Hypothesis: Rolex is about to flood the market with BLNRs and BLROs

[Dougiebaby]

Originally Posted by 2nastie

They don't need a GMT to make up for the potential loss in revenue from the LN.

Rolex can either manufacture more BLRO, BLNRs, Subs... or simply push forward another model like a DJ which probably has better margins. Not that all these examples are apples to apples comparisons but based on 2018, Ads/Boutiques are "magically" able to convince customers to buy DJs (in a form of bundle) or simply grind new customers down who just wants a crown on their wrists.

Rolex isn't stupid enough to shut off any gravy train.

I believe you are correct.

These are what marketers call “halo products.” A product of limited production that creates a halo effect for the brand and promotes sales of their more mainstream products.

Example: the Audi R8, Chevrolet Corvette, and Toyota Supra. In every case, these limited production vehicles are sold at a loss per unit, but they drive Audi A4/Q5, Chevy SUVs, and Camry sales in great volume.

People who buy Datejusts tell their friends with pride, “Did you know the Paul Newman Daytona Rolex sold at $17 million?!”

They don’t need to sell more GMTs, because the Halo effect of the GMT will sell more Datejusts.


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[Fallranger]

Originally Posted by Dougiebaby

I believe you are correct.

These are what marketers call “halo products.” A product of limited production that creates a halo effect for the brand and promotes sales of their more mainstream products.

Example: the Audi R8, Chevrolet Corvette, and Toyota Supra. In every case, these limited production vehicles are sold at a loss per unit, but they drive Audi A4/Q5, Chevy SUVs, and Camry sales in great volume.

People who buy Datejusts tell their friends with pride, “Did you know the Paul Newman Daytona Rolex sold at $17 million?!”

They don’t need to sell more GMTs, because the Halo effect of the GMT will sell more Datejusts.


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Great thoughts. No doubt DJ’s and other less desirable models wouldn’t sell as well if availability were all the same. High end and hard to get pieces definitely prop up the brand.


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[Harry-57]

Originally Posted by Pantheon

Rolex should send only 1 ss model per AD per year.

I thought they did already.

[Pantheon]

Originally Posted by Harry-57

I thought they did already.

But lots of guys on TRF says their AD gets 2 BLROs a year! That's too many!

[nworbled]

Originally Posted by Dougiebaby

Example: the Audi R8, Chevrolet Corvette, and Toyota Supra. In every case, these limited production vehicles are sold at a loss per unit, but they drive Audi A4/Q5, Chevy SUVs, and Camry sales in great volume.

Being in the "business" I can wholeheartedly say that these units are not loss leaders. The profit margin on these cars is higher than most other cars by these respective manufacturers.

[Spartacus]

Rolled up my pants, ready for the flood.

[locutus49]

I completely agree with this assessment. Wishful thinking clouds the judgment of many Rolex fans. BTW, you should read the phenomenal book, or watch the movie with Tyrone Power, of The Razor's Edge. You will quickly understand.

Originally Posted by Larry Darrell

I don't think the Rolex supply issue is about Rolex's inability to produce enough to meet demand. It is about keeping their products a luxury item and a status symbol. I suspect that Rolex is actually moving in the opposite direction of making their watches more available. With the economy red hot (at least for those who can afford a Rolex), they are trying to make sure every thirty thousandaire doesn't start walking around with a Sub or GMT on their wrist. I suspect that when a recession hits, you will see Subs easier to obtain. But maybe not. You may be seeing Rolex move their more desirable and affordable stainless steel watches into the permanently hard to get category that has been previously reserved for the Daytona. The true status symbol Rolexes will be impossible to get stainless steel versions and cost prohibitive for most precious metal versions. Tudor will become the watch for the upper middle class, and Rolex will be for the upper, upper middle class and above.

[dwjez14]

Did I
Miss the flood ? I see a flood of gray dealers with them if that counts ?

[Easy E]

Originally Posted by dwjez14

Did I
Miss the flood ? I see a flood of gray dealers with them if that counts ?

It must have been a flash flood, very dangerous.

[envuks]

Originally Posted by dwjez14

Did I
Miss the flood ? I see a flood of gray dealers with them if that counts ?

AD or grey they’re both produced in the same factory. So from my perspective it counts

There’s another post in this forum today about a near BLNR purchase where the purchaser shopped the watch to greys. One offered 12.5k, others weren’t buying that model. That seems like a change

[mml4]

You folks read the same posts I do. It is widely reported most sales are from dealer to dealer of late rather than dealer to end user. If they think the "music" is about to stop it makes sense the greys are nervous with $ tied up in unmovable inventory.
Remember there is no shortage of product just a question of who has them. If indeed the market is stagnant maybe the bubble will finally burst!

