Shady ADs

[JDsnewwatch]

The profit margin on used watches is so high, that it’s frankly impossible to believe that authorized dealers with used outlets (govberg, Bernie Robbins, Tourneau, Wempe etc.......) aren’t opening up the plastic caskets, throwing the warranty cards in the trash and selling an unworn $9000 watch for 18k. You can’t blame Rolex for this one. All they care about is getting paid for their items. What the dealer does is apparently up to them.


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[tyler1980]

Originally Posted by JDsnewwatch

The profit margin on used watches is so high, that it’s frankly impossible to believe that authorized dealers with used outlets (govberg, Bernie Robbins, Tourneau, Wempe etc.......) aren’t opening up the plastic caskets, throwing the warranty cards in the trash and selling an unworn $9000 watch for 18k. You can’t blame Rolex for this one. All they care about is getting paid for their items. What the dealer does is apparently up to them.


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thats a stretch. there is plenty they can do without going to that extent which would probably be a bridge too far with Rolex.

bundling, only selling to high spending clients, conditional sales w/ jewelry etc i believe. I dont believe they are using their own new stock and selling as used.

The point here is AD's need to move other stuff too so a bundle actually helps them achieve this.... selling a new watch at double retail doesnt as the slow mover is still on the shelf. Turnover of inventory is an important metric

[JDsnewwatch]

Can you give me a reason why not? Let’s re-focus the paradigm for a second to help explain.

A company makes shirts that are sold at a high end store. So, the company might charge the store 50 dollars for a shirt that will ultimately be sold for 250 dollars. The shirt company likes getting paid, so they collect their fifty dollars happily.

Then, a new fashion magazine comes out and EVERYONE wants that shirt! The company knows this because they have tons of orders. The stores know it because they can’t keep the shirts in stock. The secondary market is selling the shirts for 500 dollars per shirt! It’s insanity.

The store would be idiotic to ignore this trend. Most people know that high end department stores barely break even. In fact, if Christmas sales are off, it’s BAD NEWS.

So, an enthusiastic manager might see an opportunity to sell his companies ownership at a very significant return. He chooses to use back channels to sell the 50 dollar shirt to customers on the secondary market for ten times the stores investment! The store is happy because they might just break even this quarter AND they won’t be stuck with stale merchandise that will sit forever. The manufacturer is happy because their shirts are selling and they are getting paid. The customer is happy because he got the shirt that he has been dreaming about and saving for. It’s all good, right?

Except... a button falls off the shirt. These are special buttons, they are good buttons. The customer is upset. This was an expensive shirt. He goes back to the shirt manufacturer and suddenly realizes the deal that he got was a bad one. They won’t repair the shirt under warranty (well, they might not, it’s not clear).

In the end, the shirt manufacturer is just fine selling tons of shirts and floating the money into their charitable trust.

*The part of the shirt manufacturer is being played by Rolex
** The part of the department store is being played by the authorized dealers

Final thought: if someone I was interviewing told me he accomplished this, I would be a little bothered but I would make an offer on the spot to hire him.



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[tyler1980]

Originally Posted by JDsnewwatch

Can you give me a reason why not? Let’s re-focus the paradigm for a second to help explain.

A company makes shirts that are sold at a high end store. So, the company might charge the store 50 dollars for a shirt that will ultimately be sold for 250 dollars. The shirt company likes getting paid, so they collect their fifty dollars happily.

Then, a new fashion magazine comes out and EVERYONE wants that shirt! The company knows this because they have tons of orders. The stores know it because they can’t keep the shirts in stock. The secondary market is selling the shirts for 500 dollars per shirt! It’s insanity.

The store would be idiotic to ignore this trend. Most people know that high end department stores barely break even. In fact, if Christmas sales are off, it’s BAD NEWS.

