If you were an AD how would you allocate watches?

[Rado63]

It depends on the size of the AD. What volume do they receive each year? Smaller shops could just make everything available to whoever walks in each day and when it's gone it's gone. Another shop with higher volume is probably offering watches for sale to repeat buyers who keep some, wear some, and sell some of those watches. With so much inventory for any hyped Rolex watch available in the secondary market, it is obvious that repeat buyers are offered watches and they don't want them so they sell them off.

[Gab27]

I'd sell the most high demand Rolex models to customers with the greatest tendency to buy other stock that was relatively easy to replenish (at least much more so than most Rolex stock) and had very good margins. This, from what I observed, isn't all that different from what the more savvy ADs are doing right now.

Let's be real...with respect to customers who have a purchase history of just high-demand Rolex watches and other high-demand watches that I cannot easily replace once I sell them...those customers can be easily replaced both now and likely in the foreseeable future. They can be replaced with a 30 second phone call.

Now the customers that buy other jewelry from me for themselves or family members (or Rolex references that are not the ones everyone is going crazy over on Instagram), especially the ones I have long-standing relationships with or reason to believe I will have a long-term sales relationship with, those are the ones I would give most priority to for the highest demand Rolex models. These customers cannot be easily replaced and have substantially greater value to my company. Keeping them as ongoing customers is top priority and what better way to keep them continuing to use my company as their go-to for gifts than to offer them some my best Rolex references.

[MrGoat]

I would not be a Rolex AD, I don’t like to mix business and pleasure.


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[norcalctr]

AD receives shipments of Rolexes, brings them to the back and out the back door lol

[brkn]

Originally Posted by bluestreak

It’s a fact there are many more people wanting to buy these watches than there are available to sell.

I don't think this is true. Not for Rolex. The scarcity is artificially created.

[Dr. Robert]

Originally Posted by joli160

Prioritize customers who have significant spending history., the only logical thing to keep your business afloat long term.

Unfortunately & sadly I concur.

[dannyp]

A lot like airlines do their status-based upgrades. Perhaps three tiers that have some very specific priority to them:

1. Long-time customers - need to show loyalty
2. Friends & friends of friends - want to do favors
3. Profitable trade-ins from new customers - good opportunistic sale (i.e. straight Hulk for Cermit trade)
4. Everyone else

Within each clearly defined tier, it would be first come, first served. Perhaps a few possible exceptions (like a friend w/a profitable trade-in bumped ahead of friend w/o one, just like airlines do w/those on full-fare tickets, for example).

[CarlOver]

Thank goodness that selling watches to your most loyal customers and those that have spent the most is not the case otherwise most of us would never get a watch from the AD.

[Jari from Finland]

Even if it is important to take care of
the old existing customers ADs must
also get new customers. That probably
can be managed by selling watches
to those newcomers who show their interest.

[dannyp]

Originally Posted by bluestreak

It’s a fact there are many more people wanting to buy these watches than there are available to sell.

Originally Posted by brkn

I don't think this is true. Not for Rolex. The scarcity is artificially created.

I think it's important to differentiate between demand to own, vs. purchase, the watches.

• Demand to own the watches (most, at least) is probably close to supply.
• Demand to purchase the watches, as a tradable instrument, far exceeds supply.
• The latter is the product of artificially-created scarcity.

[bluestreak]

Originally Posted by dannyp

I think it's important to differentiate between demand to own, vs. purchase, the watches.

• Demand to own the watches (most, at least) is probably close to supply.
• Demand to purchase the watches, as a tradable instrument, far exceeds supply.
• The latter is the product of artificially-created scarcity.

I’m not sure why it matters why someone wants to buy a watch. It means it’s a watch that someone else can’t own.
And how is the scarcity artificial if people are actually buying watches?


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[Gab27]

Originally Posted by dannyp

I think it's important to differentiate between demand to own, vs. purchase, the watches.

• Demand to own the watches (most, at least) is probably close to supply.
• Demand to purchase the watches, as a tradable instrument, far exceeds supply.
• The latter is the product of artificially-created scarcity.

This is a VERY solid point IMO. Much of the demand to buy is likely accompanied by an intent to sell, which is very different from the intent to own. What percent of watches sold by ADs actually wind up in the wrists of those they sell to we will never know, but probably a substantial portion wind up on the wrist of someone other than the original purchaser.

[bluestreak]

Originally Posted by brkn

I don't think this is true. Not for Rolex. The scarcity is artificially created.

What’s the evidence that this is happening?


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[Swiss Mad!]

I would only allocate the hot pieces to people called Max

Kind regards

Max




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[dannyp]

Originally Posted by bluestreak

I’m not sure why it matters why someone wants to buy a watch. It means it’s a watch that someone else can’t own.
And how is the scarcity artificial if people are actually buying watches?


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See below…

Originally Posted by Gab27

This is a VERY solid point IMO. Much of the demand to buy is likely accompanied by an intent to sell, which is very different from the intent to own. What percent of watches sold by ADs actually wind up in the wrists of those they sell to we will never know, but probably a substantial portion wind up on the wrist of someone other than the original purchaser.

