Availability going to get better?

[huncho]

Originally Posted by skp

I know it's been bad for several years now but it seems like it just got worse in the last 2. My local ADs can't even honestly take orders and they seem to be getting maybe 1 steel model every 4-6 months.

I'm not holding my breath and I'm not in a rush but I would love to be able to wear more than one Rolex in the forseeable future.

Wouldn't basic business sense say that if you're selling every unit produced then you should increase production starting with the models with highest demand? I don't think Rolex is trying to artificially raise their preceived value and I think it's a production issue which they're going to have to address sooner than later.

if rolex made more steel models people would stop buying gold models. if they made more of both and they were both more available they would lose that "rare" image. people want what they can't have. if no one can get a daytona then everyone wants one because it makes a statement that either you have enough clout to get one or you paid a huge premium to get one and have a super hard to get watch. look at how this progressed...first the steel watch hype started and they became harder to find, then suddenly every AD started bundling, coincidence? i don't think so, i think it came straight from the top. now you can't even bundle because gold watches are flying off the shelf and selling the instant they come in and now buying gold watches is a privilege. for the first time in a long time people actually want to buy gold watches and they're selling out every single model and making more money than ever. before this they always had one or the other sitting in cases, first it was both, then it was just gold and now the cases are empty. i think they're doing everything right whether it was accidental at first or planned. it's just unfortunate that newcomers can't get watches now

i doubt your AD is getting 1 steel piece every 4-6 months. they all get a decent amount of steel pieces but they just have way too many people they can go to. most of them probably lie because it's easier than saying they chose someone else over you to your face

[skp]

Originally Posted by huncho

if rolex made more steel models people would stop buying gold models. if they made more of both and they were both more available they would lose that "rare" image. people want what they can't have. if no one can get a daytona then everyone wants one because it makes a statement that either you have enough clout to get one or you paid a huge premium to get one and have a super hard to get watch. look at how this progressed...first the steel watch hype started and they became harder to find, then suddenly every AD started bundling, coincidence? i don't think so, i think it came straight from the top. now you can't even bundle because gold watches are flying off the shelf and selling the instant they come in and now buying gold watches is a privilege. for the first time in a long time people actually want to buy gold watches and they're selling out every single model and making more money than ever. before this they always had one or the other sitting in cases, first it was both, then it was just gold and now the cases are empty. i think they're doing everything right whether it was accidental at first or planned. it's just unfortunate that newcomers can't get watches now

i doubt your AD is getting 1 steel piece every 4-6 months. they all get a decent amount of steel pieces but they just have way too many people they can go to. most of them probably lie because it's easier than saying they chose someone else over you to your face

Everything you say makes sense but how much more are they making by selling out on the precious metal versions at the expense of not maximizing SS sales? Rolex still needs to pay for the gold right?

[huncho]

Originally Posted by skp

Everything you say makes sense but how much more are they making by selling out on the precious metal versions at the expense of not maximizing SS sales? Rolex still needs to pay for the gold right?

i don't know the exact figures but i believe it was posted here recently that they're having record breaking sales despite being in a market dominated by apple watches but basically the lack of SS models is the reason everything is trickling up to two tone and full gold

if they put out more steel models it would sell less gold watches and besides that people would go grey. someone can go spend 25k on a pepsi or they could be like "buy this gold watch and we can get you a pepsi" and in effect maximize their revenue and have someone for 2 sales rather than that person just going grey, in which case they'd only make money off the steel one that ended up with the grey. as long as they sell all their gold models they'll make more so it's in their best interest to have some kind of incentives to get SS pieces

[Tanalasta]

I really don’t know what happens to stock. Nor do I know what is going to be Rolex’s marketing strategy.

But it seems readily apparent that what they are making is being sold. If you’re selling all that your produce, the only way to improve revenue is to either make more (at the risk of devaluing if you over supply) ; sell higher margin pieces (change your product differentiation ratio) or raise prices! It’s a sellers market.


