Rolex's financial craftsmanship

[Nightwriter]

I am a Rolex owner who is serious considering purchasing two new watches (ice blue Day-Date II with diamonds and an Arabesque PearlMaster) for my wife and I. We are hesitating only because we cannot get today's price locked in when paying 100% on the order today. One is a special order that will take 2-3 months to manufacture and Rolex wants to incorporate any additional price increases when the watches are delivered.

I understand that the Swiss Franc and the Dollar are not stable but when purchasing a new BMW 650i, I was able to pay upfront and the price was locked in at that point, despite the fact that it took six months to receive the vehicle. The financial markets were not stable then but BMW has a different policy, one that is balanced in that it honours the fact that I am willing to pay 100% of today's price upfront. Presumably Rolex can use our money (interest free) for the time it takes to purchase raw materials and manufacture the watches while I am left to wait with the economic uncertainty of a wager.

It strikes me that Rolex is very customizable and it appears so are their prices.

[Tools]

It's not Rolex, it's your Dealer.

Rolex charges the current price to the Dealer when it ships out. Very few Dealers will lock in a price, especially when they are pretty sure that it will be going up soon, perhaps before they get it in.

[tkerrmd]

Well post some pics of those two when you get them!!

[Brian Page]

Keep us posted on this

[GB-man]

Originally Posted by Tools

It's not Rolex, it's your Dealer.

Rolex charges the current price to the Dealer when it ships out. Very few Dealers will lock in a price, especially when they are pretty sure that it will be going up soon, perhaps before they get it in.

Exactly as Larry said

Rolex is selling to your dealer, whom is selling to you.

If future shop was selling xyz, and had to order it for you. You wouldn't blame Samsung when the price went up, you would blame future shop.

[Lgear080]

you've got bad timing.

[GradyPhilpott]

Don't pay 100% on the order day.

I've special ordered two Rolex watches and my AD requires only 50% up front.

If your AD doesn't like that deal, go to another.

I know it's tough having to wait out the price increase, but no one knows when it will happen.

If I were a betting man, I'd say it'll be more like June before Rolex bumps the prices, but like everyone else in the world, I'm guessing.

[AK797]

Originally Posted by Lgear080

you've got bad timing.

[brandrea]

Welcome to TRF, looking forward to the incoming

[mjclark32]

Find another AD that will work with you

[Nightwriter]

Hi Larry,
Thanks for the prompt reply.

If "Rolex charges the current price to the Dealer when it ships out" then it doesn't accept the price at the point of purchase and thus the crux of my issue. I do not need to pay 100% when ordering but if I do then I would have expected that this would lock in the price.

What is your best guess on what to expect for a price increase?

Cheers,

Peter

[padi56]

Originally Posted by Nightwriter

Hi Larry,
Thanks for the prompt reply.

If "Rolex charges the current price to the Dealer when it ships out" then it doesn't accept the price at the point of purchase and thus the crux of my issue. I do not need to pay 100% when ordering but if I do then I would have expected that this would lock in the price.

What is your best guess on what to expect for a price increase?

Cheers,

Peter

As for prices Peter its like saying how long in a piece of string, all we can say there will be a price rise some month this year.Even the ADs will not know until a few days before any price rise.

[brandrea]

Originally Posted by Nightwriter

Hi Larry,
Thanks for the prompt reply.

If "Rolex charges the current price to the Dealer when it ships out" then it doesn't accept the price at the point of purchase and thus the crux of my issue. I do not need to pay 100% when ordering but if I do then I would have expected that this would lock in the price.

What is your best guess on what to expect for a price increase?

Cheers,

Peter

Since you're looking at dropping some serious coin on these two,pieces, I don't think your AD will stick you with a nominal price increase. Have the conversation with your AD upfront. Tell him you want to special order and don't want a price increase surprise in a month or whenever they arrive.

They'll either deal with you, or they won't.

Good luck

[jjnd08]

Originally Posted by brandrea

Since you're looking at dropping some serious coin on these two,pieces, I don't think your AD will stick you with a nominal price increase. Have the conversation with your AD upfront. Tell him you want to special order and don't want a price increase surprise in a month or whenever they arrive.

They'll either deal with you, or they won't.

Good luck

I agree with this. You are making a big time order; if I were them, I would want to give you special consideration. I'd threaten to walk, and don't be scared to do so if they don't budge. Go to another AD and see if they will be more accommodating.

[Muzz]

I would be very surprised if Rolex Canada does not have those two pieces in stock!! Should be only a week to get.

[Nightwriter]

Thanks for the welcome and also for the various suggestions. FYI: I have tried 4 other dealers, including one in Europe but they all point towards Rolex and state they cannot set the price today.

Muzz: You are most likely right in that Rolex Canada will have my watch and in this case any price change will only affect my wife’s watch - which is a custom order (different bezel which also requires a different case etc.). As far as we know, it is not available anywhere.

brandrea & jjnd08: I hear you and the AD we favour is certainly the most co-operative. However, this is where everybody I spoke to has drawn the line and I feel that this is not any AD's fault but the policy of Rolex - which is not willing to honour the sales price at the point of sale. Which, again, I find surprising. (See my car-purchase analogy.)

Maybe we’ll be lucky and the increase will come late enough to not affect us, after all.
Will keep you posted.

