How much is the profit margin for Rolex or Tudor watch does an AD earn?

[hbk75]

They usually have a big store front but sometimes do not sell any watches at all. How much do they usually earn?

[Racingwatches]

I read before that on Rolex the AD pays about 62% of MSRP and they own all stock. Those numbers could be different now, so I’m not 100% sure.


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[travisb]

37.5% off MSRP


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[hbk75]

Originally Posted by Racingwatches

I read before that on Rolex the AD pays about 62% of MSRP and they own all stock. Those numbers could be different now, so I’m not 100% sure.


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So they earn about 38%

But some watches are hard to sell

[InitialAndPitch]

Heard similar. They’re not making much on a $12,000 watch when a grey is doing his best to achieve $26,000 even on a lower % margin.

[Racingwatches]

Originally Posted by hbk75

So they earn about 38%



But some watches are hard to sell

Correct


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[hbk75]

Originally Posted by travisb

37.5% off MSRP


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Considered good margin. But they could not get any sports model to sell. How to earn much these days?

[hbk75]

Originally Posted by InitialAndPitch

Heard similar. They’re not making much on a $12,000 watch when a grey is doing his best to achieve $26,000 even on a lower % margin.

And the ad does not get the steel watches to sell.

[Sandpit]

It is margin on the piece, but it's not nett profit. I can't imagine dealerships are cheap things to keep running.

[Clasper]

But they AD is usually selling other watches and jewelry etc, in addition to some of the higher value PM watches, so in reality you can't just look at it as such unless it's exclusively Rolex of course.

[jrs146]

Originally Posted by Sandpit

It is margin on the piece, but it's not nett profit. I can't imagine dealerships are cheap things to keep running.

I’d agree. ADs have a lot of expenses to keep up with.

[zjd168]

Originally Posted by hbk75

And the ad does not get the steel watches to sell.

this is not true. they just sold them in 30 seconds or less, instead of 30 days or plus before

[jsausley]

Originally Posted by hbk75

They usually have a big store front but sometimes do not sell any watches at all. How much do they usually earn?

Don't sell watches what? They're selling tons of watches right now. Steel watches are sold before they come in or within 5 minutes as soon as they call the first person on the list who will pick up the phone, and there's a ton of Oyster Perpetuals, Datejusts and PM models for people who walk in the store.

Plus most ADs have jewelry lines too which have an even larger margin of profit.

People are still getting low inventory and low sales confused. Yes, ADs have low inventory. No, ADs do NOT have low sales.

[77T]

The price an AD pays Rolex for each piece of inventory, sometimes called the wholesale cost, is not indicative of the profit for selling that piece of inventory. On the surface, it may appear that an AD makes 32% on a sale, but there are other direct costs.

Aside from the variable cost of sales time spent on the 4 out of 5 “showings” where a sale doesn’t result, and the commission for the one sale that results out of each showing, there are many fixed costs associated with the Rolex lineup.

For example: the dedicated displays, signage, advertising, parts, training, etc. that must be expended before the first Rolex sale is ever made.

When recorded in the annual income statement, I’d be surprised if an AD nets a dime on every sales dollar booked for a Rolex.


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