View: Rolex Knows

[rlx123]

Originally Posted by JR16

Agree. Why in the world would Rolex want to sell direct ? Makes zero business sense IMO. They sell to ADs who take all the risk, pay all the overhead etc.


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Because the AD profits goes directly to Rolex. How about that?

[JR16]

Originally Posted by Bryantto

Because the AD profits goes directly to Rolex. How about that?

I suspect after figuring in overhead they would lose money , which is probably one reason why they haven’t done it and unlikely ever will.


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[Dr Watches]

Originally Posted by JR16

I suspect after figuring in overhead they would lose money , which is probably one reason why they haven’t done it and unlikely ever will.


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Vertical integration is generally not a bad thing for control obsessed firms. If I had to guess, they don't do it either because of risk aversion (let the AD eat all the risk and take margin as their risk premium) or because they want to stay only with their core competency (making/marketing watches).

[JR16]

Originally Posted by Dr Watches

Vertical integration is generally not a bad thing for control obsessed firms. If I had to guess, they don't do it either because of risk aversion (let the AD eat all the risk and take margin as their risk premium) or because they want to stay only with their core competency (making/marketing watches).

Agree on both accounts!


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[igomez70]

Originally Posted by PJitz

If this is your main concern maybe you should indeed offload your Sub to someone who likes the watch for the watch itself.

Originally Posted by Dr Watches

Rich people problems.

That is not my main "concern" and actually I was referring to rich people problems and actually making fun of myself and others, maybe didn't expressed myself well.


I've been a member of this forum for years but I haven't been coming here for quite some time, only to find out the last 2 weeks how everyone is obsessed, disgruntled, sad. Constantly complaining, whining about a "shortage" of luxurious watches. Throwing all kind of crazy theories as to why we can't get our precious pieces of stainless steel.


I work in finance and don't know shit about marketing, I didn't even know before returning here that there was a "crisis" or a "shortage", but as I said maybe they are just tired of themselves because everyone has one and they want to be more "exclusive"


Where I come from, crisis and shortages are about lack of food, blackouts, lack of running water. It would seem that there is a shortage of bread, cheese, jam and tomatoes here (I love sandwiches).


Rich people problems indeed.

[Seeking_balance]

As a new owner and late to the party my perception is that while Rolex for sure knows what it is doing, there is a danger that established authorised dealers will get very fed up with not having stock of the popular lower priced models (i.e. not PM) and will either put great pressure on Rolex to up production or will simply stop selling Rolex, or at least will give them less space to enable more from other manufacturers.

I know several people who would like a Rolex, but not a one of them would buy a gold or platinum one, and certainly not the more “bling” models. All prefer either the Subs or the GMTs, and those who know enough like the Daytona. The fact that 4 people that I know might be in the market to buy but can’t get a watch without paying well over RSP, and in fact can’t even get to see and try on the watch they think they want is quite frankly ridiculous.

All that said, my gut feel is this is a temporary situation which will indeed be resolved either with higher prices reducing demand, slightly increased output, or newer models helping to mop up demand. Possibly all three.

But ADs won’t want to put up with this for much longer, something needs to change.

[PJitz]

Originally Posted by Seeking_balance

As a new owner and late to the party my perception is that while Rolex for sure knows what it is doing, there is a danger that established authorised dealers will get very fed up with not having stock of the popular lower priced models (i.e. not PM) and will either put great pressure on Rolex to up production or will simply stop selling Rolex, or at least will give them less space to enable more from other manufacturers.

I know several people who would like a Rolex, but not a one of them would buy a gold or platinum one, and certainly not the more “bling” models. All prefer either the Subs or the GMTs, and those who know enough like the Daytona. The fact that 4 people that I know might be in the market to buy but can’t get a watch without paying well over RSP, and in fact can’t even get to see and try on the watch they think they want is quite frankly ridiculous.

All that said, my gut feel is this is a temporary situation which will indeed be resolved either with higher prices reducing demand, slightly increased output, or newer models helping to mop up demand. Possibly all three.

But ADs won’t want to put up with this for much longer, something needs to change.

