Rolex Dealer Leaves

[DG123]

Bully may be too harsh a word. Rolex corporation has done a great job designing and producing the very best products. Consequently, the company has power to control their retail distribution. Rolex has earned their strength, and along the way Rolex AD's have made nice profits too. So, it works both ways.
I agree that other brands are grateful to be in the same store with Rolex, because Rolex brings in consumer traffic. But Rolex doesn't like it because a consumer may find that $5,000 for an Omega doesn't look too expensive when compared with $9,000 for a Rolex. This is why Rolex wants AD's to distinguish the Rolex product with special in store signage and display cases, and, or, separate boutiques.

Originally Posted by Lisa

Placating a bully, maybe?

Or maybe because these other brands know that Rolex draws customers into the store like no other brand?

[JIFF1975]

Try to get hold of then old displays and other Rolex stuff they have at that AD...!

[Megalobyte]

Originally Posted by 6352

Except for a Swatch.

Excuse me! All swatches have in house movements now. :)

[DG123]

Grey dealers can help AD's meet Rolex purchase requirements.

Originally Posted by The GMT Master

Its been happening everywhere - we've had the talk from a Rolex rep very recently asking us to heavily increase our stock levels. I think it's basically survival of the fittest - they're deliberately setting the bar high so that the weaker ADs will either go voluntarily or not reach their targets and be pulled. Its going to be a very hard time for ADs

[travisb]

I prefer to deal with the smaller private owned ADs.
I find that you get more personal attention and an overall better buying experience.

[East Bay Rider]

Originally Posted by Lisa

Placating a bully, maybe?

Or maybe because these other brands know that Rolex draws customers into the store like no other brand?

Exactly. A Rolex sign in the window will draw people into the store even if they're interested in 'higher' brands and it won't scare people away if they're only interested in 'lower' brands. Once inside the customer has many choices in brands they may not already be familiar with. The owners can educate from there.
Thankfully the store has such a solid reputation and repeat customer base that they were not permanently hurt by Rolex's new policy.

[The GMT Master]

Originally Posted by DG123

Grey dealers can help AD's meet Rolex purchase requirements.

If Rolex found out that they were doing this regularly, dealer status would probably be pulled anyway

[East Bay Rider]

Originally Posted by DG123

Grey dealers can help AD's meet Rolex purchase requirements.

Very true and from what I hear are often more knowledgeable.

[UJU]

Originally Posted by travisb

I prefer to deal with the smaller private owned ADs.
I find that you get more personal attention and an overall better buying experience.

Amen to that.

[Mr. K]

This trend is too bad. I wish it were not so. But Rolex will do what they want and people will still buy. Just part of being King I guess, you get to make the rules.

[buke45]

Originally Posted by The GMT Master

If Rolex found out that they were doing this regularly, dealer status would probably be pulled anyway

Rolex must know, a lot of Gray Dealers sell brand new watches and all Rolex would have to do is buy them. With the serial number they can check which AD they sold the watch to originally. If they don't know which ADs sell to Gray Dealers it's because they don't want to.

[Scunner]

My AD has always been happy to give me the personal attention, they treat me as a customer and have always remembered my name, my partners name and a little about me, they have furnished my partner with advice (at considerable length) on gem mounting and even offered a design service (free of charge), their attitude to customers is 'pop in anytime'. They don't care what I dress like or how much of their time I take up. I have had phone calls asking me to pop in to see the latest release only to be met with a response of 'I don't like that'. All of which has been greeted by a friendly smile and a cuppa. They have made that extra effort to source me 'hard to get' models. Yes they care about selling watches but in the end they know that if they take care of the customer then the customer will look to them. I've been back many times so they must be doing something correctly!. Ask an AD the difference between Rolex model X and Omega model Y - they'll let you know, ask a Rolex Boutique and watch them scratch their head and sweat in panic. A boutique will know how to sell, a passionate independant AD will know what they are selling. Yes Rolex have earned their strength but they owe that in a big way to their knowledgeable passionate ADs, they may just trip themselves up with this new strategy, they'll still have to generate the same revenue to pay for overheads but the independant offers more choice, trade up from a Omega to a Rolex - not in this boutique......lost customer.

