ROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEX
26 February 2020, 05:26 AM | #31 |
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This actually makes a lot of sense..
Make 40% more.. And since Rolex are such anal control freaks.. This would enable them to control pricing etc. across the board.. But.. They would actually have to make the watches available..or this is not going to work.. And their non profit status..may dictate another variable..that does not allow for this type of improvement to their business model. |
26 February 2020, 05:31 AM | #32 |
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If I were Rolex, I would keep things exactly as they are. The world is Rolex-hungry, people are flocking to the brand (even more so than before) and it's all causing a trickle-down effect in terms of watch "hotness"; there are waitlists on Datejusts, for goodness sake.
Why would they alter anything?? People want what they can't have, and continuing to drive up that desirability is the right move for Rolex. Let's hope they don't go the way of Panerai (upping supply to meet demand, creating "LE's" too similar to other watches in their portfolio, increasing prices because demand was high, etc.), though I don't think that will ever be an issue for a brand like Rolex because of the execs at the top.
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26 February 2020, 05:35 AM | #33 |
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26 February 2020, 05:48 AM | #34 |
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This was the argument in early 17 when ADs first became battlegrounds, esp in the UK, but Rolex rode the storm, or rather did nothing as is their creed, and while their rep amongst regular customers took a dive they have so many new customers now that that is not a concern any more. The only thing they have publicly stated is that they want to avoid flippers so a wait list will still need screening and previous purchase history etc so it's just too big a job for this watch maker, easier to leave it to the retailers.
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26 February 2020, 05:52 AM | #35 | |
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26 February 2020, 06:18 AM | #36 |
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This is a potential solution to a problem that Rolex does not have.
Given that they can shift everything they want to make, using a model that has served them well for nearly 100 years, perhaps a more realistic move would be for customers to boycott the arsehole ADs and only use the good ones? My AD is brilliant. Will that ever happen? Of course not. But it's more likely than Rolex throwing all their ADs over the side and risking the gigantic outlay for direct to customer sales. There's an infinite amount of logistical organisation involved. Chucking money at a few Rolex owned prime locations is only the start of it. But feel free to approach Rolex. Everyone likes a good laugh. |
26 February 2020, 06:39 AM | #37 |
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Rolex should do what Omega is doing...Sell online and through boutiques with a few ADs here and there.
Buy online, pay in full and wait for your watch....Visit the Boutique try them on and do the same if you want to purchase. Eliminate the middle man and keep more profit...Also control prices that way. |
26 February 2020, 06:45 AM | #38 |
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Idea to combat the lack of stock
Regardless of how successful Rolex is currently, their inability to better control distribution and at least put watches in cases is embarrassing. It’s a mass produced watch, not an FPJ, and the shortage is imaginary.
Direct to consumer would fix the problem, and I used to support the idea, but now I think that it would be an overly dramatic shift from the way they’ve done business for a very long time. I’ve been told that Grey dealers are supplied by buyers who purchase from oversees distribution networks. If true, finding out who the major players are should be easy. All Rolex has to do is buy a sampling of stock from the major Grey dealers and trace the serial numbers. My suggestion would be to simply shift stock away from countries and distribution networks that aren’t playing by Rolex’ own rules. They’ve not done this yet, best I can tell, and I think Rolex deserves some criticism for their lack of action. Sent from my iPhone using Tapatalk |
26 February 2020, 06:53 AM | #39 |
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The Rolex 'sales' model works fine for them just as it is. Don't see them needing to change that.
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26 February 2020, 08:54 AM | #40 |
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26 February 2020, 09:47 AM | #41 |
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Right now the stock market is crashing and Rolex will likely put their watches on sale at 50% off. So get ready with your cash. Good idea, though, OP. Maybe the stock market crash will jar them at corporate.
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26 February 2020, 10:27 AM | #42 |
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Nice read.
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26 February 2020, 09:20 PM | #43 |
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Lol best way to destroy the goodwill and impression of scarcity the brand is currently enjoying.
