AD’s are pulling inventory and holding it. There is really no shortage.

[tyler1980]

Originally Posted by Darzee

Especially those models in high demand with wait list. If no price increase or any other big surprises after Baselworld they can always start fulfilling those on wait list, nothing to lose.

except cash flow. Could you buy hundreds of thousands of dollars worth of inventory (probably more) every month and then sit on that inventory and not sell it for months based on speculation that you may get 5 or maybe 10 percent more several months down the road?

You would probably go bankrupt as you still have salaries and overhead to pay.

A price rise does not mean the dealer will make more money. Their margin is fixed. So their buying costs go up and their selling price goes up. AD's have no incentive to hold unless its a for sure price rise and its happening next week.

[Chiboy]

Originally Posted by tyler1980

A price rise does not mean the dealer will make more money. Their margin is fixed. So their buying costs go up and their selling price goes up. AD's have no incentive to hold unless its a for sure price rise and its happening next week.

I think what people are speculating about is the idea that inventory already purchased has a cost basis that is fixed. If they sell the inventory post-Basel and get 10% (or whatever) more revenue, they may make ~50% margins rather than 40% margins.

I don't really see any downside for an AD slow-walking sales of hot SS models until after the price (probably) goes up. It's hard to envision a scenario where they can't quickly sell Daytonas, Sky-Ds, Hulks, etc. for whatever MSRP is at the end of March. IMO.

[Why1504]

Originally Posted by SteelSubmarinerGuy

I think all Rolex AD’s are pulling inventory and holding it in anticipation of a price increase. How is it that SS watches that don’t move fast are all of a sudden gone? It’s all a faux shortage to drive demand!


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Doubtful. In my experience, this is not how the retail marketplace works. In every retail business that I have had an association, the more you sell, the more inventory you get. Prove to be a really good, long term dealer and you get treated better and better. I can see Rolex calling dealers out of the blue to see if they would sell over the phone and taking away inventory as a result. I would think Rolex knows how much inventory their dealers have and at some level who the buyers are. If it is like most higher end businesses the dealer is also rated on the market they serve. Be a dealer in a mid market, selling locally, over performing and you get more inventory. Also, the places that sell jewelry have ridiculous overhead. Viable businesses must conduct commerce to remain viable. The 40% that dealer has for a markup pays the expenses on the brick and mortar stores that we frequent. If he isn’t selling the cost of operation doesn’t go away. You have to sell to remain viable.

[Darzee]

Originally Posted by tyler1980

except cash flow. Could you buy hundreds of thousands of dollars worth of inventory (probably more) every month and then sit on that inventory and not sell it for months based on speculation that you may get 5 or maybe 10 percent more several months down the road?

You would probably go bankrupt as you still have salaries and overhead to pay.

A price rise does not mean the dealer will make more money. Their margin is fixed. So their buying costs go up and their selling price goes up. AD's have no incentive to hold unless its a for sure price rise and its happening next week.

There is no need to keep every model, only those highly in demand. They are more than happy to release as and when a “regular” customer is willing to pay above list. There are at least a couple of AD here known to have complete range in their inventory most of the time.

I believe that once Rolex will invoice the AD once they deliver the stocks and hence cost are fixed. Increase in RRP is not going to affect their inventory cost. Correct me if I’m wrong.

[Why1504]

Originally Posted by Darzee

There is no need to keep every model, only those highly in demand. They are more than happy to release as and when a “regular” customer is willing to pay above list. There are at least a couple of AD here known to have complete range in their inventory most of the time.

I believe that once Rolex will invoice the AD once they deliver the stocks and hence cost are fixed. Increase in RRP is not going to affect their inventory cost. Correct me if I’m wrong.

Normally retail pricing and dealer cost track at a recommended percentage. Cost goes up, retail price goes up.

The only way that isn’t how it works is when the manufactur carries the dealers inventory cost. History has proven that this model is not effective.

[SteelSubmarinerGuy]

Originally Posted by tyler1980

except cash flow. Could you buy hundreds of thousands of dollars worth of inventory (probably more) every month and then sit on that inventory and not sell it for months based on speculation that you may get 5 or maybe 10 percent more several months down the road?

