Why the AD hate?

[Solo118]

Originally Posted by teck21

Plenty of money is not the same as maximum money. Every business tries to make maximum money.

Why should ADs be held to a higher standard?

And ADs anywhere cannot sell above MSRP if they wish to keep their dealership if Rolex’ finds out. Please do not embarrass yourself by trying to dispute this.


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Rolex dictates what their maximum margin is. The extra money on the table is for Rolex to decide, not the AD.

[teck21]

Originally Posted by RobearH

So by your logic Rolex should sell directly to Gray to cut out the middleman...the AD that’s dealer agreement is to sell to consumers!

No, that’s a completely separate argument altogether, which is whether Rolex should give in to short term market forces. If Rolex wanted to, they would not insist AD’s sell at MSRP. That would completely eliminate greys.

That is not the issue here.

The issue is that Rolex controls what ADs have to sell, and how much they can sell it for.

It is simply on this basis that I feel ADs are bearing the brunt of a lot of customer dissatisfaction. And ADs are taking a lot of flak for their behaviour, which is in fact perfectly normal for any business that:

A) can order as much as it wants for the supplier regarding what is selling well

B) price it accordingly.

ADs can do neither, therefore they have to resort to ‘creative’ methods to make as much profit as possible.




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[dtwer]

Originally Posted by teck21

It’s very simple. They are forced to sell all their sports models at prices well below what the market is currently willing to pay.

This is a fact.

If you cannot see how this is losing money, you should not even engage in this conversation.

You are confusing opportunity cost with real profit/loss.

When you sell something for $100 msrp, and your COGS is $80, you are not losing money; you are making money.

As to whether you could have sold it for $200 or $300 instead of $100, that's the question of opportunity cost; it has nothing to do with real profit or loss.

Taking into consideration that Rolex is actively enforcing the AD pricing rule with a big stick, the opportunity cost of not selling at inflated prices is justifiably mitigated.

[youngfromNY]

Originally Posted by teck21

No, that’s a completely separate argument altogether, which is whether Rolex should give in to short term market forces. If Rolex wanted to, they would not insist AD’s sell at MSRP. That would completely eliminate greys.

That is not the issue here.

The issue is that Rolex controls what ADs have to sell, and how much they can sell it for.

It is simply on this basis that I feel ADs are bearing the brunt of a lot of customer dissatisfaction. And ADs are taking a lot of flak for their behaviour, which is in fact perfectly normal for any business that:

A) can order as much as it wants for the supplier regarding what is selling well

B) price it accordingly.

ADs can do neither, therefore they have to resort to ‘creative’ methods to make as much profit as possible.




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No industry or business that deals with limited goods runs like this though

Take Nike for example

sure, certain pairs of Nikes can fetch thousands of dollars on the grey/resell market.
authorized dealers of Nike dont get to dictate how many they can get or the price they are allowed to sell at.

Should these stores start charging thousands of dollars to maximize profits disregarding their deal with the bran that supplies them the goods?

[oldman2005]

In business greed is the driving force, Boeing driven by maximizing its profit by pushing a flaw aircraft that costed some 300+ lives but brings in billions of profit. Rolex maximizing its profit by shifting from SS sport to higher profit DJ/TT/PM, ADs are maximizing their profit by bundling selling to greys or VIP customers. Greys are doing the samething selling the watches to most hungry buyers with mucho cash....And many of us the end-customers, love potential profit of a SS Rolex sport watch flocked into playing the big Rolex game. So why hate when we can just look at the mirrors LOL.

These are just materials and won't really bring happiness, it's always one more watch that you lust for. If you're a real WIS check out other brands which make incredible watches too without many of the games you have to play.

[westcoastghost]

...

[Jonesy2099]

Originally Posted by teck21

But you have noticed Rolex advertisements never specifically and actually tell you what’s available at any given time.

They just show models in their line up, and describe them.

There is no law that says only readily or
presently available pieces can be advertised.

These ads are about creating desire, not promising availability. Sure it can be damaging to customer goodwill, but it certainly is not illegal. One can argue it crosses some ethical line, but even that may be tenuous.




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I think you’ve answered your own question. I think “hate” is too strong a word but certainly the current situation is damaging to customer goodwill. Some of the practices that ADs are currently utilising to maximise profit is actually damaging their relationship with customers. I also disagree that every business tries to maximise profit at the expense of the customer. Some will understand that in the long term making a customer feel valued is more important than a short term gain in profit. ADs are currently enjoying a situation where they have more potential customers than they can supply. I think customer service standards have slipped as a result. People don’t appreciate greed and a lack of respect which numerous stories on this forum have reported are happening.

[nuwildcat928]

I know I developed some AD hate when my Rolex experience involved calling me to tell me watch has arrived, then refused to allow me to pay by credit card (bank check only) and as banks were already closed for the day then I was unable to pick up the watch until the following week. All in the name of “maximizing profits”. If it were just about maximizing profits then there would be no other incentives like a hat, a scotch, free shipping, etc. Most people probably don’t have much of problem with what ADs need to do to survive but they do have a problem with dishonest games. Please see prior posts involving AD games like calling 3 people to tell them a watch is in and watch goes to whoever gets there first, another where a guy waited over a year for a watch and when it came in he went to AD and was told a bundle was required, etc.

