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I don't understand the recent Rolex SS craze/shortage. What am I missing?

cvalue13
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ckhaing ckhaing
i am not clear how secondary market (both gray and used) higher pricing helps Rolex SA directly, maybe indirectly?

To pile on what others have mentioned:

If grey is above MSRP, it has at least three main positive effects: official retailers can charge full MSRP, virtually all inventory is going to sell and quickly (significant to bottom line), and the manufacturer can incrementally increase MSRP at a steady growth rate.

Conversely, when grey is below MSRP, it has the corollary downsides of the above.

So, the net difference between these two postures is a big swing in outcomes for manufacturers.

This is, at least, how I’ve seen the professional analysts characterize the business models and outcomes.
 
ckhaing
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it looks like to me that omega is trying to replicated as -

OB equivalent to Rolex AD <- willing to cater only to VIP / larger than individual transactions
Omega AD equivalent to Rolex grey channel <- true retail price and availability
 
S
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cvalue13 cvalue13
No doubt for me that keeping grey market prices above msrp is a key business aspiration.

I find it hard to believe, though, that Rolex doesn’t care about ‘unscrupulous AD’s taking kickbacks in back door sales’? That doesn’t square with the stories I’ve heard about Rolex’s treatment of ADs.

But, hell if I know
I concur with you that AD are always saying how hard Rolex is making their life. But strangely from the Rolex statement it is clear they do not get involved in allocation of watch I.e they do not tell the AD what to do.
 
DoctorEvil
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ckhaing ckhaing
it looks like to me that omega is trying to replicated as -

OB equivalent to Rolex AD <- willing to cater only to VIP / larger than individual transactions
Omega AD equivalent to Rolex grey channel <- true retail price and availability
It depends on the watch too. As I understand it, Seamaster Pro and Speedmaster Pro are still easy to get. However, you'd be waiting for a long time if you wanted a Snoopy.

Reading some of the other threads on this forum it seems that the days of getting big discounts from your Omega AD may soon be over as it appears they are being instructed not to discount. So yes, it looks like Omega may be starting to resemble Rolex.
 
S
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ckhaing ckhaing
it looks like to me that omega is trying to replicated as -

OB equivalent to Rolex AD <- willing to cater only to VIP / larger than individual transactions
Omega AD equivalent to Rolex grey channel <- true retail price and availability
I beg to disagree. The only watch that Omega has a waiting list is the Snoopy. I spoke to a boutique a few months ago and they told me that last year they were taking deposit for the snoopy and by December 2020 they were contacted by Omega telling them to stop taking anymore deposits as they will not be able to deliver more watches. All the people that have paid their deposit in 2020 should get their watch in 2021. This shows that their is a way to do business honestly! Maybe Rolex should take a leaf out of Omega’s book!
 
ckhaing
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S Shay
... only watch that Omega has a waiting list is the Snoopy.....

no more waiting list on 321?

other than that, it is fair play anyway

most of the omega watches are / have been below MSRP at AD, but that may no longer be the case in years to come

and AD paid for their inventory, so to some extent they should be able to do what is for their best interest with their own watches
Edited:
 
S
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ckhaing ckhaing
no more waiting list on 321?

other than that, it is fair play anyway

most of the omega watches are / have been below MSRP at AD, but that may no longer be the case in years to come

and AD paid for their inventory, so to some extent they should be able to do what is for their best interest with their own watches
Agree. My point is that there might be a way for Rolex to make a waiting list and weed out the flippers.
 
ckhaing
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flippers are not watch lovers. what they want is money out of watches. they do not want the watch.

too much flippers is going to lead to the price bubble - burst cycle (maybe we are already there)

burst is more likely to happen after a good number of mechanical watch collectors who are / were the net cash injectors into the market running out of quarters due to their typical age group (they put their hard earn money in to watch market)

while there is not enough cash injection, all the flippers want is to milk out the cash, there be net cash outflow from the whole watch market
Edited:
 
Donn Chambers
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cgaites cgaites
When an AD sells someone a new SS Daytona at MSRP, they are effectively paying that person (the buyer) $20K to take the watch out of their inventory. I imagine it’s a pretty easy sale.

As long as secondary market prices remain above MSRP, and ADs are restricted to selling only at MSRP, then any watch purchase represents an arbitrage opportunity to the buyer. As such, AD shelves will remain empty because demand for free money is always extremely high.

If ADs were allowed to sell at the market clearing price, then AD stock levels would pretty instantly return to normal. As it is under current Rolex policy, ADs have for all intents and purposes become wholesalers. Grey market dealers are the new retail channel for the end customer. We all just have to face the fact that a new Submariner really does cost $13K, and unless we’re willing to buy wholesale quantities of merchandise from an AD to access wholesale pricing, we are not really the ADs customer anymore.

I think this is a strategy that would work for Rolex (and the consumer) in the long-run. Remember, the S in MSRP stands for “suggested.” I know that consumers who are looking to make an instant profit by flipping the watch with complain about this, but buyers who have no other hope than finding one on the gray market would probably be ecstatic — they could get the Rolex they want for the price they would have to pay anyway somewhere else AND be certain to have the full warranty behind it.