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[Jack T]

Who knows? Who cares?

[teck21]

Once upon a time the AD-grey dealer was symbiotic and tacitly approved by Rolex.

That was in the bad old days when ADs had trouble selling everything, and that’s when greys stepped in to pick up excess inventory at a discount so the AD could make room for new incoming stock from Rolex.

The AD would then resell all this stock at a greater discount, but still with a margin for themselves obviously.

Rolex is a very understanding supplier so they closed one eye to this practice.

However times are completely different now, and the grey is no longer needed to serve this function of cleaning up left overs, because there are no leftovers.

ADs no longer have any excuse to call on the greys and Rolex knows it (they know everything that is happening).

ADs now even have the strength to end discounting.

What purpose does a grey dealer now serve to ADs (and Rolex by extension)?

None at all, in fact now they are an overall negative part of the chain because they facilitate sales of BNIBs from flippers to genuine buyers.

Anyone who thinks that the ADs supply greys with large quantities of watches is just plain wrong.

Rolex will come down very hard on those that do, except where they are in jurisdictions where Rolex has no levers to pull, such as having connections to the ruling elites.

But logic never convinces people that ADs aren’t supplying greys because they all want somebody to blame for the fact that they can’t get what they want from an AD.

Simple demand exceeds supply will not do because blame must be assigned to someone else.


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[skp]

Originally Posted by huncho

i don't know the exact figures but i believe it was posted here recently that they're having record breaking sales despite being in a market dominated by apple watches but basically the lack of SS models is the reason everything is trickling up to two tone and full gold

if they put out more steel models it would sell less gold watches and besides that people would go grey. someone can go spend 25k on a pepsi or they could be like "buy this gold watch and we can get you a pepsi" and in effect maximize their revenue and have someone for 2 sales rather than that person just going grey, in which case they'd only make money off the steel one that ended up with the grey. as long as they sell all their gold models they'll make more so it's in their best interest to have some kind of incentives to get SS pieces

I wouldn't think that would be a good sales strategy. For one, the cost of precious metals are volatile, so your profit margin changes thus making forecasting difficult. Also, one of the main advantages that Rolex has over its competitors is that they use 904L stainless steel and I would think they have that processing ability down. And finally, relying on ADs to use a sales tactic to sell PM pieces would be irresponsible to put it in a good way.

Wouldn't it be more reasonable to think that there was a certain demand for PM pieces and a certain higher demand for SS pieces (totally based on the amount of people in each relative earnings bracket) but both have gone up to a point that there are none of either left unsold? Most people that I know that purchase gold watches do so because they want thave a watch that they paid $$$$ for. They don't have the time to wear a SS watch and they definitely would feel it was a waste of time to flip a SS watch to make a few thousand dollars.

[Jack T]

Originally Posted by skp

I meant by purposely creating an unbalance of supply vs demand thus raising market value. There is no benefit of raising market value if you're not going to take advantage of it. The only point of any business is to increase profit and increase revenue.

How about a thought experiment to illistrate the point? What if Rolex decided to just make one SS watch per year, keep the MSRP at 10K and provide that one piece to an AD and allow the market to stipulate the value?

The counter argument would be that it's all about finding a balance but that balance is not there right now. I don't know that many watch enthusiasts that go out and buy Rolexes or expensive watches for that matter on the regular. However, for the past 20 years of my experience, it was a given that a groom would be gifted a Rolex for a wedding gift. In the past few years, I've been to several weddings and the groom received another watch brand as a gift and I don't think it's because of a decrease in desire for a Rolex.

Can anyone honeslty say that they think Rolex knows exactly what they are doing and this "shortage" of availability is all a part of their plan?

Again, I have to disagree. Rolex has done nothing to create this imbalance of supply vs demand - they are producing as many watches now as they were three years ago. The demand has surged, to a level no one ever forecast; it’s the same across all types of luxury goods, building supplies, industrial materials, residential real estate.

