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2careless · 16 May 2008, 08:52 PM

I'm trying to do a back of the envelope calculation on AD margins.

Say Rolex makes 1M pieces a year, say each piece on average sells for $USD 7k, AD's at average 30% margin (there has to be some dead stock which they discount out heavily), approx USD2.1k margin per piece.

So, if they got 10k ADs, each AD's profit is approx USD210k p.a. (they get 100 piece each on average p.a.) Hardly good business.

I would expect an AD on average would do $1M margin p.a. (before expenses) to be viable, so globally there should be like 2000 ADs.

Would this be a reasonable guesstimate?

16 May 2008, 08:52 PM	#1
2careless "TRF" Member Join Date: Dec 2007 Location: Melbourne, AU Watch: Pepsi Posts: 4,370	How many ADs are there globally? I'm trying to do a back of the envelope calculation on AD margins. Say Rolex makes 1M pieces a year, say each piece on average sells for $USD 7k, AD's at average 30% margin (there has to be some dead stock which they discount out heavily), approx USD2.1k margin per piece. So, if they got 10k ADs, each AD's profit is approx USD210k p.a. (they get 100 piece each on average p.a.) Hardly good business. I would expect an AD on average would do $1M margin p.a. (before expenses) to be viable, so globally there should be like 2000 ADs. Would this be a reasonable guesstimate?

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