CONFIRMED news regarding the professional line

[GerardoG]

As some of you have read in the Open Forum, I spent all day planning for our upcoming Vegas gathering, as well as talking watches with one of the largest accounts for Rolex in the United States.

I do not share ‘I heard’ or ‘someone said’; I only share confirmed information with you, my virtual family.

Rolex is letting all Authorized Dealers IN WRITING that, effective immediately, they will CUT BACK the production of ALL professional line watches. Not only SS, but 2T and precious metal.

Therefore, we, as customers, will see LESS of these units at our AD’s. Hold on to your subs, GMTs, Daytonas...steel, rolesor or gold/platinum. They will be harder to get.

[Gharddog03]

[nyc2la]

Originally Posted by GerardoG

As some of you have read in the Open Forum, I spent all day planning for our upcoming Vegas gathering, as well as talking watches with one of the largest accounts for Rolex in the United States.



I do not share ‘I heard’ or ‘someone said’; I only share confirmed information with you, my virtual family.



Rolex is letting all Authorized Dealers IN WRITING that, effective immediately, they will CUT BACK the production of ALL professional line watches. Not only SS, but 2T and precious metal.



Therefore, we, as customers, will see LESS of these units at our AD’s. Hold on to your subs, GMTs, Daytonas...steel, rolesor or gold/platinum. They will be harder to get.

Frenzy, begin!

[jrs146]

Haha this seems like old news by now it just leaves the question of WHY???


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[GerardoG]

We had suspected or heard about it, now, it is oficial and in writing from factory. I sort of understand the SS product, but ALL???

[Fleetlord]

Originally Posted by GerardoG

We had suspected or heard about it, now, it is oficial and in writing from factory. I sort of understand the SS product, but ALL???

On the surface, I would agree that it would make sense to limit SS production to steer the masses to 2T and Gold....higher margins, etc.

BUT..there is more at stake here than just margins.

There has been speculation for years that Rolex turns a blind eye to the grey market as it is just another sales channel for them to sell their products through...thus generating re-orders from the AD's that are jobber friendly...

It appears that this has stopped.

The grey channel is now completely out of control. It is hurting the brand and the dealer network. There are Rolexes all over the place...except AD's.

Simply raising prices is not enough...that would just create a discounting scenario.

The product must be controlled in order to maintain the integrity of the Brand.

It's what Patek is doing now. It's great for their image.

It's what Panerai USED to do. I remember going on hunts for 000 and 005 Panerai as they were never in stores. You would basically take any luminor you could get as they were very limited...

Now? Panerai produces more watches references and MORE of each, so it's not a big deal finding anything anymore....and because of this the brand is pillowy soft...

So Rolex is making a preemptive strike on protecting their brand.

Is it the right move? I think so. Up until recently ROLEX was just too available. It will be interesting to see how this pans out.....so even after the MVMT switch, this production limitation will still be in effect.

[Smarties]

Originally Posted by Fleetlord

On the surface, I would agree that it would make sense to limit SS production to steer the masses to 2T and Gold....higher margins, etc.

BUT..there is more at stake here than just margins.

There has been speculation for years that Rolex turns a blind eye to the grey market as it is just another sales channel for them to sell their products through...thus generating re-orders from the AD's that are jobber friendly...

It appears that this has stopped.

The grey channel is now completely out of control. It is hurting the brand and the dealer network. There are Rolexes all over the place...except AD's.

Simply raising prices is not enough...that would just create a discounting scenario.

The product must be controlled in order to maintain the integrity of the Brand.

It's what Patek is doing now. It's great for their image.

It's what Panerai USED to do. I remember going on hunts for 000 and 005 Panerai as they were never in stores. You would basically take any luminor you could get as they were very limited...

Now? Panerai produces more watches references and MORE of each, so it's not a big deal finding anything anymore....and because of this the brand is pillowy soft...

So Rolex is making a preemptive strike on protecting their brand.

