Now we can discuss the SS shortage with some more data.

[Mystro]

Now that we see the Submariner hasn’t changed and other SS professional models have not changed, we can discuss what other factors may be influencing the SS shortage accross the line. With no radical changes to the SS professional line, it doesn’t look like there is any reason SS models should have been so restricted.

[busytimmy]

Yes, yes we can. How about Rolex can create more hype surrounding these watches, and therefore continue evolving the image and customer base of the brand.

[Maiden]

Yep, who knows, my speculation is Rolex underestimated production, I think the Chinese market was much stronger than anticipated. But hey I could be wrong, maybe they are slowing supply to keep values inflated?

[Mystro]

I have been watch this new phenomenon this past year very closely.
It doesn’t look like floodgates are going to open any time soon for SS professional models. You can’t get most of the SS professional line now when walking into a dealer which is concerning since most are unchanged. What are the chances you will ever see any of the new released models??? We might be in the new normal Rolex wants to create.

[rexG]

Asia? Saw the graphs in the live feed.....

[TimeToWatch]

Originally Posted by Mystro

Now that we see the Submariner hasn’t changed and other SS professional models have not changed, we can discuss what other factors may be influencing the SS shortage accross the line.

I think it's a multitude of factors, however, primarily they're trying to cutout greys, boost their standing in the market place and weather the consolidation of the Swiss watch industry.

Greys
-Decreased supply and elimination of special orders of sports models means that greys will struggle to continue filling their pipelines. Rolex hates greys and will do everything they can to strangle them.

Boost standing in marketplace
-To the layman, a Rolex is the finest watch you can buy on earth. Regardless of whether this is true, Rolex is arguably the best marketed brand on Earth. With that being said, their price points are not commensurate with this reputation, being outpriced by many well known names. By decreasing supply, they increase demand and the prices will in turn rise. This will certainly bolster the perceived exclusivity of the brand and appease loyal customers who will be rewarded with these hard to attain pieces.

Weather consolidation of the Swiss watch industry
-Whether we like to admit it or not, the Swiss watch industry is facing an existential crisis. Fueled by technology, namely smartphones and smartwatches, the masses no longer have a need for a wristwatch. The market for luxury timepieces will remain, but will be much smaller. This will lead to a consolidation of brands, which only those who are prepared will survive. By decreasing supply and increasing the price points of their watches, Rolex can offset any declines in sales volume with increases in MSRP.

[lecorsaire]

Other than killing discounts and creating hype the only thing I can think of is a transition to 32xx movements. But the TT Datejust 36s just got the 3235 and they always have a truckload of those.

When this all started I thought it was because the LV was being discontinued and then maybe some thought the BLNR was as well making impatient people pick up regular Subs. Only time will tell. If by the end of summer supply and market prices remain the same then this is the new normal.

[904VT]

Weak currencies

[toto]

Shortage of SS comes maybe from changing 904L to oystersteel.

[904VT]

Originally Posted by Mystro

I have been watch this new phenomenon this past year very closely.
It doesn’t look like floodgates are going to open any time soon for SS professional models. You can’t get most of the SS professional line now when walking into a dealer which is concerning since most are unchanged. What are the chances you will ever see any of the new released models??? We might be in the new normal Rolex wants to create.

That's what worries me about the Pepsi. As soon as I was excited, I thought to myself, why? I won't get my hands on a new one for at least 5 years. That's why I wish Rolex would've released the Coke and Red Hand LN as well. I guess those come next year

And Rolex still needs to move their remaining 3186 movements

[Mystro]

I would think a long overdue price increase is also going to happen soon. Strategically, Rolex is ready for one.

[toto]

At least they are not increasing prices like some believed here and there.