So, an enthusiastic manager might see an opportunity to sell his companies ownership at a very significant return. He chooses to use back channels to sell the 50 dollar shirt to customers on the secondary market for ten times the stores investment! The store is happy because they might just break even this quarter AND they won’t be stuck with stale merchandise that will sit forever. The manufacturer is happy because their shirts are selling and they are getting paid. The customer is happy because he got the shirt that he has been dreaming about and saving for. It’s all good, right?

Except... a button falls off the shirt. These are special buttons, they are good buttons. The customer is upset. This was an expensive shirt. He goes back to the shirt manufacturer and suddenly realizes the deal that he got was a bad one. They won’t repair the shirt under warranty (well, they might not, it’s not clear).

In the end, the shirt manufacturer is just fine selling tons of shirts and floating the money into their charitable trust.

*The part of the shirt manufacturer is being played by Rolex
** The part of the department store is being played by the authorized dealers




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You are missing the point... the store also wants to sell the non popular items too. that is a ton of cash and inventory being held AND without an incentive they will continue to sit. Selling the shirt for 250 and making a 600 dollar pair of pants part of the deal is much smarter to do because its more important to get rid of the pants and the shirt is the leverage.

a bundle solves the larger problem where as selling at market price just adds more cash on an item that is among the cheapest items in the store to begin with and probably not enough to make a real difference.

[JDsnewwatch]

Understood, but even if you move an unpopular item in a bundle, you won’t make as much profit from selling on the secondary market.

At best, you are just moving stale merchandise out of the store. This stale merchandise is costing you a fortune because you frankly invested a ton of money in shiny rocks (let’s just call them “magic beans”). You as a store owner are sitting on a ton of magic beans. The magic beans farmers want to get paid, but no one is buying those, so you don’t have the money to pay the farmer back! You’re stuck, until a manager figures out that you can bundle the magic beans with the shirts. That will solve two problems.

I’d argue that there is tons more money to be made on the secondary market and the store owner could cover his expenses on the magic beans that way.... but then he is stuck with cases and cases of magic beans, right?


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[tyler1980]

Originally Posted by JDsnewwatch

Understood, but even if you move an unpopular item in a bundle, you won’t make as much profit from selling on the secondary market.

At best, you are just moving stale merchandise out of the store. This stale merchandise is costing you a fortune because you frankly invested a ton of money in shiny rocks (let’s just call them “magic beans”). You as a store owner are sitting on a ton of magic beans. The magic beans farmers want to get paid, but no one is buying those, so you don’t have the money to pay the farmer back! You’re stuck, until a manager figures out that you can bundle the magic beans with the shirts. That will solve two problems.

I’d argue that there is tons more money to be made on the secondary market and the store owner could cover his expenses on the magic beans that way.... but then he is stuck with cases and cases of magic beans, right?


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250 dollar shirt sold for 500 dollars means $250 extra money plus the normal $200 margin for a net profit of $450.... $250 shirt selling at $250 and a $600 pair of pants selling for $600 means they just made $200 on the shirt and about $475 on the pants for a total of $675 and moved two items vs one

the bundle is more profitable and moves unpopular inventory because that extra sale wouldn't have happened otherwise. two birds one stone

[JDsnewwatch]

Originally Posted by tyler1980

250 dollar shirt sold for 500 dollars means $250 extra money plus the normal $200 margin for a net profit of $450.... $250 shirt selling at $250 and a $600 pair of pants selling for $600 means they just made $200 on the shirt and about $475 on the pants for a total of $675 and moved two items vs one

the bundle is more profitable

It’s a moving variable, and both of us could obviously influence the math to make our case.

I’ve seen this behavior (secondary markets) in lots of industries.. cars, cameras, makeup, clothing, housing, etc. it’s not new behavior. No one wants to be the guy holding the ball at the end of the game. So, moves are made to convert to cash. At the end of the day, no one wants to be stuck with a box of magic beans (or, as you call them “pants”).

The shirt manufacturer doesn’t get involved in this nonsense because it’s trendy, they aren’t the shirt police and frankly, they are making enough money to support their charitable shirt trust.


