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Rolex and Rolex retailers are deliberately holding back watches to boost prices
This article was inspired by a throwaway line by a collector at Dubai Watch Week 2023. I was talking to Rexhep Rexhepi at the Akrivia booth and, as I was leaving, I had a quick chat to a well-heeled watch collector who had also been visiting Akrivia. He came across to me as a sensible, intelligent young man . . . until he casually said, “Rexhep has worked out how to fix the algorithm, that’s why his watches are so hard to get.
All well as causing millions of deaths and sickness, COVID-19 had a big impact on many areas of society in all parts of the world. And one of the relatively minor effects of the shutdowns was a massive increase in the number of people interested in, and buying, mechanical watches.
This happened across all sectors of the watch market, from the massive Rolex to the tiny independents, all of which experience extremely high demand. And no surprise, the brands were caught out. And as it takes a long time to increase production, demand quickly exceeded supply and many of the popular models of nearly all brands quickly sold out and became hard to get.
Rolex prices on the secondary market (graph courtesy Watchchart.com)
And again, no surprise, that this caused a significant increase in prices, with many models selling on the secondary market at significant premiums to their retail prices.
But it didn’t take long before the simple demand-exceeds-supply explanation was widely replaced with brands – and being the biggest Rolex featured prominently here – being accused of withholding stocks of watches to boost supply. The fact that if brands had secret stock they could have just sold the watches at a higher price didn’t deter the conspiracy theorists.
Now, while the bubble hasn’t burst, it has certainly deflated, things are getting back to normal, albeit thanks to the COVID-induced increased awareness in mechanical watches, the new normal is still a higher level of demand than the old normal.
Rolex models that were selling way above retail on the secondary market now selling below retail include the Sea-Dweller, Explorer, Yacht-Master, GMT-Master, and Submariner Date.
It would surprise me not in the least that reduced demand for these models will lead to even lower demand as many desperately want what they can’t have. There’s nothing like being able to easily get something to dampen or eliminate your desire for it.
Let’s let sanity prevail!
Further reading: Why Facts Don’t Change Our Minds and Beliefs Are so Hard to Change?
Your phone is not listening to you
Spurious correlation
Correlation is not causation: I highly recommend looking at the entertaining Spurious Correlations website, which publishes factually correct correlation graphs.
You might also enjoy:
Rolex Case Study: How Many Watches and How Much Money Does Rolex Make?
Flipping Watches: How to Eliminate Both Flipping and the Gray Market
Mixing Money and Watches: A Collector’s Lament on the Current State of Our Hobby
