Watch Prices and Distribution
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  1. #1
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    Watch Prices and Distribution

    How are watch prices paid by AD and distribution model work? Is it more of scenario #1 or #2 below or something else?

    #1: AD pays for say 70% of the retail cost and pockets the difference between price sold and cost. For example, if retail cost is $10,000, AD pays $7000. Watch sold to consumer for $11,000 a year later because manufacturer raises retail price. Therefore, gain to AD is $4000

    #2: AD gets a float on the inventory and pays a % (say 70%) to the manufacturer when watch is sold. Using the example above, watch is sold for $11000 and AD pays $7700 and pockets $3300 as gain.

    If distribution model is #1, does it mean that the AD has more price flexibility for older models than new issued models or for in-stock models than special order models? Thank you

  2. #2
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    Re: Watch Prices and Distribution

    Well, it's back to this again.
    Nokie likes this.

  3. #3
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    Re: Watch Prices and Distribution

    Paying the product after you sold it? I'm opening a jewelry tomorrow .

    Btw, you forgot taxes. And for goods like watches i doubt it'll be 70%, more like 40/50+taxes.

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  5. #4
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    Re: Watch Prices and Distribution

    Depends on the brand and model of course, let's say on average anywhere from 35% to 45%. It's a extremely tough business, very risky.
    P

    Current Rotation:Rolex Sky Dweller YG, Rolex YachtMaster II, Rolex Day Date Anniversary Green, Rolex GMT Master 2 YG, JLC Master Compressor Chrono RG, Carl F Bucherer Diver RG, Louis Moinet Memoris RG, Cartier Diver RG, Grand Seiko High Beat Diver, Hublot Unico White Ceramic, Omega Grey Side of the Moon, Seiko Ananta Chrono, Tag Heuer Senna Limited, AP Royal Oak Offshore Forged Carbon, Patek Phillipe Nautilus.

  6. #5
    Member Nokie's Avatar
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    Re: Watch Prices and Distribution

    You could ask six different people this question and get six different answers........
    "Either he's dead or my watch has stopped"
    Groucho Marx

    "The only reason for time is so that everything does not happen at once..."
    Albert Einstein

  7. #6
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    Re: Watch Prices and Distribution

    Six of one, half dozen of another.

    Thanks,
    Mike

    Quote Originally Posted by Nokie View Post
    You could ask six different people this question and get six different answers........

  8. #7
    Member cedargrove's Avatar
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    Re: Watch Prices and Distribution

    Quote Originally Posted by hawkeyes View Post
    How are watch prices paid by AD and distribution model work? Is it more of scenario #1 or #2 below or something else?

    #1: AD pays for say 70% of the retail cost and pockets the difference between price sold and cost. For example, if retail cost is $10,000, AD pays $7000. Watch sold to consumer for $11,000 a year later because manufacturer raises retail price. Therefore, gain to AD is $4000

    #2: AD gets a float on the inventory and pays a % (say 70%) to the manufacturer when watch is sold. Using the example above, watch is sold for $11000 and AD pays $7700 and pockets $3300 as gain.

    If distribution model is #1, does it mean that the AD has more price flexibility for older models than new issued models or for in-stock models than special order models? Thank you
    I think it's mostly #1, however the AD would typically pay between 50% and say 65%. I've heard Rolex is among the highest a 62.5%.

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