Getting your hands on a new Rolex at the moment is like looking for the proverbial needle in the midst of the haystack.
While there may have briefly been a supply chain disruption for watchmakers at the peak of the coronavirus pandemic, Adam Golden of MentaWatches says that the issues in the past year are a mere blip compared with larger trends happening in the luxury watch market generally and with Rolex in particular.
“Rolex seems to have structured their business in such a way that they’re controlling distribution and who gets what, at a retail level,” he said. A decade ago most models were available on-demand from authorized dealers (ADs) of the brand, he explained.
On a recent trip to a shop in Florida, Golden said there was just one Rolex available to buy – a ladies’ Datejust that a customer had ordered and cancelled. But he believes timepieces are still flowing to the brand’s preferred ADs, and that the backlog is more illusion than reality. Rolex is generally believed to produce as many as a million timepieces per year.
“Rolex would like to perpetuate the image that there’s a shortage and that there’s such high demand that they can’t produce enough to satisfy the demand, but I think in reality it’s just very controlled release in order to keep that demand super high,” he said.
Another result of this artificially constrained supply of new watches is the absolute explosion of prices on the resale market where some timepieces now command far higher prices used than they do at the retail counter. For example, a steel Daytona is advertised on the Rolex website for $13,150, but over at Chrono24, the exact same timepiece is listed for more than $36,000. What other asset appreciates so instantly after purchase?
Rolex is by no means alone here, but it is a leading brand in the pre-owned watch market, which is expected to reach $29 to $32 billion in sales by 2025, according to a recent report from McKinsey.
“Rolex could probably do a number of things to fix the current situation and increase the supplies of these watches and dampen the secondary market,” Golden said. “But I think at this point they’re choosing not to because it’s good business for them.”
If you really want to get your hands on a Rolex – and at this point, it does not matter what model – you may want to consider the services of a luxury personal shopper, that is, if you’ve had no luck securing one on your own. The final price may come to something higher than you budgeted, but what is that compared to getting the original of a timepiece you truly crave?
Source: Business Insider