ADs will put up with more than you think. This brand is a cash cow - the reason displays are empty is because on every restock most available models get snatched up within days.

[igomez70]

Originally Posted by PJitz

ADs will put up with more than you think. This brand is a cash cow - the reason displays are empty is because on every restock most available models get snatched up within days.

And you are very concerned about this.. I understand, I can't sleep at night thinking about all those empty displays.

I was reading that yesterday or today, a member here spend all day calling all the AD's in the fucking country and couldn't find one single SS watch, I cried all day and just now I'm starting to regain my composure.

Reminds me of what George Carlin used to say, He didn't understand white bands playing in the house of blues because he wondered what reason a white guy has to be blue about: "oh they ran out of khakis at Banana Republic" he said. Now we can add all privilege white folks frustrated because they ran out of luxurious SS watches at AD's displays.

[Fleetlord]

Originally Posted by PJitz

ADs will put up with more than you think. This brand is a cash cow - the reason displays are empty is because on every restock most available models get snatched up within days.

That is very true.

As an AD if you want to sell watches, you want ROLEX.

[igomez70]

Originally Posted by Fleetlord

That is very true.

As an AD if you want to sell watches, you want ROLEX.

Orly?

[entendu]

Originally Posted by peacocknation

I visited a Bay Area AD this weekend that in a couple months will no longer be a Rolex AD. Apparently Rolex wanted a lot more floor space and the owner didn’t agree. So...cya Rolex (bummer since I’ve bought 3 pieces there in the last year).

Joe Escobar?

[ShingaMC]

Originally Posted by entendu

Joe Escobar?

I doubt it.


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[peterpl]

All I can say is this is a Rolex forum. There are WAY WAY WAY too many people who have rose colored glasses on who think Rolex are faultless and that they can do no wrong.

That in itself portrays a level of naivety that should be worrying for many who have logical brains.

Now to say ANY company is immune to global economic issues is a BIG call and wont stand true for 99% of companies. Is Rolex one of them? I highly doubt that - why? One simple reason their product becomes of ZERO importance in life when there is a downturn. The fundamental fact is their product is simple watch nothing else.

Who gives a damn about a watch in hard times. Even times when people have less disposable income their watch requirement drops from 100 - 0 REAL quick.

[rlx123]

Originally Posted by Seeking_balance

As a new owner and late to the party my perception is that while Rolex for sure knows what it is doing, there is a danger that established authorised dealers will get very fed up with not having stock of the popular lower priced models (i.e. not PM) and will either put great pressure on Rolex to up production or will simply stop selling Rolex, or at least will give them less space to enable more from other manufacturers.

I know several people who would like a Rolex, but not a one of them would buy a gold or platinum one, and certainly not the more “bling” models. All prefer either the Subs or the GMTs, and those who know enough like the Daytona. The fact that 4 people that I know might be in the market to buy but can’t get a watch without paying well over RSP, and in fact can’t even get to see and try on the watch they think they want is quite frankly ridiculous.

All that said, my gut feel is this is a temporary situation which will indeed be resolved either with higher prices reducing demand, slightly increased output, or newer models helping to mop up demand. Possibly all three.

But ADs won’t want to put up with this for much longer, something needs to change.

What If all the ADs get together and form a union and refuse to sell Rolex unles...... now that is the power of collective bargaining!

[WatchLurv]

I remember the SS Daytona dipping a little then it went stratospheric. Now, it's at its all-time high.

[Maiden]

Originally Posted by Bryantto

What If all the ADs get together and form a union and refuse to sell Rolex unles...... now that is the power of collective bargaining!

I think a lot of you may be looking at this the wrong way. Apparently Rolex is shipping the same amount (and maybe a little more) stock than they always have. If that is the case, if you owned a business, what would you prefer. Your stock sells out immediately, before it even arrives, you can cut labour hours by not employing as many salespeople. Or you can increase labour costs while units sit on the shelves and your salespeople take time to sell them.

Yes no doubt AD's could make MORE money with more stock to sell, but if inventories are the same, the AD's (owner) have never had it so good.

