CONFIRMED news regarding the professional line

[Why1504]

Originally Posted by casadecamporolex

Lots of opinions here based on supposition.
Realize this.....Worldwide sales of Rolex up nearly 20%.
Demand, especially for SS models, never been higher.
Rolex production can not keep up.
Factories in Geneva working overtime.
And, ORJ’s in USA business never better.

Where do you get that data?

According to my AD they are not seeing any increase in supply. This is consistent with the other posters here.

[casadecamporolex]

Originally Posted by Bigblu10

If production can't keep up, why were the factories shut down and done for the last couple of months last year? No AD's were receiving shipments and there was a stock shortage for the holiday season when many splurge for a Rolex watch.

Certain models....like all the over retail versions were in short supply. Everything else was business as normal.
Can’t use the Sub, GMT and Daytonas as the norm of business. Represents a small cross section of their inventory.
Rolex only makes so many green Sub and demand exceeds supply.

[singkwokhk]

Originally Posted by HogwldFLTR

Why would they? Less volume means fewer sales!!!

not true. because Rolex watches are inelastic, a reduction in the quantity actually will increase revenue.

[Krash]

Originally Posted by singkwokhk

not true. because Rolex watches are inelastic, a reduction in the quantity actually will increase revenue.

I do agree that Rolex watches are inelastic because they sell regardless of price. However, after that, you're not making any sense, and you're getting accounting terms all mixed up.

Profit and revenue aren't the same thing.

Profit = sales revenue - taxes - expenses.

You don't increase revenue by selling less.

Now if they reduce quantity but increase prices, then it's still possible to increase net profit. (e.g., less expenses associated with reducing production + net increase in revenue due to prices increase = more profit.)

Plus, I'd imagine that Omega (Swatch) would be thrilled if Rolex reduced sales.

[Quamby]

Originally Posted by singkwokhk

not true. because Rolex watches are inelastic, a reduction in the quantity actually will increase revenue.

Not entirely correct as Rolexes sold at the AD level are sold at MSRP and any mark-up will belong solely to the AD proprietor.

[Net-man]

Majority of SS models are pre sold, where is the problem for Rolex or AD?
Yes some customers feel hurt when they can’t get want they want, I don’t understand how it translates to less business for AD or manufacture?



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[Bostonbert]

I can understand Rolex wanting to eradicate the replica business (since they make no money out of it and it damages the brand). Everyone knows ADs feed the grey market and that the grey market is also a conduit for replicas. In view of this, shipping less of the most frequently counterfeited models (the steel sports models) to ADs makes sense, but not manufacturing fewer numbers of the sports steel models. That would be equivalent to surrendering to the counterfeiters....they’ll keep making fake Rolexes and selling them to the more seedy grey market vendors.

Maybe Rolex will start doing direct sales through the internet to cut out the ADs, grey market merchants and flippers? All they would need to do is know who is placing the order and make sure that client doesn’t have a history of flipping they pieces they purchased before. I can understand a private owner selling a 20 year-old Rolex but not a 20 month-old watch and even less a 20 day-old Watch (those people are just flippers looking to make a buck at everyone’s else’s expense).

[doctorstrange]

Originally Posted by Bostonbert

I can understand Rolex wanting to eradicate the replica business (since they make no money out of it and it damages the brand). Everyone knows ADs feed the grey market and that the grey market is also a conduit for replicas. In view of this, shipping less of the most frequently counterfeited models (the steel sports models) to ADs makes sense, but not manufacturing fewer numbers of the sports steel models. That would be equivalent to surrendering to the counterfeiters....they’ll keep making fake Rolexes and selling them to the more seedy grey market vendors.

Maybe Rolex will start doing direct sales through the internet to cut out the ADs, grey market merchants and flippers? All they would need to do is know who is placing the order and make sure that client doesn’t have a history of flipping they pieces they purchased before. I can understand a private owner selling a 20 year-old Rolex but not a 20 month-old watch and even less a 20 day-old Watch (those people are just flippers looking to make a buck at everyone’s else’s expense).

selling rolexes through the internet would like selling iphone 6 through apple's web site. the majority of them will only go to the grey dealer, as they have the resources to write programe to place orders, which can be as fast as completing 100 orders in a second. we have no chance getting one.

[Rondineli]

Yeah, in stainless steel only an explorer 1 and an air-king. No Daytonas, no subs, no gmts, even DJs were not plentiful at all.

But, I was offered the gold sub for $34.5k...



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[doctorstrange]

Originally Posted by Rondineli

Yeah, in stainless steel only an explorer 1 and an air-king. No Daytonas, no subs, no gmts, even DJs were not plentiful at all.

But, I was offered the gold sub for $34.5k...



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it sure is a lovely watch, but 34.5k, no discount? even seems like its over msrp.

[Rondineli]

Originally Posted by doctorstrange

it sure is a lovely watch, but 34.5k, no discount? even seems like its over msrp.

I was not buying, so...