I expect that eventually the craziness would subside and the price would trend back toward the MSRP or a little higher.
 
E
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So, how does this work for the car market? Went to service my Nissan and the lot was literally empty, all they had was used cars, hell I owe 17.8k on my car and they were willing to give me 20k for my used car, they only had like 10 new cars they got off the truck and the new car I was interested was on hold until later this month, the shortage is like that everywhere except for BMW.

watches are no different, everyone is getting away with selling 10k over msrp, shit they were trying to sell me a new 2022 pathfinder for 45k but I had to put a 6k down payment to guarantee for me.
It sucks to buy anything right now. No brand is safe.

just went to a local ad and told me their waiting list is 3 years for a Rolex.

They only had 4 Rolexes on display, 1 older male Celllini and 3 female models .

With that said it makes me curious if I would have better luck flying to Vegas or New York stores just to see
 
S
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E eldiano84
So, how does this work for the car market? Went to service my Nissan and the lot was literally empty, all they had was used cars, hell I owe 17.8k on my car and they were willing to give me 20k for my used car, they only had like 10 new cars they got off the truck and the new car I was interested was on hold until later this month, the shortage is like that everywhere except for BMW.

watches are no different, everyone is getting away with selling 10k over msrp, shit they were trying to sell me a new 2022 pathfinder for 45k but I had to put a 6k down payment to guarantee for me.
It sucks to buy anything right now. No brand is safe.

just went to a local ad and told me their waiting list is 3 years for a Rolex.

They only had 4 Rolexes on display, 1 older male Celllini and 3 female models .

With that said it makes me curious if I would have better luck flying to Vegas or New York stores just to see
Did they try to sell the Cellini to you?
 
Davidt
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blufinz52 blufinz52

The first video I’ve seen that hits the nail on the head re:Rolex et al supply issues.
 
E
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S Shay
Did they try to sell the Cellini to you?
Not at all, he wasn’t trying to sell me anything. Even when I asked about the wait list he didn’t even asked if I wanted to be in it or what type of model I was interested in but Hey at least I got a nice 2021 brochure out of it
 
rob#1
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E eldiano84
So, how does this work for the car market? Went to service my Nissan and the lot was literally empty, all they had was used cars, hell I owe 17.8k on my car and they were willing to give me 20k for my used car, they only had like 10 new cars they got off the truck and the new car I was interested was on hold until later this month, the shortage is like that everywhere except for BMW.

watches are no different, everyone is getting away with selling 10k over msrp, shit they were trying to sell me a new 2022 pathfinder for 45k but I had to put a 6k down payment to guarantee for me.
It sucks to buy anything right now. No brand is safe.

just went to a local ad and told me their waiting list is 3 years for a Rolex.

They only had 4 Rolexes on display, 1 older male Celllini and 3 female models .

With that said it makes me curious if I would have better luck flying to Vegas or New York stores just to see

It’s a tad different with cars; COVID has caused many delays in vital parts for cars so availability has decreased. I heard of a dealer that had sold all but one of their incoming Porsche’s for the next year. Therefore second hand cars have gone up in value, especially so for desirable models. Add that to the fact that people can’t spend their disposable income on skiing holidays, etc. which means they have to spend it somewhere and a new car (secondhand if need be) becomes desirable (this also explains why kitchen and pool companies and the like are so busy).

With Rolex, the supply issue was around way before COVID hit...
 
cvalue13
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blufinz52 blufinz52

Does a good job of emphasizing that luxury brands do not *really* sell commodities like watches, but instead ideas like exclusivity/prestige.
 
ckhaing
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S Shay
Did they try to sell the Cellini to you?

have been looking for cellini 5240 or 5241, sort of want to buy but has never seen in flash yet and better not to pull the trigger just from online photos

i wonder if any b&m stores (either AD or not) may have left over stock or second hand, ideally in southern california area, to go and see
 
S
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E eldiano84
Not at all, he wasn’t trying to sell me anything. Even when I asked about the wait list he didn’t even asked if I wanted to be in it or what type of model I was interested in but Hey at least I got a nice 2021 brochure out of it
I have then to give credit to my AD, they have been trying to sell me a Cellini for a while with a 15-20% discount 😀.
 
S
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ckhaing ckhaing
have been looking for cellini 5240 or 5241, sort of want to buy but has never seen in flash yet and better not to pull the trigger just from online photos

i wonder if any b&m stores (either AD or not) may have left over stock or second hand, ideally in southern california area, to go and see
To be honest they are very nice watches. I know many people don’t like them, the rose gold is quite nice. The white gold is nice, but you it looks like steel. The issue is for that price whether you can add some more money and get a Patek Calatrava! I would however think that the Cellini movement is very sturdy. If I had to buy a Rolex and money is no issue I would be happy with the Celini. They are easy to get at wire but discount.
 
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