The Great Shortage of Rolex Watches

Let’s say you are a wealthy businessman or woman or a successful professional. You’ve taken the time to hone your craft, make the right career choices, climb the corporate ladder, and probably drive home in your German-made luxury sports sedan.

Yes, you did, and now you might be thinking, “It’s time I bought this status symbol that lets everyone know I did it every time I walk into one piece” – one rolex.

Well, I have bad news for – you probably can’t get any.

The Great Rolex Shortage

The Rolex GMT “Batman” (Credit: Bob’s Watches)

There are shortages all over the world these days – from cars, to the microchips that go into them, to coffee beans and even toilet paper. The pandemic supply shortage has fueled much of this, and that goes even for high-end wristwatches.

While sales of these wristwatches fell during the height of the pandemic in 2020, purchases have recently jumped higher. According to the FHS, a Swiss watch industry research group, Sales of Swiss watches increased by 7.6% in July compared to the 2019 pre-pandemic baseline. Sales growth jumped 48.5% in the United States in July from 2019 levels, and even 75% in China.

Today, global sales of Swiss watches are on the rise, but for Rolex, the situation is more complex. Paul Altieri, CEO of an online watch retailer Bob’s watchessays that the history of Rolex in particular spanned many years, even before factory closures that reduced supply.

“Supply to some extent due to COVID, where the factory was closed for several months, that exacerbated the problem, but the [supply] problem already existed before,” Altieri said in an interview.

“Global demand has been steadily increasing over the past five years, and supply has kind of stayed constant, it’s a classic supply and demand situation,” he said, and it exerts a “upward pressure on prices”.

Altieri doesn’t think Rolex is deliberately removing the offer; it’s just that the demand is so high for a luxury item like Rolex watches, he said.

Example: Bob’s Watches uses an email alert system to notify buyers when the watch they are interested in is in stock, and once that email is sent, those watches are picked up – fast.

“New models that come onto the site can sometimes sell out in 15 minutes,” says Altieri. If you’re too late, within minutes or even seconds, “They may be gone.”

“A Perfect Storm”

The Rolex Submariner

The Rolex Submariner “Kermit” (Credit: Bob’s Watches)

Watchmaking expert and journalist Eric Wind from Wind Vintage sees a confluence of factors pushing Rolex prices up and availability down.

“I think it really is a perfect storm,” he told Yahoo Finance Live. Along with supply constraints and rising overall demand for the product, he says, there are now more ways for regular owners, as well as resellers, to sell across the world.

“There are many more ways to sell these watches online than ever before – so anyone could buy, for example, a [Rolex] Daytona or Submariner can easily make it and sell it for thousands of dollars more than they paid,” he says.

“It’s kind of like the sneaker mentality with StockX and being able to resell sneakers online a lot easier; the same is true for watches. [There are] many more players in the market.

Can the shortage be reversed?

“There is not a single event that caused this [phenomenon]”, Ariel Adams, founder of the famous watch blog aBlogtoWatch said in an interview.

“Rolex has made it clear that they are not going to ramp up production of popular watches to meet demand, and that makes sense as they are trying to create long term value for their customers, they don’t want to flood the market and reduce the value of these things,” Adams says. Plus, the pandemic has reduced the supply of watches by 70%, and “there are really fewer watches to circulate.”

The problem of shortage of supply and demand is, in Adams’ view, exploited by both “scrupulous and unscrupulous” dealers.

The Rolex Oyster Perpetual (Credit: Bob's Watches)

The Rolex Oyster Perpetual (Credit: Bob’s Watches)

Some authorized dealers, or AD as they are known in the industry, sometimes ask their potential customers to buy a less popular watch first, before they can be put on the dealer’s list for desirable Rolex models. – like a Submariner, GMT or Explorer — when the watches become available. This is a common phenomenon in the industry; it’s not illegal but can be very frustrating for a buyer.

Unscrupulous dealers will take these popular Rolex models, sell them above cost to the gray market or to unauthorized watch dealers, who will then sell the watch directly to the consumer at an even higher cost, usually online.

And the main reason this problem exists, says Adams, is that there is no official list from Rolex of buyers who are on a waiting list. As noted, resellers have their own list of customers who want certain watches, and when a batch of new watches arrives at the reseller, the reseller sells them to whoever the reseller prefers: long-time customers, heavy hitters, etc.

The tricky part is that Rolex dealers don’t know which watches they will be sending. They’re basically sent a “mystery box,” Adams said, and they have to sell what they get — good watches and less desirable watches. Hence the preferred customer lists at the dealership level.

Rolex could solve all the frustration from a buyer’s perspective, Adams said, if Rolex created an official waiting list or a guaranteed way for people to buy the watches they want at retail price. This would solve the problem, even if potential buyers had to wait.

“Most of the overspending would go away,” Adams explained.

While an official waitlist would be great news for Rolex watch fans, the instant gratification of getting your hands on that Rolex “Batman” GMT, even if you have thousands of dollars in your pocket, is going to be delayed.

Note: Yahoo Finance has contacted Rolex for an official comment on this story. We received the company’s response shortly after posting:

“The scarcity of our products is not a strategy on our part. Our current production cannot meet the existing demand comprehensively, at least not without reducing the quality of our watches, which we refuse because the quality of our products must This level of excellence takes time, and as we have always done, we will continue to take the time necessary to ensure that all of our watches not only meet our standards of excellence, but also meet the expectations of our customers in terms of quality, reliability and robustness, Rolex does not compromise on what it takes to produce exceptional watches.

All Rolex watches are developed and produced in-house at our four sites in Switzerland. They are assembled by hand, with extreme care, to meet the brand’s unique and high standards of quality, performance and aesthetics. Naturally, this restricts our production capacities – which we continue to increase to the maximum and always according to our quality criteria.

Finally, it should be noted that Rolex watches are available exclusively from official dealers, who independently manage the allocation of watches to customers.”

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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on instagram.

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