Supply change will occur...someday

[rossi46]

Originally Posted by Calatrava r

10 years ago Rolex watches weren't cool, they were actually dated relics of the past, people who did buy, bought one watch and were happy... When Subs back up in the cases, it will because nobody wants them.

As someone who has been on this very forum for over 10 years (and there are countless people who were here before that/have owned countless more Rolexes before me) I can categorically state what you’re saying is laughably wrong.

Yes, there is a hype bubble driving even plain-jane SS DJ41s to be rare in store displaysright now, but to say that in 2009 Rolex watches were uncool relics of the past?!

As the kids say: “I can’t even...”

[donq]

Originally Posted by PeterC4

Rolex think they are immune. You don't get it. 1,000,000 watches....maybe. 7.53 billion people. I have said this elsewhere. Greatest flex of marketing muscle in the 21st Century. They are going to push to the limit and see how much you will pay for their, good quality, reliable, relatively pedestrian, high end watches.

So this explains the yearly MSRP increases?

[mrarchiegoodwin]

Originally Posted by PeterC4

They are going to push to the limit and see how much you will pay for their, good quality, reliable, relatively pedestrian, high end watches.

These are the qualities I prize in a watch. It was not always so. I started out WIS-like and looking for fine quality and interesting high end brand watches. But they are delicate. I got tired of having them break down when I was traveling--once a trendy brand's band snapped during a lunch party; kerplop into the gaspacho. I was pissed and decided to try Rolex. I wanted to do it cheaply and bought a vintage Sub. I enjoyed it so much, I retired the other brands to the sock drawer. My Sub (or its stand-in, an SD) is a good quality, reliable, relatively pedestrian watch. I am not rich, but would not consider Rolex to be high end. When I encounter someone wearing a Rolex I think that person appreciates a robust movement in a well crafted case.

Thanks to this thread I now know prices are inflated. I decided to buy another Rolex and thought the prices were okay. Now I am aware. But I think I will buy one anyway. Life is not long.

[just1time]

Originally Posted by SFBAY

Of course real estate prices decrease during a recession.

Real Estate prices decrease (and increase) at different times. Not only during recessions....Its all relative. Type of Real Estate, Location, Market Value and most importantly the dynamic between demand and supply.
SO just cause a you in a recession doesn't mean you will find your dream home crashing all the way to Zero dollars.

[trfChris]

Originally Posted by pepsiretail

The more in demand a model becomes the amount supplied is reduced.

That appears to be the Rolex supply strategy.

Example, I read that stainless DJ41s are being allocated, just as their sales have increased.

I think you are mistaking supply for demand a bit here. For instance take a piece with low demand, say a platinum day-date with white dial. When you go to your AD and ask for it the AD will most likely not have it in the case. They will turn around to Rolex and buy this piece from Rolex at the time they get asked for it and then sell it to the client.

For pieces with high demand like SS GMT, Subs & Daytonas the AD knows they can easily sell every single piece they buy from Rolex so they just go to Rolex and say "I want to buy as many of these as you can sell me" and Rolex will determine how many they will sell to the AD.

The "stainless DJ41s are being allocated" just means that the DJ41 moved from the former category to the latter due to higher demand, not that Rolex decided to make fewer of them.

[pepsiretail]

Originally Posted by trfChris

I think you are mistaking supply for demand a bit here. For instance take a piece with low demand, say a platinum day-date with white dial. When you go to your AD and ask for it the AD will most likely not have it in the case. They will turn around to Rolex and buy this piece from Rolex at the time they get asked for it and then sell it to the client.

For pieces with high demand like SS GMT, Subs & Daytonas the AD knows they can easily sell every single piece they buy from Rolex so they just go to Rolex and say "I want to buy as many of these as you can sell me" and Rolex will determine how many they will sell to the AD.

The "stainless DJ41s are being allocated" just means that the DJ41 moved from the former category to the latter due to higher demand, not that Rolex decided to make fewer of them.

I get your points but meant just what I said.

Rolex seems to want to limit the supply of in demand models.

It seems counter intuitive. Increased restriction with increased demand.

