What if sanity prevailed and Rolex cut prices ??

[Tools]

Rolex prices are high.

You can buy a basic DJ for ~5,000 bucks US. (Hey, maybe this is that "entry level watch")

The exact same movement can be wrapped in a gold case and bracelet, a couple diamonds on the dial and - bling - it cost over 20,000.. A few diamonds on the bezel and band and "bling, bling" over 100,000 dollars US.

The insane part is that Rolex demands that Dealers sell for fixed high prices....essentially controlling prices.

If sanity took over and Rolex said "Sure, go ahead and cut prices and compete..We don't care." Would there be a price war ? Would Dealers undercut each other for the business ?

What would happen to the value of those watches we now possess ??

[S2000 Driver]

Originally Posted by Tools

What if sanity prevailed and Rolex cut prices ??

When that times comes, I'll be too busy dodging these:

[Alcan]

Originally Posted by Tools

If sanity took over and Rolex said "Sure, go ahead and cut prices and compete..We don't care."

Larry, stop drinking your bath water!!!

[Dan Pierce]

Never happen. But Larry you bring up an interesting point. They sure hold their value.
dP

[Paulie]

They will, and DeBeers will release all of their stockpiles and sell by the kilo instead of the karat.

How bad are prices if Euro currency people visit the US right now? Or for that matter, how about Canadians? I bet they think the US is cheap!

[Blue Bull]

Originally Posted by Tools

Rolex prices are high.

You can buy a basic DJ for ~5,000 bucks US. (Hey, maybe this is that "entry level watch")

The exact same movementcan be wrapped in a gold case and bracelet, a couple diamonds on the dial and - bling - it cost over 20,000.. A few diamonds on the bezel and band and "bling, bling" over 100,000 dollars US.

The insane part is that Rolex demands that Dealers sell for fixed high prices....essentially controlling prices.

If sanity took over and Rolex said "Sure, go ahead and cut prices and compete..We don't care." Would there be a price war ? Would Dealers undercut each other for the business ?

What would happen to the value of those watches we now possess ??

I firmly believe Rolex dont fix prices.Dealers "fix" prices,depending on their own situation.If in eg. Las Vegas and they can sell every one @ MRSP,why would they discount ?.If in a smaller town,less fancy mall,lower rent etc and they sell most volume at a certain discount.That is what they will do.Even in this situation, if the client is prepared to pay MRSP,they will sell it at that.Its just pure business sense.
Off course dealers will throw the "Rolex does not allow such and such a discount and I will lose the AD status etc etc." crap at you.I must say, I have visited MANY ADs and never have they thrown that excuse.Very simple,the bigger the city,the fancier the mall,the larger the AD,the higher the pricing.Also,this is the general rule,but not always true.
Enjoy the hunt,because the trophy is the best discount and its there to be found

[Andad]

What if sanity prevailed and Rolex cut prices ??

Most of us would lose a lot of money.

[walds11]

LOL!!! Never thought of it that way.

Originally Posted by directioneng

What if sanity prevailed and Rolex cut prices ??

Most of us would lose a lot of money.

[frostie]

Originally Posted by walds11

LOL!!! Never though of it that way.

[Alcan]

Originally Posted by Blue Bull

I firmly believe Rolex dont fix prices. Dealers "fix" prices,depending on their own situation........... Very simple,the bigger the city,the fancier the mall,the larger the AD,the higher the pricing.

Interesting perspective. How does that mesh with the two page published price list which came with my most recent Rolex catalogue?

[Blue Bull]

Originally Posted by Alcan

Interesting perspective. How does that mesh with the two page published price list which came with my most recent Rolex catalogue?

Thats MSRP ....suggested retail.A guideline.

What you end up paying is dependent on the AD.Once the AD buys the watch from Rolex,Rolex is out of the deal.Now its just a question of what kind of profit margin the dealer will be happy with.Simple.Is the AD happy with 40% profit,or 20% ?? The model dictates the dicount.Obviously on the more expensive ones,they can discount more,because in percentage the profit is smaller,in absolute terms they make a lot more $$$. Each will do calculations and see at what discount level vs amount sold,gives him the largest profit at the end of a timespan.

[ROGU808]

I have to agree with Chris...The AD's are keeping the prices high!
Chain dealers like Ben Bridge (one of only 2 AD's on Oahu) will not discount...
because it's a store-wide policy. Smaller, privately owned AD's are much more
flexible on the discount issue...
Also...if Rolex "fixed" prices on their watches...why would some AD's be able to sell hard to find models like a SS Daytona for WELL above MSRP???
Just my 2 cents :)

[SPACE-DWELLER]

Originally Posted by Blue Bull

Thats MSRP ....suggested retail.A guideline.

