Rolex Strong-arming AD's

[bigG]

Visited my AD yesterday and noticed that they had pulled their Breitling and Omega displays. When asked they told me Rolex NA came in and told them that if they wanted to keep being a Rolex AD they had to dump Breitling and Omega n They said they expect all AD's to make Rolex the centerpiece of their watch lines.

I don't know about you but I think this type of strong arm tactics is not befitting a company such as Rolex. What are they afraid of? Can't they take the competition? This sounds like a very insecure company as opposed to the industry leader they think they are. I love Rolex watches and own two, but am not pleased with the way they can treat AD's. But when you are Rolex I guess you can do what you want. Anybody else feel the same way or is it just me

[Dan Pierce]

Look how they treat customers. It's as if they own your watch and you just pay for the privilege of wearing it. Having said that, Rolex USA's modus operandi does keep the value of the brand and our watches very high compared to others. There's always a compromise.
dP

Originally Posted by bigG

Visited my AD yesterday and noticed that they had pulled their Breitling and Omega displays. When asked they told me Rolex NA came in and told them that if they wanted to keep being a Rolex AD they had to dump Breitling and Omega n They said they expect all AD's to make Rolex the centerpiece of their watch lines.

I don't know about you but I think this type of strong arm tactics is not befitting a company such as Rolex. What are they afraid of? Can't they take the competition? This sounds like a very insecure company as opposed to the industry leader they think they are. I love Rolex watches and own two, but am not pleased with the way they can treat AD's. But when you are Rolex I guess you can do what you want. Anybody else feel the same way or is it just me

[fear]

Yeah, and if I remember correctly (from other forums) Omega does take away Omega AD status too certain ADs who don't fit their marketing.

It seems that Omega wants to create their own boutique niche as Rolex is doing.

I've not encountered this in Hawaii. We have a Ben Bridge AD that carries Omega, IWC, Patek Phillippe, Panerai, GP.... But the outside displays have Rolex prominently displayed.

[Spark]

I have seen/heard this a few times.
I think it has happened to small AD's here in the UK a few times, but the big boys sell almost all watches together.
You almost always see Omega, Breitling and Longines together.
Or in the BIG cities Rolex, Patek, Vacheron, Omega, Audermars, Longines and Tag Heuer all in the same stores.
I guess they can push the small guy around, but the selling power of the big guns gives them the upper hand.
It is a shoddy way to do business though IMO

[Scarface]

Originally Posted by Dan Pierce

Rolex USA's modus operandi does keep the value of the brand and our watches very high compared to others. There's always a compromise.
dP

I 'll have to agree with Dan on this.
It has nothing to do with insecurity or anything like.
Rolex wants exclusivity - and the market is a dirty place anway

[marty mehl]

do you want to sell ?

[Steven79]

i think thats a wrong move on rolex's part. they should allow AD's to carry whatever brand they want to. people who want a rolex will still buy one no matter how many tags, omegas, etc. are also in the cases.

[Scarface]

Steven. it is about customer perception - Rolex doesn't like people to associate the brand with a "watch-supermarket", they want them to think that it is one of a kind and it has to stand alone. That's how value is created and that's what Dan meant above.

[f16570]

Anything that makes Rolex more exclusive does not have to be a bad thing.
Look at Mercedes, Range Rover, Louis Vitton, just high street names. Nothing exclusive now.

[bigG]

.....and why Breitling and Omega?? This AD still carries JLC, Panerai, Patek, and others. Why did Rolex single out those brands?

[Hamilton Carvalho]

Sometimes I think that Rolex act like the mafia. In a way I think their message is "it's our way or nobody's way." Isn't this a way to monopolize?

[Scarface]

Originally Posted by Hamilton Carvalho

Isn't this a way to monopolize?

Yes, almost. As long as they stay within the (legal) limits set by competition law.

[krattzz]

It's because they are greedy and know the there are many in the world with huge egos that will continue to buy a Rolex so they can feel inside more valuable.

[Terry Newton]

Originally Posted by f16570

Anything that makes Rolex more exclusive does not have to be a bad thing.
Look at Mercedes, Range Rover, Louis Vitton, just high street names. Nothing exclusive now.

Wise words. Could you imagine buying a Mercedes that is then sitting next to a bunch of Ford Focus vehicles. It would probably be a big turn off to the people that can afford the Mercedes. They want that exclusivity.

Terry Newton

[2careless]

I suppose for the AD it really depends on:
1. does Breitling and Omega sell in his store?
2. can he live without Rolex? or Brietling and Omega?
3. if he drops Brietling and Omega, what brownie points will he get from Rolex? more daytonas/GV or a bigger territory?

BTW, is he the only Rolex AD in town? What are the competition in terms of Rolex ADs there?

[bigG]

Originally Posted by 2careless

I suppose for the AD it really depends on:
1. does Breitling and Omega sell in his store?
2. can he live without Rolex? or Brietling and Omega?
3. if he drops Brietling and Omega, what brownie points will he get from Rolex? more daytonas/GV or a bigger territory?

BTW, is he the only Rolex AD in town? What are the competition in terms of Rolex ADs there?

My AD is a medium size family owned operation. There are probably 3-4 other authorized AD's with a 25 mile area, so he has competition. He did say that his margins on Rolex's are much better than Omega and Breitling so from that standpoint it makes sense, but they were obvioulsy disappointed that they had to drop the other two lines. I doubt they are going to recoup the lost revenue in additional Rolex's so this will be a financial hit to them. Again not sure why Rolex would want to tie their hands like that. They are interfering with their ability to be a successful business. It's not like Breitling and Omega are low end cheap watches. I don't think that having Rolex's in the same store as Breitling (some of which are in excess of $10G) diminishes Rolex's standing.

