Rolex price for Daytona vs. Market price for Daytona

[montecarlo77]

I know Rolex raised the price for the SS Daytona last year from $12,400 to around $13k but I see the current price for many (at least in white) is about $36k now at many dealers.

This price disparity just seems to be growing, so I am wondering how and if the price gap will be closed? Will Rolex raise the price significantly, or will market price fall? Rolex could easily raise the price to at least $25K without any issues so why don't they? If they do that, will the market price just jump even further to like $45K??? I can't think of any reason for Rolex to not raise the price, even double the price. If Rolex did something like that, then anyone "cashing in" now by selling their SS Daytona they bought for $12,400 for $30k plus would be out of luck if Rolex raises price to $25k plus, especially if they are hoping to get back into the market in the future when/if market prices cool off. What are your thoughts?

[geoffreyis]

Dude. It’s been talked about so many times.

Look at Panerai back in the day. It ain’t gona happen.

[Brew]

Hello dead horse!

[vh2k]

Originally Posted by montecarlo77

This price disparity just seems to be growing, so I am wondering how and if the price gap will be closed?

I disagree with the premise that price gaps should close. Given the massive global demand, there is no logical reason or benefit for the MSRP of Rolex watches to be equal to the market price.

[Fleetlord]

Rolex won't raise the price significantly. They did that with the SS Daytona in the past and it (combined with recession) actually had a fairly negative effect on the brand that lasted for quite some time.

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. This created high valuation on the secondary market as demand exceeds supply and the appreciating "value" of the reference makes people want to own it. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

Keeping the "low key" retail is also a protection for the brand against an economic downturn...that why the watches are still "affordable" in a down market and Rolex wouldn't have to reduce MSRP, which is really terrible for branding.

The mistake other luxury brands have made in the past is trying to capitalize on a good thing through overproduction and raising prices. BAD IDEA. The market doesn't like that at all and will severely punish brands who pull this by making them almost irrelevant. Sorry Panerai....you are guilty as charged....amongst others.

So, barring economic collapse circa 2008..one that actually affects the wealth of Rolex buyers, expect the gap to be there...maybe even increase. More money from more sources than ever before and that money WANTS ROLEX..and the Daytona is a focused statement piece...

[101031-28]

Originally Posted by Fleetlord

Rolex won't raise the price significantly. They did that with the SS Daytona in the past and it (combined with recession) actually had a fairly negative effect on the brand that lasted for quite some time.

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

Keeping the "low key" retail is also a protection for the brand against an economic downturn...that why the watches are still "affordable" in a down market and Rolex wouldn't have to reduce MSRP, which is really terrible for branding.

The mistake other luxury brands have made in the past is trying to capitalize on a good thing through overproduction and raising prices. BAD IDEA. The market doesn't like that at all and will severely punish brands who pull this by making them almost irrelevant. Sorry Panerai....you are guilty as charged....amongst others.

So, barring economic collapse circa 2008..one that actually affects the wealth of Rolex buyers, expect the gape to be there...maybe even increase. More money from more sources than ever before and that money WANTS ROLEX..and the Daytona is a focused statement piece...

As always, exceptionally well put!

[montecarlo77]

Originally Posted by vh2k

I disagree with the premise that price gaps should close. Given the massive global demand, there is no logical reason or benefit for the MSRP of Rolex watches to be equal to the market price.

The benefit would be to Rolex.....if a company you owned made a product that you sold for $13k and you saw people reselling that same product (that you made) for $36k, how long would it take you to also start selling it for more?

[montecarlo77]

Originally Posted by Fleetlord

Rolex won't raise the price significantly. They did that with the SS Daytona in the past and it (combined with recession) actually had a fairly negative effect on the brand that lasted for quite some time.

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

Keeping the "low key" retail is also a protection for the brand against an economic downturn...that why the watches are still "affordable" in a down market and Rolex wouldn't have to reduce MSRP, which is really terrible for branding.

The mistake other luxury brands have made in the past is trying to capitalize on a good thing through overproduction and raising prices. BAD IDEA. The market doesn't like that at all and will severely punish brands who pull this by making them almost irrelevant. Sorry Panerai....you are guilty as charged....amongst others.

So, barring economic collapse circa 2008..one that actually affects the wealth of Rolex buyers, expect the gap to be there...maybe even increase. More money from more sources than ever before and that money WANTS ROLEX..and the Daytona is a focused statement piece...

Thanks, your answer makes sense....I agree they won't raise it too much all at once. But maybe if they raise it by $1k per year for the next ten years, it will be more in balance with market price.

[Dougiebaby]

Originally Posted by montecarlo77

I know Rolex raised the price for the SS Daytona last year from $12,400 to around $13k but I see the current price for many (at least in white) is about $36k now at many dealers.

This price disparity just seems to be growing, so I am wondering how and if the price gap will be closed? Will Rolex raise the price significantly, or will market price fall? Rolex could easily raise the price to at least $25K without any issues so why don't they? If they do that, will the market price just jump even further to like $45K??? I can't think of any reason for Rolex to not raise the price, even double the price. If Rolex did something like that, then anyone "cashing in" now by selling their SS Daytona they bought for $12,400 for $30k plus would be out of luck if Rolex raises price to $25k plus, especially if they are hoping to get back into the market in the future when/if market prices cool off. What are your thoughts?

