When looking at Rolex watches and reading information online, you may have come across the term ”Rolex AD” and wondered what it means.
So what does Rolex AD mean? AD stands for ”Authorized dealer” and refers to official Rolex dealers. These are stores that sell brand-new Rolex watches that are supplied directly by the factory. Rolex ADs are not to be confused with dealers and non-authorized dealers, which essentially is any individual or company that does not have a contract with Rolex directly, hence do not get watches supplied directly from the Rolex factory.
What does Rolex AD mean?
There are many terms being used that all referred to the same thing. Some of the most common terms are:
- Rolex AD
- Rolex official retailer
- Rolex agent
- Official Rolex jeweler
What is a Rolex AD?
As mentioned, a Rolex AD is a store that has a contract and partnership with Rolex. Under this contract, a dealer has a number of rules they have to follow and conditions that the official dealership status means. The store needs to sign a Rolex Distribution Agreement that stipulates what a dealer can and can not do.
In Rolex’s own terms:
”Only official Rolex retailers are allowed to sell and maintain a Rolex watch. With the necessary skills, technical know-how, and special equipment, they guarantee the authenticity of each and every part of your Rolex and help you make the choice that will last a lifetime.”Rolex.com
The first sentence is not quite true because everyone can sell a Rolex watch that they own. And equally, so companies that have specialized in selling pre-owned and second-hand watches, although these are not affiliated with Rolex in any way.
Some of the key points of being a Rolex AD include:
- A Rolex AD is obligated to sell watches at the so-called recommended retail prices that Rolex set. They may be able to give some discounts (although Rolex has become stricter with discounts in recent years because it damages the exclusivity of the brand). However, they are under no circumstances allowed to sell watches at a higher price than the recommended retail prices.
- Rolex ADs get their watches supplied directly from the Rolex factory
- In general, Rolex ADs get shipments of watches from the Rolex factory once or twice a month
- Rolex ADs request watches that they wish to receive from Rolex but Rolex ultimately decides which watches they ship to the Rolex AD
- Rolex ADs are the only point of sale where brand new Rolex watches that come directly from the factory are sold. Rolex does not sell any watches to final customers themselves. There is technically only one exception of this, which is the ”Chrono-Time” Rolex store in Geneva, Switzerland, which is owned by Rolex. All other Rolex ADs are owned by a third-party company that Rolex does not own. Therefore, Rolex is technically solely a B2B company, not a B2C company.
- Rolex ADs are the only ones that can order watches, parts, and merchandise directly from Rolex.
- Rolex ADs are the only ones that can activate the Rolex guarantees. (Which is today done via an iPhone that has been provided by Rolex)
- Rolex ADs decide how to allocate their watches to their clients and who gets to buy them. In Rolex’s own words ”New Rolex watches are exclusively sold by Official Rolex Jewelers, who receive regular deliveries and independently manage the allocation and sales of watches to customers.”
- Rolex ADs are not allowed to sell Rolex watches to resellers/secondhand watch dealer companies, known as the ”gray market”
..And many other criteria and rules…Whilst the official contract for becoming a Rolex AD is not official, there is a lot of information about becoming an official retailer that is known.
Other requirements that Rolex has are:
- Requirements regarding how the stores look. Usually, Rolex sends professional builders and designers to a store that becomes a Rolex AD to decorate and build part of the store according to Rolex’s own requirements. If it’s a Rolex-only boutique that only sells Rolex watches, they will design the whole store. If it’s a store that also sells other brands, they will naturally only design parts of the store, for example by creating a ”Rolex corner”. The Rolex AD has to pay for the construction and designing of the store
- The Rolex AD has to pay for advertising of Rolex watches and has to do a few adverts per year (the exact number is not official, although we would assume it varies depending on a number of factors). Rolex may require a specific ad spend, or they may require a particular number of ads. The complete details are, as mentioned not known. But what is known is that different Rolex ADs do advertising in different ways. Some choose to create newspaper advertisements, others use billboards, and so on.
What distinguishes a Rolex AD?
You can find all of the official Rolex ADs on Rolex’s website here.
As previously mentioned, a Rolex AD should not be confused with a non-official Rolex dealer, reseller, etc. Today, there are plenty of companies and dealers that specialize in selling secondhand watches, but these companies are never able to buy watches directly from Rolex.
Although some Rolex ADs have started to also sell pre-owned watches, they are the only ones that get brand new watches directly from Rolex and have to follow the rules as agreed in the contract they have signed with Rolex.
Non-official Rolex retailers do not have a contract with Rolex and instead operate according to the market’s principles. Unlike Rolex ADs, they buy their watches from clients, private collectors, and other individuals who wish to sell their watch. Because they do not have a contract with Rolex, they can set whatever prices they want for their watches. But at the same time, they are not able to buy Rolex watches at wholesale prices like ADs are able to do. When Rolex ADs buy Rolex watches directly from Rolex, they have a markup of about 30-45% when they sell the watches at the recommended retail prices, depending on the model and the tax rate. Bear in mind that in Europe, the VAT is included in the final sale price and ranges from 15-25% which naturally affects their margins.
Whilst this may sound like a lot, Rolex ADs have a lot of associated costs as discussed above which ultimately affects the final profit margins.
You can read the complete Rolex AD (Rolex Official Jeweler contract) in the link here:
Note that this contract is from the year 2000, so there has naturally been a number of changes to the contract over the years, and the current official jeweler contract is different today, although many of the key points still remain relevant today.