[UofRSpider]

My AD has 2 stores in my area and one of the stores is located inside a large shopping mall. Rolex just recently made the mall AD move their Rolex inventory to their other stand-alone store. Rolex apparently didn't want the image of their watches being sold in a mall.

[DG123]

I realize that by selling out the backdoor to a grey dealer, an AD is risking his AD status with Rolex. However, if Rolex is demanding that AD's buy a minimum quota , then some AD's will likely start selling to grey dealers and, or, offer discount prices to their retail consumers. Whatever it takes to move enough product to meet Rolex minimum quotas.
Some AD's will figure they have nothing to lose, because without somehow selling more product, they will lose their Rolex AD status, anyway. This is a common problem when a major brand vendor starts imposing minimum quotas. The retailer is forced to become more "creative" .

Originally Posted by The GMT Master

If Rolex found out that they were doing this regularly, dealer status would probably be pulled anyway

[rolexertion]

Why are they acting like the Gestapo? What is up with that?

[Lisa]

Originally Posted by DG123

Bully may be too harsh a word. Rolex corporation has done a great job designing and producing the very best products. Consequently, the company has power to control their retail distribution. Rolex has earned their strength, and along the way Rolex AD's have made nice profits too. So, it works both ways.
I agree that other brands are grateful to be in the same store with Rolex, because Rolex brings in consumer traffic. But Rolex doesn't like it because a consumer may find that $5,000 for an Omega doesn't look too expensive when compared with $9,000 for a Rolex. This is why Rolex wants AD's to distinguish the Rolex product with special in store signage and display cases, and, or, separate boutiques.

You're right; "bully" is a pretty harsh word. But I do find it distasteful when a luxury brand imposes this kind of control over its retailers, and subsequently, its customers, who will be corralled into the exclusive, boutique environment and expected to pay more. You want to own a Rolex, it has to be on Rolex's terms. This is what bugs me. Rolex doesn't seem to give a flip about appearing to appreciate its customers. When one is in the market for luxury goods, do old-fashioned customer-oriented attitudes go by the wayside? I'd gladly pay more if I felt appreciated, and that the company wanted my business. Guess I'm not the kind of consumer Rolex is after.

[kkwn98]

Originally Posted by rolexertion

Why are they acting like the Gestapo? What is up with that?

Please, get a grip. That is just a stupid comparison, and you should know it.

[Art 1]

Rolex has always used strong arm tactics.

[HL65]

Many of the smaller AD's have been leaving Rolex--most by Rolex request though. I had a buddy lose his Rolex line a few months back. I know Sam too--great guy! I bought my LV in 2003 from him.

[Dr. Robert]

Hey Rolex....bah humbug

I wish I could run my biz like Rolex....who's their CEO? Darth Vader?

[DG123]

My guess is that Rolex corporate's theory on retailing is the following :

1) AD's to have a good selection of the brand.
2) brand to be displayed within its own display case.
3) retail floor sales people to be knoweldgeable about the brand and the functional features of the watch models.
4) limited number of AD's within a given territory, all AD's expected to sell the brand at full suggested retail price.
5) AD salespeople to treat customers with courtesy, patience, and respect.

I believe the above is Rolex corporate's goal for its relationship with its AD's. Obviously, several of these idealistic goals are not proving true or practical.

Originally Posted by Lisa

You're right; "bully" is a pretty harsh word. But I do find it distasteful when a luxury brand imposes this kind of control over its retailers, and subsequently, its customers, who will be corralled into the exclusive, boutique environment and expected to pay more. You want to own a Rolex, it has to be on Rolex's terms. This is what bugs me. Rolex doesn't seem to give a flip about appearing to appreciate its customers. When one is in the market for luxury goods, do old-fashioned customer-oriented attitudes go by the wayside? I'd gladly pay more if I felt appreciated, and that the company wanted my business. Guess I'm not the kind of consumer Rolex is after.

