Small AD's get really hurt by Rolex

[Swiss Mad!]

Originally Posted by MinMay

In the end blame Rolex. They can’t keep up with demand or they choose to control how many to ship.

I think they can quite easily keep up with demand...like you say,they choose not to, or at least seem to have a deliberate policy of restricting supply.
Chrono24 and other web based dealer sites are rammed with all the popular SS models we are desperate for, so the watches are being produced they are just never making it to where they were intended for - us, the 'regular Joe' consumer.
Genuine customers like us who just want to buy what they want at retail prices, to keep and enjoy for themselves are being penalised at the expense of greedy speculators buying to flip for an outrageous mark up.
Rolex thought they could kill the grey market by restricting supply, but it's actually had the opposite effect of creating more demand (everyone wants something they can't have, right?) and pushing the grey dealer prices even higher.
Us regular Joe's are in a no win situation.
You can't buy what you want at retail from your local AD and you can't afford, or at least through principals, refuse be ripped off and feed the jackals that are benefitting from this crazy situation.


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[peterpl]

Yep Rolex tactics these days are going to hurt all ADs especially the smaller ones.

I run a small business and I know the frustration when your supply chain stuffs up or supply is limited - its hurts your business and profits. Over a long term its not sustainable so if Rolex dont fix their supply issues its going to cause big big issues for ADs.

[Swiss Mad!]

Originally Posted by Stressed

If I may ask, what does AM represent?

AM? Is this a typo?
Did you mean 'PM' or 'AD' ?
PM is precious metal
AD is authorised dealer.


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[WatchGuy1966]

Originally Posted by Yvette

Now who said Rolex was a part of charity organization?

Not "part of". The Hans Wilsdorf Foundation, which is a charitable trust, owns Rolex.

[SackLVG]

Originally Posted by Uppersouth

I beg to differ. There are many small shops where Rolex sales account for 1/3 to 1/2 of there gross sales. I didn’t pull this data out of the air. I know several family owned AD’s that have shared this with me over the years. The manager at Mayors (obviously not family owned) in Tampa once stated Rolex was the single most important part of their business. I would add they now are a Boutique dealer within their store. At the time they were not.

i agree with this. some small shops i visited are dropping omegas and tag heuer because the rolex relationship makes them more money and the inventory cycles faster.

[BillA]

The whole world is not just buying SS sport models.
DJ’s sell also. The watch buying world is not just members of the watch forums.
I love this forum, great info, but let’s remember it is heresay and opinions.

[padi56]

Originally Posted by kauffee

For what it’s worth, my father and I both got stainless Daytonas from a small AD last month. Everything we hear from ADs needs to be taken with a grain of salt.

Have to agree afraid many today are just full of below.

[tyler1980]

Originally Posted by padi56

Have to agree afraid many today are just full of below.

Im taking the both got daytonas with a grain of salt though. The exception isnt the rule.

[AK797]

Originally Posted by kauffee

We talk about constant shortages all day long here, but remember that there is no real shortage of Datejusts and Lady Datejusts. While the watch enthusiasts lament the shortage of SS Pro models, there are plenty of customers who want that jubilee bracelet and fluted bezel and wouldn’t know a stainless steel Daytona if it hit them in the face. Many of my non-WIS friends gravitate toward the DJ/DD style over the professionals. It’s often mentioned here that the Datejust is far and away the best selling line.

The issue is the balance is changing and exponentially so as the power of SM and IG is overtaking most product's perception and certainly the younger generations, and as Rolex is a slow conservative company they will not adapt to this new future quickly, so there will be a few years where there is a wide gap between what Rolex is making and what more and more people are actually buying, as clearly we see with sky high grey prices on sports and rows upon rows of unsold DJs in ADs.

The only material thing people want more than a clear display of wealth and status, is a clear display of wealth and status that is rising in value. It's how the rich get richer in a nutshell and everybody wants on board this train, even the already very rich.

[superyl]

Originally Posted by jfmiii

im seeing a lot of Daytonas being posted on forums via WatchRecon. i think supply is coming back but slowly. we shall see if it has an impact on prices.

Just picked up a Batman at local ad last night. Paid 2000 deposit upfront and they delivered in 5 weeks. I’ll do the same for the Pepsi and see how it goes. According to the manager Rolex is not talking to ads. Everything is random. She was shocked that the Batman could arrive this soon.


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[beshannon]

Originally Posted by TakeYourTime

He said that they would had closed already if they wouldn't sale jewellery, too. According to Rolex do they only deliver to major AD's right now and small AD's have to suffer.

So you are saying that a retailer cannot get enough inventory to maintain their level of sales to turn a profit?

Sounds like they need to find another product to sell

[RHIII]

Beyond all of the grey market and flipping discussions and all of that - this is a business - many large manufacturers are 'stressing' ADs within their networks to sell merchandise....many brands are pulling AD statuses and trying to bring back the exclusivity of their products. A bi-product of this would be reducing inventory going to the grey and Secondary markets, perhaps, but can never truly make it go away. EVERYONE knows that (including the manufacturers). They can't govern the consumers, but the most CERTAINLY can govern the distributors. Enter today's market.

Sales of watches by type are very much statistically disparate geographically. ADs sell 100x PM watches in Miami or New York (for example) than they would EVER where I live. So if you're not selling the 'lines' in their entirety, perhaps a 'performance' review should be required.

From a business perspective - it makes perfect sense. From the consumer perspective it is a difficult pill to swallow, especially if you're shopping at a stifled or low inventory AD - and are after a high demand model.

Same thing happens with cars. My local BMW dealership (which is owned by a good friend) doesn't get many M cars due them not selling very well locally. So what did I do? Went elsewhere - or purchased another brand. I won't even get into allocated Porsches or the 'process' to buy a Ferrari.

