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

[DG123]

Originally Posted by Gunnersaurus

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.

Remember that a significant part of the business of managing Rolex Company
is maintaining the image and prestige of the brand. Towards that goal Rolex management seems to do a great job of balancing the number of models and materials used to produce same within the product line.
If the Rolex line is 100 models and all but 2 or 3 are relatively easy to purchase from an AD, that means Rolex is doing a lot of things right.

[Plant]

I could be very wrong, but I feel like PM Rolex models are incredibly overpriced at msrp. Honestly SS pieces seem overpriced as well because demand is so high.

Right now looks like they can make PM or SS and sell it at a high price compared to other brands creating similar quality watches. If PM pieces have higher profit margins it could be argued they do subsidize SS pieces, but does anyone actually know if PM pieces are relatively more profitable for Rolex?

[SN13]

Ok Sooo.

116610 MSRP $8950
116618 MSRP $35750

Actual GOLD value in a 116618 ~$7k...

oH bUt MuH dIsCoUnTeD pReCiOuS mEtAlS....


Get out of here with your CRAP. The Markup in PM is so damned high...It's a 400% markup on just the GOLD itself. $35k - $8k = $27k for $7k worth of GOLD.


It's the SAME movement, Dial, Crystal, Ceramic, etc etc... Gold is softer (although 18k not terribly soft) compared to Steel so Machining is FASTER and EASIER.

The Steel Bracelets and Gold Bracelets are the EXACT same assembly these days, sans metals.

If it costs Rolex $3k worth of labor / tech to make a $9k Sub, then it costs the same $3k (+$7k Gold) to make a $35k Gold Sub....

BUT, 10% discount!

This entire thread is based on flawed logic.

[DG123]

Originally Posted by Plant

I could be very wrong, but I feel like PM Rolex models are incredibly overpriced at msrp.

Whether an item is "incredibly overpriced" is a personal decision.
The fact is that Rolex produces lots of precious metal watches and those watches sell very well.

[007_Omega]

I laugh when I see the price difference on some SS models vs the Precious Metal counterpart.

Remember the idiots paying almost the same price for a SS Pepsi as the White Gold version? Obviously, many of these people were successful enough to afford to make a decision like that but I have to question people like thats insecurity that they have to show off so fast that they pay $30k for a current production SS watch.

[garyk]

Originally Posted by 007_Omega

I laugh when I see the price difference on some SS models vs the Precious Metal counterpart.

Remember the idiots paying almost the same price for a SS Pepsi as the White Gold version? Obviously, many of these people were successful enough to afford to make a decision like that but I have to question people like thats insecurity that they have to show off so fast that they pay $30k for a current production SS watch.

I hate to disagree with you on any level but, life is short, money is designed to be spent and even though I only buy watches at retail from ADs, I understand the passion some people feel that drives them to pay a premium to have the watch they desire. I'm sure some folks are showing off, I don't know people like that or understand that either but to each his own!!!

[Plant]

Originally Posted by DG123

Whether an item is "incredibly overpriced" is a personal decision.
The fact is that Rolex produces lots of precious metal watches and those watches sell very well.

This is a fair point. I should have clarified by saying its my personal belief that PM models are overpriced compared to similar SS models.

The "value" of a Rolex is an interesting thing. Purely objectively, I look at my watch and think its absurd how much I paid for something I truly dont need. Its also overpriced compared to similar or even "better" watches from other brands. On the other hand, I love it so much I would be willing to pay DOUBLE what I paid if I had to do it again. Its simultaneously overpriced and underpriced at the same time...

Im sure PM owners feel this way as well, I dont mean to be critical of fans of PM pieces

[77T]

As for timekeeping, a gold Rolex is a poor tool - a Casio quartz is far more accurate, never needs winding, never needs an expensive service, can be customized without the manufacturer charging you to “make it right”, only needs $5 battery every year or two and is still water resistant.



Even in SS, every penny spent on a Rolex beyond $11.20 is wasted.

Now, if you view Rolex as jewelry - then I agree gold is the only way to go.

Who wears bracelets, necklaces, rings or other baubles made of SS?

So while the OP’s question riled many, caused all sorts of calculation about this or that cost and discounting, I say Resin is your friend

And in Basic Black to boot

But if you don’t agree, just go midstream with TT.




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[Tools]

Originally Posted by Plant

This is a fair point. I should have clarified by saying its my personal belief that PM models are overpriced compared to similar SS models.