Part of the aura (the legend, really) of the Daytona is that it is worth x more than retail. To purchase one at retail, one must be invited. To be invited, one must be a VERY GOOD CLIENT.

The marginal increase in profit on a very limited watch (Daytona) is so insignificant to the profit and revenue Rolex earns selling multiple PM and less desirable watches over several years to that client who wants to achieve VERY GOOD CLIENT status in Rolex’s mind.

Basically, the lure of being invited to purchase a Daytona is so powerful, Rolex will earn several years (ever hear of the 5-8 year waiting list for SS Daytona?) of purchases. It is not a “waiting list” of 5-8 years ... it is “you must buy our stuff” for 5-8 years before you can buy the Daytona. A waiting list makes it sound like the participant puts their name on a list and does nothing except wait (passively). Far from it ... they must actively buy during that time period.


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[Fleetlord]

Originally Posted by montecarlo77

The benefit would be to Rolex.....if a company you owned made a product that you sold for $13k and you saw people reselling that same product (that you made) for $36k, how long would it take you to also start selling it for more?

It doesn't work that way.

[vh2k]

Originally Posted by montecarlo77

Thanks, your answer makes sense....I agree they won't raise it too much all at once. But maybe if they raise it by $1k per year for the next ten years, it will be more in balance with market price.

8% annual increases in MSRP don’t close the gap when the market price increases by 10-20%.

[Tools]

Originally Posted by montecarlo77

The benefit would be to Rolex.....if a company you owned made a product that you sold for $13k and you saw people reselling that same product (that you made) for $36k, how long would it take you to also start selling it for more?

Jumping at every trend and fad is not a sustainable business model.

"Rolex" isn't selling Daytonas for $13k, that is the retail price, they sell at wholesale prices throughout the world. Their profit is made before any retail customer straps a watch on their wrist.

[vh2k]

Originally Posted by Fleetlord

It doesn't work that way.

Agreed. And Rolex will never forget the lesson learned by the 2009 financial crisis.

[RJRJRJ]

Rolex can raise the price to 25k today no problem, but what about tomorrow? Panerai, IWC, JLC etc. taught the industry a very valuable lesson.

[Sub*Man]

Let’s remember that Rolex KNOWS the SS Daytona isn’t worth more than $14k. A move up market would disturb the PM on OF pricing, full PM, Platinum.

[bob sims]

They should raise it to 25K and there would still be waiting lists.

[Hollie_Rollie]

Originally Posted by Sub*Man

Let’s remember that Rolex KNOWS the SS Daytona isn’t worth more than $14k. A move up market would disturb the PM on OF pricing, full PM, Platinum.

Exactly. If Rolex themselves thought it was 36k watch they would’ve priced it in accordance.


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[spacebjorn]

Agree with points on Rolex’s pricing strategy many have already pointed out. It’s about sustaining long term brand value than making a quick buck.

But one thing people aren’t mentioning is that in order to get a Daytona at MSRP... there is almost certainty you needs a good purchase history of around $40-65K worth of Rolex ‘prerequisites’ (I.e, datejust, sub, & PM pieces)

You could almost argue that Rolex sells the Daytona ‘at an intrinsic loss’ at 13k MSRP, but really makes up the margins from their hidden bundle pricing.

At the end of the day, they’re earning a higher margin per capita doing this method than just raising the price to 25k. And the biggest bonus here is not risking a backlash from a steep price raise - instead, customers are delighted to ‘buy’ for exclusivity and be addicted to the process of ‘finally got the call’ - just amazing marketing.


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[RolexSimon]

Originally Posted by spacebjorn

Agree with points on Rolex’s pricing strategy many have already pointed out. It’s about sustaining long term brand value than making a quick buck.

But one thing people aren’t mentioning is that in order to get a Daytona at MSRP... there is almost certainty you needs a good purchase history of around $40-65K worth of Rolex ‘prerequisites’ (I.e, datejust, sub, & PM pieces)

You could almost argue that Rolex sells the Daytona ‘at a intrinsic loss’ at 13k MSRP, but really makes up the margins from their hidden bundle pricing.

At the end of the day, they’re earning a higher margin per capita doing this method than just raising the price to 25k. And the biggest bonus here is not risking a backlash from a steep price raise - instead, customers are even more delighted in this process given how much posts of ‘finally got the call’ we’ve been seeing as of late... just amazing marketing.


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Not Rolex doing the bundle pricing. They make nothing from the Jewellery / Omega / IWC sales that are often required. The bundling is for the AD's benefit - not Rolex in most cases.

[Brich436]

Originally Posted by Fleetlord

Rolex won't raise the price significantly. They did that with the SS Daytona in the past and it (combined with recession) actually had a fairly negative effect on the brand that lasted for quite some time.