Exactly. And it’s all driven by a decent percent of people willing to pay a bit over MSRP and a few willing to pay way above to actually own them.

[VogelPhoenix]

Originally Posted by brkn

I don't think this is true. Not for Rolex. The scarcity is artificially created.

Would like to see the fully worked out theory for this. Rolex is making as many (or more) watches as ever. Where do they go?

[Ichiran]

Originally Posted by brkn

I don't think this is true. Not for Rolex. The scarcity is artificially created.

Rolex themselves have clarified in a Yahoo article they have not artificially restricted production ("The scarcity of our products is not a strategy on our part," the company said. "Our current production cannot meet the existing demand in an exhaustive way, at least not without reducing the quality of our watches - something we refuse to do as the quality of our products must never be compromised") and a recent Morgan Stanley research (https://watchesbysjx.com/2022/03/mor...port-2022.html) indicated Rolex is producing more watches in 2021.

Why do you have this idea that Rolex is lying and trying to hurt their own revenue and profitability by restricting their own products, in a period of massive demand?

[ArtNouveau]

Originally Posted by brkn

I don't think this is true. Not for Rolex. The scarcity is artificially created.

I don’t know how someone could get this idea and believe it. Rolex is producing more watches than ever, 1000050 per that industry report last week. AD’s are selling more than ever before, they all have way more people asking than they have watches for. Scarcity isn’t the problem, too much demand, but Rolex knows that overproducing would lower their appeal.

[JR16]

Originally Posted by ArtNouveau

I don’t know how someone could get this idea and believe it. Rolex is producing more watches than ever, 1000050 per that industry report last week. AD’s are selling more than ever before, they all have way more people asking than they have watches for. Scarcity isn’t the problem, too much demand, but Rolex knows that overproducing would lower their appeal.

Perfectly said . And 0 evidence to support any other claim.


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[JR16]

Here’s how I would do it:




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[dannyp]

Originally Posted by ArtNouveau

I don’t know how someone could get this idea and believe it. Rolex is producing more watches than ever, 1000050 per that industry report last week. AD’s are selling more than ever before, they all have way more people asking than they have watches for. Scarcity isn’t the problem, too much demand, but Rolex knows that overproducing would lower their appeal.

Not sure it would lower their appeal. But it would look bad when demand returns to normalized levels and one of two things happens: Either Rolex ends up overproducing, and prices plummet or Rolex has to curtail production and then have idle machinery and laid-off employees. Those are both wholly unattractive scenarios from a capital allocation or repetitional perspective.

[2001jesper]

Would make it a requirement to register a watch with Rolex upon sale, and for any watch being serviced by RSC to be registered as well. Then one would overtime be able to differentiate between flippers / collectors and optimise allocation based on that

[rolex16]

Originally Posted by VogelPhoenix

Would like to see the fully worked out theory for this. Rolex is making as many (or more) watches as ever. Where do they go?

I would be interested in knowing this too. With AD consolidation, you would expect each AD to get more watches than in the past, yet some ADs have allegedly told people they have never seen XYZ model, or don't get many of those per year, they are allocation models (for almost everything now), etc. I struggle to reconcile this - it is one thing for ADs to say they get plenty, but the demand is too high, but they don't say that. Something seems off there.

[dannyp]

Originally Posted by rolex16

I struggle to reconcile this - it is one thing for ADs to say they get plenty, but the demand is too high, but they don't say that. Something seems off there.

Easy: People lie, to avoid confrontation and hurt feelings, or protect potential future relationships.

"I get two of those per month, but am saving them for my dentist, my deadbeat son-in-law, and the guy who spent $75,000 in crappy, low-grade diamond stuff for his mistress last year, and $100,000 on a single bracelet to say 'sorry' to his wife this year" may be more honest, but it won't win any new customers nor will it actually accomplish anything.

Or sometimes, it may just be true. There are some models that are low-production because they are deemed low-demand. Matching supply with demand in that case can be a bit tricky and take a bit longer.

[BNA/LION]

The same way they all do... whoever gives them the biggest kickback, gifts, trips, etc. gets the watches.

[boogiebot]

I would make all prospective buyers remove all articles of clothing and tell them that I get to hunt them in the Forrest with my paintball gun. Whoever made it out without getting shot would get the first pick of the watches. From there it would be the people with The least amount of paint stains who picked next.


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[George58]

first come first serve no one can argue with that

[mattidk]

i would make it more transparent to customer - when they can expect the watch they order. make the rule very clear - one Rolex max pr 12 or 24 months for hot models.
Customer with high priority might get first - can be based on buying history and potential future business. All flippers to be put in black list aside without notice them.
Alternatively - keep the card for at least 1 year - if feasible.

[Madman37]

I would make sure everyone who was a member of the rolex forum went to the bottom of the list. Also any man utd and man shitty fans get none

[teck21]

Originally Posted by George58

first come first serve no one can argue with that

Absolutely no genuine buyer is going to be able to get one at an AD then.

A cure that’s far worse than the disease.


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