Example, fewer Pepsis than BLNRs.

The DJ41 scenario looks more like fewer deliveries than "we will take as many as possible"(sic). Allocation as described by others on the forum just means specific dial versions can't be individually requested. Why would that be?

Rolex realized, imho, that the key to success today is high pre owned prices. It is what buyers want. Limiting supply fosters this.

[brandrea]

Originally Posted by Calatrava r

10 years ago Rolex watches weren't cool, they were actually dated relics of the past, people who did buy, bought one watch and were happy, now everyone is a collector and has to have one of each model. Plus the modern market is far widespread and deeper particularly into China. The internet has changed the world we live in entirely. When Subs back up in the cases, it will because nobody wants them. That day is coming. Everything has its run in the sun. I just do not believe this particular market is so tied to economy. Most of the watch industry is in the gutter now despite the great 10 year economic run.

I always thought they were cool, even back in the early 90’s when I was able to afford my first

[FloridaGary]

Originally Posted by Juantxo

Suppress the gray market and all authorized dealers will have plenty of stock at suggested retail prices. So simple.

The only way to affect the gray market is by providing more inventory to their AD’s and Rolex doesn’t seem to be able to or want to. We can all speculate as to why but will never know.


Sent from my iPhone using Tapatalk

[PeterC4]

Originally Posted by donq

So this explains the yearly MSRP increases?

Sure does. But it will be interesting to see if their strategy works in the end, without damaging their retail channels. You can't really purchase the watch you want instantaneously today, unless you go to a Non-Authorized dealer. And Rolex does not control those dealers, or the prices, which for some stainless steel watches seem to be getting up to unrealistic levels.

It seems to me that Rolex is really curtailing production as it would appear every major market in the world has no watches of desire in inventory. I don't know if that is a sustainable strategy. The watches will find their way to the market in unconventional ways.

[PeterC4]

Originally Posted by FloridaGary

The only way to affect the gray market is by providing more inventory to their AD’s and Rolex doesn’t seem to be able to or want to. We can all speculate as to why but will never know.


Sent from my iPhone using Tapatalk

Correct. We don't know what their strategy is, and it may be not be working as intended. It seems every major market in the world has no desirable watches to sell. Is that a strategy? It certainly is pushing prices up. But like many others, I'm somewhat fascinated by this phenomenon, but put off at the same time. Five years wait list to buy a watch. Give me a break. Time to move on.

[jltait]

I for one am looking forward to selling my ss dj36 next year for $25k

[oldman2005]

Originally Posted by SFBAY

Luckily, I’m not in the market for a new Rolex. However, lots of folks on this forum are understandably frustrated with the lack of stock at AD’s. The economy has been on fire for the past 10 years. If/when a recession hits, those who have enough money for a rainy day will have no problem getting the watch they want at an AD. For those who think Rolex is immune to the ebbs and flows of the economy can continue to live with their heads in the sand.

During the past great recession, the SS Daytona was easier to get but I have never seen it displayed at ADs (I was offer one as a good customer), since now Rolex has taken the Daytona strategy to all the SS watches. I have no doubt Rolex will further cut the SS watch production accordingly when the recession hit, so accessibility is not a sure thing during recession.

[PeterC4]

Originally Posted by jltait

I for one am looking forward to selling my ss dj36 next year for $25k

Too Cheap. You have to auction it nowadays. Make sure the full colourful history is known.

[Mike Jab]

Ok

[DoctorA]

It to sound cynical but I believe economy will turn down but even then I don’t believe we will see ceramic Daytona’s and skydwellers at the cases!
Things might go back to the 2016 time where you could get the “usual” black subs, DJ, and GMT but doubt we will see the discounts they used to go for !

[HL65]

Originally Posted by Calatrava r

10 years ago Rolex watches weren't cool, they were actually dated relics of the past, people who did buy, bought one watch and were happy, now everyone is a collector and has to have one of each model. Plus the modern market is far widespread and deeper particularly into China. The internet has changed the world we live in entirely. When Subs back up in the cases, it will because nobody wants them. That day is coming. Everything has its run in the sun. I just do not believe this particular market is so tied to economy. Most of the watch industry is in the gutter now despite the great 10 year economic run.