[NoVaSubowner]

This thread reminds me that speculation rhymes with a similar sounding 4 syllable word that begins with M and ends in 'tion".

Hint, according to the Sisters of Mercy, it was a leading cause of blindness in the 20th century.

[NoVaSubowner]

Originally Posted by Maiden

I think a lot of you may be looking at this the wrong way. Apparently Rolex is shipping the same amount (and maybe a little more) stock than they always have. If that is the case, if you owned a business, what would you prefer. Your stock sells out immediately, before it even arrives, you can cut labour hours by not employing as many salespeople. Or you can increase labour costs while units sit on the shelves and your salespeople take time to sell them.



Yes no doubt AD's could make MORE money with more stock to sell, but if inventories are the same, the AD's (owner) have never had it so good.

This.

My AD has been getting subs and sub dates in on a regular basis. They are either gone within 24 hours of being set in the case. Or they are already spoken for before they even hit the display.

So much for conspiracy theories.


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[Slurve30]

Originally Posted by 007_Omega

As watch enthusiasts, it sucks. Especially as a young one, as I have just gotten to an age where I can start to afford these things I dreamed about when I was younger. Rolex knows the watch enthusiast isn't the key to survival. We are by far the minority.

So true. My experience in acquiring my first Rolex (in progress) has been a massively frustrating one.

[101031-28]

Originally Posted by Fleetlord

Absolutely 100% right.

Rolex is clearly a luxury good and luxury goods in 2019 thrive off of exclusivity and value retention / appreciation.

Rolex knows...as you stated in your title....by limiting distribution, keeping the retail relatively low (not going up in price to match market valuation) they are creating a sense of "value" in the brand and driving the FOMO purchases. Rolex is not the only brand who does this. RM is infamous for limiting availability and keeping the retail "low" in spite of the market value...$50K over or more depending on reference...this keeps the frenzy going. This pricing component to the marketing strategy is key....

The market has clearly spoken. Luxury shoppers crave exclusivity and want value retention. They don't want to buy products that don't hold their value They are just not going to put up with it anymore. This theme is reoccuring in social media videos and posts regarding luxury goods such as watches.

1) This is hard to get, so you better get one if you see it.

2) Your money is safe if you buy this, so you shouldn't worry.

Rolex is so good at this and so dominant that I have heard some squawking about this creating a watch brand culling similar to the quartz crisis in the 1970's..

Rolex is going to put the brands with lousy marketing on the brink of or will put them out of business. People just won't want anything else in that price point..

Now WIS will recoil and say that other brands have availability and we will buy those to feed the need....well I hate to break the news, but overall the WIS market is pretty insignificant to the overall landscape.

Last week I was in the Miami Design District on a weeknight evening.

For those not familiar there are a large number of AD owned and factory watch boutiques. Rolex, Omega, IWC, Panerai, VC, ALS, Piaget, Panerai..and some others.

The Rolex store was PACKED. "All" they had were DJ, TT and PM. No worries...it's Rolex. Can't get a sub because they are too hot? Oh damn...better get something before it sells out too...my money is safe...with Rolex. I'll get this whatever it is. It's pretty and might not be here tomorrow.

The other brands? Their stores were empty. Associates on their phones or on their computers just waiting to close down for the night...beautiful stores with amazing watches, that nobody was looking at. That's a problem.

Spot on, as usual

[edyu]

Originally Posted by lightingball2

Im curious, what AD is it in the bay area? I'm in Sacramento and there were 2 AD here, now just one. Grebitus and Sons just lost their AD of Rolex. They had them for over 60 years, along with a ceritified Rolex technician there. Now Devon's is it in Sacramento.......

I'm surprised De Vons is still an AD. It's probably the most low-end looking Rolex AD I've ever visited.

[frankfrazetta]

Rolex is preparing to sell with only internet direct and Rolex owned boutiques and fulfillment direct to your house. No more AD's. The internet will also be a Rolex to you channel. The boutiques will just be for those who want to touch before they buy.