I never knew gifting a Rolex to the groom to be a given; nevertheless I don’t follow your thought experiment - Rolex isn’t allowing the market to determine the price Rolex charges - this dislocation caused by demand has created a boon for the after sellers, not necessarily Rolex; they’re keeping prices flat, retail and presumably wholesale to the AD’s.

Rolex sets and gets their price, the grey market determines value.

[hambone1983]

you can never meet the demand for a product when dealers are forced to sell 30% or 50% below the market price. The demand is virtually limitless under these conditions, it doesn't take Kreskin to understand that

[teck21]

Originally Posted by hambone1983

you can never meet the demand for a product when dealers are forced to sell 30% or 50% below the market price. The demand is virtually limitless under these conditions, it doesn't take Kreskin to understand that

It’s still too much for many to grasp here.

For them MSRP must be the market price, because that’s:

a) how Rolex priced it
b) mass produced
c) it’s not worth more than that
d) insert whatever reason that has absolutely nothing to do with price discovery


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[huncho]

Originally Posted by skp

I wouldn't think that would be a good sales strategy. For one, the cost of precious metals are volatile, so your profit margin changes thus making forecasting difficult. Also, one of the main advantages that Rolex has over its competitors is that they use 904L stainless steel and I would think they have that processing ability down. And finally, relying on ADs to use a sales tactic to sell PM pieces would be irresponsible to put it in a good way.

Wouldn't it be more reasonable to think that there was a certain demand for PM pieces and a certain higher demand for SS pieces (totally based on the amount of people in each relative earnings bracket) but both have gone up to a point that there are none of either left unsold? Most people that I know that purchase gold watches do so because they want thave a watch that they paid $$$$ for. They don't have the time to wear a SS watch and they definitely would feel it was a waste of time to flip a SS watch to make a few thousand dollars.

demand and premiums for PM only started skyrocketting in 2019-2020 when it became hard to get SS models even with bundling so people just went to the next best thing. pay 20-30k for a steel rolex or pay 30k for a full gold rolex...i think it finally hit people that there was a huge disconnect there in terms of value. gold daytonas cost the same as steel ones and eventually with the amount of new money coming in due to stocks/crypto/etc people just started spending it on whatever was available. pretty sure the value of gold doesn't really matter here as the amount of gold that's in these gold watches is way less than the dollar value of the watch

[skp]

Originally Posted by Jack T

Again, I have to disagree. Rolex has done nothing to create this imbalance of supply vs demand - they are producing as many watches now as they were three years ago. The demand has surged, to a level no one ever forecast; it’s the same across all types of luxury goods, building supplies, industrial materials, residential real estate.

I never knew gifting a Rolex to the groom to be a given; nevertheless I don’t follow your thought experiment - Rolex isn’t allowing the market to determine the price Rolex charges - this dislocation caused by demand has created a boon for the after sellers, not necessarily Rolex; they’re keeping prices flat, retail and presumably wholesale to the AD’s.

Rolex sets and gets their price, the grey market determines value.

I don't think we are fully in desagreement here. You feel that Rolex is not purposely manipulating preceived value and the current shortage is just because of increased demand.

I feel that Rolex is not trying to manipulate perceived value and the shortage is because of increased demand but I think Rolex should increase the supply to meet the demand as I feel that there isn't much business sense to not do so. Another poster mentioned that it could make business sense to keep the demand high and availability low so that they could move more PM pieces.

In the asian community, everyone gifts the groom at least a Rolex and many people couldn't even name off another luxury watch brand if asked.

After reading all the threads regarding this issue it seems that a lot of people on forums fall into two camps. One are the "butthurt" people who can't get a Rolex and refuse to pay Grey. And then there are the people who convinced themselve that grey value is the real value and they coughed up the dough, don't wan't the bubble to burst and are tired of the "butthurt" people crying about it.