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[lecorsaire]

Originally Posted by doctorstrange

selling rolexes through the internet would like selling iphone 6 through apple's web site. the majority of them will only go to the grey dealer, as they have the resources to write programe to place orders, which can be as fast as completing 100 orders in a second. we have no chance getting one.

Yep. I have used scripts aka bots to buy limited edition sneakers that sell out within a minute. You fill in all of your information and the preferred size and the script will place an order in milliseconds. Those doing it manually really have no chance!

There are lots of talented programmers out there who can modify the code as fast as websites change theirs to stop automated buying.

[Krash]

Originally Posted by lecorsaire

Yep. I have used scripts aka bots to buy limited edition sneakers that sell out within a minute. You fill in all of your information and the preferred size and the script will place an order in milliseconds. Those doing it manually really have no chance!

There are lots of talented programmers out there who can modify the code as fast as websites change theirs to stop automated buying.

It's pretty easy to defend against Bots. Most retailers don't have very sophisticated online platforms.

If Rolex really wanted to sell online on the their website, they could employ defensive measures. However, I doubt Rolex wants to invest in an online sales platform, and especially an advanced online sales platform. I suspect they're happy with their current distribution model.

[lecorsaire]

Originally Posted by Krash

It's pretty easy to defend against Bots. Most retailers don't have very sophisticated online platforms.

If Rolex really wanted to sell online on the their website, they could employ defensive measures. However, I doubt Rolex wants to invest in an online sales platform, and especially an advanced online sales platform. I suspect they're happy with their current distribution model.

I don’t see them doing it either. The AD/boutique experience is part of buying luxury goods especially jewelry and shipping massive amounts of luxury watches through Fed Ex/UPS/DHL is really just asking for trouble.

[037]

If Rolex sold online then they'd have to ship watches with stickers, and that goes against all rumors that ADs are supposed to remove them after purchase. It would also make returns rather tricky with warranty cards filled out. Rolex would have to print new cards after each return, assuming they allow returns in the first place.

Then, how would they sell models like the SS BLRO, SS Sky-Dweller and SS Daytona given the wait times? Would they post that your order will be fulfilled in 1~3 years from purchase date? Would they make more of these models to meet demands?

I personally don't see it happening but of course could be wrong.

[GMT Aviator]

Rolex should sell selected references online, and deliver to local AD of choice for collection. Your mfg date confirmed at time of order. Need only be applicable to high demand sport references. Option to let AD keep the watch to sell on if come delivery time, you’ve had a change of heart. Customer loyalty could be confirmed by asking the purchaser to register their existing Rolex watches with Rolex by way of their serial numbers and length of time each reference has been owned.
Simples.

[MonsterSS]

Originally Posted by Krash

I do agree that Rolex watches are inelastic because they sell regardless of price. However, after that, you're not making any sense, and you're getting accounting terms all mixed up.

Profit and revenue aren't the same thing.

Profit = sales revenue - taxes - expenses.

You don't increase revenue by selling less.

Now if they reduce quantity but increase prices, then it's still possible to increase net profit. (e.g., less expenses associated with reducing production + net increase in revenue due to prices increase = more profit.)

Plus, I'd imagine that Omega (Swatch) would be thrilled if Rolex reduced sales.

Rolex pays minimal (if any) taxes, since it is owned by a non-profit foundation...

[singkwokhk]

Originally Posted by Rondineli

This is not a marketing tactic. This is a mistake. A global company cannot reduce the total production and thus disrupt distribution to its network, a number of them exclusive Rolex sellers only, for such an extended period of time without leading to the closure of a high percent of Authorized Dealers.

Something really bad is happening at headquarters.


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Rolex has already employed game theory to maximize its goal. Besides, I live in hong kong and Rolexes are everywhere. Even the 7&11 cashier and the local hairdresser are wearing Rolexes! The market in Asia is saturated. Rolexes are all over Macau, especially in the Casinos!

[Krash]

Originally Posted by MonsterSS

Rolex pays minimal (if any) taxes, since it is owned by a non-profit foundation...

Wow, you're really missing the point. I was merely explaining the difference between top line revenue and bottom line profits, because surprisingly, some people on this forum have very little knowledge of even the most basic fundamental business and accounting principles. How much taxes Rolex pays is completely irrelevant.

Revenue - Expense - Taxes = Profit

If Rolex pays minimal taxes, then good for them. That doesn't change the equation.

[hambone1983]

Originally Posted by singkwokhk

not true. because Rolex watches are inelastic, a reduction in the quantity actually will increase revenue.

this is absolutely false. Wholesale and authorized retail prices are fixed. The only place where market forces are permitted to freely influence prices is among grey dealers. So fewer watches does not generate greater revenue for Rolex.

And even if market pricing were allowed to occur, the only way an increasing price can fail to reduce the quantity demanded is if there are no close alternatives for consumers to purchase.

[77T]

Originally Posted by singkwokhk

Rolex has already employed game theory to maximize its goal. Besides, I live in hong kong and Rolexes are everywhere. Even the 7&11 cashier and the local hairdresser are wearing Rolexes! The market in Asia is saturated. Rolexes are all over Macau, especially in the Casinos!

