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Discussion Starter · #1 ·
I recently came across a Rolex ADs stocklist.


While it was consistent with the public knowledge of a 40% markup mentioned on other forums and other posts on WUS, I'm not sure if I can see Rolex the same way again.

Just to put things into perspective, this would translate to the cost price of a

Ceramic daytona - just over $7k USD
Batman - just over $5k USD
Hulk - just over $5k USD
Oyster perpetual 39 - just over $3k


While I did take a step back and acknowledge that
- Rolex invests a lot into their store fronts
- Rolex funds and sponsors a ton of events
- That only a small population of the watches will be sold


I'm not sure if the points above justify how it's controlling it's current supply to ADs.
Especially seeing that a ton of in demand sports models like the batman, ceramic daytonas and hulk are only supplied to ADs in 2019, but they were made and left the factory in 2010.


It really puts into question - what are really paying for when we buy a Rolex.
Are we paying for the quality or are we paying for the status?

Any thoughts on this matter?
 

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Patek Philippe 5960P, Grand Seiko SBGM221, Rolex 16570 Exp II Polar, Omega Speedmaster FOIS
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Rolex doesn’t invest a single cent into store fronts, that’s a cost that the AD has to bear. The AD also has to pay the rent, the electricity, the staff wages, the insurance, the pensions etc etc etc. If AD’s only made small margins there’d be no AD’s as it simply wouldn’t be profitable.
 

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We all know they’re not worth what we pay for them however unlike most brands you can still sell them on for the same or more at a later date IF that is important to you. Understanding this doesn’t help however, if you believe you deserve to buy what you want, when you want and at a big retail discount.
I can deal with AD pricing but when AD’s are selling to grey’s to fuel their greed, I draw the line and take my money elsewhere hence the reason I just added a Speedy Pro to my daily wear instead of buying another Rolex and couldn’t be happier with my choice.
 

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I recently came across a Rolex ADs stocklist.
::
... consistent with the public knowledge of a 40% markup mentioned on other forums and other posts on WUS, I'm not sure if I can see Rolex the same way again.
::
I'm not sure if the points above justify how it's controlling it's current supply to ADs.
::
It really puts into question - what are really paying for when we buy a Rolex.
::
Any thoughts on this matter?
Rolex doesn’t invest a single cent into store fronts, that’s a cost that the AD has to bear. The AD also has to pay the rent, the electricity, the staff wages, the insurance, the pensions etc etc etc. If AD’s only made small margins there’d be no AD’s as it simply wouldn’t be profitable.
Hubs is right. The 40% mark up or in some cases slightly more is consistent with manufacturing. It is the same as the perfume, the pair of shoes etc. that you buy. Manufacturers set the RRP after taking into account the "market perception" of their products. Sweat shops in Vietnam, Bangladesh and China make garments for big brands where the mark ups are 200%.

The huge difference in RRP and cost price is to allow retailers - e.g. Walmart or Macy's - to make some money and cover marketing, rent, staff salaries, pension etc. In the case of the AD, they carry all the financial risk in being a Rolex AD.

To answer your original question, you are paying for the privilege to wear a Rolex.
 

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It really puts into question - what are really paying for when we buy a Rolex.
Are we paying for the quality or are we paying for the status?
Both, the quality is there, as is the status, they are not mutually exclusive.
Rolex has, either by design or by chance/luck, created a brand that can not only stand on its own in terms of workmanship / longevity but also has mass appeal at the luxury end of the market, and a certain image in pretty much most peoples minds.
 

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Other brands prices will shock just as much. Why pick on Rolex?

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Simple explanation Mr. Knight Rider. Rolex is an easy target. Even the people in the public forum thread call Rolex owners tools.

Exhibit A - An ETA quartz movement sells for around US$30 so how is it that a high end quartz watch from the Swatch Group can cost over a thousand dollars?
Exhibit B - A Casio G-shock Mud Master has a quartz module inside a rubber molded case which retails for about $1,000. LOL.

Like you rightly pointed out, same can be said for every other brand.
 

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40% isn’t too large a markup at all, are they supposed to make no profit? All their overheads have to be met, and then you have to pay tax on the difference - being in Switzerland I would imagine the corporate tax rate is ludicrous. But take that with a pinch of salt as I’ve done no research. Am I right in thinking that Rolex is also a charity? Doesn’t the profit after tax and re-investment go towards helping people?


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That will be similar across all brands they carry.
 

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40% isn’t too large a markup at all, are they supposed to make no profit? All their overheads have to be met, and then you have to pay tax on the difference - being in Switzerland I would imagine the corporate tax rate is ludicrous. But take that with a pinch of salt as I’ve done no research. Am I right in thinking that Rolex is also a charity? Doesn’t the profit after tax and re-investment go towards helping people?


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That’s not how it works. The AD pays Rolex for its stock and then marks up the price within Rolex guidelines (MRSP or RRP). That net increase would go to the AD not back to Rolex.
 

