check inventory and chat with 3 smaller ADs in Northern California. The only reason I’m posting is the consistency of the 3 stories. This may be locally dependent based on the NorCal Rolex HQ representative whom they all mentioned was consistent between the 3.

At each AD I heard the same story about the allocation system. The ADs all mentioned a specific call which they received from Rolex HQ announcing a specific allocation system based on their volume. Each AD was given a annualized volume of each professional watch they would receive. They were then instructed to take orders (differed on whether they were requiring cash to secure order) on a watch by watch basis.

For example two stated they would receive (4) 116610LV annually (the other said only 2) one at a time and to take an order for only one watch. When that watch was delivered to the consumer they could place the next watch in their allocation.

One of the ADs went into more details model by model (8) BLNRs, (2) Daytonas, (2) Skydwellers per color. Etc


Rolex also instructed all 3 ADs to not keep any of the above models in the case. These were for repeat customers only.

Once again I thought the consistency of the story was interesting.

Overall the inventory for stainless models was:

All had Explorers of all varieties, Yacht master 2, and at least two Milgauss.

Saw a bunch of two tone all models including Daytona.





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[Racerdj]

I'm not surprised. Thank you for verifying what we all know is taking place.

[Etschell]

when this blows up im gonna laugh. rolex, patek and ap are playing a dangerous game. hope the market doesnt turn on them.

[Al1969]

Sounds like ROLEX doesn’t really want to sell watches anymore.

[gregmoeck]

stupid, if I was selling BMW's I would have a lot full of them

[Bigblu10]

How can Rolex "instruct" the AD to do or what not to do with the watches. Once the AD pays the invoice, the watches belong to the AD.

[oldman2005]

Pretty sad time to buy new SS Sport from Rolex ADs

[cajerseyboy]

Which ADs did you visit?

[yxc145]

I actually think Rolex is smart by doing this. They definitely make enough money. I don't double the production quantity just to meet the demand. I personally think Rolex's production number is about the same as before. The demand just went skyrocketed, which caused the shortage. By not making tons of SS sports models to fill every dealer's case, it makes those watches even more desirable. I remember 20-30 years ago. Owning a Mercedes was something special. now, they make 1000 different models, huge production numbers trying to sell to everyone. It doesn't really feel so special when you tell people you own a Mercedes anymore.
I don't think when bad economy hits again is gonna affect Rolex much since they didn't drastically increase the production when economy was good. Same quantity as before, same quantity now, same quantity in the future. I think companies that will suffer more are the ones that make huge expansion, buy machines, hiring tons of people to meet the demand. Once the demand is low, they had to let people go, sell machines, and close facilities.

[Fleetlord]

Originally Posted by Etschell

when this blows up im gonna laugh. rolex, patek and ap are playing a dangerous game. hope the market doesnt turn on them.

Why? This is what consumers of luxury goods want.

For example.

Rolex, AP, Patek have limited distribution. They are cutting off dealers. They are making the product harder to get.

The result? Increased sales. Increased interest. Increased Demand. Increased brand value. All positive positive positive.

The market is feeding off of the distribution policies and the brands are becoming MORE popular and stronger.

Now, lets take Breitling or Hublot (or most of Richemont)..

The references from these brands are overproduced. If one visits a Breitling boutique is there a reference that they won't have in stock? Nope. Got them all. All 454 versions of the Navitimer....all the mutiple permutations of the Superocean. Tons and tons of them.

The market response to this?

Apathy. Uncool. Un-exclusive. Undesirable. Unsold.

Dealers are forced to dump these on the grey market just to get some cashflow.....so bad that Richemont had to offer a buy back to get their mess off the streets.

So, Rolex, AP, and Patek are clearly giving the market what it WANTS....so why would they stop limiting distribution?

[Nikrnic]

You really do know what your talking about Fleetlord. Very wise .

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[AdaWit711]

Originally Posted by Bigblu10

How can Rolex "instruct" the AD to do or what not to do with the watches. Once the AD pays the invoice, the watches belong to the AD.

The ADs are given instructions on how to handle the Rolex product. They can choose not to do it but the brand is important to their overall business. I asked if it was hurting business and ALL of them said business was better this year than the past few.


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[SoCal_Batman]

This is wild, constricting the supply is certainly driving up the demand and desire to purchase a Rolex. I'll be honest, if I walked into my AD and they had a couple BLNR's sitting in the display case, I'd be more inclined to think about it before I made a decision to purchase that day or even that week.

Now if I see one...

[kimnkk]

Heard the same story from USA (Michigan) AD maybe 2 weeks back when i was picking up my hulk.

He said they were told by Rolex they will be getting SS Sports watches on allocation only... pretty much all SS Sports watches i recall, but he didn't qoute numbers.

[rexG]

Supply..............and demand

[Uppersouth]

Originally Posted by Fleetlord

Why? This is what consumers of luxury goods want.

For example.

Rolex, AP, Patek have limited distribution. They are cutting off dealers. They are making the product harder to get.

The result? Increased sales. Increased interest. Increased Demand. Increased brand value. All positive positive positive.

The market is feeding off of the distribution policies and the brands are becoming MORE popular and stronger.

Now, lets take Breitling or Hublot (or most of Richemont)..

The references from these brands are overproduced. If one visits a Breitling boutique is there a reference that they won't have in stock? Nope. Got them all. All 454 versions of the Navitimer....all the mutiple permutations of the Superocean. Tons and tons of them.

The market response to this?

Apathy. Uncool. Un-exclusive. Undesirable. Unsold.

Dealers are forced to dump these on the grey market just to get some cashflow.....so bad that Richemont had to offer a buy back to get their mess off the streets.

So, Rolex, AP, and Patek are clearly giving the market what it WANTS....so why would they stop limiting distribution?

I concur.