The "value" of a Rolex is an interesting thing. Purely objectively, I look at my watch and think its absurd how much I paid for something I truly dont need. Its also overpriced compared to similar or even "better" watches from other brands. On the other hand, I love it so much I would be willing to pay DOUBLE what I paid if I had to do it again. Its simultaneously overpriced and underpriced at the same time...

Im sure PM owners feel this way as well, I dont mean to be critical of fans of PM pieces

Luxury items are not priced by the cost/value of the material used in it's construction.

A Louis Vuitton hand bag can set you back as much as your SS Rolex.

500 bucks for a pair of tennis shoes only because of the logo?

I would say that Rolex watches are a value considering many of the Swatch Company offerings cost as much or more.

[Ensign]

It’s remarkable that your question seems to pertain to the grey market.

I see you are in a big watch market (HK); perhaps that is the new distribution model in metropolitan areas. Watches go straight grey, save a few for VIPs.
Here in Los Angeles, I can’t imagine an ordinary customer getting a professional steel model from an AD. By ordinary I mean a person who buys a Rolex or two every few years - like as a graduation present or to celebrate an occasion.

[Pongster]

Originally Posted by indi

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.

Who said max discount from an AD was 3%?

I think i got more than that for all my PM purchases. Both for me and my wife.

I even managed to get a good discount for a SS Sub i bought for my dad back in 2016.


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[horseShu]

So, we can all agree that
- PM models are the biggest moneymakers because they have the biggest margins.
- SS models are more in demand
- ADs are given (mostly) free rein to meet their sales targets.
- Bundling (SS+PM) is a common tactic.

I don't see anything harmful or illegal here. Just another day of good ol' capitalism.

[007_Omega]

Originally Posted by Tools

Luxury items are not priced by the cost/value of the material used in it's construction.

A Louis Vuitton hand bag can set you back as much as your SS Rolex.

500 bucks for a pair of tennis shoes only because of the logo?

I would say that Rolex watches are a value considering many of the Swatch Company offerings cost as much or more.

The margins on a Rolex are certainly less than many other luxury goods. Think about how much Gucci makes on a T-Shirt... That said, my fiancee has their sneakers and they are great quality and while overpriced certainly not a cheap pair of sneakers with a brand printed on them. You are right though that many are guilty of such actions.

I think much of the value of a Rolex comes from its value retention. I do think they make the best watch in their price range but that is because I am a utilitarian at heart. If we are talking about luxurious elements such as finishing, they fall short of the competition.

[sgwatchguy]

This is turning out to be an interesting thread

[Johndong888]

Originally Posted by 007_Omega

I laugh when I see the price difference on some SS models vs the Precious Metal counterpart.

Remember the idiots paying almost the same price for a SS Pepsi as the White Gold version? Obviously, many of these people were successful enough to afford to make a decision like that but I have to question people like thats insecurity that they have to show off so fast that they pay $30k for a current production SS watch.

If they’re buying for insecurity, that’s just terrible

For me, the RG hue is so much nicer than SS on my skin tone. No choice here lol. I also like the hefty weight.


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[kumar75203]

Originally Posted by SN13

Ok Sooo.

116610 MSRP $8950
116618 MSRP $35750

Actual GOLD value in a 116618 ~$7k...

oH bUt MuH dIsCoUnTeD pReCiOuS mEtAlS....


Get out of here with your CRAP. The Markup in PM is so damned high...It's a 400% markup on just the GOLD itself. $35k - $8k = $27k for $7k worth of GOLD.




It's the SAME movement, Dial, Crystal, Ceramic, etc etc... Gold is softer (although 18k not terribly soft) compared to Steel so Machining is FASTER and EASIER.

The Steel Bracelets and Gold Bracelets are the EXACT same assembly these days, sans metals.

If it costs Rolex $3k worth of labor / tech to make a $9k Sub, then it costs the same $3k (+$7k Gold) to make a $35k Gold Sub....

BUT, 10% discount!

This entire thread is based on flawed logic.

No one buys a Rolex based on logic.

I think a PM watch at $25-30k is a lot better deal than a stainless watch at $15-20k. Every time I walk into a nice steakhouse, there are 20+ stainless Rolexes in the place.

A Sub isn't 2-3x the watch as a Seamaster but people pay the premium for exclusivity.

