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

[indi]

Do you think the title is correct ?
Well.. I do think so.

Almost all Rolex gold watches price are subsidized by Rolex SS buyers, (except for GMT gold watches )

When we check prices of Rolex gold watches, we can see prices are just below its MSRP. Maybe discounted at least 15% for some types.
I heard and watch somewhere, that reseller got their sport watches stocks from AD with commitment to combine buying the gold watches.

So this is what happened. Reseller mark up the SS watches by almost 100% for some SS types (GMT again, Daytona, Sub and SD) and the margin given to subsidize the gold watches.

Conclusion:
SS buyers subsidize Gold watches buyers. Or shall I mention average income buyers subsidize rich people to enjoy their luxury on gold watches..
ouch.. oo..oww..

[MILGAUSS88]

I think the gold watch buyers, just pay a less ridiculous premium.

[minhc88]

You may or may not be onto something. But I still refuse to pay premiums on SS pieces. Watch prices drop soon, 13% unemployment rate and counting fellas. Some scary numbers

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[Rado63]

Certainly clients who spend more at an AD may get more opportunities to buy steel pieces. Is that what you are referring to?

[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.

[WatchEater666]

It's pretty hard to pull off a gold watch though.

[Xenon]

A Rolex is not like a Porsche whereby Macan and Cayenne SUV owners actually do subsidize the development of higher performing 911 models. Without the Macan and Cayenne, Porsche would cease to exist in this day and age. If Rolex eliminated all stainless steel models, Rolex would still be in business selling PM models. The VW Group owns Porsche. Rolex owns Rolex. Not the same analogy. Porsche needs to develop the fastest race cars for competition in addition to selling cars at dealerships. Rolex simply needs to sell watches at certain price points.

[Calatrava r]

I do not agree. Buy what you want.

[horseShu]

I believe there was a thread long ago. Saying that, if you take all the gold in a two-tone or all-YG/WG/Plat Rolex, it still doesn't justify the big jump in price.

That is why the prevailing wisdom in the forums is to get steel; get PM only if there is a significant discount.

[DG123]

Originally Posted by indi

So this is what happened. Reseller mark up the SS watches by almost 100% for some SS types (GMT again, Daytona, Sub and SD) and the margin given to subsidize the gold watches.

I don't believe reseller (grey) dealers are selling any watches at a "100% mark up above MSRP".

[Setarip]

What’s the point of this post?

[BaliBryan]

If you have the funds, yes the pm watch at 10-20% off is a relative bargain.

[Bigblu10]

Originally Posted by BaliBryan

If you have the funds, yes the pm watch at 10-20% off is a relative bargain.

25% off three years ago. Could care less about steel watches anymore.

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[AK797]

Even at a 20% plus discount the AD is still making a nice profit on a PM piece so there is no subsidising going on, it is just that there are different retail price points for SS and PM to reflect their perceived luxuriousness, and the demand for them creates the prices they sell at, SS Subs were selling for 15% discounts as well 4 years ago.

[beshannon]

Originally Posted by indi

Do you think the title is correct ?

When we check prices of Rolex gold watches, we can see prices are just below its MSRP. Maybe discounted at least 15% for some types.

And precious metal watches are still very over priced, which is why they are discounted.

At MSRP it is the precious metal buyers that subsidize stainless steel.

[THC]

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

[Sandpit]

Is the material cost of gold over steel equivalent to the uplift in premium? I would think absolutely no chance.

[Stu3]

Originally Posted by AK797

Even at a 20% plus discount the AD is still making a nice profit on a PM piece so there is no subsidising going on, it is just that there are different retail price points for SS and PM to reflect their perceived luxuriousness, and the demand for them creates the prices they sell at, SS Subs were selling for 15% discounts as well 4 years ago.

I'd sure love to see 15% to 20% discounts on a YM 37 Rhodium.

[indi]

Originally Posted by beshannon

And precious metal watches are still very over priced, which is why they are discounted.

At MSRP it is the precious metal buyers that subsidize stainless steel.

From reseller perspective it is SS that subsidize PM.

Demand for PM is less than SS, so they must mark up SS price to cover discounted price of PM.

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.

[Maiden]

Don't believe this is true at all.

[Ravager135]

The premium or lack thereof comes down to demand. Precious metal Rolex watches have a far smaller audience than a stainless steel watch. Any discount is an incentive. It wasn't long ago that stainless steel watches commanded a similar discount. I think lines have been blurred since stainless steel Rolex watches now approach some two tone and precious metal watch costs on the secondary market, but realistically there's a big difference between a 10k watch and a 20-30k watch.

Most people will never own a Rolex. Those that are fortunate enough to have that luxury can envision saving up 10k to purchase one. Spending 20k+ is a whole different level. I've been collecting for 12 years. Ive owned about 20 different watches at one point or another, holding on to about 10-11 at a time. I still can't picture parting with the kind of money it costs to own a gold or platinum Rolex. For others, it's a drop in the bucket.

[1William]

I don't agree with this. The margin on all Rolex watches is 62% of msrp. Even if a PM, TT or SS watch is discounted it will be within the margin of profit. In the current market the SS Sport watches are very desirable and do not have to be discounted and sell for a premium in the Grey market. Such is the current market but like all things it will change, hopefully for the better for the consumer.

[Golfpaul66]

Originally Posted by Bigblu10

25% off three years ago. Could care less about steel watches anymore.

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This! Like a boss!

[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.

[Sgooter]

MSRP: Manufacturer's Suggested Retail Price...it's only a starting point.
Supply vs Demand vs the Buyer's Emotions vs the Seller's Needs are the real world factors that determine today's price. Tomorrow may be an entirely different price.
WRT "...make the game fair to all buyers..." sounds like a cry for needing social justice and outcome equality reforms in the evil and greedy Rolex market place.

[DG123]

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.

I read the OP as suggesting that a grey dealer buys in bulk, for example a dozen watches at a time, 6 PM and 6 SS. The grey pays about MSRP for the dozen. The grey then resells the dozen watches, losing a bit or breaking even on the PM's, but making a large profit margin on the SS models.
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.

[Brew]

Originally Posted by Harry-57

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

Me too.

That said, if it's true that someone's going to help pay for my next dd, I'll roll with it though.

[DonRickles]

OP, you got it bassakwards.....now go save up some more cash so you can subsidize my next SS.....

[beshannon]

Originally Posted by indi

From reseller perspective it is SS that subsidize PM.

Demand for PM is less than SS, so they must mark up SS price to cover discounted price of PM.

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.

Resellers are irrelevant.

MSRP is what the manufacturer sells for. The cost of materials vs the MSRP is lower for stainless than for precious metals, hence the reason precious metals are discounted.

Precious metals subsidize lower cost goods. Period.

[indi]

Originally Posted by DG123

I read the OP as suggesting that a grey dealer buys in bulk, for example a dozen watches at a time, 6 PM and 6 SS. The grey pays about MSRP for the dozen. The grey then resells the dozen watches, losing a bit or breaking even on the PM's, but making a large profit margin on the SS models.
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.

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.

I believe Rolex know this game and recently implement some rules like all stickers need to peel off when the watch leave AD to avoid reseller sell it as new. But still it is not enough.
If only the buyer need to register an ID and all watches sold need to have the real owner in Rolex online system, Rolex would know if someone stock piles their watches. When this time comes, hopefully we can buy a New Pepsi at MSRP at AD and our money not being used by reseller to “discounted” PM.