Rolex is making plenty of watches, but good luck getting your hands on one
Actress Ashley Tisdale arrives at the Los Angeles Premiere of Journey 2: The Mysterious Island at Grauman's Chinese Theater on February 2, 2012 in Hollywood, California.,
Rolex makes some of the most popular watches in the world, such as the Daytona, the Submariner, and the classic Oyster.
The Swiss company is believed to earn around 1 million a year, each one by hand.
New Rolexes can be difficult to find for a buyer without an established relationship with an authorized dealer.
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Semiconductor chips, used cars, Rolex watches: one is not like the other.
Yes, people have a hard time getting their hands on them; and yes, all are more expensive now than last year; but unlike the first two, Rolex's scarcity is strategic.
While there may have been a brief interruption in the supply chain for watchmakers at the height of the coronavirus pandemic, Adam Golden of Menta Watches told Insider that the problems over the past year have been compared to bigger trends in the luxury watch market in general and with the marketplace Rolex in particular are just a slip-up.
"Rolex appears to have structured its business to control sales and who gets what, at the retail level," he said. A decade ago, most models were available on-demand from the brand's Authorized Dealers (ADs), he explained.
Read more: A luxury watch designer who sells timepieces costing $ 500,000 shares how he got his start and his daily routine
On a recent visit to a Florida store, Golden said there was only one Rolex for sale - a women's Datejust that a customer ordered and canceled.
In Houston, real estate investor Tyron McDaniel tweeted that he couldn't find a men's Rolex and that many stores wouldn't get a new one for a year and a half.
But Golden says watches are still flowing to the brand's preferred ADs and that the lag is more illusion than reality. It is widely believed that Rolex produces up to a million watches a year.
“Rolex wants to maintain the image that there is a shortage and demand so high that they can't produce enough to meet the demand, but I think in reality it's just a very controlled release to make that demand super high to keep." he said.
Rolex did not respond to Insider's request to comment on the story.
Another result of this artificially restricted range of new watches is the absolute price explosion on the resale market, where some timepieces are now selling used prices that are far higher than those at the shop counter.
For example, a steel Daytona is advertised on the Rolex website for $ 13,150, but Chrono24 sells the exact same watch for more than $ 36,000. What other asset appreciates so immediately after purchase?
Rolex is by no means alone here, but it is a leading brand in the pre-owned watch market that, according to a recent report from McKinsey, is expected to reach sales of $ 29 billion to $ 32 billion by 2025.
"Rolex could likely take a number of steps to correct the current situation and increase the supply of these watches and dampen the secondary market," said Golden. "But I think at this point they decide against it because it's good business for them."
On Twitter, a commenter recommended McDaniel take a look at the exquisitely handcrafted mechanical timepieces from German watchmaker Nomos Glashütte, the most expensive of which is $ 21,500.
"Nice watch," replied McDaniel, "but it's not a Rolex."
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