Let’s pretend for a moment that you’re a prosperous businessperson or another type of accomplished professional. Thanks to your hard work, strategic career moves, and ascent up the corporate ladder, you’ve probably earned a German-made, high-end sports sedan.
You have achieved your goals, and you may think, “It’s time I got that luxury item that tells almost everyone I’ve made it every time I walk into a room” – a Rolex; if this is the case, congratulations!
Sadly, I must tell you that it’s improbable that you can obtain one.
A worldwide Rolex shortage
Everything from automobiles to the microelectronics that power them to coffee beans to toilet paper is in limited supply these days. Some of this is attributable to the pandemic supply bottleneck, which has affected even luxury items like wristwatches.
While demand for such wristwatches dropped in 2020 at the pandemic’s peak, it has since increased. The FHS, which conducts market research for the Swiss watch industry, reports that July sales were up 7.6 percent compared to 2019’s pre-pandemic levels. July sales in the United States were up 48.5% from January 2019, and sales in China were up 75% from January 2019.
Even though sales of Swiss watches as a whole are on the rise, the situation for Rolex, which is owned privately, is more nuanced. Watch dealer Bob’s Watches CEO Paul Altieri believes the Rolex story has been building for years, even before manufacturing shutdowns limited production.
During an interview, Altieri explained that the manufacturing closing due to COVID only worsened an existing supply problem.
During that time, “global demand has continuously climbed,” but “supply has kind of remained steady,” resulting in “upward pricing pressure,” as he described it.
It’s not that Altieri thinks Rolex is intentionally limiting production; instead, he attributes the scarcity of Rolex watches to the fact that such a high-end luxury product is in high demand.
For example, Bob’s Watches has an email notification to warn customers when a specific watch they’re interested in is back in stock. When the email goes out, the watches sell out fast.
According to Altieri, “the new products that do hit the web can occasionally sell in 15 minutes.” If you wait a few minutes, “They can be gone.”
Journalist and watch expert Eric Wind of Wind Vintage attributes the rising cost and decreasing supply of Rolexes to several interconnected reasons. He claims that supply restrictions and increased product demand are only part of the story and that regular owners and dealers now have more opportunities than ever to sell internationally.
“There are many more methods to sell these watches online than ever before,” he adds. “Anyone who could buy, for example, a [Rolex] Daytona or Submariner could easily do so and resell it for tens of thousands more than they spent.”
The ease with which one can resell sneakers on StockX is mirrored in the convenience of reselling watches on the site. Many more businesses now compete in this sector.
Is there a chance of ending the shortage?
Ariel Adams, a creator of the widely read watch blog aBlogtoWatch, stated in an interview that “there’s no one incident that produced this [phenomenon].
“Rolex has made it apparent that they are not going to raise manufacturing of renowned watches to satisfy demand,” says Adams. “This makes sense because they are seeking to generate long-term value for their clients, and they do not want to overload the market and significantly lower the value of these goods.” Additionally, the epidemic has cut watch production by 70%, meaning that “there are significantly fewer timepieces to go around.”
Adams believes that both “scrupulous” and “unscrupulous” dealers are taking advantage of the current supply shortfall and demand situation.
Some “authorized dealers,” or ADs, will make customers buy a less desirable Rolex before adding them to a waiting list for hotter items like the Submariner, GMT, or Explorer. Although not prohibited, the practice can be highly infuriating for a consumer and is unfortunately all too common in this sector.
Some shadier merchants steal popular Rolex models and resell them on the black market or unauthorized watch vendors who then sell them to consumers for even more money.
Adams claims that the lack of a Rolex-maintained waiting list is mostly to blame for the issue. As mentioned, dealers keep their own lists of customers interested in purchasing specific watches. When a shipment of new watches arrives at the store, the store sells them to whoever the dealer thinks will be the most interested buyer (regulars, high rollers, etc.).
The catch is that Rolex retailers can never be sure which models of watches they will receive. According to Adams, they are essentially delivered a “mystery box” and expected to profit from whatever they find within, be it a high-quality watch or one that is less attractive. This is why there are preferential customer lists at the dealer level.
According to Adams, it might alleviate all buyer irritation if Rolex established a formal waitlist or another assured method for customers to purchase desired watches at retail rates. Even if this meant waiting for potential buyers, it would be the best solution.
Adams emphasized that this would eliminate the majority of unnecessary spending.
Fans of Rolex watches might welcome the announcement of an official waitlist. Still, it would mean that even with thousands of dollars in hand, purchasing a Rolex “Batman” GMT would have to be put on hold.
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