You would probably go bankrupt as you still have salaries and overhead to pay.

A price rise does not mean the dealer will make more money. Their margin is fixed. So their buying costs go up and their selling price goes up. AD's have no incentive to hold unless its a for sure price rise and its happening next week.

Most AD’s are Jewelers so I’m sure they don’t have a cash flow problem as there is more mark up in jewelry than Rolex watches


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[jrs146]

I’m sure there are one or two held in the back. But most likely because they have been reserved for VIP’s well in advance.


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[watchwatcher]

Highly doubt it. I don't know of course, since I'm not in the senior leadership of Rolex.

But...my conversations, travels, and experience with the brand tells me otherwise.

[DKRanger22]

Personally, I think demand is simply up. Whether that be from gray dealers hedging their bets and getting ahead of the price increase, or simply a strong economy (DOW at record highs, low unemployment, etc) and people loosening up on their discretionary spending. I doubt, however, that AD's are hoarding stock in the "back room" in order to artificially inflate demand.

[Wahlberg]

I'm sure people are willing to pay 1-2k more for a Sub or GMT but it has to stop at some point.

Those prices are nearing AP and other high-end watches. I would rather get that, than a Rolex.

[Calatrava r]

Originally Posted by SteelSubmarinerGuy

How can watches that were already paid for be effected by a price increase?


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The AD is supposed to re-price existing inventory with the new higher price. This actually makes sense as it allows the dealer sufficient margin to buy the new product at the higher price.

[DoctorA]

Maybe Rolex “shifts markets” there has been a drought in the U.K........ in the US even thought not easy but there has been supply. Where people can actually get those hard to get watches. So I wonder if Rolex will shift markets a little towards other parts of the world to keep the stigma that “Rolex is hard to come by watch”

Allllll are speculations

[RHIII]

Not an impossible or improbable assertion...but I would say quite unlikely.

I was at my AD yesterday - and their Rolex display is as barren as I’ve ever seen it — and they aren’t holding or storing anything.

Everything they have is out. Including a Deep Blue - DSSD as well as the standard dial — which almost went home with me...

They are still in the business to sell watches...not collect them...

Just my.02


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[brandrea]

Originally Posted by RHIII

Not an impossible or improbable assertion...but I would say quite unlikely.

I was at my AD yesterday - and their Rolex display is as barren as I’ve ever seen it — and they aren’t holding or storing anything.

Everything they have is out. Including a Deep Blue - DSSD as well as the standard dial — which almost went home with me...

They are still in the business to sell watches...not collect them...

Just my.02


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Agreed I suppose they may have a few in back if you were to ask, you never know what they might surprise you with

[RHIII]

Originally Posted by brandrea

Agreed I suppose they may have a few in back if you were to ask, you never know what they might surprise you with

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[Dayton ssb]

If they have something sought after/rare... they are going to sell it. I was at AD in N. West suburbs of Chicago and was talking with Sales Woman. I told her I want to get on the list for a LVC and/or White Daytona. After trying on 6-7 watches from Breitling, Tudor and Rolex... I was torn between the white dial explorer and black GMT SS. After I told her I was going to think about, she told me about a well sought after Rolex. Out flying of the Batcave was Gothams Finest ...."BatMan."!!!!!!......Of course singing to the 70's show tune.... I didn't buy it since Im really trying to buy a his and her rolly for mom and dad before my next Rolex.

Goes to show, at the end of the day, they are trying to sell merchandise. Now if she pulled out a LVC or White Daytona I would of done the happy dance... My thoughts... "I Don't think she was holding back."

[kearez]

ADs always hold stock in the back. Happened to me a few times when I was looking for BLNR. They do the dance say oh it’s hard watch to get your hands on. You try a few watches on then suddenly they say well we just got a shipment today/yesterday and then one magically appears from the back.

I’m sure have a few subs, gmts back there just to make you think oh wow this is hard to find, I should buy it now.

[ian6988]

Just came from AD in Fashion Island, Newport Beach CA and saw a bunch of Submariner Date, no Date, TT Black and blue dial and a black GMT II.