I don't fall in either. I don't think steel Subs and GMTs are worth 20K but I don't think any less of anyone who did pay grey prices as I would just think that saving on the wait time was worth that much to them. I was just curious because I thought that there seems to be a problem with supply that is not benefiting the consumer nor Rolex.

[doboy007]

Originally Posted by teck21

It’s still too much for many to grasp here.

For them MSRP must be the market price, because that’s:

a) how Rolex priced it
b) mass produced
c) it’s not worth more than that
d) insert whatever reason that has absolutely nothing to do with price discovery


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And yet I paid exactly MSRP + tax on my 124060 last week so that’s my market price.

[Shadow Play]

Originally Posted by teck21

Once upon a time the AD-grey dealer was symbiotic and tacitly approved by Rolex.

That was in the bad old days when ADs had trouble selling everything, and that’s when greys stepped in to pick up excess inventory at a discount so the AD could make room for new incoming stock from Rolex.

The AD would then resell all this stock at a greater discount, but still with a margin for themselves obviously.

Rolex is a very understanding supplier so they closed one eye to this practice.

However times are completely different now, and the grey is no longer needed to serve this function of cleaning up left overs, because there are no leftovers.

ADs no longer have any excuse to call on the greys and Rolex knows it (they know everything that is happening).

ADs now even have the strength to end discounting.

What purpose does a grey dealer now serve to ADs (and Rolex by extension)?

None at all, in fact now they are an overall negative part of the chain because they facilitate sales of BNIBs from flippers to genuine buyers.

Anyone who thinks that the ADs supply greys with large quantities of watches is just plain wrong.

Rolex will come down very hard on those that do, except where they are in jurisdictions where Rolex has no levers to pull, such as having connections to the ruling elites.

But logic never convinces people that ADs aren’t supplying greys because they all want somebody to blame for the fact that they can’t get what they want from an AD.

Simple demand exceeds supply will not do because blame must be assigned to someone else.


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You say that grey dealers no longer serve a purpose to ADs and by extension Rolex.

Surely in the current climate grey dealers are one of the greatest piece of free marketing Rolex and by extension ADs receive? How many other manufacturers can advertise their product with the unwritten tag line that you can immediately make a profit by selling the product on?

[RollieNZ]

Originally Posted by Shadow Play

You say that grey dealers no longer serve a purpose to ADs and by extension Rolex.

Surely in the current climate grey dealers are one of the greatest piece of free marketing Rolex and by extension ADs receive? How many other manufacturers can advertise their product with the unwritten tag line that you can immediately make a profit by selling the product on?

Very true! What the grey dealers provide is liquidity.

An easy way to realise a quick profit.

[teck21]

Originally Posted by Shadow Play

You say that grey dealers no longer serve a purpose to ADs and by extension Rolex.

Surely in the current climate grey dealers are one of the greatest piece of free marketing Rolex and by extension ADs receive? How many other manufacturers can advertise their product with the unwritten tag line that you can immediately make a profit by selling the product on?

The free marketing you speak of is in the secondary prices, not the grey dealers themselves.

These prices exist with or without greys like DavidSW.


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[HL65]

Demand isn’t going down so no.

[Goin2drt]

Walk into another AD this one in Cincy. One watch in 4 cases. Looked completely stupid. Meanwhile Omega, Breitling, Tudor, Grand Seiko and others all had plenty of supply. People will just move on except for the hardcore got to have Rolex people.

[RollieNZ]

[QUOTE=teck21;11684237]The free marketing you speak of is in the secondary prices, not the grey dealers themselves.

These prices exist with or without greys like DavidSW.]

I'm not sure the prices would be so high in the secondary market without the Grey's.

How much more difficult would it be to buy and sell without them facilitating deals?

[teck21]

[QUOTE=RollieNZ;11684267]

Originally Posted by teck21

The free marketing you speak of is in the secondary prices, not the grey dealers themselves.

These prices exist with or without greys like DavidSW.]

I'm not sure the prices would be so high in the secondary market without the Grey's.

