2012 price increase confirmed! (Don't expect as high of a discount in the future!)

[MovieGuy]

But, its not the usual price increase! Instead of raising the retail price, Rolex raised dealer cost by 3.5%.

They used to have a 5% discount for ADs that paid for their watches within 30 days. Then they lowered it to 3%. Last year they eliminated that discount altogether. Now dealer cost has been raised 3.5% higher than it previously had been.

It is their attempt to reduce and/or eliminate discounting of their product.

[Speed]

[Oyster Al]

[MovieGuy]

I looked back a few pages and it looks like this information was already posted in a thread about price increases in general. Thought it would be good to have this separate thread dedicated to the raising of the AD's cost.

[btinl]

This information has already been posted several times.

[nim]

Whats the implication for buyers

[TempoKing]

Originally Posted by nim

Whats the implication for buyers

Other than No discounts - nothing else
in my opinion....buying a Rolex at a good
discount has become a true chase
I for one will try to find a loophole for
a discount not because it makes a real
difference.... but because it is therapeutic
for my rolexolism malady...

[FX44]

[esm]

Originally Posted by MovieGuy

It is their attempt to reduce and/or eliminate discounting of their product.

why is everyone always expecting a discount?

[10:10:31 28]

Originally Posted by esm

why is everyone always expecting a discount?

Because people don't like to spend more than they need to?

[HL65]

They eliminated the 2% discount they had for 30 days paid up a while ago. They increased the cost for AD's by 3% as well making it 5% more for an AD who pays for watch within 30 days--taking AD cost to 37% off of retail price.

[bottom of the ninth]

I always liked a discount

[Sky-Dweller]

Originally Posted by bottom of the ninth

I always liked a discount

Who does not like .

[jim251]

I made a new purchase yesterday and while my excellent AD admits to the Rolex pricing actions, it didn't affect the nice discount I've enjoyed there for a while now, not to mention the "material expressions of goodwill" that seem to accompany each purchase.

I think that whatever wiggle room still remains is there for the AD to share with established customers, not the walk-ins off the street.

It's a YMMV kind of thing - good luck to all.

[snaggle]

Wow. Rolex is very very smart (well obviously). But notice how they imply their tactics.

So, as we know, as time passes by, Rolex's prices are always increasing slowly over time. They have many ways in doing it however. On occasions they will just blatently increase MSRP, sometimes they do a modification to a watch so they justify a price increase, and as we can see now, this is another smart tactic - they increased the price, WITHOUT increasing prices.

Now the general public thinks - oh okay, the MSRP is still the same - YES! Rolex did not make a price increase!

WRONG - rather than getting that 5 or 10% discount from AD's or buying from gray dealers at a discount, you have to pay more regardless.

Now, Rolex is making more profit per watch they sell, but the MSRP and overall image they have in the public is that "prices did not change"

Good move Rolex, good move!

Now guess what happens next year, an actual price increase (my prediction) - then they can justify themselves by saying "Well, we did not have a price increase for TWO YEARS!"

[jrssv]

It will also raise the price of gray market dealers and make them closer to AD's.

[LightOnAHill]

They have to keep up with the vanishing value of paper money somehow. . .

[bodybump]

You will be super lucky if you get 10-15% off in the near future

[greekbum]

This has been known for some time now. Rolex has been eliminating AD's, Eliminating Watchmakers parts accounts, Raising prices, Selling less watches, And now raising the price it costs to the AD's who did everything to keep the brand. They got a plan.......Discounts are all but done. They don't need to give them they have people lining up to buy the almost $9,000 Stainless Steel sport watches.IMHO the product is now way overpriced and there is BIG demand BUT not at the current prices. Demand is at 35% off

[nim]

eliminating ADs totally will be the grand plan of rolex
so that they can keep 100% of the sales revenue and not having to share that 35-40% with the middlemen

[Vernal]

Originally Posted by nim

eliminating ADs totally will be the grand plan of rolex
so that they can keep 100% of the sales revenue and not having to share that 35-40% with the middlemen

No offense, but since you posted and I'm feeling chatty, I see this idea pop up a lot on these threads, but the logic confuses me. Rolex pays nothing to sell through an AD, unless you count the difference between wholesale price and retail as a cost, so it seems to me that as long as Rolex has the supply available, they will send them to ADs. The cost and hassle of running a boutique has to eat into the bottom line as well. I don't see ADs being eliminated, although the waiting lists may grow.

Am I wrong? I know Omega is opening boutiques (I went to one, not impressed) but are they actually eliminating ADs?

[captiva]

Well, if the demand is there, discount will be lowered. If lesser demand, there will be more discount given to boost the sales.