[Mystro]

Originally Posted by 904VT

That's what worries me about the Pepsi. As soon as I was excited, I thought to myself, why? I won't get my hands on a new one for at least 5 years. That's why I wish Rolex would've released the Coke and Red Hand LN as well. I guess those come next year

^^Yup, that’s exactly the first thing I thought of when viewing the new models and changes. These are watches you are never going to see in a long long time. I have been at this hobby for over 2 decades and I don’t know what to tell new potential buyers when they ask about buying a Rolex???? My last two new Rolex models this past year were purchased through forum trusted sellers. I think a healthy mark-up is what you are gonna pay unless you want to wait for over a year at a AD. God help those accross the pond. It was horrific for them in 2017 to find any SS professional model. It seems like this is all to get a new buyer to open up their wallet and buy PM models they can actually try on and purchase.

[904VT]

Originally Posted by Mystro

I would think a long overdue price increase is also going to happen soon. Strategically, Rolex is ready for one.

At this point I'd welcome it, just to not deal with this supply issue. I'd gladly pay $1k higher across the range if it meant they were in AD displays

[TimeToWatch]

Originally Posted by toto

At least they are not increasing prices like some believed here and there.

They in effect are. Decreasing the availability of their Professional line means that unless you have a great pre-existing relationship with your AD, your only means of purchasing such a watch is at inflated prices on the grey market.

[Easy E]

Originally Posted by TimeToWatch

I think it's a multitude of factors, however, primarily they're trying to cutout greys, boost their standing in the market place and weather the consolidation of the Swiss watch industry.

Greys
-Decreased supply and elimination of special orders of sports models means that greys will struggle to continue filling their pipelines. Rolex hates greys and will do everything they can to strangle them.

The problem with this logic is the greys are thriving right now. You want a LVc, BLNR, Daytona of your color choice, how about a SkyD? You're not getting that from an AD right now, but many, many greys have them readily available at a 10% to as much as 65% OVER MSRP! Sorry not buying this line of reasoning.

[TimeToWatch]

Originally Posted by Easy E

The problem with this logic is the greys are thriving right now. You want a LVc, BLNR, Daytona of your color choice, how about a SkyD? You're not getting that from an AD right now, but many, many greys have them readily available at a 10% to as much as 65% OVER MSRP! Sorry not buying this line of reasoning.

You don't know what greys are purchasing these watches for. You realize their cost of acquisition, if not directly through an AD, is going to be higher as well, right?

[904VT]

Originally Posted by TimeToWatch

They in effect are. Decreasing the availability of their Professional line means that unless you have a great pre-existing relationship with your AD, your only means of purchasing such a watch is at inflated prices on the grey market.

Though Rolex isn't really profiting off of secondary market pricing. It helps support their product value, but not necessarily their profits. The only reason they would profit is if their goal is to drive sales into slower models (Ex2) and high margin (Precious metal) by having customers move up "the list" at their ADs, to be able to purchase the models customers really want (SS Subs, SS Daytonas, SS GMT Masters).

[toto]

Greys don't seem to have any problem to get some wacthes. So I don't get the whole process.

[Easy E]

I discount myself here, but in talking to my AD last week, who claimed to have had their rep in the store, his story is simply the Asian growth. Rolex has a choice, hold the line with their current production capacity or add facilities. They believe (according to these guys) that the spike is temporary, in the grand scheme, and they dont want to drop a wad of cash into increased production, be it equipment, actual buildings, labor, materials, etc then to see the market normalize in a couple of year and be sitting on a bunch of expensive machinery and such. So far, to me, this make the most sense.

E-

[lecorsaire]

The GM is helping elevate their prestige. This happened more than a decade ago with the sneaker market. Same thing just with an extra digit or 2. Lots of people are also now buying watches from ADs for the sole purpose of reselling.

They could care less than they aren’t receiving the profits from the GM. It’s all about the product being perceived as exclusive. Luxury ceases to be luxury if it’s not exclusive.