[indi]

As I mentioned before, I believe Rolex already know about the AD and the grey market's game.
That is why Rolex put some strict, weird rules for AD like: skin-off all the plastic, abduct the warranty card and put maximum discount threshold for every sales (well at least that's what I've been told by AD here in HK, or maybe they are just exaggerating).

For Rolex, this issue might become a problem to their sales strategy but they also need AD to achieve their number.

So it is between Loves and Hates

[indi]

Originally Posted by kumar75203

No one buys a Rolex based on logic.

I think a PM watch at $25-30k is a lot better deal than a stainless watch at $15-20k. Every time I walk into a nice steakhouse, there are 20+ stainless Rolexes in the place.

I kinda agree with you.

But don't you ever think that part of your discounted below MSRP PM that you currently enjoy, actually subsidized by heavy mark-up price of some SS model stock-piled by grey market seller.

[beshannon]

Originally Posted by Gunnersaurus

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.

I disagree

What you deem "available" has nothing to do with production worldwide.

[justdate]

Seriously, you are suggesting Rolex makes a loss or lower profits on PM pieces, and can only afford to do so through the abnormal profits they make on SS watches?

PM margin is MASSIVE!!

Let's take the submariner date:
- STEEL: £7,150
- TWO TONE: £11,250 (+£4,100 vs SS)
- GOLD: £28,650 (+£17,400 vs TT)

A single Gold submariner costs the same as FOUR steel submariners. Given that the Rolex cost base is dominated by staff and marketing costs, not materials, you would have to be mad to suggest SS subsidises Gold!

[Brny11]

Originally Posted by indi

Background of this is:
Reseller must take the PM watches together with SS watches from AD, otherwise they will be replaced with other reseller who is willing to do that with AD and they will never can get that sport watches.
This is the common AD games which create unfairness to the SS buyers where their money used to subsidize PM buyers.

This isn’t new. Difference is, Greys might be paying closer to MSRP in today’s market. Prior, they would by in bulk from AD. In the mix was SS and PM watches, all discounted enough to make it worth it for greys and the AD, who are getting rid of slow moving pieces.

[Xenon]

https://usa.watchpro.com/rolex-incre...-made-of-gold/

https://millenarywatches.com/how-much-gold-in-rolex/

https://www.bobswatches.com/rolex-bl...lex-watch.html

https://www.rolexforums.com/archive/.../t-362885.html

https://www.businessinsider.com/10-t...ld-know-2015-1

https://forums.watchuseek.com/f23/ro...ld-568254.html

[notchview]

Originally Posted by Harry-57

I don't understand how the two link together. I'm probably being thick and missing something.

An AD will likely give a discount on a PM watch. Perhaps a generous one. How does this subsidise/offset grey sellers selling hot SS models at way over MSRP? If grey sellers are selling hot SS models at way over MSRP, how does this subsidise the discount an AD will give on a PM watch? Or are we just talking the grey market and putting ADs to one side? If so, the argument is still hard to follow.

There's more logical holes in OP's argument than a slice of Swiss cheese. Simple baiting.

[Onikage]

Look at what microbrands are charging and compare the fit and finish. Then take into account that the work is done in the far east by people falling asleep and/or eating as they do it. Then take into account that the movements are worlds apart - Mingzhu - Seiko preassembled or at best Sellita with less food crumbs vs Rolex in house + over a year to get working properly (apparently). Yeah Rolex are overpriced. They aren't a resin casio though. *sorry I didn't really answer anything of relevance there did I. The Gold to SS price ratios are probably not far off given how many are made of each. No mention of Platinum? It's cheaper than gold.

[Harry-57]

Originally Posted by indi

That is why Rolex put some strict, weird rules for AD like: skin-off all the plastic, abduct the warranty card and put maximum discount threshold for every sales (well at least that's what I've been told by AD here in HK, or maybe they are just exaggerating).

I can't speak for the situation in HK. Maybe the laws/rules are different. Any English AD acts is at their own discretion. My AD has always pulled stickers, regardless of brand. That's nothing new and does not apply solely to Rolex. They have never retained the warranty card of any brand. They tell me that it is something they just would not do. There is no maximum discount threshold at my AD. They can sell something at a loss if they want to. Although I don't suppose that happens much.

[Xenon]

Consumer subsidies commonly reduce the price of goods and services to the consumer. For example, in the US at one time it was cheaper to buy gasoline than bottled water.