Rolex pricing strategy

[Alcan]

I was in my AD yesterday, and took a look at the Rolex display. The black and white dial SS Daytonas are both still there, and next to them was a new 116613LN TT Sub C.

Here`s the kicker, the Daytonas are priced a $11,520 cdn but the Sub is priced at $12,080. $540 more for the Sub! Go figure.....

[stephengreen]

Originally Posted by Alcan

I was in my AD yesterday, and took a look at the Rolex display. The black and white dial SS Daytonas are both still there, and next to them was a new 116613LN TT Sub C.

Here`s the kicker, the Daytonas are priced a $11,520 cdn but the Sub is priced at $12,080. $540 more for the Sub! Go figure.....

Is the sub not a better watch. Newer design, more waterproof, a date and made with gold. Imo the ss sub c's a better watch as well.

[EE33]

Scary!

[Kiddodoc]

Difference between them is that the Subc will drop a lot in resale value but the Daytona would only drop a small amount.

[HL65]

I am surprised that AD has 2 SS Daytonas on display for sale. Regardless if you like the Sub TT C better--it will be worth 35% less once you walk out the door and the Daytona will hold pretty tight--maybe with in 10% range-give or take a few.

[stephengreen]

Originally Posted by SteelerFan1965

I am surprised that AD has 2 SS Daytonas on display for sale. Regardless if you like the Sub TT C better--it will be worth 35% less once you walk out the door and the Daytona will hold pretty tight--maybe with in 10% range-give or take a few.

I get the feeling that the Daytona's star is fading. There are countless second hand ones for sale while the asking price seems to be softening. Here in the UK i saw two at a local AD with no home to go to..times are a changing methinks

[sond86]

Actualy depending on AD, the sub may be acquired
With a discount. But ya would drop
A lot more

[HL65]

Not fading here--look at all of the ones that have sold on TRF--all sold rather quickly and for solid prices.

[stephengreen]

Originally Posted by SteelerFan1965

Not fading here--look at all of the ones that have sold on TRF--all sold rather quickly and for solid prices.

A dedicated forum is perhaps not the best place to judge public demand.
I think with the new generation of updates being released the daytona is under serious pressure given that there are more choices to sway buyers. The daytona is in desperate need of an update too. Imo it needs a maxi type case, more legible timers, and a DATE.

[PeteNYC13]

Wow, we almost went a week without a "the Daytona isn't in demand thread"....

lol

-Pete

[Alcan]

Originally Posted by PeteNYC13

Wow, we almost went a week without a "the Daytona isn't in demand thread"....

That was not the intent of the thread, Rolex pricing peculiarities was.

[HL65]

Agree--certainly did not want it to turn into a Daytona demand post--market speaks for itself and Rolex sets the prices as secondary market
is set by what we all are willing to pay!!

[ersnyder]

Not to burst anyone's bubbles, but I really think Rolex is in it for the money!! I know....

[HL65]

Originally Posted by ersnyder

Not to burst anyone's bubbles, but I really think Rolex is in it for the money!! I know....

Exactly!!!!

[The GMT Master]

I don't think there's anything peculiar about it. The Daytona has a far more complex movement, and people will pay that much for it, which is why the steel is so expensive in the first place - the Sub is mechanically a more simple watch, and most of the price can be attributed to the gold content, plus there isn't as much of a hype. As a general rule, with the sports models, the retail of the TT is around £2k more than the retail of the SS - I just think the Daytona is just generally an unusual case.

[snowbird]

The thing I can't figure out is why the gap is smaller in Canada than in the US on the two models.

Cdn the difference is $560 as noted above, USD it's $850 [Daytona $10,400, TT sub $11,250]

I know the prices vary from country to country, but I always assumed the relative price of one model versus another would be similar?

[stephengreen]

Originally Posted by Alcan

That was not the intent of the thread, Rolex pricing peculiarities was.

Maybe the peculiarity will address itself when the updated daytona is released along with its updated price?

[jevans41]

Originally Posted by steelerfan1965

i am surprised that ad has 2 ss daytonas on display for sale. Regardless if you like the sub tt c better--it will be worth 35% less once you walk out the door and the daytona will hold pretty tight--maybe with in 10% range-give or take a few.

+1

[FancyWatch]

Originally Posted by SteelerFan1965

Regardless if you like the Sub TT C better--it will be worth 35% less once you walk out the door.

Is this just for the Sub TT c only or all subs in general?

[Richard.]

Originally Posted by The GMT Master

.... most of the price can be attributed to the gold content

Don't think so.

