Hi stonehenge,
it's not correct.
Firstly, official dealers are getting Rolex from the factory with a 35-38% discount.
With some skills & longterm contacts it's possible to get a part of the above mentioned discounts on own purchases from AD's, especially on bulk purchases.
The second part of your question is better to answer with an opposite question.
How would you explain the existence and the huge volume on absolutely new and unworn watches on:
Chrono24, or online shops like Chronext, Horando, Montredo, Luxurybazaar all others around the world?
;-)
P.S. By the way we have not only Rolex.
P.P.S. We need to think about to raise our prices to retails, as most of the concerns are focused on it )))
Cheers,
André
BitDials by A.C.Watches
A pertinent post by a contact of mine:
The profit margin is 40%. One other thing though is Rolex requires their dealers to spend 5% of their wholesale volume on advertising every year. So if a dealer bought 500000 from Rolex, they must spend $25,000. I beleive most people who know about retailing would agree that this is not a large or profitable markup. If a store has a 50% markup on an item in Retail, after employees salary, rent, taxes, utitilities, other inventory that doesnt sell, etc, the retailer nets about 6% in profit. So if they sell 1,000,000, they make $60,000 when its all over!! Contrary to most peoples opinions, most jewelers do not operate on a triple profit markup. I believe mall chains do this on low end items, but from my understanding on higher end goods such as diamonds, a jeweler can only make 10%. So its all about volume. Also, no Rolex jeweler is getting full price every time. So in the end they probally gross 30% over cost. When you factor the expenses I mentioned above, its a net of 4 or 5%
Its my understanding from my dealer, who is a friend,that selling Rolex in itself is not hugely profitable. They make money, but it doesn't get you rich. It does, however, bring prestige to the store, traffic, customers who end up buying other items, etc. Its also a "safe" inventory investment. If a jeweler went out of business, they would be lucky to get 10 cents on the dollar for most of their jewelery that didn't sell. They can put a 25% sign on Rolex and sell every watch. So even though Rolex makes them put alot in inventory, its money in the bank.
High volume dealers do not get better pricing, but as stated, a better share of rare models.
And in answer to your question of how there are unworn Rolex for sale at a discount online, it is because they are grey market watches offered by ADs with too much stock. Some grey market Rolex, whilst authentic, come with their serial numbers removed and Rolex warranty invalid. I appreciate this is only some, but the grey market can be quite grey.
So, you mean, watches, which are sold from overstocked AD's are out of warranty? )))))
ABSOLUTELY FALSE!
There are hundreds of thousands sold worldwide each year and still nothing on internet about real cases of this issue from real customers beside of some rumors?
Well, it's easy to imagine that AD would says that)