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.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.
Availability
Re: Availability
Re: Availability
Pretty sure the margin is still 30-35% or better, so hardly a “loss leader” IMOsierra11b 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.
- JP Chestnut
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Re: Availability
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.sierra11b wrote: ↑Sat Oct 02, 2021 10:25 amYears 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.
Re: Availability
========JP Chestnut wrote: ↑Sat Oct 02, 2021 11:50 amPer 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.sierra11b wrote: ↑Sat Oct 02, 2021 10:25 amYears 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.
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.
Re: Availability
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.jimyritz wrote:========JP Chestnut wrote: ↑Sat Oct 02, 2021 11:50 amPer 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.sierra11b wrote: ↑Sat Oct 02, 2021 10:25 amYears 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.
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.
- streetracer101
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Re: Availability
And the risk of fraud, which is pretty common when selling online.JP Chestnut wrote: ↑Sat Sep 25, 2021 7:44 amThey 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.
- JP Chestnut
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Re: Availability
I mean gross margin. (MSRP - COGS)/MSRPSeppia wrote: ↑Sun Oct 03, 2021 7:41 amYou mean markup*?JP Chestnut wrote: ↑Sat Oct 02, 2021 11:50 amPer 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.sierra11b wrote: ↑Sat Oct 02, 2021 10:25 amYears 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.
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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