What you end up paying is dependent on the AD.

That is true! It is a sellers' market, 100 %. AD's can put whatever price they want to put on the Rolex watches.

A different story is whether people would BUY the Rolex watches.

[timebroker]

Originally Posted by Paulie

They will, and DeBeers will release all of their stockpiles and sell by the kilo instead of the karat.

How bad are prices if Euro currency people visit the US right now? Or for that matter, how about Canadians? I bet they think the US is cheap!

Yes the USA is very cheap for us europeans, I remember when the dollar (in belgium frank) was almost worth 2 euro (calculating back from frank). 35 % more euros for the dollar is amazing but expensive for you guys.

[GoldenBear]

Why would or should they lower the price? They make one of the most popular and desirable luxury consumer items in the market. The demand is high and continues to increase. Just look at the increase at the members of this forum. The price will always go higher (as will the value of the ones we own). It's basic economic theory supply and demand. The demand is there so they can price and supply at their discretion.

[Welshwatchman]

The thread starter makes a fair point about the cost prices of Rolex and it is hard not to disagree with him. If you exclude the movement the actual raw material cost of a Rolex watchcase and bracelet would be :

Stainless Steel (RRP $5,000) - Less than $1
18ct Supercase (RRP $22k) - $3418 at today's gold price ($21.32 per gram)
18ct plus diamonds (RRP $50k) - Approx $6k
The Full Bling (RRP $100k+) - No more than $15k

Obviously there are other costs and the 18ct / Bling models get a lot more individual attention than the SS.

It still makes you think a bit.

[D2JP]

Originally Posted by ROGU808

I have to agree with Chris...The AD's are keeping the prices high!
Chain dealers like Ben Bridge (one of only 2 AD's on Oahu) will not discount...
because it's a store-wide policy. Smaller, privately owned AD's are much more
flexible on the discount issue...
Also...if Rolex "fixed" prices on their watches...why would some AD's be able to sell hard to find models like a SS Daytona for WELL above MSRP???
Just my 2 cents :)

Rolex and Bose are two companies that are known to strictly police their product, and both sell in great quantities (i.e. they are not small boutique manufacturers). MSRP is just that, 'suggested' retail price. It is illegal (in the US) for a manufacturer to dictate the selling price..however should a retailer run an ad; say, on Bose or Rolex products at 30% off, and Bose or Rolex were to discover this ad or sale, they magically run out of stock or continually late ship that retailer. Then the burden is upon the retailer, possibly in a back-ordered situation with customers and they can't get any, or enough product when they need it. In turn the consumer is angry at the retailer, and unless the retailer forces the issue to court and and proves that Bose or Rolex purposely did not ship them it becomes a tough situation for the retailer. Both Bose and Rolex have built an excellent brand along with a great marketing strategy. That's not saying that Bose is the the nicest audio equipment on the market (many would argue just the opposite), nor is Rolex the absolute finest timepiece (well, I think it is), but both brands offer good solid quality, great customer service and most importantly provide excellent service and MARGINS to their retailers, and consumers readily purchase these brands....so the retailers are inclined to go along with this.

I'm sure larger chain store AD's would have a 'chain-wide 'no discount' policy, but think that the store manager would have the ability to over-ride if needed. That manager will also know the highest margin, best selling items in the store, and which he/she might need/want to discount too! I bet in a lot of cases, Rolex watches sell themselves at good margins w/o too much work on the manager's part, so they typically don't feel a compelling reason to offer a discount other than possibly paying sales tax or the like. For smaller independently owned AD's their cash flow is more critical, and that person you're talking too probably IS the decision maker. And they could wheel and deal with greater impunity as the chance of Rolex learning of these deals is much less than a larger chain.
I have several exclusive lines in my store that strictly forbid on-line sale from my website and absolutely forbid any sale of their brand - new or used - on eBAy by an AD. I accidentally loaded a product last year showing it for sale on my website and received an email within one week advising I was in violation of my dealer agreement. This company has over 2000 dealers in the US alone and they found me that quickly! I immediately removed it and everything was cool. I love this policy and they strictly police it. I detest eBay.

Whew, I just meant to make a couple of points and got a litte carried away I need to make that morning Venti Starbucks a Tall.