How much more difficult would it be to buy and sell without them facilitating deals?

This is a two edged sword.

Being able to sell to greys easily is one of the big attractions of Rolex flipping.

This increases supply to greys. It cancels out the ease of buying from greys which increases demand.

Ultimately, the greys merely facilitate price discovery, take them out of the equation and the price discovered is likely to be similar.



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[strettyend]

Originally Posted by Goin2drt

Walk into another AD this one in Cincy. One watch in 4 cases. Looked completely stupid. Meanwhile Omega, Breitling, Tudor, Grand Seiko and others all had plenty of supply. People will just move on except for the hardcore got to have Rolex people.

Maybe on the margin, and no disrespect to those other brands, but in the eyes of many of these consumers there is no substitute for Rolex

[BLNR Nairobi]

Originally Posted by Goin2drt

Walk into another AD this one in Cincy. One watch in 4 cases. Looked completely stupid. Meanwhile Omega, Breitling, Tudor, Grand Seiko and others all had plenty of supply. People will just move on except for the hardcore got to have Rolex people.

Might you have considered that there’s a reason Rolex cases are empty and Omega/Breitling/etc are full (and even sell at a discount) yet they are so available?

I could pick up (almost) any Omega and any Breitling today. The only delay would be a car ride to the mall complex. Nothing to stop people ‘angry’ at Rolex from swarming Omega and Breitling ADs and picking the cases clean of watches. Buyer’s choice even, and at a discount.

Yet, they remain full and collecting dust.

Must be a lot of ‘hardcore got to have Rolex people’ out there, or maybe the demand for a 300m, Planet Ocean or Super Ocean isn’t the same.

[Harry-57]

Originally Posted by Goin2drt

Walk into another AD this one in Cincy. One watch in 4 cases. Looked completely stupid. Meanwhile Omega, Breitling, Tudor, Grand Seiko and others all had plenty of supply. People will just move on except for the hardcore got to have Rolex people.

This has been the case for at least two years. How much longer do you think it will take to drive all but the hard core business away from Rolex?

According to Morgan Stanley, in 2020 Rolex sold more than the Swatch Group as a whole. How much longer do you think it will take the Swatch Group to get back ahead of Rolex, never mind just Omega? After all, their watches are on sale and in plentiful supply, and better still, most are available through grey dealers at significant discounts.

Those of us on waiting lists would like to know.

[Shadow Play]

Originally Posted by Goin2drt

Walk into another AD this one in Cincy. One watch in 4 cases. Looked completely stupid. Meanwhile Omega, Breitling, Tudor, Grand Seiko and others all had plenty of supply. People will just move on except for the hardcore got to have Rolex people.

Have you ever wondered why the Omega, Breitling, Tudor and Grand Seiko displays are almost full? The demand just isn’t there. Imagine how full the cases would be if they produced the same number of watches as Rolex?

An awful lot of people will wait patiently for Rolex.

[Jack T]

Originally Posted by Shadow Play

Have you ever wondered why the Omega, Breitling, Tudor and Grand Seiko displays are almost full? The demand just isn’t there. Imagine how full the cases would be if they produced the same number of watches as Rolex?

An awful lot of people will wait patiently for Rolex.

Good point, although I’m not sure how patient they will be, which buoys the grey market.

My guess is that those other brands will benefit more from experienced collectors that have a full stable, and don’t have that ‘gotta getta Rolex’ mentality.

After all, Omega makes some great watches, Grand Seiko has superb movements, incomparable finishing. Watch enthusiasts know this well.

[teck21]

Originally Posted by Jack T

Good point, although I’m not sure how patient they will be, which buoys the grey market.

My guess is that those other brands will benefit more from experienced collectors that have a full stable, and don’t have that ‘gotta getta Rolex’ mentality.

After all, Omega makes some great watches, Grand Seiko has superb movements, incomparable finishing. Watch enthusiasts know this well.