Its a numbers game after all.

[Feras]

Admin, please ban such thread.
they make me feel depressed and wana rush and buy one or two :P

[cruvon]

complete opposite to this by Breitling:)
http://rolexforums.com/showthread.ph...50#post3114950

[The GMT Master]

The discount situation had gotten out of hand in the US, IMO. You don't go into a Ferrari showroom and ask for 25% off, Rolex should really be the same. It's a desirable luxury item, and one that is being snapped up in droves in emerging markets for full price. Cutting down the sheer number of dealerships (same is happening here in the UK) allows Rolex to put their house in order, and make sure they have dealerships that don't undermine the brand. Sure, it's sad when long standing dealerships get closed down, but there's usually a pretty good reason for it

[COBill]

Originally Posted by The GMT Master

The discount situation had gotten out of hand in the US, IMO. You don't go into a Ferrari showroom and ask for 25% off, Rolex should really be the same.

Yes, but do we really want to hit the Ferrari model of paying over MSRP for a new vehicle and only being allowed to purchase a new vehicle if you've previously purchased one or more used ones from the same dealer?

On the note of luxury goods, consider the MSRP of the Chanel classic Jumbo Flap purse:

2008: $2850
2009: $3420
2011: $3500
2012: $4300

[Solo118]

Originally Posted by COBill

Yes, but do we really want to hit the Ferrari model of paying over MSRP for a new vehicle and only being allowed to purchase a new vehicle if you've previously purchased one or more used ones from the same dealer?

On the note of luxury goods, consider the MSRP of the Chanel classic Jumbo Flap purse:

2008: $2850
2009: $3420
2011: $3500
2012: $4300

I was going to bring up the exact same thing. Chanel is doing this to keep the regular folk from having their merchandise. As for Rolex, the days of having a new Sub for $3,500 are long gone, so that guy that could just manage to afford it can no longer have such thoughts.

At 8k for an SS Sub, I do not think the 10% will make or break the buyer. These days if I would even purchase a brand new Rolex from an AD, I would just want to walk out with it and not pay any Tax. Luckily I do not have the need the be the first owner to rip off the plastic, and i have no problem buying pre-loved

[rr-nyc]

Originally Posted by Solo118

I was going to bring up the exact same thing. Chanel is doing this to keep the regular folk from having their merchandise. As for Rolex, the days of having a new Sub for $3,500 are long gone, so that guy that could just manage to afford it can no longer have such thoughts.
...

I don't think Chanel or any other brand is trying to keep "regular folk" from buying their products. They are bumping up their pricing to the level where comparable brands have been successful.

People who want to buy a Rolex will still buy a rolex, even at a higher price and the same for Chanel.

[MoBe]

Originally Posted by The GMT Master

The discount situation had gotten out of hand in the US, IMO. You don't go into a Ferrari showroom and ask for 25% off, Rolex should really be the same. It's a desirable luxury item, and one that is being snapped up in droves in emerging markets for full price. Cutting down the sheer number of dealerships (same is happening here in the UK) allows Rolex to put their house in order, and make sure they have dealerships that don't undermine the brand. Sure, it's sad when long standing dealerships get closed down, but there's usually a pretty good reason for it

Spoken like true Rolex salesguy!

[joe100]

The end-game is zero discount for sure. It's amazing to think of the titanic profit margin Rolex must have. I would be seriously surprised if it cost more than $800 to make an SS Sub. They retail for 10x that amount. The ceramic bezel may add a little to that, maybe. They have their production down to a science, they've been making the same core design since the war, and not much really changes on the new model. When they updated the sub to ceramic, some details changed but the design is the same. Tooling was probably easily reprogrammed as well.

My point is that Rolex is the poster child for the Veblen Effect. A Veblen good is an item which is desirable because it's expensive. Doesn't matter what the production cost is. Frankly, Rolex wouldn't appeal to the majority if it were priced at a usual retail markup based on production costs. A $2200 Submariner, for example would be less desirable in theory. We can find great dive watches at this price point and some much lower than a Sub. You don't buy the cheap diver because you want the Rolex cachet, quality, and history. You're buying into the whole package. Rolex backs this with a solid service network and marketing second to none. You want a piece of that John Q.

Their goal is to sell watches at their msrp because selling at a discount is a catch-22 and winds up hurting sales in the long run. The more expensive it is, the more desirable. The more desirable, the more try sell.

With that said please don't think I'm talking directly to you, whoever reads this...this is meant to sum up the majority, not the detail-oriented hobbyist.

Something to think about though. I drank the cool-aide, I'm in!