[Psmith]

Originally Posted by brandrea

Since you're looking at dropping some serious coin on these two,pieces, I don't think your AD will stick you with a nominal price increase. Have the conversation with your AD upfront. Tell him you want to special order and don't want a price increase surprise in a month or whenever they arrive.

They'll either deal with you, or they won't.

Good luck

This

[locutus49]

Welcome to the forum. Keep us posted on how your order turns out.

Also, you may want to touch base with a trusted seller from our forum (like DavidSW) via PM to see what they can do, although I understand if you want to order through an AD on an order like yours.

[rr-nyc]

I think the AD is trying to anticipate the price increase without any official word from Rolex. Catalog prices come out prior to the date the increase occurs. Any orders that come in before the effective date should be honored by your AD and Rolex.

In my industry, we honor the prices at the time the order is placed. If Rolex doesn't operate in this fashion, its another reason for me to continue to hate on the brand.

[Tools]

Originally Posted by Nightwriter

Hi Larry,
Thanks for the prompt reply.

If "Rolex charges the current price to the Dealer when it ships out" then it doesn't accept the price at the point of purchase and thus the crux of my issue. I do not need to pay 100% when ordering but if I do then I would have expected that this would lock in the price.

What is your best guess on what to expect for a price increase?

Cheers,

Peter

I think that you are missing the point here. Rolex never accepts "the price at the point of purchase". In fact, they have nothing to do with that price, it is entirely your Dealer charging you that price, not Rolex.

Some Dealers may make the choice to eat any increases in the wholesale cost to them for customer satisfaction. In this case I suspect that Dealers are not willing to eat a double digit increase in their costs, so they will not give you a locked-in price.

As to a guess, I don't know since this is a Government exchange rate change and not Rolex actual manufacturing cost change. I would not expect Rolex to make a 100% mirrored price hike but phase it in over time..

[Racerdj]

I'm reasonably sure Rolex does not need to 'use' our money.

[Tri-Tip]

Seems to me that when the AD cuts a Purchase Order to Rolex it will state the current price for each item. Rolex should be prepared to honor that price, or decline to accept the Purchase Order, and counter with a new price. Once agreed upon between the AD and Rolex, the price should be set to the AD even if it takes Rolex 2 months to make the watch.

If Rolex does not accept the PO, and the AD won't absorb the price difference, then you as the buyer deserve a 100% refund of any deposit you put down.

I could not imagine dealing with my suppliers under conditions that they set the price when they decide to ship the merchandise and nothing I can do about it.

[grimmz]

This is the way it works AD's get the watches in advance at the current list price.
Anything they order they have to pay the list price that is current when the watch is delivered.
AD's pay after they sold the watches not in advance so yes it is Rolex.
For Example a very big Rolex AD in Amsterdam cannot sell any watches right now they don't have in stock because they will have to pay more after the increase!

[rmfnla]

Can you imagine going through this if you were ordering a new car..?

[rr-nyc]

Originally Posted by Tri-Tip

Seems to me that when the AD cuts a Purchase Order to Rolex it will state the current price for each item. Rolex should be prepared to honor that price, or decline to accept the Purchase Order, and counter with a new price. Once agreed upon between the AD and Rolex, the price should be set to the AD even if it takes Rolex 2 months to make the watch.

If Rolex does not accept the PO, and the AD won't absorb the price difference, then you as the buyer deserve a 100% refund of any deposit you put down.

I could not imagine dealing with my suppliers under conditions that they set the price when they decide to ship the merchandise and nothing I can do about it.

+1

I understand that Rolex is a valuable brand but to rewrite the books on how business is done - I just don't see them having this kind of leverage over AD's

[rr-nyc]

Originally Posted by grimmz

This is the way it works AD's get the watches in advance at the current list price.
Anything they order they have to pay the list price that is current when the watch is delivered.
AD's pay after they sold the watches not in advance so yes it is Rolex.
For Example a very big Rolex AD in Amsterdam cannot sell any watches right now they don't have in stock because they will have to pay more after the increase!

I'm not sure if I'm reading your post correctly. Based on what I read, you're saying that AD's carry consignment inventory? I can't imagine any company having this much liability/inventory on the books (warehouse and in stores). That has to be hundreds of millions in outstanding liabilities sitting in AD's around the globe. That would be a jewelers dream not to have cash tied up on inventory.

I doubt this is the way it works but I suppose I've seen stranger things.

[engin33r]

From what I heard, the price increase will be most on SS models, TT models next, and least increase on PM models.

With PM models, the raw material is arguably the largest production cost. Gold / platinum prices are not affected by CHF increase - so in the end, in percentage point, the increase should be minimal.

Suppose a USD $30k PM watch vs USD $10k SS one, a 3% increase on the PM watch translates to $900 increase. While a 7% increase on the SS means $700 increase.

So yeah, if you're after PM watches - shouldn't worry too much about the price increase. It's not like they will suddenly increase the price for 10% or more. My guess is just around 3% to 7% at most. I could be wrong though.... But if you can afford a brand new PM rolex, price increase should be your least concern.

[Cymruwal]

Not surprised at the Eurozone price increases , Rolex prices are very reasonable
for UK purchasers following the rise in Pound / Euro to 1.34