Why is there so much demand and customers willing to wait for a mass-produced watch? The answer is in Rolex brand, as defined by quality, design and marketing
Why can't Rolex up the production to meet demand? They can, but why would they want to. By artificially controlling supply they can maintain and grow their pricing, inflate demand, and sustain "exclusive"\"desired" brand image.
It reminds me when I was in my twenties. The best uptown discotheque in my city used to make customers wait outside in line for hours. They were very picky of who could go in, they had a very strickt dress code. Of course if you had their VIP cards you could walk straight in. When they were at the top of their success they would even turn many customers away.
When things started to go down hill the situation changed dramatically. No more lines and you could get in with your pants on your head.
In short. I believe this way of doing business is good in a short run but when too many customers feel mistreated by a company this leads to dissatisfaction and in bad times this can crack a business.
I hope Rolex really only has too much demand and they can't keep up, because if it's really them being snob and controlling supply it's really sad and not very professional.
I just bought my first two watches and they are both Rolex, they are great quality no doubt, but still, if I feel mistreated they can kiss my future money goodbye. Maybe now they would laugh at me and not care but when the tide turns they probably regret every penny they lost.
Rant finished :laughing::laughing:
I think the real reason has to do with incentives for the Rolex AD's. Rolex wants them to sell more of the PM Daytonas, which are a harder sell than the SS models, but are also more profitable. If there were lots of SS models around, fewer PM models would be sold. Rolex also probably rewards dealers with a better allocation of SS models if they sell more of the PM's.
Rolex could definitely ramp up production but isn't doing it. On the other hand, it's not like they're destroying merchandise to increase scarcity, like Louis Vuitton does.
I'm sure they could increase their factory size by adding in more machines. Their production is so automated that they don't rely on increasingly rare artisans that require years of practice to perfect their craft. But increasing production like that would put them at risk of overexpansion, which would result in excess supply and completely destroy the value retention of their products that they've so carefully built up. They're too smart for that; If they've shown us one thing, it's that they're brilliant at marketing and selling their product.
The better question would be why are people paying ridiculous markups and clamoring for a mass-produced watch that will become more plentiful with time?
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