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[77T]

Jewelers are the usual AD for Rolex and their principles can vary. They often carry other Swiss watch brands in their shop. Rolex has a natural concern about their placement and the sales process to differentiate its brand.

Each AD has different salespeople - and their principles can vary. Rolex desires some form of control over their presentation of its brand.

What happens in the retail setting is controlled by those combined principles and the terms in the Rolex contract.

Without some form of control over compliance, Rolex would be a laughingstock within the jewelry trade. Rolex has many field reps on the payroll to both serve the AD’s and to inspect each AD and watchmaker holding a parts account.

I’d be surprised if they did not respond to repeated reports of unethical sales practices. We might not be contacted with the outcome, but I believe the Distributor HQ in each Country/Zone refers the complaints to the field rep for handing and/or investigation.




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[mattsrs]

Originally Posted by 77T

Jewelers are the usual AD for Rolex and their principles can vary. They often carry other Swiss watch brands in their shop. Rolex has a natural concern about their placement and the sales process to differentiate its brand.

Each AD has different salespeople - and their principles can vary. Rolex desires some form of control over their presentation of its brand.

What happens in the retail setting is controlled by those combined principles and the terms in the Rolex contract.

Without some form of control over compliance, Rolex would be a laughingstock within the jewelry trade. Rolex has many field reps on the payroll to both serve the AD’s and to inspect each AD and watchmaker holding a parts account.

I’d be surprised if they did not respond to repeated reports of unethical sales practices. We might not be contacted with the outcome, but I believe the Distributor HQ in each Country/Zone refers the complaints to the field rep for handing and/or investigation.




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Question is how do we report such unethical sales practices? Is there an email or phone number?

[77T]

Originally Posted by mattsrs

Question is how do we report such unethical sales practices? Is there an email or phone number?

To the distribution HQ for the country/zone where the AD is situated.

For the US market, Rolex USA HQ in New York City.

(212) 758-7700

665 Fifth Avenue New York, NY 10022


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[ITony]

Originally Posted by tyler1980

its the AD's watch. they can sell or not sell to anyone they want. As for the rest, im sure Rolex is aware and i doubt they care.

its got to be a factor in the reason they are not in the retail game, they dont want to deal with customers at all.

I am sure they are aware as well, the care part might be different. The moment someone does something to affect brand towards dilution everything changes.

All manufactures will have a written price policy that can be enforced too protect themselves. MSRP and MAP are two different things that can control distribution. I would be curious to see what the written policy is and the enforcement provisions, this would give some clue as to AD behaviors.

Since they are a private company, they may not be enforcing their own written policies, it is possible that the thought process is that all the frustration that is out there is actually driving their brand awareness and they are OK with that.

My two cents.

[WatchLurv]

Originally Posted by JDsnewwatch

It’s a moving variable, and both of us could obviously influence the math to make our case.

I’ve seen this behavior (secondary markets) in lots of industries.. cars, cameras, makeup, clothing, housing, etc. it’s not new behavior. No one wants to be the guy holding the ball at the end of the game. So, moves are made to convert to cash. At the end of the day, no one wants to be stuck with a box of magic beans (or, as you call them “pants”).

The shirt manufacturer doesn’t get involved in this nonsense because it’s trendy, they aren’t the shirt police and frankly, they are making enough money to support their charitable shirt trust.


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You left out the variable that if you don't move the slow selling pants then you won't get nice shirts in the next shipment.

[Brich436]

Originally Posted by JDsnewwatch

I posted this before but its worth repeating. Once they saw me as less of a customer, and more of a walking pile of cash, the manager at Bernie Robbins starts laying it on thick. He fired up that idiotic espresso machine in the corner and we started talking watches. I asked a few questions about a Cellini that was interesting to me. He gets VERY interested, even takes it out of the case and asks if I want to try it on. Being a rule follower, I ask if he really needs to see my license (there is a sign), he laughs and says "Of course not". I declined to try the watch on and started to go. He offers me "a discount". We start talking $ and I take my wallet out. Then, just to treat him like he has treated me, I say 'you know what, I really should go to the authorized dealer that I'm known to, I'll just go back to the dealer who sold me this' (looking at my watch). He ups the discount.. I walked out.