[teck21]

Originally Posted by Jonesy2099

I think you’ve answered your own question. I think “hate” is too strong a word but certainly the current situation is damaging to customer goodwill. Some of the practices that ADs are currently utilising to maximise profit is actually damaging their relationship with customers. I also disagree that every business tries to maximise profit at the expense of the customer. Some will understand that in the long term making a customer feel valued is more important than a short term gain in profit. ADs are currently enjoying a situation where they have more potential customers than they can supply. I think customer service standards have slipped as a result. People don’t appreciate greed and a lack of respect which numerous stories on this forum have reported are happening.

You do make good points. Every single business’ strategy for profit maximisation may be different, which explains why there seem many stories of people being able to provide coveted pieces by simply being on a list, compared to others whose dealers expect instant bundling.

Again my only point is that all ADs work under severe constraints presently, and blaming them exclusively for not being able to obtain any given model is frankly, self entitlement.




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[teck21]

Originally Posted by nuwildcat928

I know I developed some AD hate when my Rolex experience involved calling me to tell me watch has arrived, then refused to allow me to pay by credit card (bank check only) and as banks were already closed for the day then I was unable to pick up the watch until the following week. .... Please see prior posts involving AD games like calling 3 people to tell them a watch is in and watch goes to whoever gets there first, another where a guy waited over a year for a watch and when it came in he went to AD and was told a bundle was required, etc.

Those are very different levels of dishonesty which even which I too cannot abide by.


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[JLUK]

People hate the lack of transparency with the AD. It would be easy for AD’s to be more transparent and avoid the conspiracy theories around allocation etc.

[PossumDixon]

AD's should get inventory from Rolex and stick in their cases for sale. End of story. The lists, the inventory in the safe hidden for their "best" customers is nonsense. If they have no inventory, then they have no inventory, but the manipulation of the inventory is what I find ridiculous. It's a watch, a fairly useless item in the world today, and if you have one you aren't that special.

[imperio]

Originally Posted by teck21

blaming them exclusively for not being able to obtain any given model is frankly, self entitlement.


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Who exclusively blames ADs? Example please. Direct quote if possible

[BillA]

Tech
I think your point is that even though they are making money, by not selling at above msrp they could even make more money if they could.
But let's be clear, the AD makes money (a profit) by selling at msrp.

[Defiancekofb]

Originally Posted by PossumDixon

AD's should get inventory from Rolex and stick in their cases for sale. End of story. The lists, the inventory in the safe hidden for their "best" customers is nonsense. If they have no inventory, then they have no inventory, but the manipulation of the inventory is what I find ridiculous. It's a watch, a fairly useless item in the world today, and if you have one you aren't that special.

This. This statement has put me off of buying watches for the foreseeable future. I have the coin, I just refuse to pay above MSRP. But part of me is curious to know how many ADs do this "bundle for SS model" sale. Perhaps purchaser will buy a PM model or expensive piece of jewelry for the SS model? These clients must have some serious cash reserves in the bank.

[oldman2005]

Originally Posted by nuwildcat928

..., another where a guy waited over a year for a watch and when it came in he went to AD and was told a bundle was required, etc.

As for SS sport, maybe many ADs are shifting from the "entitlement" system to "earn privilege" system. For example, you're going to spend your hard-earn money on $10,000 status symbol/jewelry watch, you would expect or are entitled to receive your beautiful watch and be treated with dignity but now you have to spend more money buying extra merchandise at the AD in the name of "building relationship" to earn your privilege to get such watch.

It sounds crazy but it is what it is.

[teck21]

Originally Posted by imperio

Who exclusively blames ADs? Example please. Direct quote if possible

Don’t act cute. You have been on this forum long enough to see how much many posters blame them exclusively for the fact they can’t obtain an SS sports model from them.


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[teck21]

Originally Posted by BillA

Tech
I think your point is that even though they are making money, by not selling at above msrp they could even make more money if they could.
But let's be clear, the AD makes money (a profit) by selling at msrp.

Indeed, a lot of woes do stem from the fact that Rolex does not care for making maximum profit as much as ADs do.


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[teck21]

Originally Posted by BillA

Tech
I think your point is that even though they are making money, by not selling at above msrp they could even make more money if they could.
But let's be clear, the AD makes money (a profit) by selling at msrp.

And yes, ADs can make a lot of money just by selling at MSRP.

My point is plenty of businesses don’t cop near where as much flak as as Rolex ADs do for doing what they can to maximise profit.

And these other businesses don’t get the same criticism.

The power of Rolex. The more heated the debate....