[Tha Baron]

Originally Posted by frankfrazetta

Rolex is preparing to sell with only internet direct and Rolex owned boutiques and fulfillment direct to your house. No more AD's. The internet will also be a Rolex to you channel. The boutiques will just be for those who want to touch before they buy.

Rolex doesn’t own boutiques
Rolex will never own boutiques

[Fleetlord]

Originally Posted by 101031-28

Spot on, as usual

Thanks...

The visit to Miami was pretty telling. Rolex was packed on a weeknight, the other brands? Not at all.

I'm going beyond all this jibber jabber about whether this is a Rolex strategy or simply organic supply and demand vs static production..

I think this is reshaping the landscape to the point that some of these other brands are in big trouble. They just cannot compete with Rolex for the $$$ of the general public and are getting left behind...and quite possibly shuttered.

[Rolexlover123]

It doesn't bother me if everyone wears a Rolex. I don't wear mine because it is exclusive, I wear it because ever since I was a kid, I had been introduced to a DJ and as I got older and went through my Tag phase, I went right back to Rolex and knew that's what I would wear. That fluted bezel and cyclop is just classic.

Originally Posted by igomez70

I’m sitting here reading this and can’t help but think who cares, really think about it Rolex is just too common, maybe they are just tired of themselves.

Have y’all gone out lately?, man I was out with my wife at a very nice trendy place in Wynwood and I swear at least 90% of the crowd there were wearing a fucking Rolex (wife included), it was so obvious it was impossible not to notice, I think even the valet kid was wearing one.

When I got home I really wanted to throw my Sub to the trash, but what I did instead was to put a rubber strap on it, looks great btw, I don’t thing I would ever want to see an oyster bracelet again.

I’m not trolling man, I’m really happy I sold most of them and only have one, I much prefer wearing anything else, even Casio.

[GB-man]

All I know is I use to buy a couple new Rolex a year and now I buy none. I’m tired of pleading for a watch.

[WJGESQ]

Originally Posted by mbdurham

I’m some respects I disagree. I don’t think this is some mastermind plot with Rolex. I believe they are producing the same amount of product but savvy resellers are plucking them up knowing people are willing to pay double MSRP and they can make a profit. If it was only consumers who actually wanted the product to keep it then buying them wouldn’t be this supply issue. The secondary market is flooded with all models that are supposedly hard to get. If there was a reduction or shortage this would not be the case.

The reason and equivalencies behind this reasoning go to my business. I often see one buyer for numerous luxury condos in a high rise building purchase numerous units on the front end during development. Now obviously they are not going to inhabit all of these units if any but they hold on to them until the building is finished then sell them for a profit. We get others who were not as early or couldn’t get funding at that stage clamoring to get in the building once it’s finished. Obviously we like it because the building is sold out early which creates a buzz and people wanting to get in. Many eventually do but at a profit to the original buyer.

Do I care? No not a bit. All units are sold at our asking price and the building gets built. Doesn’t matter to me if someone makes a profit later on. Could we stop this? Yes absolutely. Will we? Not a chance as there is too much benefit. Same with Rolex and ADs and resellers

Now if and when the market turns will investors be so willing to plunk out a lot of money on the front end hoping for a large return on the backend or maybe waiting a long time for that return? Nope so I believe it will correct itself eventually.


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I agree with you.

And while Rolex might feel immune up on there perch, those who like watches, but are not Rolex Fan Boys, will simply move to other brands if they cannot obtain what the are looking for and there are some other great brands that can fill the gap. Only time will tell, but big luxury brands can indeed stumble.

[WJGESQ]

[QUOTE=WJGESQ;9372961]I agree with you.

And while Rolex might feel immune up on their perch, those who like watches, but are not devout Rolex Fan Boys, will simply move to other brands if they cannot obtain what the are looking for and there are some other great brands that can fill the gap. Only time will tell, but big luxury brands can indeed stumble.

[entendu]

Originally Posted by entendu
Joe Escobar?

Originally Posted by ShingaMC

]
I doubt it.


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Joe Escobar isn't on Rolex's AD list anymore.