Yeah I believe you are seeing what you believe to be Rolexes everywhere - yet maybe many wouldn’t pass close scrutiny of a watchmaker.


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[Old Expat Beast]

Originally Posted by 77T

Yeah I believe you are seeing what you believe to be Rolexes everywhere - yet maybe many wouldn’t pass close scrutiny of a watchmaker.


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No. Pretty much everyone wears the real thing in HK, even hairdressers and lowly store clerks. The guy who drives my building's shuttle bus wears a Sub, and it's not unusual at all. The other stuff is just for tourists.

[peterpl]

In HK/Macau there are Rolex's EVERYWHERE!!! Never seen so many in my entire life.

[Quamby]

Originally Posted by 77T

Yeah I believe you are seeing what you believe to be Rolexes everywhere - yet maybe many wouldn’t pass close scrutiny of a watchmaker.


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Fakes are really easy to spot. From observation and talks with friends, most entry level and mid tier SS and Professional models on wrists are genuine. It's the daydates and high-end PM models that are questionable.

[MinMay]

Originally Posted by Old Expat Beast

No. Pretty much everyone wears the real thing in HK, even hairdressers and lowly store clerks. The guy who drives my building's shuttle bus wears a Sub, and it's not unusual at all. The other stuff is just for tourists.

Yah, asian loves to spend money on luxury item. Another reason why submariner is a common low entry watch in Asia. I guess if you want to blend in with the general public, wear a submariner

[semi-ambivalent]

Originally Posted by Quamby

If I were the CEO of Rolex, I'd ramp up production of SS and Professional models and increase shipment as soon as possible

Yeah, and you'd destroy the brand. Rolex is so far beyond other watch brands in product recognition (Patek who?) among people on the street, and they're (Rolex) sitting on so much money, do you really think they'll risk the value of the brand long term for short term profit? People will just put their name on a list and wait. They'll buy an interim watch and dump it when their Sub or GMT or whatever finally comes in.

You can't really think Rolex sells only to folks on TRF, do you? Ten watch collections with eight of them Subs? This could be a plan to make a Rolex not just expensive but almost a unicorn. And kill the grays in the bargain.

[semi-ambivalent]

Originally Posted by lecorsaire

Yep. I have used scripts aka bots to buy limited edition sneakers that sell out within a minute. You fill in all of your information and the preferred size and the script will place an order in milliseconds. Those doing it manually really have no chance!

There are lots of talented programmers out there who can modify the code as fast as websites change theirs to stop automated buying.

Ha! There's a depreciating asset if there ever was one; fashion. My Rolex is forty years old and factoring for inflation it's worth about $200 more than what I paid for it in 1978. Those scripts work in your world because the people buying "limited edition sneakers" are suckers. The product must be dumped before street fashion, always so fluid, has moved on to yet something else again. milliseconds are all you get to unload. lol.

[Quamby]

Originally Posted by semi-ambivalent

Yeah, and you'd destroy the brand. Rolex is so far beyond other watch brands in product recognition (Patek who?) among people on the street, and they're (Rolex) sitting on so much money, do you really think they'll risk the value of the brand long term for short term profit? People will just put their name on a list and wait. They'll buy an interim watch and dump it when their Sub or GMT or whatever finally comes in.

You can't really think Rolex sells only to folks on TRF, do you? Ten watch collections with eight of them Subs? This could be a plan to make a Rolex not just expensive but almost a unicorn. And kill the grays in the bargain.

I really can't see how greys are "getting killed" in all of this. Also, how will a couple of years of increased production in SS and Professional models kill the brand? The more you think about it, it's the AD distribution model that Rolex wants to change, Rolex is not going after bonafide customers.

[AK797]

Originally Posted by lecorsaire

I don’t see them doing it either. The AD/boutique experience is part of buying luxury goods especially jewelry and shipping massive amounts of luxury watches through Fed Ex/UPS/DHL is really just asking for trouble.

Yes and if they ever sold online, they'd be wise just to limit it to DJs and PMs, which can be automated, but the populars cannot be automated, they would still have to have all the buyer info analysed by salespeople, probably start looking at personal SM accounts as well, to weed out flippers so the same thing as now.

[Bostonbert]

Originally Posted by doctorstrange

selling rolexes through the internet would like selling iphone 6 through apple's web site. the majority of them will only go to the grey dealer, as they have the resources to write programe to place orders, which can be as fast as completing 100 orders in a second. we have no chance getting one.

Not if they first ask the buyer to supply proof they haven’t sold their current Rolex collection by bringing (or shipping) their watches to a Rolex service center or trusted AD. If the client still has the watches, then the order is accepted. If not, no Rolex though the direct channel.

I posted a link to a “video confession” by a grey dealer saying they get highly desired watches directly from ADs provided they take enough unwanted models also. I suspect that this is the cause for the drought we are seeing. Rolex knows about this practice and is holding back the models that have inflated grey market prices to interfere with AD dumping to the grey market. I don’t think Rolex’s motivation is to create inflation, they want to shut down the grey market because of high quality fake Rolexes are a clear danger to their brand.