Rolex ADs don't hold onto their watches. They sell them.

[AznD85]

Admittedly I don't post here often but I do follow some threads and read online about Rolex watches.

I stopped by my local AD and we had a very interesting conversation that I wanted to share with you all hence the subject line above.

I am sharing my conversation with him and wanted to hear everyone's thoughts about this and it does make sense to me.

Nivarox is the maker of metallic alloys for hairsprings and mainsprings for the movement of the time piece. Nivarox used to make these parts for Rolex but Rolex bought the machine from Nivarox to bring it all "IN HOUSE" movement.

Rolex has been struggling to make these parts with the Nivarox machine and thus supply has been low or slow due to difficulty making these essential parts.

For Rolex to make their watches scarce starting with the famous Daytona then now some of the other ones like the Submariner is crazy. A business should find ways to ramp of their production when demand is high and if it doesn't meet the demand then their profits will be capped by production. It is not like Rolex ADs can sell their scarce sought after Rolex models for more. We all know ADs cannot do that. Therefore again, profits for Rolex and ADs are capped by Rolex production. This seems to make sense for me that Rolex has trouble producing their time pieces in terms of their movements.

What are you thoughts guys?

(I apologize if this was previously brought up before on another thread. If not, this may enlighten us all!)

[Snow-Dweller]

Rolex is worth many billions of dollars. I suspect that if they had a technical problem like you describe then they would get it sorted rather quickly.

[Castlesinthesky]

Originally Posted by Snow-Dweller

Rolex is worth many billions of dollars. I suspect that if they had a technical problem like you describe then they would get it sorted rather quickly.

^^^ This ^^^

[jsausley]

I don't buy that there are production issues limiting supply. Sorry.

[kauffee]

The blue parachrom hairspring used in most (all?) of Rolex professional watches was introduced in 2005. (https://www.rolex.com/rolex-history/2000-2013.html)
The idea that late in 2017 Rolex started having trouble producing them makes no sense.

[Bavariandoc]

Established businesses like Rolex would not allow itself for such problem you describe to hold up/slow down production

Scarcity of particular models is something discussed many times on this forum — its more of business strategy vs lack of production

[mulgogy]

Rolex is also a charitable trust and doesnt need to do anything to meet a temporary demand in product when the brand has never been stronger. I would say they are exactly where they want to be.

[ericl]

i'm sorry - I don't see what the subject line has to do with your speculation on why there are no watches at AD's. Nowhere do you discuss them holding onto watches - you merely go into speculation that a machine making a part to the watches is not working as intended? From the way I see it, dealers are not holding the watches. Its Rolex limiting supply to their dealer channel and in turn that limited supply is spilling over to us watch aficionados. Its a multi-pronged issue:
1) They are getting limited supply from Rolex - and they're simply selling these tougher to receive pieces to their better customers who give them a lot of business over the years vs. someone currently looking for a piece, and the AD being unsure if this customer will continue their watch buying (and helping to keep the AD's lights on) in the future.
2) They're building demand from their customers so they'll be excited and happy to find a watch at MSRP so that when the economy cools, they will still clamor for the opportunity to find a piece and pay full boat for it.
I just don't find a correlation to your subject line vs. what you are trying to explain.

[marc12]

theyre focusing a lot of manpower to pump out the ever popular two tone datejusts

[DtownRRS]

I don't know anything about watch production but I do work with multi billion dollar manufactures of other products and they can easily have issue in production just like any size company, especially if they are bringing systems in house that were made by very experienced personnel on the outside. There are very limited pools of highly skilled people out there in any industry. So I would say the point is a valid one if true but I have no idea if it's the reason for the lack of product.

[oldman2005]

Originally Posted by kauffee

The blue parachrom hairspring used in most (all?) of Rolex professional watches was introduced in 2005. (https://www.rolex.com/rolex-history/2000-2013.html)
The idea that late in 2017 Rolex started having trouble producing them makes no sense.

Yes, Makes no sense IMO and if that the case you would see a shortage of all Rolex watches but Rolex is cranking out oceans of DJ/TT/PM which are plentiful at your ADs. The shortage only affects SS Sport. I think Rolex scarcity marketing is at work to hype up the brand

[AK797]

Brexit caused a mad rush in demand not the supply collapse of hairsprings.

[MTBer]

Yeah, interesting how there are plenty of hairsprings to go around for all of the “less desirable” watches yet the shortage seems to only have affected the sports models that have historically held their value better than other product lines...

[GradyPhilpott]

Originally Posted by kauffee

The blue parachrom hairspring used in most (all?) of Rolex professional watches was introduced in 2005. (https://www.rolex.com/rolex-history/2000-2013.html)
The idea that late in 2017 Rolex started having trouble producing them makes no sense.