[Darlinboy]

Originally Posted by Dr. Robert

Hey Rolex....bah humbug

I wish I could run my biz like Rolex....who's their CEO? Darth Vader?

Palpatine, actually. Evil twin of a well-regarded TRF member!

[gimpex]

Originally Posted by Lisa

You're right; "bully" is a pretty harsh word. But I do find it distasteful when a luxury brand imposes this kind of control over its retailers, and subsequently, its customers, who will be corralled into the exclusive, boutique environment and expected to pay more. You want to own a Rolex, it has to be on Rolex's terms. This is what bugs me. Rolex doesn't seem to give a flip about appearing to appreciate its customers. When one is in the market for luxury goods, do old-fashioned customer-oriented attitudes go by the wayside? I'd gladly pay more if I felt appreciated, and that the company wanted my business. Guess I'm not the kind of consumer Rolex is after.

Working for a manufacturer but in a different industry I see it from a different perspective ( although I feel for the ADs affected).

Rolex is only doing this for one reason - it thinks ( you can argue if its right or not ) it will make more money , either by selling more watches or at higher prices or a combination. Its all to do with the environment customers prefer , competitive positioning , brand perception etc etc based on some study and clinic.

There are those who prefer to purchase wherever its the cheapest , and there are those who want the experience/satisfaction/comfort of going through offical channels.

I am 100% sure Rolex would not be doing this without a definite strategy and goal.

Again, whether they are right or wrong - only time will tell

[Scunner]

Originally Posted by UofRSpider

My AD has 2 stores in my area and one of the stores is located inside a large shopping mall. Rolex just recently made the mall AD move their Rolex inventory to their other stand-alone store. Rolex apparently didn't want the image of their watches being sold in a mall.

I'm confused about this as there are probably more prospective customers and malls are not always budget rentals - Mall of the Emirates in Dubai - cheap?. If your in a prime location within the mall then there is more traffic.

[Lane from s.c.]

A couple of points: Less dealers will equal less sales overall...I believe. It will however increase the value of preowned...which is good for the folks that own them.

I saw Harley Davidson and BMW Motorad do something like this a few years ago and many are out of business.....including one last week...BMW of santa cruz....I hear the overhead killed them.



Lane

[6352]

It is just corporate business at work, supply and demand.

[DG123]

I think Rolex business strategy is not so much increasing annual sales, which I am sure the company achieves most years, no matter what.
Instead of annual sales gains Rolex management is probably most focused on enhancing, improving, and maintaining the image of the brand. One way to do this is pay close attention to its retail distribution (the AD's).

Originally Posted by gimpex

Working for a manufacturer but in a different industry I see it from a different perspective ( although I feel for the ADs affected).

Rolex is only doing this for one reason - it thinks ( you can argue if its right or not ) it will make more money , either by selling more watches or at higher prices or a combination. Its all to do with the environment customers prefer , competitive positioning , brand perception etc etc based on some study and clinic.

There are those who prefer to purchase wherever its the cheapest , and there are those who want the experience/satisfaction/comfort of going through offical channels.

I am 100% sure Rolex would not be doing this without a definite strategy and goal.

Again, whether they are right or wrong - only time will tell

[train-time]

Originally Posted by The GMT Master

If Rolex found out that they were doing this regularly, dealer status would probably be pulled anyway

Exactly! A long standing dealer in Baltimore, MD lost Rolex, Panerai and Breitling in the last few months because they were supplying gray market dealers.

[Omega 1120]

Rolex could theoretically use and abuse dealers for the next 5 years....going up the food chain, "so to speak", until all that's left is a bunch of Rolex Boutiques and a lot of old trusted dealers.....dropped off like elderly people to a convalescent home.

[astrazen]

I have posted this on another thread but my local AD is building an exclusive Rolex shop attached to their premises.

Its the way Rolex is going and the AD's have to adapt. Not good for us guys though.