AD no Longer Taking Deposits

[Why1504]

I talked to King Jewelers in Nashville TN over the weekend. (I have a long standing relationship here).

They do not do waiting lists but do take deposits. My sales person told me Saturday that they have quit accepting deposits for any Rolex watches. They carry several other brands and are receiving new stock on everything but Rolex. They have had deposits on the Daytona that have been in store for 4 years. I know for a fact this list isn’t a long list. A few months back there were less than 5 deposits on Ceramic Daytona’s.

[beshannon]

Good for them, smart move!

[jfoord27]

Originally Posted by beshannon

Good for them, smart move!

Not good for their cashflow. If they got robbed of deposits they can act like a financing company using that cash to buy more stock, rinse and repeat.

[GoingPlaces]

Makes sense to me. In addition to managing the business, you also end up managing wait lists and deposits.

[train-time]

Every time I ran into something like this, a few months later they are no longer on the Rolex website as an AD. I ran into this with at least four times over the past several years. The last time was earlier this year. I called a local AD that I used for years about a list for a SS Daytona (earlier this year) and the sales person I use told me that they would not take a deposit and were not taking names anymore for a list. Three months later they were off the website. It seems to be a pattern with smaller independent ADs getting cut in favor of the larger volume multi-unit stores.

[beshannon]

Originally Posted by jfoord27

Not good for their cashflow. If they got robbed of deposits they can act like a financing company using that cash to buy more stock, rinse and repeat.

No respectable company would use customer deposits for their own cashflow.

[Trailboss516]

Originally Posted by beshannon

No respectable company would use customer deposits for their own cashflow.

This :)

[thomaspp]

You gotta love interest free loans lol


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[onemany]

Out of seven or eight ADs near me only one is still adding names a waitlist and taking deposits. That waitlist is 20 deep for a BLRO and 10 deep for a BLNR. No dice on a Daytona.

[josephvman]

Wrong. Deposits are just profits taken up front without delivering the product. Taking big deposits is indicative of an underfinanced business with cash flow issues. Even more reason not to give a big deposit. A dealer asking for a big deposit on a popular watch that can easily be sold is a huge red flag.

I’d rather not do business with anyone who has to rob Peter to pay Paul...

Big deposit on a diamond bezel Day-Date, no problem. Any dealer asking for a significant deposit for a Sub is one to walk away from.

Originally Posted by jfoord27

Not good for their cashflow. If they got robbed of deposits they can act like a financing company using that cash to buy more stock, rinse and repeat.

[Bo-Dacious]

Originally Posted by beshannon

No respectable company would use customer deposits for their own cashflow.

Whether you like it or not, the main reason why a company takes a deposit is to strengthen their CF position, not to hold someone's place in line.

[904VT]

Originally Posted by train-time

Every time I ran into something like this, a few months later they are no longer on the Rolex website as an AD. I ran into this with at least four times over the past several years. The last time was earlier this year. I called a local AD that I used for years about a list for a SS Daytona (earlier this year) and the sales person I use told me that they would not take a deposit and were not taking names anymore for a list. Three months later they were off the website. It seems to be a pattern with smaller independent ADs getting cut in favor of the larger volume multi-unit stores.

I think you're on to something...

[Olive Drab]

Originally Posted by josephvman

Wrong. Deposits are just profits taken up front without delivering the product. Taking big deposits is indicative of an underfinanced business with cash flow issues. Even more reason not to give a big deposit. A dealer asking for a big deposit on a popular watch that can easily be sold is a huge red flag.

I’d rather not do business with anyone who has to rob Peter to pay Paul...

Big deposit on a diamond bezel Day-Date, no problem. Any dealer asking for a significant deposit for a Sub is one to walk away from.

Cash flow issues aside, the deposits are on the books as a liability which cancels out the increase in cash when calculating profits.

[Etschell]

Originally Posted by beshannon

No respectable company would use customer deposits for their own cashflow.

really? i am not trying to be argumentative but the entire banking and financial management industry does. the government lends money based on it to the banks.

i presume you mean retailer.

[billykmd]

Interesting. I’m in nashville and been by Kings several times but don’t have a relationship with them. Following this thread.

[Bigblu10]

Originally Posted by Etschell

really? i am not trying to be argumentative but the entire banking and financial management industry does. the government lends money based on it to the banks.

i presume you mean retailer.

He means the AD, which is the subject at hand here.

[Finslayer83]

Did you talk with Derrick?

He’s good people.

I do know of a local who put one down this year on a hulk and it was fulfilled within 2 months.

I’m in Williamson Co and Kings is the only game in town, so that stinks. They do take them for Tudors.....

[piratepress]

My AD said the same thing. I offered to pay for my SS BLRO upfront when they placed my order, but my AD wouldn't even take a deposit.