[Scarface]

Originally Posted by bigG

Again not sure why Rolex would want to tie their hands like that. They are interfering with their ability to be a successful business.

Rolex doesn't care about such things, unfortunately. As I said, market wars are dirty. Big fish eats small fish.

[topcat30093]

IMO if Rolex what exculsive rights to only have their watches on display.
Then they should increase their production to match demand!!!

[bran319]

Being an AD is a privilege, not a right, just like owning one. The AD obviously found more value in that privilege than the other two brands combined and chose to maintain the relationship. I'm sure that name recognition alone drives foot traffic into the store where other purchases could be made. I wouldn't feel too bad. The business world is a tough one.

[Hamilton Carvalho]

I completely agree with you.

Originally Posted by topcat30093

IMO if Rolex what exculsive rights to only have their watches on display.
Then they should increase their production to match demand!!!

[Art 1]

Nothing new with Rolex.

[docnagel]

Originally Posted by Art 1

Nothing new with Rolex.

Agreed.

[Lane from s.c.]

I have been to watch dealers all over the world and I have never seen just a rolex dealer. I`m sure they are out there but most carry different brands like motorcycle dealers, car dealers are different, its a bigger pruchase and you really need a car. I don`t see a problem with sharing retail space. If you want a rolex, you want one and walking in a dealer with different brands won`t change peoples minds, IMO. I believe most minds are made up before they enter the store. I also believe NOW is a bad time to be a watch snob, the US economy is about to correct in a big way and it WILL slow down other nations. IMO

Lane

Lane

[TempoKing]

Originally Posted by bigG

.....and why Breitling and Omega?? This AD still carries JLC, Panerai, Patek, and others. Why did Rolex single out those brands?

You have to remember that the only other "good" watch company that can produce watches in numbers similar to Rolex is Omega, they have the know how, they have the complications, they have a trio of managers (2 sons & a crazy father) that can run circles around the arteriosclerotic Rolex managment.
Look at Omega lately...production up to 500.000 pieces..??
Now to Breitling, Breitling "steals" sales from Rolex in the lower priced time pieces and it can inrease production at will.
Patek, Vacheron, Audemars, Jaeger and Panerai are trully small potatoes
Like if GM would care if a GM dealer also sold Sbarro made cars in the same dealership.

http://jalopnik.com/photogallery/sbarroturbos20/1567299

[delldeaton]

Originally Posted by bigG

.....and why Breitling and Omega?? This AD still carries JLC, Panerai, Patek, and others. Why did Rolex single out those brands?

1. Breitling was the first Q watch, and it took screen time from the Rolex Submariner in Thunderball.

2. After getting a Submariner Date on the wrist of James Bond in Licence to Kill, the franchise switched to Omega one film later, in GoldenEye.

It always goes back to 007!

[rpryan55]

Here's what Patek Philippe is doing: In order to sell more watches and to increase demand, they've decided to close outlets - yup, close them. They see, in a recession, that big money people will still spend IF the brand is exclusive. So they're getting rid of the discounters, the ones that deal in the gray market, etc. Rolex has made a couple of marketing decisions as well - they're not going to be selling in any watch supermarkets anymore. Their brand will be exclusively sold in stores without Omega and Breitling in the U.S., whom they see as their biggest competitors at similar pricepoints.

I see nothing wrong with it - except that it's, er, stupid. Watch buyers who spend thousands on a timepiece like to form relationships with A.D.s, and if the A.D. has other valued watch brands it makes it more likely that the customer will come back to a store that SELLS ROLEX. If Rolex wants to be by itself, its likely I'll have a better relationship with the guy that sells Omega, Brietling, Patek, IWC, Zenith, JLC, AP, etc.......and I'll rarely visit (and rarely buy from) the guy that sells solely Rolex.

[TempoKing]

Rolex tried to pull the same scenario, some years back with Tiffanys and Cartier, of course these two are the Mega Boys in the jewelry world, and strong arm tactics...not going down well, not to mention the fact that they have wrote the book in snobism and superior attitude among jewelry peers, so flat out, told the Rolex emissaries to..GET LOST and stopped carrying Rolex products.

[SPACE-DWELLER]

Originally Posted by Scarface

(...)and the market is a dirty place anway

Indeed it is.

Vesper Lynd: "Rolex?"

James Bond: "Omega".

Vesper Lynd: "Beautiful."

[Scarface]

Originally Posted by SPACE-DWELLER

Indeed it is.

Vesper Lynd: "Rolex?"

James Bond: "Omega".

Vesper Lynd: "Beautiful."

I bought my first good watch - an Omega Seamaster - as a present to myself when I was graduating from my MBA and I used to believe that Omega was James Bond 's brand....back then I didn't knew anything about Rolex and Bond ....
Now, this dialog is an insult to Rolex and a sin

Originally Posted by rpryan55

I see nothing wrong with it - except that it's, er, stupid.

It is a brilliant decision that adds value to the brand and its effects are LONG-TERM (sales of 2-3 quarters that might suffer initially but the value is not in temporary sales but in the brand and a brand like Rolex with its aura of exclusivity and -yes - snobbery pays LONG TERM.).