[The GMT Master]

Originally Posted by Richard.

Don't think so.

Well, it certainly isn't through the movement

[JetRanger]

Even if the all SS Daytona was more $ than the TT Sub, I strongly would opt for the Daytona. IMHO,it's a way cooler watch. Also, the Sub will drop at least 40% before you exit your AD's door (it becomes a Used Watch the second your sale is cleared), while the Daytona will hold solid at 90+% for a good while.

[Big_S]

Originally Posted by snowbird

The thing I can't figure out is why the gap is smaller in Canada than in the US on the two models.

Cdn the difference is $560 as noted above, USD it's $850 [Daytona $10,400, TT sub $11,250]

I know the prices vary from country to country, but I always assumed the relative price of one model versus another would be similar?

That is odd. Are those prices standard in Canada, or does this one dealer just want to unload them?

[Big_S]

To answer the OP: The Sub could be more expensive than the Daytona for a number of reasons that in all likelihood are caused by supply and demand variables. The Sub-C may in fact cost more to produce (supply factor). It has been mentioned on the forum that the Daytona has a simpler movement. It is older and production methods and technologies are older and cheaper. As more units are produced, more are produced in a given time period as production methods are improved, thus reducing the wage required to produce a single unit. The amount of gold in a TT actually is quite small as I have read in several other threads, and will only partially offset the savings that has been generated by other factors. When compared to an all stainless model that has a more complicated movement, newer more expensive production methods and technologies (both R&D and actual per unit), and less efficient production methods, it is easy to see why the Daytona is cheaper. There may be import tariff differences, import quotas, export quotas, and other trade restrictions (supply factors) affecting the price as well. Or simply greater demand for the Sub versus the Daytona.

I initially ran a couple of numbers. Based on the prices provided, ceteris paribus, it looks like rolex is using its supply controls to influence the price in both the US and Canada to compensate for variations in demand for the two models. I believe that this will give them an equal amount of profit in each (market) country regardless of the demand for each individual model. It's late here, I am tired, and perhaps the correllations that I am seeing are really just in my head. Of course this should be tempered with supply/ demand factors (above), and in all likelihood this theory is completely false. This also does not take into account the other models/ goods Rolex markets, and it only accounts for two markets when rolex exports their goods to many worldwide.

If there are any other economists or business folks out there, please chime in. I appreciate any positive or negative criticism!

I am presenting this theory from an academic position for educational purposes only. I am in no way intending to disparage Rolex or assert that they are in fact using price controls whatsoever as there may be applicable factors and information that I am not aware of.

[snowbird]

Originally Posted by Big_S

To answer the OP: The Sub could be more expensive than the Daytona for a number of reasons that in all likelihood are caused by supply and demand variables. The Sub-C may in fact cost more to produce (supply factor). It has been mentioned on the forum that the Daytona has a simpler movement. It is older and production methods and technologies are older and cheaper. As more units are produced, more are produced in a given time period as production methods are improved, thus reducing the wage required to produce a single unit. The amount of gold in a TT actually is quite small as I have read in several other threads, and will only partially offset the savings that has been generated by other factors. When compared to an all stainless model that has a more complicated movement, newer more expensive production methods and technologies (both R&D and actual per unit), and less efficient production methods, it is easy to see why the Daytona is cheaper. There may be import tariff differences, import quotas, export quotas, and other trade restrictions (supply factors) affecting the price as well. Or simply greater demand for the Sub versus the Daytona.

I initially ran a couple of numbers. Based on the prices provided, ceteris paribus, it looks like rolex is using its supply controls to influence the price in both the US and Canada to compensate for variations in demand for the two models. I believe that this will give them an equal amount of profit in each (market) country regardless of the demand for each individual model. It's late here, I am tired, and perhaps the correllations that I am seeing are really just in my head. Of course this should be tempered with supply/ demand factors (above), and in all likelihood this theory is completely false. This also does not take into account the other models/ goods Rolex markets, and it only accounts for two markets when rolex exports their goods to many worldwide.

If there are any other economists or business folks out there, please chime in. I appreciate any positive or negative criticism!

I am presenting this theory from an academic position for educational purposes only. I am in no way intending to disparage Rolex or assert that they are in fact using price controls whatsoever as there may be applicable factors and information that I am not aware of.

That could be. I can't see any other obvious reason why the relative pricing of the two models would differ in the two countries. Unless import duties are affecting pricing i.e. if one country taxes watches with gold content differently than stainless watches. Years ago I understand Rolex US-market gold watches had US-made bracelets for this reason.