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[squatchy]

Teck, as an AD I appreciate your recognition of this dilemma. Our hands our tied. The only watches "hiding" in our safes are Special Orders awaiting delivery. Although YMMV. Hot Sport watches don't hit the case because established clients receive them.
Ultimately, if we put EVERYTHING in the case when we received it, the grey market would be even worse. Sure, the layman who has time on his hands to run around and check AD cases multiple times per week would LOVE for a SkyDweller to just fall in his lap, but the reality is that we have business relationships that are far too valuable for any joe-schmo to come in and swoop up anything in high demand.

[grimps]

I’m sure ADs would sell everyone a Daytona if they could , Rolex are to blame for the shortage

[Gravity]

[squatchy]

Gravity, did you get the RO directly from dealer? If so, what other watches did you have to buy to get it?

[teck21]

Originally Posted by Gravity

The thread title was not click bait in any way, you could simply have chosen to not click on it rather than try to act clever with the meme.




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[PossumDixon]

Originally Posted by squatchy

Teck, as an AD I appreciate your recognition of this dilemma. Our hands our tied. The only watches "hiding" in our safes are Special Orders awaiting delivery. Although YMMV. Hot Sport watches don't hit the case because established clients receive them.
Ultimately, if we put EVERYTHING in the case when we received it, the grey market would be even worse. Sure, the layman who has time on his hands to run around and check AD cases multiple times per week would LOVE for a SkyDweller to just fall in his lap, but the reality is that we have business relationships that are far too valuable for any joe-schmo to come in and swoop up anything in high demand.

And, this statement is why AD's are ridiculous. You are saving us from the gray market, please, give me a break.

[squatchy]

Originally Posted by PossumDixon

And, this statement is why AD's are ridiculous. You are saving us from the gray market, please, give me a break.

We are always open to suggestions and more importantly, justification as to WHY your suggestion would be better for everyone involved.

[teck21]

Originally Posted by PossumDixon

And, this statement is why AD's are ridiculous. You are saving us from the gray market, please, give me a break.

That’s not his point at all, you are putting words in his mouth.

If he simply sold every coveted piece on a first come first serve basis, greys would simply corner even more of the market than they already have.


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[bondtoys]

Originally Posted by bondtoys

Well, first of all, ADs are not allowed (by their contract with Rolex) to sell to resellers.

So, those who break that contract by selling to greys are unfailry competing with those honest ADs that play by the rules.

Additionally by drying out the market for ‚normal‘ buyers, they fuel the hype and exaggerations in the grey market and that means they contribute to the insane prices which many pay on that market.

Teck, You have replied to everybody but not my post.

Because I am right?

[PossumDixon]

Let's not BS here, the AD's feed the grey market. So, to say they are there to save us from the grey market is insane. Every grey dealer I have spoken to gets their watches from AD's.

Call me crazy, but a dealer's job is to buy inventory at cost plus from the manufacturer and sell it with a markup that is agreed upon by the manufacturer and his dealer. That's the gig. It's not to then buy said items, and then manipulate the market to make more from the sale. If greys want to come in and buy all the inventory, so be it. Let them. It's really not the AD's concern. They aren't the moral police. They are a seller of Rolex watches. They get their markup, and they sell the watches. They shouldn't care one bit who buys them.

They aren't holding them back from the grey market, they are holding legitimate customers hostage, to pay way more in a backwards way. Rolex won't let you charge over MSRP, so you get way more by using these deceptive practices.

As a customer for a Rolex watch, if I walk in and there are no watches, I'm out of luck. I can live with that. If a grey dealer bought them all, oh well, he beat me to it. I will try again later, if it is that important to me. If I want to buy from a grey, I can but I don't have to. But, don't give me the nonsense that I can't buy a watch that is in inventory because:

1) I won't bundle it with a piece of jewelry, I don't want
2) I won't bundle it with other watches, I don't want
3) I won't buy a PM watch, I don't want

To do that stuff, is manipulating the gain, you have already agreed to make with the manufacturer. If you don't like the Rolex margins, sell another brand. Quite frankly, I can't believe Rolex let's AD's pull this nonsense. It is bad for Rolex's business in my opinion.

[Chester01]

Originally Posted by teck21

There appears plenty of dissatisfaction towards ADs for their ‘shenanigans’, and to be honest I don’t understand why they should be blamed for woes not of their doing.

For one thing, they are profit maximising entities. They aim to make as much money as they can, no different from any other business at all. Yet they seem hated in a way other businesses are not, and I find that incredibly unfair to them.

Firstly, they are unable to determine what they receive from Rolex in every shipment. They receive what they receive, and do what they can with it. All of them wished they could satisfy the demands of every customer that walked in, but the scarcity of supply simply means they cannot.

They are also not allowed to sell above MSRP, and every idiot knows that the popular pieces can currently command prices well beyond MSRP.

I therefore put it to you AD haters, why should they sacrifice their own profit (by way of bundling or relationship building) in order for you to enjoy a watch from which they all know they will be ‘losing’ money from by selling it to you purely at MSRP?


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Because bundling is coercion and they are not losing money by me purchasing it at retail. It’s like going to the grocery store and saying I need milk and they say no, milk well maybe milk if you buy all these oats and quinoa no one wants. Sorry, it’s greed.