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. This created high valuation on the secondary market as demand exceeds supply and the appreciating "value" of the reference makes people want to own it. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

Keeping the "low key" retail is also a protection for the brand against an economic downturn...that why the watches are still "affordable" in a down market and Rolex wouldn't have to reduce MSRP, which is really terrible for branding.

The mistake other luxury brands have made in the past is trying to capitalize on a good thing through overproduction and raising prices. BAD IDEA. The market doesn't like that at all and will severely punish brands who pull this by making them almost irrelevant. Sorry Panerai....you are guilty as charged....amongst others.

So, barring economic collapse circa 2008..one that actually affects the wealth of Rolex buyers, expect the gap to be there...maybe even increase. More money from more sources than ever before and that money WANTS ROLEX..and the Daytona is a focused statement piece...

Hit the nail right on the head.

Oh plus an extra 5 TRILLION of cash floating around!


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[inadeje]

Originally Posted by Dougiebaby

Part of the aura (the legend, really) of the Daytona is that it is worth x more than retail. To purchase one at retail, one must be invited. To be invited, one must be a VERY GOOD CLIENT.

The marginal increase in profit on a very limited watch (Daytona) is so insignificant to the profit and revenue Rolex earns selling multiple PM and less desirable watches over several years to that client who wants to achieve VERY GOOD CLIENT status in Rolex’s mind.

Basically, the lure of being invited to purchase a Daytona is so powerful, Rolex will earn several years (ever hear of the 5-8 year waiting list for SS Daytona?) of purchases. It is not a “waiting list” of 5-8 years ... it is “you must buy our stuff” for 5-8 years before you can buy the Daytona. A waiting list makes it sound like the participant puts their name on a list and does nothing except wait (passively). Far from it ... they must actively buy during that time period.


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very well explained

[kieselguhr]

Originally Posted by Brew

Hello dead horse!

Neighhhhhhh

[calebb90]

Daytona’s are selling over retail?? Since when?!


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[Nairn1980]

Originally Posted by Brew

Hello dead horse!

This

[teck21]

Originally Posted by Hollie_Rollie

Exactly. If Rolex themselves thought it was 36k watch they would’ve priced it in accordance.


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Umm no, that’s what you’d like to think but it’s absolutely not the reason why they have not priced it like that.


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[VogelPhoenix]

Originally Posted by Fleetlord

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. This created high valuation on the secondary market as demand exceeds supply and the appreciating "value" of the reference makes people want to own it. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

I'm baffled that some people still don't seem to understand this.

[fskywalker]

Originally Posted by Fleetlord

Rolex won't raise the price significantly. They did that with the SS Daytona in the past and it (combined with recession) actually had a fairly negative effect on the brand that lasted for quite some time.

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. This created high valuation on the secondary market as demand exceeds supply and the appreciating "value" of the reference makes people want to own it. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

Keeping the "low key" retail is also a protection for the brand against an economic downturn...that why the watches are still "affordable" in a down market and Rolex wouldn't have to reduce MSRP, which is really terrible for branding.

The mistake other luxury brands have made in the past is trying to capitalize on a good thing through overproduction and raising prices. BAD IDEA. The market doesn't like that at all and will severely punish brands who pull this by making them almost irrelevant. Sorry Panerai....you are guilty as charged....amongst others.

So, barring economic collapse circa 2008..one that actually affects the wealth of Rolex buyers, expect the gap to be there...maybe even increase. More money from more sources than ever before and that money WANTS ROLEX..and the Daytona is a focused statement piece...

Well said!


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[beshannon]

Originally Posted by montecarlo77

What are your thoughts?

I like my Daytona

[UK_]

Originally Posted by Fleetlord

Rolex won't raise the price significantly. They did that with the SS Daytona in the past and it (combined with recession) actually had a fairly negative effect on the brand that lasted for quite some time.

Watches selling on the grey market for significantly less than retail and cases FULL to the brim are awesome for the WIS, but terrible for a luxury brand.

The key here is creating FOMO craze by maintaining a "low key" retail price and limit distribution of select references, such as the SS Daytona. This created high valuation on the secondary market as demand exceeds supply and the appreciating "value" of the reference makes people want to own it. The spread between the low retail and HIGH grey market is absolute rocket fuel for the brand...metallic hydrogen type of power.

Keeping the "low key" retail is also a protection for the brand against an economic downturn...that why the watches are still "affordable" in a down market and Rolex wouldn't have to reduce MSRP, which is really terrible for branding.

The mistake other luxury brands have made in the past is trying to capitalize on a good thing through overproduction and raising prices. BAD IDEA. The market doesn't like that at all and will severely punish brands who pull this by making them almost irrelevant. Sorry Panerai....you are guilty as charged....amongst others.

So, barring economic collapse circa 2008..one that actually affects the wealth of Rolex buyers, expect the gap to be there...maybe even increase. More money from more sources than ever before and that money WANTS ROLEX..and the Daytona is a focused statement piece...

Absolutely spot on.

[jaySL350]

:

Originally Posted by Brew

Hello dead horse!

l