[bobabreath]

Originally Posted by MTBer

Yeah, interesting how there are plenty of hairsprings to go around for all of the “less desirable” watches yet the shortage seems to only have affected the sports models that have historically held their value better than other product lines...

Agree, there seems to be no shortage of parts for the sea of Datejusts sitting in display cases, which have the same movement as the Submariner.

[lenfried29]

My conversation with AD was different then yours. My AD said that Rolex limited production of they watches. Rolex want to be like AP, Patek or CV when customer come and without Q pay Rolex established prices. Just repeat my AD story on this subject.
However, I have my thoughts regarding the matter but rather not speculate them on this forum. There're enough speculation on this subject.

[phraxos5]

Oh, they do hold on to watches, all the time., and they are in the safe. Especially in seasonal markets where a watch comes in in the early winter and its a ghost town until after mem day. My Sd 43 was in the safe 3 months before I bought it in the spring. Never hit the display case. Not all ADS, but definitely some. Also, they can create a phantom market which determines whether you will be flipped liver treaT one day. Excuse me, let me look at your purchase history with us. Oh, you have not brought anything from us, well, would you like to look at our other references we have in stock? Pretty simple really. Why act like its not happening?

[MTBer]

To the OP's (and their AD's credit), I have no doubts that this is the line Rolex may be telling their Official Jewelers, because tales of supposed manufacturing problems isn't as unsavory as "we're purposely manipulating the market". As an ancillary benefit, it might even be intended to plant the idea that Rolex is focused on quality control.

Just my $.02 of cynicism

[kauffee]

I think we can file this thread into the "My AD told me..." bin.

[AznD85]

Go with OMEGA lol!

[CoveWatch]

I can say quite a few AD’s hold product on their back safes.. my AD as well.. ask and ask and they will say they have nothing.. buy a couple DD’s and ask and suddenly a Daytona comes in from the back room just for you

[Vvvlllooo]

makers of premium cars do this all the time..its how they control price in markets

[GoingPlaces]

No production issues, this is a management/business decision. Be it right or wrong it's on purpose. I'm sure as Rolex manipulates supply, there are many AD's that end up doing the same.

[replicator]

Rolex is owned by a private trust.

No need to make quarterley earnings or flood the market for short term gains. Their brand value is higher than ever.

[Etschell]

was this before or after he offered you a two tone model at full retail?

[530ExplorerII]

I'm not an expert in Rolex's operations, but as a business consultant who routinely deals with companies with billions of dollars in revenue, you would be surprised by the amount of time it can take to actually fix problems, especially if there are any politics or layers of beauracracy to get though. In fact, the biggest companies in the world generally have much more difficulty in getting things done. Most COO's and other C-suite execs would tell you that making any kind of change at all is like steering a battleship. Again, I certainly am not an expert in Rolex operations, but I do consult and give strategic advice for a living and the largest companies that I work for (AB InBev, NIKE, Coca-Cola, etc.) all have major operational silos and it's often the case that even when everyone know's exactly what needs to change, it's unclear who owns the responsibility for making it happen. This doesn't typically happen in smaller companies. Just some food for thought for those saying that Rolex can fix things by throwing money at the problem. You'd think it would be that simple, but it's often not the case.

[Navarino]

Originally Posted by MTBer

To the OP's (and their AD's credit), I have no doubts that this is the line Rolex may be telling their Official Jewelers, because tales of supposed manufacturing problems isn't as unsavory as "we're purposely manipulating the market". As an ancillary benefit, it might even be intended to plant the idea that Rolex is focused on quality control.

Just my $.02 of cynicism

I could see this being the case. I am sure plenty of ADs have put pressure on the mothership about getting more of what the market is crying for. Rolex may think it's best to give some kind of answer rather than no answer at all.

Originally Posted by Etschell

was this before or after he offered you a two tone model at full retail?

I'm sure the "production issues" would quickly dissipate if OP went in to buy himself a DD and something for his wife. Sales associate may say "you know I think we just got a shipment in, let me see what steel sports model that may have been delivered."

[c.rod]

Originally Posted by snow-dweller

rolex is worth many billions of dollars. I suspect that if they had a technical problem like you describe then they would get it sorted rather quickly.

ha, this is all I could think about when I read your post....

[captainron62]

Harley-Davidson boosted production and made their product more readily available to the masses, we see how that worked out. I know it is annoying we can't get the watch we want when we want, but once you do it is worth it. It is also nice that every third guy you see isn't wearing a watch like yours and it actually retains value which is increasingly rare these days. I will take the shortage over the alternative.

[zaydans]

MY AD pleaded with me not to buy from a grey dealer and then quoted 3 years for the new GMT. Also advised me not to believe everything I read on the internet.