Availability

Discussion of Rolex Watches.
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sierra11b
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Re: Availability

Post by sierra11b » Sat Oct 02, 2021 10:25 am

Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.

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BacoNoir
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Re: Availability

Post by BacoNoir » Sat Oct 02, 2021 11:05 am

sierra11b wrote:Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Yep. My AD told me about how Rolex was strong arming him to update his store to the boutique look and what it cost him. I was shocked, but he said that price tag was worth it because having the brand brought in so much business for other sales.
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hoppyjr
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Re: Availability

Post by hoppyjr » Sat Oct 02, 2021 11:49 am

sierra11b wrote:Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Pretty sure the margin is still 30-35% or better, so hardly a “loss leader” IMO

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JP Chestnut
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Re: Availability

Post by JP Chestnut » Sat Oct 02, 2021 11:50 am

sierra11b wrote:
Sat Oct 02, 2021 10:25 am
Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Per the last order sheet I saw, margin on Rolex is about 35%. On diamonds, it's more like 400%+. I doubt they lose money on them, but clearly selling nothing but Rolex watches at MSRP isn't a super profitable business model for ADs.

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jimyritz
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Re: Availability

Post by jimyritz » Sat Oct 02, 2021 12:18 pm

JP Chestnut wrote:
Sat Oct 02, 2021 11:50 am
sierra11b wrote:
Sat Oct 02, 2021 10:25 am
Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Per the last order sheet I saw, margin on Rolex is about 35%. On diamonds, it's more like 400%+. I doubt they lose money on them, but clearly selling nothing but Rolex watches at MSRP isn't a super profitable business model for ADs.
========
Heard the same thing, make a little on the watches and a lot on the diamonds....You wonder if these ADs are wishing they took another route. For some a quarter of their store is dedicated to Rolex, their web site is branded Rolex and their display cases and wall cases are empty, not a single watch.

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BacoNoir
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Re: Availability

Post by BacoNoir » Sat Oct 02, 2021 12:27 pm

jimyritz wrote:
JP Chestnut wrote:
Sat Oct 02, 2021 11:50 am
sierra11b wrote:
Sat Oct 02, 2021 10:25 am
Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Per the last order sheet I saw, margin on Rolex is about 35%. On diamonds, it's more like 400%+. I doubt they lose money on them, but clearly selling nothing but Rolex watches at MSRP isn't a super profitable business model for ADs.
========
Heard the same thing, make a little on the watches and a lot on the diamonds....You wonder if these ADs are wishing they took another route. For some a quarter of their store is dedicated to Rolex, their web site is branded Rolex and their display cases and wall cases are empty, not a single watch.
I asked my guy about that and he said the name outside draws people in and when they don’t have the watch they were hoping to see, they see the other brands and jewelry. He said there is no better advertising to get someone to walk in off the street and end up with a sale.
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streetracer101
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Re: Availability

Post by streetracer101 » Sun Oct 03, 2021 4:55 am

JP Chestnut wrote:
Sat Sep 25, 2021 7:44 am
JBZ wrote:
Sat Sep 25, 2021 7:39 am
SoCal C4S wrote:
Fri Sep 24, 2021 6:40 pm
They own their supply chain already. Just cut out the AD middle man, and have DHL and FedEx continue to ship and fulfill their orders D2C.
Assuming a company can afford the start up costs for direct sales (and I’m sure Rolex can), I would think this is the way to go. It’s (a lot of) found money. Omega charges MSRP on their website. So full retail price is what they’re making rather than wholesale.
They also eat the risk of overstocking. Not a problem for ROLEX but I bet IWC would prefer to shift that risk to an AD network.

That assumes these guys don’t us buyback contracts.
And the risk of fraud, which is pretty common when selling online.

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Seppia
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Re: Availability

Post by Seppia » Sun Oct 03, 2021 7:41 am

JP Chestnut wrote:
Sat Oct 02, 2021 11:50 am
sierra11b wrote:
Sat Oct 02, 2021 10:25 am
Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Per the last order sheet I saw, margin on Rolex is about 35%. On diamonds, it's more like 400%+. I doubt they lose money on them, but clearly selling nothing but Rolex watches at MSRP isn't a super profitable business model for ADs.
You mean markup*?

In any case, I imagine that would be gross profit.
I doubt net profit for the AD is higher than single digits, I would guess after factoring in all costs they would be VERY lucky to make 5%.
Reality should be close to 0% if not negative.

It's either that, or Rolex managers are grossly incompetent (which I doubt).

*margin is calculated down from selling price while markup is calculated on top of purchase cost

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JP Chestnut
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Re: Availability

Post by JP Chestnut » Sun Oct 03, 2021 8:10 am

Seppia wrote:
Sun Oct 03, 2021 7:41 am
JP Chestnut wrote:
Sat Oct 02, 2021 11:50 am
sierra11b wrote:
Sat Oct 02, 2021 10:25 am
Years ago I was told by the owner of a local well known jewelry chain that they’re loss leaders anyway, and that the real money is selling that 2ct diamond ring for her in conjunction with the watch for him. I also remember his tone being very bitter towards Rolex as if he really couldn’t get inventory and was tired of their shit. Makes sense. I agree that it’s a temporary problem for them in that they’ll eventually sell by boutique only.
Per the last order sheet I saw, margin on Rolex is about 35%. On diamonds, it's more like 400%+. I doubt they lose money on them, but clearly selling nothing but Rolex watches at MSRP isn't a super profitable business model for ADs.
You mean markup*?

In any case, I imagine that would be gross profit.
I doubt net profit for the AD is higher than single digits, I would guess after factoring in all costs they would be VERY lucky to make 5%.
Reality should be close to 0% if not negative.

It's either that, or Rolex managers are grossly incompetent (which I doubt).

*margin is calculated down from selling price while markup is calculated on top of purchase cost
I mean gross margin. (MSRP - COGS)/MSRP

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Seppia
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Re: Availability

Post by Seppia » Sun Oct 03, 2021 8:13 am

So 400% on diamonds is a mathematical impossibility
That’s how I got confused
:cheers:

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