Market conditions

[The Libertine]

Good (and relevant) article - thanks for sharing.

[Wiener48]

Interesting story, thanks

[burnsniper]

I don't think Rolex is artificially limiting supply - rather they have adjusted supply to more realistically reflect demand. While the difference may seem subtle, it is a much smarter and traditional business strategy. Instead of watches just sitting and gathering dust (like several years ago) stock is down across the board reducing carring costs for ADs and Rolex while enabling everyone to maintain high margins.

The downside to this is grey market dealers are speculating and sucking up any excess stock across wide areas which artificially inflates demand (which actually helps Rolex as they are still moving watches while helping create buzz around their products being "hot"). This is a risky play for greys if they properly account for costs, insurance, and risk many mark ups are not actually that high. A shift in the overall economy or a slight bump in supply by Rolex can cause this all to crash to halt. However, Rolex doesn't want to rock this boat as they are sitting pretty and they know that their product is differentiated enough that customers aren't going to run to another brand.

[Speed]

Originally Posted by ~JJ

Interesting article from A Blog to Watch https://www.ablogtowatch.com/why-som...ssible-retail/

What did you find most interesting about the article?

[KarlFr]

this is why I buy vintage rlx

[LINVS]

"...it is our distinct belief (based on plenty of evidence) that some of the more clever (and independently owned) watch companies are going to be increasingly limiting supply of high-demand sport watches in order to increase demand. "

This is what many of us figured out already. The SS Sports shortage isn't because of the Chinese or folks making money in the rising stock market. But Rolex is intentionally with holding supply to drive demand.



"...Because of unrealistic demands for growth, luxury watch brands produced more watches than consumers were actually willing to buy (at any price)."

So, Rolex is doing this to correct over growth and a glut of watches. The glut of watches is apparent as buyers have been accustomed to big (sometimes in excess of 20%) discounts.

I've noted that all of these "limited availability" watches are all available on the grey market. Anyone of us could have a Hunk, SD43, or White dial Daytona on our wrist tomorrow if we have the cash. But, that's hard to stomach after years of expecting a discount.

The glut of watches makes sense. The greys buy lots of watches (DJs) as long as some of those limited watches are included. For example, a grey dealer might agree to take 25 Datejusts off the hands of an AD just as long as a couple Subs and a Daytona are included. The ADs must cycle their stock otherwise they'll lose their AD status.

So bottom line, the "shortage" is due to massive "unmoved" stock.

[Aventura]

Originally Posted by LINVS

"...it is our distinct belief (based on plenty of evidence) that some of the more clever (and independently owned) watch companies are going to be increasingly limiting supply of high-demand sport watches in order to increase demand. "

This is what many of us figured out already. The SS Sports shortage isn't because of the Chinese or folks making money in the rising stock market. But Rolex is intentionally with holding supply to drive demand.



"...Because of unrealistic demands for growth, luxury watch brands produced more watches than consumers were actually willing to buy (at any price)."

So, Rolex is doing this to correct over growth and a glut of watches. The glut of watches is apparent as buyers have been accustomed to big (sometimes in excess of 20%) discounts.

I've noted that all of these "limited availability" watches are all available on the grey market. Anyone of us could have a Hunk, SD43, or White dial Daytona on our wrist tomorrow if we have the cash. But, that's hard to stomach after years of expecting a discount.

The glut of watches makes sense. The greys buy lots of watches (DJs) as long as some of those limited watches are included. For example, a grey dealer might agree to take 25 Datejusts off the hands of an AD just as long as a couple Subs and a Daytona are included. The ADs must cycle their stock otherwise they'll lose their AD status.

So bottom line, the "shortage" is due to massive "unmoved" stock.

And what does the gray dealer do with 25 Datejusts ?? Who do they sell them to? Apart it seems that with what you earn selling at a price premium Daytona makes up for buying 25 Datejusts ?? Let's do the numbers and we see ...
Apart you have to see if they sell the 116500 with those surcharges. Yes, they are offered at that price but I would like to see sales made.