Is it the right move? I think so. Up until recently ROLEX was just too available. It will be interesting to see how this pans out.....so even after the MVMT switch, this production limitation will still be in effect.

IMO, by limiting the supply of SS model, the grey market dealers are more than willing to pay an even higher premium to source from AD since they can always raise the selling price higher due to ever-higher demand created by scarcity in supply.

Ultimately, those grey market dealers are the people who benefit from Rolex's "austerity measures".

[Fleetlord]

Originally Posted by Smarties

IMO, by limiting the supply of SS model, the grey market dealers are more than willing to pay an even higher premium to source from AD since they can always raise the selling price higher due to ever-higher demand created by scarcity in supply.

Ultimately, those grey market dealers are the people who benefit from Rolex's "austerity measures".

Perhaps..i guess we are going to find out shortly

[digitalcrocodile]

Originally Posted by GerardoG

We had suspected or heard about it, now, it is oficial and in writing from factory. I sort of understand the SS product, but ALL???

Why does it make sense to cut production of the SS models? Just curious.

[RickR]

Why don't they just go out of business and then they will be really hard to get. That'll teach everybody about likein' their products.

[teqp]

Thanks for the news Gerardo. Does this mean getting my Hulk will be that much harder?

[GerardoG]

Originally Posted by teqp

Thanks for the news Gerardo. Does this mean getting my Hulk will be that much harder?

...and mine

[teqp]

Originally Posted by GerardoG

...and mine

I feel your pain!

[learningtofly]

Originally Posted by RickR

Why don't they just go out of business and then they will be really hard to get. That'll teach everybody about likein' their products.

[Calatrava r]

Originally Posted by RickR

Why don't they just go out of business and then they will be really hard to get. That'll teach everybody about likein' their products.

This.

[Sub King]

Originally Posted by RickR

Why don't they just go out of business and then they will be really hard to get. That'll teach everybody about likein' their products.

THIS!

I’m getting real sick of Rolex’s attempts to prevent “unworthy” customers from buying their “sacred” products :

[JElvis]

Originally Posted by RickR

Why don't they just go out of business and then they will be really hard to get. That'll teach everybody about likein' their products.

[The Argonaut]

Originally Posted by JElvis

Yes, that’s a bold strategy. Let’s sit back and watch.


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[HogwldFLTR]

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

[mailman]

Originally Posted by HogwldFLTR

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

It means less or almost no discount too.

[HogwldFLTR]

Originally Posted by mailman

It means less or almost no discount too.

But that's money in the AD's pockets not in Rolex Corp's.

[Toivonen]

Originally Posted by HogwldFLTR

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

These kind of topic drives me nuts

[galaxy101]

Originally Posted by Toivonen

These kind of topic drives me nuts

Yup, it’s complicated


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[mahefa]

Originally Posted by HogwldFLTR

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

Datejust is the most sold model of Rolex. They get along fine just by selling datejusts. Rolex is a charity foundation based, so their values differ from shareholder based entities.

[RHJ]

Originally Posted by HogwldFLTR

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

Rolex hasn't the goal to "sell more" - nobody cares about profit, it goes to the foundation. They care to hold up the brand value - and for that this is a great move!

[HogwldFLTR]

Originally Posted by RHJ

Rolex hasn't the goal to "sell more" - nobody cares about profit, it goes to the foundation. They care to hold up the brand value - and for that this is a great move!

And that doesn't make sense either; even non-profits need money to operate.

[behardt]

Rolex is definitely a brilliant marketing house. Look at all the hype and drama created by a piece of paper. Now the ADs will have "proof" to show their customers. LOL. Genius...

[amh]

Originally Posted by behardt

Rolex is definitely a brilliant marketing house. Look at all the hype and drama created by a piece of paper. Now the ADs will have "proof" to show their customers. LOL. Genius...

Maybe the "letter" was just a leaked rumor to pump up demand?

[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.