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Through life a free human being can make choices on how they want to spend their money. They may have to justify it it to a spouse or another family member but not anyone else. Similarly a privately held company can operate however it likes as long as it complies with government regulations. As ethical human beings we would hope that they assume a fiduciary relationship with it’s employees, the environment and other citizens it may affect.

If you think Rolex has high profit margins, buy something else. If you think spending more than $100.00 for a watch is ridiculous, don’t. If you want to protest high volume manufacturing, buy bespoke clothes. If you want to belittle someone else’s choices for no particular purpose, get a life because it does not appear you are enjoying yours.


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I recently came across a Rolex ADs stocklist.


While it was consistent with the public knowledge of a 40% markup mentioned on other forums and other posts on WUS, I'm not sure if I can see Rolex the same way again.

Just to put things into perspective, this would translate to the cost price of a

Ceramic daytona - just over $7k USD
Batman - just over $5k USD
Hulk - just over $5k USD
Oyster perpetual 39 - just over $3k


While I did take a step back and acknowledge that
- Rolex invests a lot into their store fronts
- Rolex funds and sponsors a ton of events
- That only a small population of the watches will be sold


I'm not sure if the points above justify how it's controlling it's current supply to ADs.
Especially seeing that a ton of in demand sports models like the batman, ceramic daytonas and hulk are only supplied to ADs in 2019, but they were made and left the factory in 2010.


It really puts into question - what are really paying for when we buy a Rolex.
Are we paying for the quality or are we paying for the status?

Any thoughts on this matter?
If you want to get your money’s worth, just buy gold bullions.
Paying thousands for steel.. when
1 ton of iron ore is 100 bucks.


40% of the mrsp without tax?
Those are common margins for watches. Some fashion or low end brands provided similar margins to retailers.

Since Rolex still needs to have a profit, their production cost is far from the figures you listed
 

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40% sounds about right and why people pick on Rolex? probably because they are successful.

when a 10k rrp Rolex is bought for 6 grand by the ad and sold for 10k we call it unfair or greedy business practice but then
when a 10k omega also bought by the ad for 6k is sold for 7 we call it a bad value and a losing proposition...
Go figure the piece that bugs me is not the ad selling the Rolex for 10k it is the ad selling it for 12 to the greys when they already made 40% . Call it greed or fmv but that part is bs and at that price point I don’t want it badly enough to pay 80 to 100% mark up
 

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And actually 40% is relatively low for retail. Most retailers work on 100% markup!
40% sounds about right and why people pick on Rolex? probably because they are successful.
OP, whatever you do, don't ever research the mark-up on food at a grocery store...you may never eat again!!
I wonder what is the cost price for a large Coke from McDonalds? Would the RRP be 500%?
I was about to say the same thing. It's amazing how naive some people can be. I'll throw cellular voice, text, and data onto the pile of markup scams.

Rolex? The exact opposite. They mint money for their owners. I've been wearing Rolexes since I was a young lad in the late 80's and they haven't cost me a dime. In fact, I've been paid by Rolex to wear their watches.
 

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While I did take a step back and acknowledge that
- Rolex invests a lot into their store fronts
- Rolex funds and sponsors a ton of events
- That only a small population of the watches will be sold
- The flaw in your math is that you are showing the markup between the AD's and the consumers. AD's are making 40%. You are failing to realize that Rolex sells the watches to the AD's before that and they are making a killing on that.

- Rolex doesn't own any stores, the Authorized Dealers are all small mom and pop jewelry stores owned by local businessmen. They cost Rolex nothing as these local businessmen are forced to purchase Rolex-branded fixturing, signage, etc. These AD's are also forced to purchase whatever Rolex ships them.

- Rolex spends a ridiculously small amount of advertising money each year considering the size of their company. Putting up a few signs on 18 holes of a golf course is cheap compared to a national ad campaign from Ford, McDonalds, Budweiser, etc.

- Rolex ships 1 million watches each year. At an average cost of $3,000 per unit, that's $3 billion dollars in revenue. And I'd bet Rolex is making about 50% margins on what they sell to the AD's.
 

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Discussion Starter · #20 ·
I can deal with AD pricing but when AD’s are selling to grey’s to fuel their greed, I draw the line and take my money elsewhere
While I do see the point that
Yes - a 40% or more margin is normal for most if not all industries
Yes - wearing a Rolex is prestige/privilege.
Yes - bills have to be paid at an AD

The point I'm trying to get at is why we do put up with them choking up sports models and for us consumers to eat up stale or half baked models.
Wouldn't everyone be saying the same if Omega did the same to the Speedy?
Or imagine if your local McDonalds made you buy a fillet-o-fish before you could buy mcnuggets (not hating on the fillet-o-fish, just an analogy haha)

What I'm trying to get at is instead of having consumers chomp up less attractive models, why not pull up the price altogether.
Invest that money back into R&D or aftercare service. Or even just a better design team. Instead of 'revitalizing' the batman, couldn't they spend the money to produce a new lines/models altogether?
From what I've seen here in Hong Kong, the aftercare service could do with a lot more investment too.

Ultimately what Im trying to get at is - can and should Rolex be a little more efficient in the way it does business?
 
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