Discovery

The Truth About Today’s Shortage of Rolex Watches

By: Shmukler Design

The Rolex brand has been in the news a lot lately, and if you caught the 91st edition of the Academy Awards on Sunday night, you probably saw a Rolex commercial featuring film notables James Cameron, Martin Scorsese, Kathryn Bigelow and Alejandro G. Iñárritu.

Then, earlier this week, Artisans de Genève — a Swiss-based watchmaking house known for its Rolex modifications — unveiled a stunning watch that serves as a tribute to Rolex’s rare 1966 Daytona 6240 watch. For Rolex collectors, aficionados, and wannabe owners, it’s a great time to be a fan.

Explaining the Rolex watch shortage

However, finding the Rolex model you desire, whether at an official licensed retailer, a Rolex store, or the secondary market for that matter, is another story. Why? Because there’s a Rolex shortage. And observers of this luxury watch brand that is renowned for its performance and reliability, say they have no idea why a shortage exists.

AskMen.com’s ‘Watch Snob’ recently wrote about his attempt to secure a steel Rolex Submariner Date with the green Cerachrom bezel. The two authorized Rolex dealers he visited said the best they could do would be to place his name on a waiting list while simultaneously admitting that what inventory they do receive typically goes to their regular customers.

“They would not accept a deposit to order one or for the next green Submariner they get in,” Watch Snob wrote. “They could not tell an approximate time when I could get one. From the Rolex website, the suggested manufacturer retail price is $9,050 for this watch. I am not sure what to do at this point,” he went on to write.

“Extreme shortages at authorized dealers for steel sports watches such as Rolex’s Sea Dwellers and GMT Masters,” writes Rob Corder for WatchPro.com, “… have driven up prices to well above retail prices mandated by the brands on platforms including Chrono24, Ebay, Watchbox and Chronext.

But why the shortages in the first place?  We have a few theories about that, including:

Forcing Generational Demand – And Not the First Time, Either

The first thing to know is this isn’t the first time there’s been a pronounced shortage of Rolex watches. The same thing happened between 2007 and 2009. Certification issues were the cause of the shortage then, Rolex claims, but few professionals in the jewelry sector saw that as the sole reason. It was widely believed that Rolex — looking to create generational demand for its watches — was intentionally holding back supply vis-à-vis slowing down its internal certification process.

And if you stop to think about it, that makes a lot of sense. It’s a bit like the Mideast oil consortium cutting back on oil production in order to drive up worldwide prices, When the market is flooded with a premium or luxury product, the perceived value of that product — or in this case, the Rolex brand itself — loses its exclusivity and therefore its value. By holding back supply, Rolex may be growing generational curiosity, which in turn revalues the brand in Rolex’s favor, especially among a new generation of buyers.

(As an important aside, certification for a Rolex watch refers to both internal certification of the timepiece, as well as COSC (Contrôle Officiel Suisse des Chronomètres) certification— both of which occur after casing. For the uninitiated, COSC is the official Swiss chronometer testing body and is responsible for certifying the precision and accuracy of nearly 2,000,000 wristwatches made in Switzerland. Each certified timepiece is unique (there’s no bulk certification happening at COSC), with each certified timepiece identified by a number engraved on its movement and a certificate number issued by the COSC. You can learn more about the COSC’s standards and process by visiting the English version of the Contrôle Officiel Suisse des Chronomètres website.)

Hording for the Holidays

According to WatchPro.com’s Corder — this time writing in December for the Lifestyle section of Arabian Business — Rolex-authorized dealers were actively hoarding watches in what he called a “desperate effort to save stock for the holiday season” for their best customers.

“Global demand for Rolex is so strong that authorized dealers (ADs) in the United States are holding back what little stock they receive of the most popular models so that their best customers have a chance of buying one this side of Christmas,” Corder wrote.

The holiday shortage was so pronounced that Authorized Rolex Dealers were actually training retail staff in the best ways to handle frustrated customers. “I know of a gentleman who went into a Rolex AD looking for a steel Daytona, and he was told it would be about 50 years before he would get one,” one retail analyst told Corder for his reporting. “Rolex is having to train people to deal with customers who are being told that there are 90 people ahead of them on a waiting list for a Batman or a Hulk, said Reginald Brack, executive director, industry analyst at NPD Group, Inc.

Tips for Buying a Rolex in 2019

If you’re still interested in purchasing a Rolex and don’t want to wait more than a lifetime to acquire the watch, you still have options. Whether by working with an experienced jewelry professional who has access to off-market inventory, or going it alone on the secondary market, there’s no shortage of avenues you can take outside of the Official Rolex Retailer route.

But because Rolex has allegedly been throttling production and slow-pacing watch certifications, prices on the secondary market are inflated, and that’s an understatement. For example, the GMT-Master II, which was first made available in 2018, carries a retail price of $9,250, according to Rolex’s own website. This exact same watch on eBay? It’s currently $18,499.

Your best bet to avoid overpaying is to either purchase a Rolex from a family member who wants you to have the watch, or contact someone like Boris here at Shmukler Design. Why? Because people like Boris know people! For us, we’d be happy to broker the purchase of a Rolex watch for anyone in the market for one. Since we’re not a retail jeweler, our margins are much different from anyone on Main Street. And because our motto is Assistance Above Sales, we’re compelled to help. That’s right. Compelled to help.

We just can’t help it.

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