I think I’d modify this, though: if by “desirable” to the average Omegaforums watch collector, maybe. But if instead we mean “desirable” to the average Rolex consumer, I’m not as sure either way.
I mean, what’s more “desirable”: one $60k watch sold, or three $20k watches sold?
Meanwhile, generally accepted lore (even by those most critical of Rolex) so that their highest selling model is the TT DJ. That may feel surprising to the Omegaforum crowd, but probably doesn’t feel surprising to the Aunt Cheryls and Uncle Larry’s of the world.
How does it benefit Rolex the business if I buy three GMT or one GMT and two DJs. In terms of sales that is. I understand the benefit to them in terms of brand strength and limiting supply to gain hype.
So Rolex are limiting supply of GMTs so they can sell TT DJs?
How does it benefit Rolex the business if I buy three GMT or one GMT and two DJs. In terms of sales that is. I understand the benefit to them in terms of brand strength and limiting supply to gain hype.
Look at the graph in the Morgan Stanley report. SS is 60% of units, but only 40% of value. Bi-Metal is 6% of units, but 18% of value. Stated more simply, the average bi-metal unit sells at much higher prices per unit on the wholesale market than SS, therefore it is reasonable to assume Rolex makes more money on each bi-metal unit vs. each SS unit. This of course assumes relatively similar costs of production. I'm sure that is not strictly accurate, but as bi-metal units appear to sell at 4.5 times the price per unit as SS (per the Morgan Stanley data), I think it is reasonably safe to assume any production cost difference are swamped by the difference in selling price. The case is even stronger for precious metal which is 2% of units and 34% of value - implying an average PM wholesale selling price of 25.5 times the average SS wholesale price.
For perspective from the retail level, last I checked the MSRP on a steel GMT was about $10K. The DJs in my ADs cases all have MSRPs ranging from $13K to over $20K. As expected they are all bi-metal with diamond markers and such. Day Dates start at like $35K and go (way) up from there. The key is not that the collector is buy 2 steel $9K DJ to get one steel $10K GMT instead of buying 3 $10K GMTs. The key is that collectors are buy 2 $15K DJs to get one steel $10K GMT instead of buying 3 $10K GMTs.
So Rolex are limiting supply of GMTs so they can sell TT DJs?
https://drive.google.com/file/d/1OWFrI0kmvguTMFpaeNWy8wWmTYkltpn9/view
The MS findings for 2020 are consistent with the prior years that I’ve read. The report itself gives some 40k view of MS’s methodology in arriving at what they believe is investment-grade information about the performance of differing brands. This year’s report appears to go to greater lengths to describe its methodology wrt Rolex, govern the resulting challenges of it being non-public: but they offer some fairly interesting insights (such as many countries having laws that still require Rolex to publically report unit and value numbers for in-country sales/imports, etc.) from which MS backs into their estimates.
While I am sure various caveats and instances of scrutiny can be applied to these investment consultants published investment advice, I personally consider it far better (even if imperfect) information compared to one person’s anecdotal observations regarding empty display cases.
here are just a few summaries relevant to the assertion that Rolex sells more units at a higher price point than any other manufacturer:
And this is not something new to 2020:
IMO, yes. Others may disagree, but the key for me in all of this is product mix, rather than overall numbers.
This forum is definitely opinion driven. And I am just giving my two cents worth here. First, I think many of us can agree that Rolex has some fantastic looking watches. They are so iconic and appear timeless, never going out of style!
With that said, we all know it's almost impossible to get one of the most desired Rolex sports watches at an AD now days unless you spend lots of money establishing a long term customer relationship. And to be real here, many people would do well just to own one luxury watch - let alone spending many thousands of dollars at an AD - just for the privilege of getting on a real or imagined Rolex waitlist at retail. I cannot do it and I am sure I am in the same boat with the majority of folks out there.
All that being said, I think there is a big plus for those of us that can just forget Rolex. First, other luxury brands, like Omega offer outstanding watches at far less cost versus a Rolex. Second, only being human, many of us simply want what we might think we cannot have - creating a bigger monster of the supply and demand problem with Rolex. And when you see that for what it is - it helps you get over the whole idea of desiring a Rolex.
But, another way of looking at this (at least for me) is the following. I want a nice luxury watch for the simple enjoyment of wearing it myself! If my watch happens to be noticed at all by others (and probably not), I would only hope to get a comment like "that's a nice watch" or something simple like that - period! I don't want others to be forming instant conclusions in their minds about what I might have paid for something on my wrist along with all the positive or negative perceptions that those people then form in their minds because it's a "Rolex". Like it or not, (or whether you care or not) it just happens when others see someone wearing a Rolex.
The funny part is, most non-watch geeks (that don't follow watch brands like all of us participating here) have "no" idea that you could actually pay far more for something like a Patek Philippe or any other number of super expensive watches that only the most wealthy people could ever own. They've only heard of "Rolex" and whatever their perceptions about this brand happens to be.
So for me, again, I just want a nice watch that speaks to me and that I enjoy wearing. And something that I can actually purchase by walking into an AD without all the hassles and problems that come with Rolex.
IMO, yes. Others may disagree, but the key for me in all of this is product mix, rather than overall numbers.
So we are all in agreement Rolex limit supply of SS watches. Rolex aren’t about selling the most units, it’s about making the most money out of the units it sells. I think we’ve answered the OP’s question. Only took 44 pages.
I totally agree on what a “halo” product is supposed to do for the entire line of products.
What is less clear to me though is whether that dynamic is quite what we think.
While an imperfect analogy, I’ll refer again to Nike and the sneaker world. The limited edition “halo” sneakers that are the focus of collectors, the sneaker grey market, etc., are no doubt there to buttress the sales of the regular dad shoes. But that’s not because the dad shoes are the tail of the dog, it’s instead because the dad shoes are actually the bulk of Nike’s volume and have considerable profit margins compared to the “halo” products. So the “halo” sneakers are used to (1) make the most popular (by volume) dad sneakers even more popular, and provide cost coverage for those most popular dad sneakers (because who wouldn’t pay $90 for a dad sneaker if there’s hype around “halo” shoes going for $300), etc.
Sometimes in this thread it’s insinuated that the only Rolex people want are SS sports models, and SS sports models are used to impart any popularity at all on the other models. This is the part I’m still not convinced of, as I think it’s possible Rolex’s non-SS sports models are their dad shoes: what they sell most of to the most people who aren’t “halo” buyers/collectors?
Sometimes in this thread it’s insinuated that the only Rolex people want are SS sports models, and SS sports models are used to impart any popularity at all on the other models. This is the part I’m still not convinced of, as I think it’s possible Rolex’s non-SS sports models are their dad shoes: what they sell most of to the most people who aren’t “halo” buyers/collectors?
Do we see posts asking why people can’t but a TT DJ?
Not so much FOMO and flexing associated with he the “dad shoe” models...