Rolex is unparalleled because experienced collectors or watch lovers form a very underwhelming portion of its customer base.

This is the very reverse of every other watch brand. Not including the fashion house ones like Cartier obviously.

Most people who buy, or wish to buy a Rolex today know nothing about impeccable finishing and complications are things that happen in their life, not something in a watch.

A lot of WIS would like to think a large number of watch buyers will be looking into other brands if they can’t get a Rolex, as any watch lover would do.

But the reality is that most people in the market for Rolex watches, are not in it for a watch at all.

They’re only in it for Rolex.

Rolex or bust.

And not being able to obtain one does not drive them elsewhere, it further fuels their desire.


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[CactusTreeFiddy]

Maybe not by the end of the year, but it's a known issue that supply has been throttled because of covid (orthogonal to demand because of other rallying markets)

Grey market listings have clearly diminished over the past year, which is 100% a supply-side shock and nothing to do with demand. This is at least one major contributing factor to prices increasing like crazy

Make no mistake, Rolex's output will increase substantially at some point in the near future, and grey market prices will reflect this accordingly. It's just a question of how patient you're willing to be

[nachopc]

Originally Posted by teck21

Rolex is unparalleled because experienced collectors or watch lovers form a very underwhelming portion of its customer base.

This is the very reverse of every other watch brand. Not including the fashion house ones like Cartier obviously.

Most people who buy, or wish to buy a Rolex today know nothing about impeccable finishing and complications are things that happen in their life, not something in a watch.

A lot of WIS would like to think a large number of watch buyers will be looking into other brands if they can’t get a Rolex, as any watch lover would do.

But the reality is that most people in the market for Rolex watches, are not in it for a watch at all.

They’re only in it for Rolex.

Rolex or bust.

And not being able to obtain one does not drive them elsewhere, it further fuels their desire.


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This !


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[Goin2drt]

Originally Posted by BLNR Nairobi

Might you have considered that there’s a reason Rolex cases are empty and Omega/Breitling/etc are full (and even sell at a discount) yet they are so available?

I could pick up (almost) any Omega and any Breitling today. The only delay would be a car ride to the mall complex. Nothing to stop people ‘angry’ at Rolex from swarming Omega and Breitling ADs and picking the cases clean of watches. Buyer’s choice even, and at a discount.

Yet, they remain full and collecting dust.

Must be a lot of ‘hardcore got to have Rolex people’ out there, or maybe the demand for a 300m, Planet Ocean or Super Ocean isn’t the same.

Yeah I don’t know about collecting dust. Or do they produce enough to fill demand. Just because Rolex cases are always empty means nothing about their brand other then they don’t make enough for the demand that exist, high or low. Richard Mille cases are empty as well and they only sell about 4K watches a year. Your argument is a silly one. “Just because cases are full means they are unwanted crappy watches that no one wants to buy”.

Originally Posted by Harry-57

This has been the case for at least two years. How much longer do you think it will take to drive all but the hard core business away from Rolex?

According to Morgan Stanley, in 2020 Rolex sold more than the Swatch Group as a whole. How much longer do you think it will take the Swatch Group to get back ahead of Rolex, never mind just Omega? After all, their watches are on sale and in plentiful supply, and better still, most are available through grey dealers at significant discounts.

Those of us on waiting lists would like to know.

Correct in market share by dollars and that is driven by their average price per watch. They don’t sell the most units and actually not even close to a few others hence the always the empty shelves. They clearly don’t make enough for the demand.

So why bother having empty cases or making ADs reserve the real estate in
their store when they will never fill them. Let them reserve about 5 watch spaces and use the rest of the real estate to actually sell something.

[Shadow Play]

Genuine question. Quite a few people here convinced Rolex are losing a lot of business to other brands due to shortages (I’m not convinced).

How many of you saying this have started off looking for a particular Rolex model and ended up purchasing something else. I’d be very interested to hear what Rolex you planned to purchase and what watch you ended up purchasing instead.