Help Me Understand - Discounted New Rolexes

[wesdaniel]

I apologize in advance if this question has been asked before; I didn't see it specifically referenced, but could have missed it.

I'm looking at purchasing a NIB Rolex from one of the recommended online sellers I found here in the forums, but am not understanding how the business of these sales works.

So, I've been told that there is room for negotiation at an AD of about 5% - 25%. I've been looking at a Datejust Turnograph that (I believe) retails around $9,900. My local AD has offered me a 15% discount, bringing the price down to about $8,500. This online seller is offering the same watch at $7,000 - about a 30% discount from retail.

How is it possible that we can buy a legit Rolex at this large of a discount? I mean, since this seller isn't an AD, there had to be a middleman somewhere between him and the factory who (I would assume) had to make some kind of a profit.....

Where's the hook? What am I missing?

Also, I'm assuming that, for most folks here, you'd save the $1,500 and buy from the online seller as long as they are well reviewed and trusted?

Thanks in advance.