[Pantheon]

Originally Posted by mml4

You folks read the same posts I do. It is widely reported most sales are from dealer to dealer of late rather than dealer to end user. If they think the "music" is about to stop it makes sense the greys are nervous with $ tied up in unmovable inventory.
Remember there is no shortage of product just a question of who has them. If indeed the market is stagnant maybe the bubble will finally burst!

Yes I believe that to be the case now most dealers are just recording sales to each other to try and prop up the price. I think the reality of the situation is most of the people willing to pay for the excessive premiums have already done so. Once the greys stop buying because of a lack of cash flow or fear of stocking up too much it will directly affect how many are sold through retail.

With all the recent incomings I think this is very plausible since the softening of the market has seem to also increase the amount of people being to obtain the watches for retail.

[vicsdca]

I think they will discontinue the BLNR and re-introduce the NRRO / RONR.

[Pantheon]

Perhaps they're trying to pump put as many as they can before they reintroduce the coke!

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[wholecz]

I do see a lot GMTs recently like every dealer has at least one holding at the back. I know a big chain store has 8 in total. However I do not think this situation will last long. ADs are not expecting any GMTs in the next three months so.

[flal]

Originally Posted by Dsmith1974

Rolex won’t make the same mistake as Panerai.

I’m curious. Mind explaining?

[AntoMeRolexPassion]

Originally Posted by envuks

My hypothesis is that we'll see a lot more BLNRs and BLROs in the years to come.

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Hope you are right

[Dsmith1974]

Originally Posted by flal

I’m curious. Mind explaining?

A bit before my time, but from I’ve picked up..

Panerai were hot watches with a waiting list, much like professional SS Rolex. Rather than control the supply they ramped up production to meet demand. Once they were readily available the demand tanked massively.



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[Dougiebaby]

Originally Posted by nworbled

Being in the "business" I can wholeheartedly say that these units are not loss leaders. The profit margin on these cars is higher than most other cars by these respective manufacturers.

According to MotorTrend mag, GM losses $20k on every C8 under $80k...

Here’s your link:

https://www.motor1.com/news/385310/g...base-corvette/


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[dtwer]

Originally Posted by Dsmith1974

A bit before my time, but from I’ve picked up..

Panerai were hot watches with a waiting list, much like professional SS Rolex. Rather than control the supply they ramped up production to meet demand. Once they were readily available the demand tanked massively.



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This is a good example. Rolex is definitely not run by myopic people who fixate on short term profit.

[Mystro]

Originally Posted by Dougiebaby

According to MotorTrend mag, GM losses $20k on every C8 under $80k...

Here’s your link:

https://www.motor1.com/news/385310/g...base-corvette/


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That is absolutely marketing crap between GM and their press marketing. The automotive press repeats anything GM gives them without any vetting or investigation of the data. That “ We lose money on each car” is right out of the GM play book from decades back. It’s nonsense. The marketing in general is in hyperdrive with the new C8 with the automotive press kissing the ring and just repeating anything GM claims as the gospel truth even though no “production car” has been independently tested. GM painted themself into a corner and has to make the new C8 look successful and is pulling out all the marketing weapons they have regardless of what the car actually is or does.

[chows99]

Flood or not, both watches will be future collectibles.

[Twovalvekid]

Originally Posted by Mystro

That is absolutely marketing crap between GM and their press marketing. The automotive press repeats anything GM gives them without any vetting or investigation of the data. That “ We lose money on each car” is right out of the GM play book from decades back. It’s nonsense. The marketing in general is in hyperdrive with the new C8 with the automotive press kissing the ring and just repeating anything GM claims as the gospel truth even though no “production car” has been independently tested. GM painted themself into a corner and has to make the new C8 look successful and is pulling out all the marketing weapons they have regardless of what the car actually is or does.

All of this.

Halo cars are also pretty readily available from dealers. It isn't anything like a SS rolex.

[SDR581]

Originally Posted by wholecz

I do see a lot GMTs recently like every dealer has at least one holding at the back. I know a big chain store has 8 in total. However I do not think this situation will last long. ADs are not expecting any GMTs in the next three months so.

I don't get it...Why are they not expecting any GMTs for the next three months? Is it due to shift in production for new models shown at Basel?

Does Rolex made references in batches?

[ras47]

I think Rolex is very happy right now with the state of the market. They're selling every watch they produce and pent up demand ensures this will continue for at least a while. For every person that screams, "I'm DONE with Rolex," there are 50 more putting their names on lists and holding the line. Rolex is under no pricing pressure, so why change a strategy that's working?

We will not see a flood of any model.