I felt REALLY good about myself on that drive home.. His attitude and that espresso were both disgusting.

Bro that is epic. I love it. I don’t look


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[JDsnewwatch]

Originally Posted by WatchLurv

You left out the variable that if you don't move the slow selling pants then you won't get nice shirts in the next shipment.

In my example, they are mutually exclusive. The shirt manufacturer and the magic beans farmers are two different entities.


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[WatchLurv]

Originally Posted by JDsnewwatch

In my example, they are mutually exclusive. The shirt manufacturer and the magic beans farmers are two different entities.


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Unfortunately in the Rolex-world they aren't mutually exclusive.

[M45]

Went to a certain dealer in the outskirts of a certain capital city of my state and when I was looking around I commented that he doesn’t have anything interesting in stock, so he showed me a cell phone photograph of about a dozen stainless steel watches and told me he keeps the professional stuff out of sight to discourage flippers and “not serious” buyers.

I asked him would he sell any of them at MSRP, and he just gave me a disgusted look.

[tyler1980]

Originally Posted by WatchLurv

You left out the variable that if you don't move the slow selling pants then you won't get nice shirts in the next shipment.

exactly.

Its clear to me that the bundle is the best thing that has happened to AD's....ever


all this selling over retail, while it happens just makes less sense.

If i was an AD i would absolutely bundle as i need to move watches, all of them, hot and not. I would not sell over retail to move hot ones only.

Spend requirements for established customers as a way to prioritize is just another form of a bundle, but its a long term one. Its the same thing as well

[shaunylw]

Originally Posted by tyler1980

exactly.

Its clear to me that the bundle is the best thing that has happened to AD's....ever


all this selling over retail, while it happens just makes less sense.

If i was an AD i would absolutely bundle as i need to move watches, all of them, hot and not. I would not sell over retail to move hot ones only.

Spend requirements for established customers as a way to prioritize is just another form of a bundle, but its a long term one. Its the same thing as well

I wonder if anyone has purchased the bundle and returned the piece they didn’t want to keep the hot piece.


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[mattsrs]

Originally Posted by shaunylw

I wonder if anyone has purchased the bundle and returned the piece they didn’t want to keep the hot piece.


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I thought watches bought from ADs are not returnable?

[tyler1980]

Originally Posted by shaunylw

I wonder if anyone has purchased the bundle and returned the piece they didn’t want to keep the hot piece.


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usually a return policy is unworn and in original condition.

Not related to a bundle but i have always wondered with sticker removal at the point of sale if that makes any watch technically not returnable since its been sized and its not in the packaging.

for example: "On presentation of the original receipt, your purchases may be returned to any Watches of Switzerland stores within 10 days of purchase for timepieces and all other merchandise within 30 days for a full refund or exchange provided that the item is unworn and undamaged and with original packaging."
A. Sizing means worn
B Sizing means AD damaged screws
C. no stickers, not in packaging

[Nairn1980]

Originally Posted by M45

Went to a certain dealer in the outskirts of a certain capital city of my state and when I was looking around I commented that he doesn’t have anything interesting in stock, so he showed me a cell phone photograph of about a dozen stainless steel watches and told me he keeps the professional stuff out of sight to discourage flippers and “not serious” buyers.

I asked him would he sell any of them at MSRP, and he just gave me a disgusted look.

brilliant

[smak]

Originally Posted by Finslayer83

Everyone wants to be capitalist until its time to do capitalist things....