[oldman2005]

Originally Posted by piratepress

My AD said the same thing. I offered to pay for my SS BLRO upfront when they placed my order, but my AD wouldn't even take a deposit.

Most if not all ADs don't want your money when it come to SS sport...That's new Rolex normal.

[Martin.A]

I placed a deposit for a 116610LV at King's early May. I was told and shown the deposit list indicating I'm 3rd in line. I stopped by a few weeks ago and they told me I was next to receive my hulk.

When I placed a deposit they don't do waiting lists.. Makes sense when they can have a deposit list for all sport models with guaranteed buyers rather than maintaining a list of names that may not even purchase the watch. The deposit list is long so better to have a list of guaranteed buyers rather than someone tossing their name into the bucket. I bet so many people go in to see them Sub, GMT, Daytona but since ADs never have stock, most people just say put my name on the list but never commit when the piece actually arrives.

Also, are you sure about the Daytona? When I asked about the waiting list, the next person in line to receive their watch placed a deposit July 2017. Not sure where you got 4 years?

[Navarino]

Regarding the finance (sorry, not very often I get to dork out on accounting nuances on TRF), deposits are not profits. If book-keeping is done correctly, the AD would take your cash and need to create an associated liability for unearned revenue. They have not provided the good you are paying for, so they have not "earned" the cash yet nor made a sale they can document on their P&L. Deposits may not be super common in DTC luxury retail, but what I just described is a common practice in a wide variety of businesses across different industries.

In principle, I think deposits are a good idea for hard-to-get watches. It can weed out potential customers calling around who just want their name on a list. If you can keep these deposit lists relatively short and actually follow them as inventory comes in, it's appealing to prospective customers. By this I mean, if I was told I would be the #5 spot on a Daytona waitlist for paying the balance upfront, I'd probably do it. If I was #15 or had serious doubts that the 5th Daytona coming in was actually mine, I'd likely have second thoughts about handing over my money. Letting a paid deposit list grow long doesn't help the AD long-term either -- all of a sudden they are sitting on cash that's earmarked against future incoming inventory, and they have no idea how long it will really take to get through all those customers. The bigger the queue/list becomes, the bigger issue they have with managing their balance sheet.

[MTBer]

Originally Posted by Carry The Interest

...In principle, I think deposits are a good idea for hard-to-get watches. It can weed out potential customers calling around who just want their name on a list.

I agree with your point about weeding out people, but what protects the customer from a cash-strapped jeweler that’s become insolvent and may soon close up before delivering the watch?

[Martin.A]

Originally Posted by MTBer

I agree with your point about weeding out people, but what protects the customer from a cash-strapped jeweler that’s become insolvent and may soon close up before delivering the watch?

You pay with a credit card

[fiebru1119]

Originally Posted by piratepress

My AD said the same thing. I offered to pay for my SS BLRO upfront when they placed my order, but my AD wouldn't even take a deposit.

Man, you got someone to take an order for a SS BLRO? My AD won’t take my money ... lol

[AK797]

Deposits were used in the past to show a buyer was serious and that he was not a flipper but these measures are now out of date and so not really worth the hassle anymore.

[Zoomerang]

My AD wanted to take a 100% deposit to get me on a list for a SD43 and BLNR.

I politely declined.

[Brownb2110]

I put a 100% deposit down(on an SD43) to be the only person on the list back on June 22nd. Just got a call this afternoon that it has arrived! In and around Atlanta, I haven’t been able to get any AD’s to give me the time of day as this will be my first Rolex. I visited this AD while on vacation in FL and they informed me that I could be first in line with a full deposit. AD seemed reputable from other discussions on TRF so I had no issues handing over the money......and at this point, I’m so glad I did!

[Navarino]

Originally Posted by Brownb2110

I put a 100% deposit down(on an SD43) to be the only person on the list back on June 22nd. Just got a call this afternoon that it has arrived! In and around Atlanta, I haven’t been able to get any AD’s to give me the time of day as this will be my first Rolex. I visited this AD while on vacation in FL and they informed me that I could be first in line with a full deposit. AD seemed reputable from other discussions on TRF so I had no issues handing over the money......and at this point, I’m so glad I did!

To my earlier point in this thread, this is a great example of the deposit working well for everyday buyers.

Very glad you were able to get the watch you wanted without too much of a wait (starting when you handed money over).

[Brownb2110]

As I mentioned above, I put a full deposit down back on June 22. I just noticed on my receipt,provided on 6/22, has an estimated “ready by” date of 8/3 and also lists a serial number. I received a call yesterday that the watch was ready and came in the week of 8/3(not sure specific date of arrival). Is this just a coincidence?
Also, I’m curious as to the serial number listed on my receipt. Is a generic serial number generated to publish a receipt? I’m sure this can’t be the actual serial on the watch!?!?!