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26 February 2020, 09:26 PM | #44 |
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26 February 2020, 09:33 PM | #45 |
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Rolex is doing fine, thank you very much
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26 February 2020, 11:25 PM | #46 | |
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I'm not trying to be awkward. Do we know if Rolex has rules and what they are? Which Rolex rules are being broken? More generally speaking and not directed at any forum member in particular: In the UK it is not illegal to buy something and sell it second hand for the going rate. Nor is it illegal to buy something you are knowingly going to sell on for a profit. It's how the free market economy works. Dealers may be discretionary about who they sell goods to. This may work in favour of potential owners or in favour of flippers. It is likely a balance, the fulcrum of which will be set by the dealer according to their particular circumstances.. If the goods are not stolen or bought through deception/fraud, they can sell to anyone they like. If mum tells a child he can't have sweets before dinner or can't watch TV all night, a tantrum may ensue. When an AD tells a fully grown adult that they can't have a hot watch they want, is closing down the AD network a rational response? Either forget it, buy grey or buy something else. Alternatively, anyone who thinks they know more about selling watches than Rolex or their AD network can open a Rolex AD. Refuse to sell to anyone they don't like the look of, and make sure a hot model is available for every "genuine" customer who walks through the door. Never give discounts, never take trade ins, never do bundles, work their arse off for as many years as they need until they can comfortably retire. Then come back and tell us how clever they are. |
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26 February 2020, 11:27 PM | #47 |
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Exactly.
Some people want to tell one of the most successful businesses on the plant how to operate. At least that is comic relief
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26 February 2020, 11:41 PM | #48 |
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Who's problem does any scheme to sell more professional pieces fix?
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26 February 2020, 11:46 PM | #49 |
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Those who feel entitled to buy high end luxury jewelry anytime and anywhere they want
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27 February 2020, 12:21 AM | #50 | |
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Idea to combat the lack of stock
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That’s a good point and you may be correct. I’m operating on the assumption that there are contracts in place with distributors that say something about getting the product in the hands of the end user. That would make good business sense. If not, what would stop a competitor from buying up all your stock from a distributor and destroying it just to keep it off the market? Long term, regardless of the business you’re in, that’s a bad position to be in. The maker must have some say so in how the product makes it to market. Sent from my iPhone using Tapatalk |
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27 February 2020, 12:53 AM | #51 | |
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Idea to combat the lack of stock
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I don’t see it as a temper tantrum. I’m with you that “the game is the game” and it’s not right or wrong. But the AD system is a legacy system that’s been in place for decades and no longer functions efficiently. OP is pointing out that with today’s technology and market, it would make sense for Rolex - who famously seek to be as vertically integrated as possible, and control their brand to the greatest degree - to go direct to consumer like so many other businesses have. Why sell watches at a wholesale price to allow a dealer to sell at MSRP to a third dealer, who sells at the “real” price? You could at the very least cut out one of those layers of margin. To the folks that said retail is a very tough business, certainly agree with that, but if Rolex is currently making money at wholesale prices, it can’t be that they could not support a tiny (as op points out, you wouldn’t need very many stores, if they’re more like showrooms) network of retail spaces, if that network would let them capture the AD’s former surplus. It would make sense to sell wholesale to ADs and let them take the selling and marketing function, which is their competency, if these were Breitlings or something and were harder to sell. Then they’d be earning their margin. But the fact is they are not. Oh, and to the folks that point out Rolex is doing just fine, thank you very much. Of course they are! But they always want to do better - that’s why they’re Rolex. |
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27 February 2020, 01:49 AM | #52 | |
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My clients have to manage it through conventional commercial systems. Freezing accounts, capping, cutting off wholesalers etc. Mostly short term. Middle people get inconvenienced but they understand how it works. There is no legal recourse. If your vigilance fails you, you will know for certain when retail chains and wholesalers offer to sell you your own products cheaper than your retail price. They are allowed to do this. Then there's parallel importing, but that's another rant. I believe it's more of an in house arrangement for brands like Rolex? Factory to national/regional distributor, to AD group or individual AD? Don't know really. |
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27 February 2020, 01:58 AM | #53 | |