[Fleetlord]

Originally Posted by Aventura

And what does the gray dealer do with 25 Datejusts ?? Who do they sell them to? Apart it seems that with what you earn selling at a price premium Daytona makes up for buying 25 Datejusts ?? Let's do the numbers and we see ...
Apart you have to see if they sell the 116500 with those surcharges. Yes, they are offered at that price but I would like to see sales made.

The grey dealer sells the (25) DJ

They will sell them to anyone who will buy them.

They sell 116500 with surcharges everyday.

Everybody wins!

[AK797]

Everyone is brave on the eve of battle...

[Sarosh]

Good interesting read! However still doesn’t solve the problem for the individual who has saved for many months, possibly years to buy the one rolex he has wanted since so long. They can’t just walk into an AD and enjoy the moment they’ve been waiting for. Sullies the experience abit, no?

Doesn’t matter I guess, people will still wait and for those who can’t, they’ll go grey. Either way, the Crown wins...

[AK797]

This is a good line - A big part of this is because rarity is easier to perceive than inherent quality when trying to determine overall product value. Ie Money talks loudest.

However he's got things the wrong way around as usual, demand outpaced supply in 16 and globally in 17 due to a number of obvious factors, and then finally supply was manipulated to control flippers recently, and supply apart from on the D500 and new Basels were released as they always were until this year.

Without a Union or Collective Bargaining the consumer has no power to insist on retail, this is a capitalist market in extremis and in this Watch Prohibition most people who want things will have to pay for them, no point crying over spilt retail in this market, that was a previous era now dead.

[cc75]

Thanks. Very interesting.

[ILuvSubs]

Great article. Thanks OP for sharing.

It certainly makes Rolex less accessible, which I think is a real shame, given its history and heritage of being a manufacturer of tool watches.

I suppose this is what happens when you become a luxury good.

[904VT]

Thanks for sharing. ABTW always has amazing pics of the references. The BLRO looks great

[MARTIN1264]

Quote

"they are looking for your biz in CT bc that insolvent liberal state is literally in a death spiral; an exodus is taking place from taxes continuously going up, up and away. look at Greenwich, or New Canaan, they have become veritable ghost towns w/ For Sale signs outside of more than half the homes. so yeah, everyone wants the biz and normal ADs are stuck w/ unhappy clients, thx to the non-profit entity known as Rolex."


Kind of a different response, but OK......

[drmizzou]

Good articles

[watchtabs]

Amazing article by Ariel. I was going to share it, glad it’s here.




Sent from my iPhone using Tapatalk Pro

[Speedbird-1]

Very interesting, thought provoking thread.

With the clamour to obtain 'the latest' and the
apparent willingness of many it seems, to pay
well over the odds.
Should Rolex be reconsidering their pricing structure?

If AD's were flogging new watches at grey (selling) prices, would
this kill the greys and elevate even further the luxury status of
the brand?
'Quids in', all 'round!
Except for the ordinary punter that is, and Rolex's highly visible
marketing, tell me that Geneva aren't targeting the ordinary punter.

Ironically, it's probably the 'Grey Pound' they're after!

[VicLeChic]

I used to be totally against paying over retail for any watch from any brand. These days though I could see myself paying more for a piece I really want to start wearing and enjoying now rather than waiting years to be called by the AD if at all. I’m talking paying over list price within reason, not going overboard, 20% extra is probably my threshold. If you can spend 10K, you can probably afford to spend 2K more.

For anything else (nice watches that can wait), I’ll always hunt for the best deal in the grey market or at the AD, pursuing the highest discount.

[Art 1]

Enjoyed. Thanks.

[MonsterSS]

thanks for sharing, that was an interesting article

[JFinder]

Interesting Article

[stealthhawk]

Interesting... thanks for sharing.