Calling All Whisleblowers!
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  1. #1
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    Calling All Whisleblowers!

    Now that I have your attention, I wanted to bring up a question to the people who are experienced in the watch retail market.

    My question is rather straightforward however I'm sure many of my fellow WUS are curious as well:

    What is the average margin an authorized dealer makes on the retail price of a high end watch?

    I hope not to offend any people here because every business is entitled to their business secrets, but, again, I'm just curious.

    Jewelry retail has always been a high margin business. Seeing many people on the forums, including me, are willing to drop +4 figures on a watch, we are curious as to how much margin they are making.

    Last edited by liujin08; August 28th, 2012 at 07:36.

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    Re: Calling All Whisleblowers!

    I'm sure other members can give brand specific examples. However, in general, my understanding that the retailers cut of MRRP is typically 40% to 50%.

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    Re: Calling All Whisleblowers!

    It was often mentioned on WUS that Omega get 55% of MSRP, all the rest is for the AD that can't anyway discount more than 30%. I assume other luxury firms won't be too far from this, unless at the very high end market.

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    Re: Calling All Whisleblowers!

    A related question is, is the MSRP fixed by the brands and regulated amongst their AD's. I've seen Tissots with different MSRP's at different AD's. Same with Longines as well. If there is no control on the MSRP, then cant the AD just boost the MSRP and appear to give a larger discount? Or is this done without the knowledge of the brand.

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    Re: Calling All Whisleblowers!

    Quote Originally Posted by jilgiljongiljing View Post
    A related question is, is the MSRP fixed by the brands and regulated amongst their AD's. I've seen Tissots with different MSRP's at different AD's. Same with Longines as well. If there is no control on the MSRP, then cant the AD just boost the MSRP and appear to give a larger discount? Or is this done without the knowledge of the brand.
    This discussion addresses Manufacturer Suggested Retail Price (MSRP) and there is one and one only price suggested from the manufacturer at a given time in the current priced catalogie. Maybe you are confusing MSRP with the price tag that is arbitrary and set by the shop. There is also some brands that choose to boost MSRP to do deep discounting...

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    Re: Calling All Whisleblowers!

    Another important consideration is how they get to the cost price. They could over inflate it a lot by including the millions spent on marketing, R&D and all those other costs that aren't directly related to making the actual watch you're wearing.

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    Re: Calling All Whisleblowers!

    Like most retail operations the trade price will almost without doubt, depend on the supplier and how much volume that dealer does

    I could be wrong but I doubt any of them achieve anything like 55% , never mind 30% (margin not markup)
    Last edited by watchma; August 29th, 2012 at 19:41.

  9. #8
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    Re: Calling All Whisleblowers!

    I remember reading somewhere that the unit cost to manufacture a typical Rolex watch is $600 (including overheads like marketing, staff wages, transport, etc). This sounds about right considering that the cost of parts required to make the watch are even less. So if Rolex makes 55% of the retail price (say $9000), that's a huge 0.55*9000-600 = $4350 of profit per stainless steel watch. The AD probably pockets 35-40% of the retail price.

    Every stainless steel Rolex watch is literally worth it's own weight in gold - prestige/marketing is modern day alchemy.
    Last edited by WnS; August 30th, 2012 at 08:18.
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    Re: Calling All Whisleblowers!

    True, many factors to consider, but generally: +/- 50% ish.
    That's why when they dump their goods, and it's 'half off' they're not giving up anything. They're simply recouping their investment back.

    If you buy grey for 50% off, then you're getting the best deal possible, without gloating on anyone's poor bizbis.



    Quote Originally Posted by watchma View Post
    Like most retail operations the trade price will almost without doubt, depend on the supplier and how much volume that dealer does

    I could be wrong but I doubt any of them achieve anything like 55% , never mind 30% (margin not markup)
    Last edited by Chronopolis; August 30th, 2012 at 08:20.
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    Re: Calling All Whisleblowers!

    Quote Originally Posted by WnS View Post
    Every stainless steel Rolex watch is literally worth it's own weight in gold - prestige/marketing is modern day alchemy.
    QFT

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