Why are Rolex watches so expensive and hard to find? The Swiss luxury brand is said to make one million timepieces per year, but tracking one down is a challenge
The pandemic may have briefly disrupted the luxury watch market, but Rolex is still raking in millions from its iconic Daytonas, Submariners, Oysters and DatejustsAs the brand’s watches are all handmade at just four ateliers, scarcity may be inevitable – or is it all a ploy to lead the resale market alongside Patek Philippe?
Rolex makes some of the world’s most iconic watches, like the Daytona, Submariner and classic Oyster. The Swiss company is believed to make roughly one million timepieces per year, each one by hand. But new Rolexes can be hard to find for a buyer without an established relationship with an authorised distributor.
Although the supply of Rolex watches may have briefly been disrupted by production and supply chain problems at the peak of the coronavirus pandemic, that’s not the reason they’re so hard to find – or so expensive when you do locate one.
The issues of the past two years are a mere blip compared with larger trends happening in the luxury watch market generally and with Rolex specifically, Adam Golden of Menta Watches said.
“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 authorised dealers (ADs) of the brand, he explained
The statement also pointed out that all Rolex watches are assembled by hand at one of its four locations in Switzerland, a process that “naturally restricts our production capacities”.
On a visit to a dealer in Florida this Summer, Golden said there was just one Rolex available to buy – a ladies’ Datejust that a customer had ordered and then cancelled.
But Golden says watches are still flowing to the brand’s preferred ADs, and that the backlog is more illusion than reality, as Rolex is generally believed to produce as many as a million watches 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.
Whether the move is strategic or not, the bottom line is that Rolex is following a playbook developed under the leadership of André Heiniger, which has served the company well for over half a century.
“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.”
This article originally appeared on Insider
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