Business 101

Just my .02

[77T]

Originally Posted by RHIII

Beyond all of the grey market and flipping discussions and all of that - this is a business - many large manufacturers are 'stressing' ADs within their networks to sell merchandise....many brands are pulling AD statuses and trying to bring back the exclusivity of their products. A bi-product of this would be reducing inventory going to the grey and Secondary markets, perhaps, but can never truly make it go away. EVERYONE knows that (including the manufacturers). They can't govern the consumers, but the most CERTAINLY can govern the distributors. Enter today's market.

Sales of watches by type are very much statistically disparate geographically. ADs sell 100x PM watches in Miami or New York (for example) than they would EVER where I live. So if you're not selling the 'lines' in their entirety, perhaps a 'performance' review should be required.

From a business perspective - it makes perfect sense. From the consumer perspective it is a difficult pill to swallow, especially if you're shopping at a stifled or low inventory AD - and are after a high demand model.

Same thing happens with cars. My local BMW dealership (which is owned by a good friend) doesn't get many M cars due them not selling very well locally. So what did I do? Went elsewhere - or purchased another brand. I won't even get into allocated Porsches or the 'process' to buy a Ferrari.

Business 101

Just my .02

Another point of agreement, Roger.

And I apologize for Re-posting the following here but felt it is on-point (I originally posted it in the thread about Rolex upping production)

Here it is:

Ariel Adams (who runs the website aBlogtoWatch) did an article for Forbes magazine a few years back. He explained a lot about the watch biz that our newer members could benefit from reading before posting drivel (not saying that about anyone in this thread): https://www.forbes.com/sites/arielad...er-in-america/

He also profiled Govberg in the article. (And many here knows that they routinely post FS items on TRF).

I bring it up because they have a few stores. But they started small and learned the trade well. Family-owned and I think 3 generations work in the business. What did they do to diversify?

From the article:
“As an authorized dealer they carry an almost unprecedented number of brands, they offer sales in-store, pre-owned purchasing and sales online. They carry new and used watches, accept trade-ins, and should a watch break, they can fix it.”

Also...
“Govberg’s watch media business venture involved the purchase of one of the US’s top watch magazines called iW (International Watch) about 15 years ago. Not that there are very many watch magazines in the United States, but Govberg decided to buy one of the largest ones. The move forever changed his relationship with the industry, but perhaps more importantly, his relationship with fellow retailers who appear in issues of the magazine. In one feel swoop many of Govberg’s retail competitors became clients of his magazine.

When asked why his publication worked to promote the competition, Govberg responded as he typically does, saying that it was indeed an irony but that he felt it was necessary. “Whatever gets people more excited about watches and buying watches benefits all of us. I want to double the size of the US watch maket, and I feel like there is enough business to go around.” To Govberg, growing the overall US watch market seems more important than fighting for existing customers, even if his tactics appear counter intuitive to some people.”

Diversify, diversify, diversify...change or die...dealing with supplier adversity is just one small risk to manage. The ADs wailing are likely the weakest ones in the trade. My local AD just sells more Tudor and Omega


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[RHIII]

Originally Posted by 77T

Another point of agreement, Roger.

And I apologize for Re-posting the following here but felt it is on-point (I originally posted it in the thread about Rolex upping production)

Here it is:

Ariel Adams (who runs the website aBlogtoWatch) did an article for Forbes magazine a few years back. He explained a lot about the watch biz that our newer members could benefit from reading before posting drivel (not saying that about anyone in this thread): https://www.forbes.com/sites/arielad...er-in-america/

He also profiled Govberg in the article. (And many here knows that they routinely post FS items on TRF).

I bring it up because they have a few stores. But they started small and learned the trade well. Family-owned and I think 3 generations work in the business. What did they do to diversify?

From the article:
“As an authorized dealer they carry an almost unprecedented number of brands, they offer sales in-store, pre-owned purchasing and sales online. They carry new and used watches, accept trade-ins, and should a watch break, they can fix it.”

Also...
“Govberg’s watch media business venture involved the purchase of one of the US’s top watch magazines called iW (International Watch) about 15 years ago. Not that there are very many watch magazines in the United States, but Govberg decided to buy one of the largest ones. The move forever changed his relationship with the industry, but perhaps more importantly, his relationship with fellow retailers who appear in issues of the magazine. In one feel swoop many of Govberg’s retail competitors became clients of his magazine.

When asked why his publication worked to promote the competition, Govberg responded as he typically does, saying that it was indeed an irony but that he felt it was necessary. “Whatever gets people more excited about watches and buying watches benefits all of us. I want to double the size of the US watch maket, and I feel like there is enough business to go around.” To Govberg, growing the overall US watch market seems more important than fighting for existing customers, even if his tactics appear counter intuitive to some people.”

Diversify, diversify, diversify...change or die...dealing with supplier adversity is just one small risk to manage. The ADs wailing are likely the weakest ones in the trade. My local AD just sells more Tudor and Omega


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[Etschell]

what prevents this ad from selling pm at a deep discount?

you could do this and still make the same profit as you would on a undiscounted ss rolex.

would rolex shut you down if you sold pm at 25 percent off?

[Bt122]

No one complained when Wal-Mart crushes the mom and pop. Fact is small ad’s can’t compete.

I don’t see why any of these larger brands need Small AD’s. There’s plenty of distribution available at boutiques or large AD’s. Added benefit is controlling pricing.

[lzz73]

Is there possibly a transition to online sales by Rolex? Or at least partial online sales in conjunction with a few large ADs or boutiques. I think it’s a plausible theory given what’s going on.


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