Income and Manufacturing Numbers – Methodology 2
The second of the 2 strategies assumes that the manufacturing variety of 1.05 million watches per yr is appropriate. With this being the case, we will apply the Chrono24 proportions mentioned earlier and visualize what number of of every mannequin are produced.
Trying on the figures right here, the numbers are nonetheless massive, even when lower than Methodology 1. There are roughly 575k Basic fashions produced, of which, practically half are the Datejust alone. To place this into context, it’s estimated that Omega produces half 1,000,000 watches a yr (BQWatches). It’s identified Rolex is massive, however now with this in thoughts, the extent of simply how monumental Rolex turns into clear.
Taking a look at just a few widespread fashions in additional depth, the Submariner accounts for simply over 98k watches a yr and inside that just below 60k are stainless-steel variations. The rest is equally break up between the two-tone and gold variants. The GMT-Grasp is considerably comparable. General, 88.5k are produced a yr, with the stainless-steel mannequin accounting for round 54k.
For the steadiness, the GMT-Grasp sees the next proportion of gold fashions when in comparison with the two-tone. The ultimate instance to think about is the Daytona. As we noticed earlier, the Daytona accounts for the next proportion than the Submariner and GMT-Grasp, however when breaking it down, the gold references make up the bulk.
The coveted stainless-steel Daytonas solely account for round a 3rd of the gold references. However take into account that there are solely two stainless-steel references.
Assuming that the manufacturing variety of 1.05 million watches a yr and the quantity per mannequin is appropriate, what does this imply for income? Utilizing the identical weighted common retail worth of every mannequin and corresponding wholesale costs, we will discover out.
Probably the most important end result is the top-line income is $10.75 billion – that is $2 billion greater than the determine from Statista. Transferring to the subsequent stage, the income generated by the Skilled and Basic collections is rather a lot nearer. That is being pushed by the Skilled aspect, extra particularly, the Daytona and Yacht-Grasp because of greater wholesale costs.
The Daytona accounts for $2.25 billion on this technique. The GMT-Grasp can be affected and generates over $900 million. This leads to the GMT-Grasp producing extra income than the Submariner, contrasting with what was seen within the earlier technique.
Alternatively, the income from the Air-King, Explorer and Milgauss is considerably decrease. Transferring to the Basic watches, the Datejust accounts for $1.6 billion. Nonetheless an astronomical quantity, however decrease than in Methodology 1, and offset by a big improve in income from the Day-Date.
These numbers, as touched upon with the Daytona and Yacht-Grasp, are all pushed by wholesale worth ranges. These watches with the next retail worth have a higher wholesale worth and that is the quantity utilized in calculating revenues. This may be clearly seen when contemplating the Day-Date.
Variety of Watches per Licensed Vendor
Lastly, with these provide figures we will estimate another metric – the variety of watches every Licensed Vendor receives a yr. In 2022, Millenary Watches calculates that there are 1816 ADs globally (2022 AD numbers vs. 2021 manufacturing so a small margin of error right here).
As we noticed above, the 2 strategies present us with differing estimates of manufacturing numbers throughout fashions. Earlier than attending to the watches per AD, you possibly can see on the chart the distinction in manufacturing values calculated between Methodology 1 and a couple of. The largest driver right here is these fashions which have a decrease wholesale worth have to be extra provided by Rolex to generate the corresponding income proportions. Beneath you possibly can see this distinction and it’ll turn out to be clear.
Now that we will simply see the variation between the 2 strategies and perceive why it’s the case, we will discover the corresponding variety of watches per AD for each. Spoiler – this simply reinforces how few every retailer receives a yr!
Specializing in Methodology 1 to start out (assuming the income worth is appropriate). On common, every retailer will obtain 244 Skilled watches, practically double that in Basic. Solely 33 Daytonas attain every AD, and solely half of the retailers globally will obtain 1 platinum Daytona annually.
Regardless of the comparatively few references, the Submariner is likely one of the extra provided fashions, much more so than the GMT-Grasp. Surprisingly, even the Explorer I & II is extra provided than the GMT-Grasp. This outcomes from the decrease wholesale worth of the Explorer vary that means extra watches have to be provided as talked about above.
Transferring to the outcomes for Methodology 2 (assuming the manufacturing worth is appropriate). Every AD would obtain 262 Skilled fashions a yr, solely barely greater than Methodology 1, nevertheless, ADs solely obtain 316 Basic fashions. That is a lot decrease than the quantity simply above, pushed by far fewer Datejust and Oyster Perpetuals offset by a small improve in Day-Date references.
Within the Skilled assortment, this may also be seen, though the adjustments lead to solely a minor divergence within the complete line. There are double the Daytonas making their method into ADs in comparison with Methodology 1 however practically half the Explorers. It is because the wholesale worth of fashions is just not taken into consideration in calculating the manufacturing, however quite, solely the Chrono24 proportions.
I do wish to acknowledge that these are simply averages. Not each Rolex AD is equal. There could also be areas or cities the place particular fashions are typically extra provided given shopper tendencies. Likewise, in case you have a big Rolex AD such because the London Knightsbridge location, I think about extra watches make their method right here in comparison with a small department in a much less populated city.
Once more, I’ve no particular info on how this works, however it could be logical that not each department obtained the identical allocation.