10 years ago there were many long term Rolex collectors who thought like many of us long term enthusiasts that Rolex were not only cool but the coolest! Not sure where you were or what you are talking about but you are way off and many of us can attest to that on that notion. The silly phenomenon of people paying ridiculous premiums over retail is a new thing starting only a few years ago.

Oh and same can be said for Patek Nautilus and Aquanauat if you want to talk about silly euphoria.

[VacherObsessive]

Originally Posted by pepsiretail

I get your points but meant just what I said.

Rolex seems to want to limit the supply of in demand models.

It seems counter intuitive. Increased restriction with increased demand.

Example, fewer Pepsis than BLNRs.

The DJ41 scenario looks more like fewer deliveries than "we will take as many as possible"(sic). Allocation as described by others on the forum just means specific dial versions can't be individually requested. Why would that be?

Rolex realized, imho, that the key to success today is high pre owned prices. It is what buyers want. Limiting supply fosters this.

Absolute rubbish you know nothing, you have no proof of anything you have just said

Supply is the same, demand is higher than ever before

[huba01]

Originally Posted by Calatrava r

The problem is Rolex will manage the supply train and limit production as needed. They are a non profit loaded with money and probably do not even have to make any set number of watches. Production needs to be just enough to support operations and maintain vital employees. What that number is who knows. But I suspect they can be very elastic in production numbers. Rolex watches become available when they are no longer cool. Rolex are very lower tier luxury items and will fare fine in a down economy. The worldwide population can absorb the production.It's the high end second homes, boats and truly expensive disposables that take the hit in a bad economy.

Very nicely written, so true

[SeaAndSky]

It's going to be interesting to us wis types for certain to see what becomes of the wrist watch as time marches on. I honestly don't have any idea what will happen with respect to desirability and manufacture of wrist watches well into the future. I think it's reasonable to bet that prices will eventually fall due to obsolescence but I wouldn't bet much. I'm unreasonably mad for these things like most of the long time members here as well. I expect the finer watch brands to keep crafting them for some time to come.

[pepsiretail]

Originally Posted by VacherObsessive

Absolute rubbish you know nothing, you have no proof of anything you have just said

Supply is the same, demand is higher than ever before

Extremely rude post.

Also illogical. Where is your proof supply is the same? You follow?

How can you posit I know nothing if you have no proof to the contrary?

At least I qualified my opinion with imho.

Guess what? I have some evidence. Very reliable source, a man who takes individual meetings with executives from all the major brands, Mr. Brian Govberg.

On September 27th 2017, just as hot SS models were starting to go slightly over retail, this video was posted on their YouTube channel. Almost two years ago.

The Rolex supply talk starts at 19:00 minutes but watch from the beginning to get a full sense.

https://www.youtube.com/watch?v=1enZ2VsSiJI

[TswaneNguni]

Originally Posted by pepsiretail

Rolex seems to want to limit the supply of in demand models.

Have dealt with 5 ADs this year .Not one is claiming less supply .Simple : VERY high demand .(I specifically asked them )

[pepsiretail]

Originally Posted by TswaneNguni

Have dealt with 5 ADs this year .Not one is claiming less supply .Simple : VERY high demand .(I specifically asked them )

That’s fine, we all can form our own opinions based on our own observations.

What is compelling about the video is that this is all being said before the current madness.

For your ADs to tell you during the madness that these watches you are lining up to pay full retail for, even PM models, are incredibly in demand is good salesmanship. There is high demand right now, the question is why?

[Muxi]

Originally Posted by pepsiretail

I get your points but meant just what I said.

Rolex seems to want to limit the supply of in demand models.

It seems counter intuitive. Increased restriction with increased demand.

Example, fewer Pepsis than BLNRs.

The DJ41 scenario looks more like fewer deliveries than "we will take as many as possible"(sic). Allocation as described by others on the forum just means specific dial versions can't be individually requested. Why would that be?

Rolex realized, imho, that the key to success today is high pre owned prices. It is what buyers want. Limiting supply fosters this.