[Blue Bull]

Jack,please dont mention Bose and Rolex in the same sentence .I am getting angina ....

[D2JP]

Originally Posted by Blue Bull

Jack,please dont mention Bose and Rolex in the same sentence .I am getting angina ....

Not comparing quality or hierarchy of brand/quality...just insight as to how the retail world spins....

When a manufactuer can say to a retailer (both large and small).."I WILL bring people into your store to ask for my product my name, and you will make good money on it, but you have to play by the rules"...most do. And, there are few products that offer a level playing field for the big guys and 'mom and pop' operations. Bose and Rolex (sorry) can do that.

[astcell]

Well Rolex gives to charity, so if prices went down you'd have dead orphans on your plate.

[Welshwatchman]

Originally Posted by astcell

Well Rolex gives to charity, so if prices went down you'd have dead orphans on your plate.

That comment is not worthy of you Robert.

It reminds me (in an opposite way though) of a old post in one of the other forums where a member blamed Rolex for funding the clusterbombing of children.

His logic was that Rolex sales generated tens of millions of dollars of tax revenue and that a large portion of that tax was used for prosecuting wars around the world.

It was a preverse logic, of course.

[jac67]

Originally Posted by Tools

"Sure, go ahead and cut prices and compete..We don't care." Would there be a price war ? Would Dealers undercut each other for the business ?

If this were to happen, I believe like ALL other products in the world the MARKET will determine the price.

Yes, in the begining there would be quite irractic behaviour wrt pricing, where the bigger dealers may try to "sink" the small guy, but at the end of the day, the price will settle - at what level, who knows????


John.

[darthmauldds]

Originally Posted by astcell

Well Rolex gives to charity, so if prices went down you'd have dead orphans on your plate.

With a lemon-butter sauce?

[TNRonin]

Sure would be nice, and you bet there would be a price war. will it happen? No.

[astcell]

Actually Rolex not only will not cut prices, but because of their tactics, the price cut is NOW. In other words, buy your Rolex right away because it will never be this cheap again! The only inexpensive time to buy is NOW!

[ROGU808]

Originally Posted by D2JP

Rolex and Bose are two companies that are known to strictly police their product, and both sell in great quantities (i.e. they are not small boutique manufacturers). MSRP is just that, 'suggested' retail price. It is illegal (in the US) for a manufacturer to dictate the selling price..however should a retailer run an ad; say, on Bose or Rolex products at 30% off, and Bose or Rolex were to discover this ad or sale, they magically run out of stock or continually late ship that retailer. Then the burden is upon the retailer, possibly in a back-ordered situation with customers and they can't get any, or enough product when they need it. In turn the consumer is angry at the retailer, and unless the retailer forces the issue to court and and proves that Bose or Rolex purposely did not ship them it becomes a tough situation for the retailer. Both Bose and Rolex have built an excellent brand along with a great marketing strategy. That's not saying that Bose is the the nicest audio equipment on the market (many would argue just the opposite), nor is Rolex the absolute finest timepiece (well, I think it is), but both brands offer good solid quality, great customer service and most importantly provide excellent service and MARGINS to their retailers, and consumers readily purchase these brands....so the retailers are inclined to go along with this.

I'm sure larger chain store AD's would have a 'chain-wide 'no discount' policy, but think that the store manager would have the ability to over-ride if needed. That manager will also know the highest margin, best selling items in the store, and which he/she might need/want to discount too! I bet in a lot of cases, Rolex watches sell themselves at good margins w/o too much work on the manager's part, so they typically don't feel a compelling reason to offer a discount other than possibly paying sales tax or the like. For smaller independently owned AD's their cash flow is more critical, and that person you're talking too probably IS the decision maker. And they could wheel and deal with greater impunity as the chance of Rolex learning of these deals is much less than a larger chain.
I have several exclusive lines in my store that strictly forbid on-line sale from my website and absolutely forbid any sale of their brand - new or used - on eBAy by an AD. I accidentally loaded a product last year showing it for sale on my website and received an email within one week advising I was in violation of my dealer agreement. This company has over 2000 dealers in the US alone and they found me that quickly! I immediately removed it and everything was cool. I love this policy and they strictly police it. I detest eBay.

Whew, I just meant to make a couple of points and got a litte carried away I need to make that morning Venti Starbucks a Tall.

Jack...I think somewhere in ALL that...we actually agree...even on making your Venti a Tall at Starbucks...