[Craigdwh]

Anyone who actually believes this fairytale has obviously never owned a business that requires cash flow and profit.


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[WJGESQ]

Originally Posted by OmegaManOnTheMoon

I think the need the cash flow more now - it's not like they are sitting on mounds of cash. They are retail with constantly escalating overhead.

Bingo.

[bmrisko]

Originally Posted by kearez

ADs always hold stock in the back. Happened to me a few times when I was looking for BLNR. They do the dance say oh it’s hard watch to get your hands on. You try a few watches on then suddenly they say well we just got a shipment today/yesterday and then one magically appears from the back.

I’m sure have a few subs, gmts back there just to make you think oh wow this is hard to find, I should buy it now.

Yup, I was in an AD in MI with my wife and parents and we all had on Rolexes...I was checking out the brown dial YM and they had no SD43 in the case. We started BSing and talking watches, etc and suddenly a SD43 appeared out of the owner's pocket. I passed on it as it still feels a bit too large for me, but I promise you not everything is always out. Sadly he could not make a white DaytonaC appear out of his other pocket.

[Fourier]

Originally Posted by RHIII

Not an impossible or improbable assertion...but I would say quite unlikely.

I was at my AD yesterday - and their Rolex display is as barren as I’ve ever seen it — and they aren’t holding or storing anything.

Everything they have is out. Including a Deep Blue - DSSD as well as the standard dial — which almost went home with me...

They are still in the business to sell watches...not collect them...

Just my.02


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Thank you

[Fourier]

Originally Posted by Craigdwh

Anyone who actually believes this fairytale has obviously never owned a business that requires cash flow and profit.


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Exactly...

[William.L.]

I can tell you that isn’t the case, I work at an AD and I have friends and contacts at other stores. It may feel that way but with the exception of some duplicates what’s out is out. It seems like everyone forgets Christmas was a month ago and many stores haven’t seen inventory for resupply come in yet. There’s a ton of demand right now.

[Fourier]

For what its worth, I was on the list for an LVC. Just before Christmas, the dealer calls me and says he has one for me. In fact, he says he received 4 of them, and some other steel watches. He said he has lists on all his new steel deliveries and were calling people on the lists before they were going to make it out to the showroom, as he should. This particular dealer also treated the list on a first-come first-serve basis. He informed everyone that he has it, and first person to commit cash would receive. Nowhere did I sense any conspiratory plot to try to retain them for speculative price increases in the future that may or may not happen. These are watch salesmen. They are not filthy rich. They need to generate enough cashflow to support the stores costs and provide salary to all employees.

Edit: The more they sell, the better of a distributor they become and should receive even more shipments.

[Deck Ape]

I am very new to Rolex watches(I do not own one yet)and i am also looking all over this forum to try and learn about them. With all the speculation about their watches being hard to get or could be hard to get does this only include the Stainless steel models? I went to a dealer about 2 1/2 hours away a couple weeks back and they had several kinds that i could try on but were mainly the Date Just models which the one i loved was the 126334 with the jubilee bracelet, Rhodium dial with diamonds, 18K white gold fluted bezel 41MM would this particular style be included in what you are talking about or No?

[asiparks]

So, they would sacrifice revenue for 6-12 months, just to make maybe 10% more after Basil ?

Yeah....

[EDL7]

As a business owner..for hard to get valuable items..it makes more sense to hold for awhile..than sell to anyone who walks thru the door..as prices rise..esp if these items are hard to come by on the wholesale level..

[breitlings]

https://www.youtube.com/watch?v=uAXtO5dMqEI

[GradyPhilpott]

Originally Posted by bmrisko

Yup, I was in an AD in MI with my wife and parents and we all had on Rolexes...I was checking out the brown dial YM and they had no SD43 in the case. We started BSing and talking watches, etc and suddenly a SD43 appeared out of the owner's pocket. I passed on it as it still feels a bit too large for me, but I promise you not everything is always out. Sadly he could not make a white DaytonaC appear out of his other pocket.

His pocket?