It’s Rolex protecting its brand cache. All this unusual market movement is new to them too. I surmise that it is a risk management matter to them and we can just roll with the punches for the moment.

Whether or not this strategy will pay off for Rolex remains to be seen.

A true connoisseur of the brand will just have to trust Rolex on this.

[zjd168]

Originally Posted by pepsiretail

There is high demand right now, the question is why?

1) these watches can be flipped easily for quick 1000s$$$ profit
2) Social media and image come with them
3) Human nature to trace luxury items hard to get for the general public
4) Huge new demands from China and other emerging markets middle class. Demand from China can easily eclipse US.
...

[zjd168]

Originally Posted by TswaneNguni

Have dealt with 5 ADs this year .Not one is claiming less supply .Simple : VERY high demand .(I specifically asked them )

same information from 4 ADs I talked to.

[Sleepy996]

The current situation with Rolex reminds me of the situation with Porsche and there GT cars. The Porsche GT wave has currently passed and the second hand market is flooded with Porsche GT cars as a result of buyers either hoping to make a quick buck or at least break even and had no real intention of keeping or actually driving the cars. I wonder if some of that reasoning will play out in the Rolex market one day ?

[pepsiretail]

Originally Posted by zjd168

1) these watches can be flipped easily for quick 1000s$$$ profit
2) Social media and image come with them
3) Human nature to trace luxury items hard to get for the general public
4) Huge new demands from China and other emerging markets middle class. Demand from China can easily eclipse US.
...

All true.

Is this not more a description of the demand?

The question is what changed?

What lead to the increased demand? For Rolex SS Professional in particular. The Chinese have been major buyers of luxury watches for well over a decade. Why has Rolex become their darling?

Watch Brian Govberg describe Rolex supply changes, two years ago.

ADs pumping how in demand their watches are is entirely different than one of the biggest ADs on the east coast tell us supply is being cut on Professional SS models at about the exact time the whole over list phenomenon begins.

[mbalmz]

Originally Posted by SFBAY

Stop the nonsense. You talk like nobody has ever been able to walk into an AD and purchase a Rolex they wanted. Two years ago my AD had 10 Subs in the vault. Rolex isn’t immune to any ebb and flow the economy has in store. This is a very unique time for Rolex due to the flourishing economy the last 10 years. Simple as that.

you talk as though this happened by accident; I'm sure demand is up, maybe even significantly, but rolex has clearly made a decision to limit supply and create the current environment.

it isn't like this by accident and it won't go back to 10 years ago by accident either--as soon as rolex wants ADs to have 10 submariners in the vault again they will, but to think that "ebbs and flows in the economy" will lead to the kind of massive drop in demand you'd need for us to go back to the "good old days" without a shift in supply is fantasyland.

[cbalster]

I am tired of hearing no one knows Rolex strategy. Rolex got rocked in 2008-2009. and had 3 new CEOs in 5 years. Dufour became new CEO in 2014. Where did he come from? Louis Vuitton. Notice how things have changed since Dufour took the helm? The Birkin bag, the Nautilus, the Daytona, etc etc. You must have your heads in the sand if you can't see they all follow the same "allocation pieces" strategy!

Go to hermes and ask for a birkin and they laugh and say "do we know you?"
Ask for a Nautilus and they laugh and say "do we know you?"
Ask for the Daytona and they say "do we know you?"

same same same

if demand decreases i expect Rolex to reduce supply further.

rant over thanks for reading!

[zjd168]

Originally Posted by pepsiretail

All true.

Is this not more a description of the demand.

The question is what changed?

What lead to the increased demand? For Rolex SS Professional in particular. The Chinese have been major buyers of luxury watches for well over a decade. Why has Rolex become their darling?

Watch Brian Govberg describe Rolex supply changes, two years ago.

ADs pumping how in demand their watches are is entirely different than one of the biggest ADs on the east coast tell us supply is being cut on Professional SS models at about the exact time the whole over list phenomenon begins.

Please don't forget China has been a developing country in many senses, playing catch-up and closing the gap. Their middle class weren't this rich 10 or 20 years ago, and the numbers of high end luxury consumers are still expanding