(almost) All Rolex Gold watches are subsidized by SS buyers

[GGGMT]

I don’t understand this thread. People buy what they want at the price they want it, with Rolex margin where it wants it.


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[Harry-57]

Originally Posted by DG123

So, I think the OP's theory is that greys paying at or near MSRP for PM's benefits the AD's overall business, and as such allows the AD to offer retail consumers a discount for PM watches.

OK. We're talking grey market. Thanks for that clarity.

[Harry-57]

Originally Posted by indi

And we know that real AD will never give discount more than 3%. Not allowed they said.

.

Sorry. I'm not picking on you. I'm kind of on side with your overall hypothesis now, but the 3% statement is factually incorrect. Or at least, it is in the case of my AD.

I think that some people tend to think personal experience is a rigid world view template. It is not.

[DG123]

Originally Posted by indi

This is exactly what I meant. Thank you for making it clear.

In short, AD would never want to sell sport watches to you if you are just a passing-by customer. You will likely heard from them “Sorry No Stock”.
AD will sell sport watch only if you buy in bulk including PM watches. And we know that real AD will never give discount more than 3%. Not allowed they said.
This game creates a grey market of reseller which in turn makes SS over-priced in order for the margin to cover the discounted price of PM. Or else the reseller are not able to sell the PM.

So eventually the SS buyers money subsidise PM watches because of this.

My guess is that Rolex company demands that the AD meet quarterly, annual etc... inventory purchases and sales quotas.
So, if a grey market reseller is willing to buy a dozen watches at a time, that type of business helps the AD make his Rolex numbers.
I have no idea whether Rolex company does anything to try and discourage its AD's from selling to grey market dealers

[macrowatch]

From R&D and machining, sure.

But in market context, I think it's the other way around. PM buyers are subsidizing the premiums of the SS watches.

[indi]

Originally Posted by Harry-57

.



Sorry. I'm not picking on you. I'm kind of on side with your overall hypothesis now, but the 3% statement is factually incorrect. Or at least, it is in the case of my AD.



I think that some people tend to think personal experience is a rigid world view template. It is not.

Is that a real AD you refer to ? Or maybe just a reseller

[indi]

Originally Posted by macrowatch

From R&D and machining, sure.



But in market context, I think it's the other way around. PM buyers are subsidizing the premiums of the SS watches.

I have the opposite theory based on real market price.
A New Pepsi priced 50% above MSRP.
A Day Date priced 15% less.
While a real AD admit they are not allowed by Rolex to give discount more than 3% for all watches.

So back to the title, eventually SS buyers money subsidise PM, because of AD and reseller games.

[Pongster]

But if you buy the PM model straight from AD at a discount, where is the subsidy?

[101031-28]

Originally Posted by THC

PM is always greater than SS /// MSRP or bust for all hot SS models

+1

[indi]

Originally Posted by Pongster

But if you buy the PM model straight from AD at a discount, where is the subsidy?

At least for me I would not buy from AD directly with max discount only 3%.
Because out there I know many reseller of grey market (created by AD), who willing to give nice discount for that PM watch to me.

[nosignalbmwdriver]

Just went strait to the comments LOL

Originally Posted by Setarip

What’s the point of this post?

[beshannon]

Originally Posted by Pongster

But if you buy the PM model straight from AD at a discount, where is the subsidy?

Exactly, this entire thread is a thinly veiled swipe at the secondary market

[DG123]

I wonder what percentage of inventory shipped to AD's ends up being sold to grey market resellers. 2%, 5%, 10%, 20%, more ?
My guess is that some AD's have no dealings with grey market but other AD's might sell 25% or more of their inventory to resellers.

[173rdabn]

HUH??? free market rules.

[indi]

Originally Posted by nosignalbmwdriver

Just went strait to the comments LOL

The point is I want to show that SS buyers become victim by this game and the mark-up price they have to pay because they desperately want a SS sport watch, being used by reseller of grey market to subsidise PM watches.

[Likestheshiny]

That's a lot of mental acrobatics just to explain that demand is not perfectly balanced among Rolex's product line, and more popular things sell for more money.

It also discounts that the prestige of the brand is based partly on the higher prices of PM models and the luxury perception associated with expensive PM pieces. A good chunk of the demand for steel is based on the exclusivity (expensiveness) of PM. (For a much more extreme example of this, see what ALS has managed to achieve with its steel pieces.)

[DG123]

Originally Posted by Likestheshiny

That's a lot of mental acrobatics just to explain that demand is not perfectly balanced among Rolex's product line, and more popular things sell for more money.

If Rolex produces 1 million watches per year, my guess as to the composition of total production would be approximately :

Classic Stainless Steel models: 700,000
Classic PM models: 100,000
Pro/Sport Stainless Steel: 150,000
Pro/Sport PM models: 50,000

[Santiago79]

I say go for what you want.

[Jack T]

Originally Posted by indi

Actually my point is on how to make the game fair to all buyers.
Me as average buyer want to buy Rolex at MSRP.
If I can only afford SS, why would I be pushed to accept prices that used to subsidize higher market segment.

You may be an average buyer of a Rolex, but paying $6,000 to $8,000 for a watch is anything but average.

[Harry-57]

Originally Posted by indi

Is that a real AD you refer to ? Or maybe just a reseller

It's my AD. Mallory Bath. They have always been fair and generous to me.

[EtherBrown]

Given the premium on the PM watches compared to the raw value of the metal, I’d say they subsidize themselves.


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[Johnpierpontmorgan]

Wow full gold sub 25% off? That’s a steal

[beshannon]

Originally Posted by indi

The point is I want to show that SS buyers become victim by this game and the mark-up price they have to pay because they desperately want a SS sport watch, being used by reseller of grey market to subsidise PM watches.

No one HAS to pay anything

[maveric]

The only thing that is clear is that Rolex produces far too many gold watches.

[Bigblu10]

Originally Posted by indi

The point is I want to show that SS buyers become victim by this game and the mark-up price they have to pay because they desperately want a SS sport watch, being used by reseller of grey market to subsidise PM watches.

"Victim"? OMG What drama! Tell me something. When does a man consider a luxury watch a "necessity"? Nobody is forcing you to buy anything. Don't like the game, don't be a participant.

[Bigblu10]

Originally Posted by maveric

The only thing that is clear is that Rolex produces far too many gold watches.

Why do you state this? Because you are unable to source the SS piece you want without paying a grey premium?
I happen to wear one of those "too many gold watches". I happen to love it!

[DG123]

Originally Posted by maveric

The only thing that is clear is that Rolex produces far too many gold watches.

How is it "clear" that Rolex produces "far too many" gold watches ?
For many decades now Rolex has been producing some stainless watches, some stainless-gold combination watches, and some all gold watches.
What makes you believe Rolex does not have a good sensible handle on which styles and, or, materials to use for its production ?

[beshannon]

Originally Posted by maveric

The only thing that is clear is that Rolex produces far too many gold watches.

Please explain?

[Gunnersaurus]

Originally Posted by beshannon

Please explain?

Pretty easy to buy any gold reference with the exception of the green dial Daytona. As they are readily available and steel professional models are not I would definitely say they produce too many gold watches.

[Onikage]

When they start giving gold watches away because they made too many I wouldn't mind taking some in. I'm nice like that.