[toto]

Originally Posted by Easy E

I discount myself here, but in talking to my AD last week, who claimed to have had their rep in the store, his story is simply the Asian growth. Rolex has a choice, hold the line with their current production capacity or add facilities. They believe (according to these guys) that the spike is temporary, in the grand scheme, and they dont want to drop a wad of cash into increased production, be it equipment, actual buildings, labor, materials, etc then to see the market normalize in a couple of year and be sitting on a bunch of expensive machinery and such. So far, to me, this make the most sense.

E-

This is understandable.
But I thought asian market was down?

[karmatp]

Supply will be right back to normal in time, be patient.

[h20addict]

My question is will the price on the new Tudor GMT also be reflected with the premiums some are paying for Rolex SS models? The opinions I've read on the new Tudor have been mostly positive and I think the demand is going to be very high.

[TimeToWatch]

Originally Posted by 904VT

Though Rolex isn't really profiting off of secondary market pricing. It helps support their product value, but not necessarily their profits. The only reason they would profit is if their goal is to drive sales into slower models (Ex2) and high margin (Precious metal) by having customers move up "the list" at their ADs, to be able to purchase the models customers really want (SS Subs, SS Daytonas, SS GMT Masters).

I just purchased a WG Oysteflex Daytona because I was tired of waiting for a 116500 and won't pay $18k. I know I'm not the only one who's done this. Also, how many situations have you heard of where ADs are requiring you purchase 2-3 watches before they'll sell you a Daytona, new GMT, etc... I think their strategy is definitely profiting them. While they don't profit off of the secondary market, their brand image does. As a luxury brand, that's what they care about most. This sets them up perfectly for a price increase.

[TimeToWatch]

Originally Posted by karmatp

Supply will be right back to normal in time, be patient.

Nope.

[Mystro]

A Rolex is a luxury purchase that to a extent relies on being a impulse purchase for the wealthy masses. What is happening is those that really want a new Rolex and can’t buy from their local AD will gladly purchase from a grey dealer and pay a premium to have it on their wrist NOW. Wealthy impulse buyers don’t wait in line. I don’t see a solution anytime soon other than to pay a premium if you want to own a new Rolex now. As a WIS, you have to factor what is your time worth not having the watch on your wrist?? If other brands like Omega are not capitalizing on this now, they are in real trouble with their own products.

[socalwatchcollector]

Originally Posted by TimeToWatch

Nope.

+1

[Easy E]

Originally Posted by TimeToWatch

You don't know what greys are purchasing these watches for. You realize their cost of acquisition, if not directly through an AD, is going to be higher as well, right?

Of course, and for sure I have no idea what a grey pays for a piece. If they are not getting supplied through ADs then where do you imagine they are coming from?

Its bad enough that ADs are feeding the cat, so to speak, but they have ways to do that, like not really assign a name to the transaction, just activate the serial number and off it goes. Rolex can't really audit end user purchases, but they can for sure audit AD sales. If an AD, in the US is caught selling at over MSRP, it's lights out. The AD can set up a straw buyer of sorts, sell it to the grey at full tilt and have an back door arrangement to either split secondary sales, or just move on and accept their full bore MSRP sale and keep their pipeline open. Which is most likely the case.

I don't really care how the greys get them. For that matter I just bought 2 grey DJ41s and couldn't be happier about it. I'm just saying this whole Sport Model thing stinks and I'm not buying the "cut the greys theory." Yes, I believe if Rolex could hang 'em high on the courthouse steps they would. But, that's not the reason for the shortage. In my personal opinion.

E-

[hambone1983]

Originally Posted by Easy E

I discount myself here, but in talking to my AD last week, who claimed to have had their rep in the store, his story is simply the Asian growth. Rolex has a choice, hold the line with their current production capacity or add facilities. They believe (according to these guys) that the spike is temporary, in the grand scheme, and they dont want to drop a wad of cash into increased production, be it equipment, actual buildings, labor, materials, etc then to see the market normalize in a couple of year and be sitting on a bunch of expensive machinery and such. So far, to me, this make the most sense.

E-

I highly doubt that Rolex is running at 100% capacity utilization and the only way to expand production is to build new manufacturing facilities.