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Retail does suck. Why would Rolex want to deal with SEIU and other unions that represent unskilled people? Why deal with theft and other shrinkage, paid sick leave for people you never met etc etc. I'm not knocking unions or employee benefits in general, just that mageing it is a colossally expensive and time consuming and money sucking nightmare. The only reason to do it is to make more profits. Rolex would not be making any more profits under this proposal, but would be incurring a massive new costs, lawsuits etc. Rolex doesn't need to change a thing as long as it sells every piece at wholesale, and they shouldn't. |
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27 February 2020, 02:17 AM | #54 | |
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People need to change their behaviour. If the system keeps changing to address this season's fads, there won't be a system. There are ways to address the shortfall in demand versus supply. which go closer to the root cause than just attempt to manage the symptoms. Possible examples include: Example 1. Significantly ramping up production. Cut production of other models and produce more SS hot models. My AD's Rolex buyer reckons that approximately 75% of Rolex production goes on stuff like DJs, OPs, DDs, and the PM gem encrusted stuff. This generates income which is high in terms of value and profit. Why would they cut that income stream to knock out more SS models? If the high margin models were not selling it would be a different matter. In 2020-21 I am told that Rolex will cut back on PM and increase SS, but not to an extent that will make any difference, because Rolex don't have a problem with the current situation. They sell everything they make and they are happy with the high income this generates. Their slight shift in production emphasis (if there is any grain of truth in it) is about the cost of raw materials and consequent profit margins. Example 2. Increase speed of production to put more SS watches on the market quicker within the parameters of their current production. Or quickly increase production capacity. That's the sort of culture that gets embedded when when accountants and shareholders start running a company. The only thing that suffers is quality. And for Rolex, that's one of the few things that really matters. They won't compromise because they don't need to and they understand that the a 100 year reputation can be wiped out in 5. Ask Mercedes how that worked out for them under Chrysler. And be thankful there is still a Mercedes to ask. It nearly killed them. And quickly. Example 3. Boycott the grey market. Only buy from ADs. Never pay a cent over retail. Good luck with that one :) |
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27 February 2020, 03:00 AM | #55 |
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Every consumer prepared to pay the market price for the watch has access to the watch.
The only "consumers" not benefiting are those who believe they have some right to purchase at the laughable "MSRP", which is unjointed from reality. Rolex has built a value consumers are very willing to pay. For reasons fully understood by Rolex, they are yielding a sizable portion of that potential margin to their channel, to be divvied up between the ADs and the resellers. But the watches are reaching consumers... those willing to pay the market price. === Take a look at the Shelby GT500 thread for clues. MSRP... $72,900. Market price... around $100,000. So why does Ford allow the dealer to pocket an extra $29,100, when Ford could raise the MSRP to $100,000 and pocket the difference? At $72,900, the car gets the cover of every magazine. It gets compared to $70k Camaro's and $70k Challengers. At $100k MSRP, there are plenty of magazines who won't show it, as that's out of their demographic's price range. And, in a compare with a $100k MSRP Porsche or etc., the Shelby may not compare so well. So Ford sets a ridiculously low MSRP and let's the channel have the extra margin. They also drop those cars on dealers as "rewards" for doing the "good boy" things... pushing a ton dreadful Focuses and Tauruses. Rolex wants the SS Daytona MSRP $13,150 reviewed against similar MSRP watches. At the $26k market price, it would be reviewed against a very different set of competitors, and not fare as well in those reviews. |
27 February 2020, 03:18 AM | #56 | |
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SS Daytona MSRP $13,150. Market value $26,000 and selling OK. Let's all agree not to pay over $13,150. Resellers feel the pressure and I get offered one for $15,500... I'm snapping it up. Sorry guys, I know I promised, but life is short. Which causes the transaction price to float back up to the market price... $26k. |
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27 February 2020, 03:44 AM | #57 |
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Still doesn't solve supply vs demand though. Rolex can own all of the ADs, but if the demand outpaces supply we still find ourselves here.
I've said it before, the appeal of Rolex to the masses (not us here on TRF) would die off if they could readily buy one, or in this case order one and have it delivered to the store. |
27 February 2020, 03:57 AM | #58 | |
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The question is, why are so many ending up on the grey market with a huge mark-up on MSRP? |
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27 February 2020, 04:06 AM | #59 |
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Won’t ever happen
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27 February 2020, 05:27 AM | #60 |
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Lol sorry but this doesn’t actually “combat the lack of stock” imo
Ur ideas only make it easier for consumers.. with no real benefit to Rolex. If Rolex really wanted to provide more stock, it’s simple as increasing production. But I think Rolex is pretty happy where they are atm. They sell everything they make... Their product is in high demand... Their used products are trading at premium. In fact, most manufacturers would love to be in Rolex’s shoes. Lol The secondary market for new Rolex may decline depending on the world economy... but Rolex as a brand will continue on strong (as long as they don’t flood the market with over-stock and tons of “limited” edition. )
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