I agree with your theory 100%

i think i take issue with that statement.

there is a difference between capitalism and capitalist pigs.

if you are subscribing to the "Greed is good" mantra or take whatever you can get away with then i'm here to say there is certainly room for people to gain without trampling over others.

as for the op's statement, bring the matter to Rolex. Call, tweet, email.. they take great pride in their provinance and do not allow charletans to become AD's.

keep reaching out till someone listens, nobody will be rewarded by exposing your AD so you may have to bang on a few doors.

[mattsrs]

Originally Posted by smak

i think i take issue with that statement.

there is a difference between capitalism and capitalist pigs.

if you are subscribing to the "Greed is good" mantra or take whatever you can get away with then i'm here to say there is certainly room for people to gain without trampling over others.

as for the op's statement, bring the matter to Rolex. Call, tweet, email.. they take great pride in their provinance and do not allow charletans to become AD's.

keep reaching out till someone listens, nobody will be rewarded by exposing your AD so you may have to bang on a few doors.

Yea would love to report it if there was a listening ear from Rolex. But already exhausted by the time wasted on staying on top ADs to get the models I want. Will call their NY HQ them but doubt they will do anything. At the end of the day, these are luxury items and there's so much energy and time you want to spend on them

[tyler1980]

Originally Posted by smak

i think i take issue with that statement.

there is a difference between capitalism and capitalist pigs.

if you are subscribing to the "Greed is good" mantra or take whatever you can get away with then i'm here to say there is certainly room for people to gain without trampling over others.

as for the op's statement, bring the matter to Rolex. Call, tweet, email.. they take great pride in their provinance and do not allow charletans to become AD's.

keep reaching out till someone listens, nobody will be rewarded by exposing your AD so you may have to bang on a few doors.

IDK its a luxury item.... If you own a property in a major city do you want to rent it for market price or for rent control prices? Most property owners are against rent control and obviously a roof over your head is essential, watches are not.

Therefore market prices for a luxury watch is far better. Price controls on anything isn't free market capitalism though

its a market price, its what the market will bear and completely different than say price gouging gas during a hurricane evacuation when people have no CHOICE but to buy. Its a watch

So yeah, people love capitalism except when it doesn't benefit them then they want a stop to the free market, which was his point

Out of curiosity if you had a Daytona C and you had to get rid of it, maybe because of a job loss or something, what price would you sell it for? retail or market? Keeping in mind you need the money now.

[smak]

Originally Posted by tyler1980

IDK its a luxury item.... If you own a property in a major city do you want to rent it for market price or for rent control prices? Most property owners are against rent control and obviously a roof over your head is essential, watches are not.

Therefore market prices for a luxury watch is far better. Price controls on anything isn't free market capitalism though

its a market price, its what the market will bear and completely different than say price gouging gas during a hurricane evacuation when people have no CHOICE but to buy. Its a watch

So yeah, people love capitalism except when it doesn't benefit them then they want a stop to the free market, which was his point

The AD may even have been coached to take care in who they sell toand how. So long as done tactfully its not practical to fight the policy of waiting lists and or low stock.

But soliciting a customer to a business you hold under another name is questional at best and likely against policy, which is why they have the entity registered seperately.

proving the conversation may be difficult, but if Rolex cares then they will investigate.

By posting here they may be tipped off.

[tyler1980]

Originally Posted by smak

The AD may even have been coached to take care in who they sell toand how. So long as done tactfully its not practical to fight the policy of waiting lists and or low stock.

But soliciting a customer to a business you hold under another name is questional at best and likely against policy, which is why they have the entity registered seperately.

proving the conversation may be difficult, but if Rolex cares then they will investigate.

By posting here they may be tipped off.

these posts have been going on for years. Rolex is a control freak type of operation and its inconceivable they need a tip off from TRF.

[shaunylw]

Originally Posted by mattsrs

I thought watches bought from ADs are not returnable?

I have no data to back this up but i cannot imagine this being true. ADs are simply retailers.


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[smak]

To surmise a path of action for OP.

Rolex customer service has a North American number at +1 212-758-7700

They are very protective of their name, and an AD or other entity using it to their detriment would and should be reported to them directly.