I don't understand the recent Rolex SS craze/shortage. What am I missing?

johnireland

.. my knowledge of Rolex......... Hope this helped those who are new to Rolex.

STANDY

Have read many other sided than glowing accounts over the last 20 years that’s all I am saying. As said don’t really hold a view but it does not sit well with some in the industry community.

johnireland

I don't know where to find the following post...it was part of a thread email alert...

"

So i have a serious question, the shortage around everything is real, as a matter of fact at this point in time collecting anything just plain sucks because everything’s either delayed or cancelled and since I finally sat down and did an inventory of all my stuff this past weekend I made up my mind and decided to sell the majority of them and buy a nice watch. Rather than have them sit in a garage I want something to look at.

I have my eyes on the Submariner Date 41 Steel/Yellow gold but is the shortage based on ALL models or just specific models? I am about to check into my local AD this weekend but from general experience I have seen varying experiences from 1-2months to 5-10 years."

My answer to this person is, why do you want to take a huge depreciation on your money by buying a new Rolex? Yes prices are up there, but those aren't the dollars that you'd get if you tried to sell it as a slightly used watch. I wouldn't by any watch as an investment. Nor car, either. Look at all the mark up you are paying...it just isn't a buyer's market. Go ask an AD what he'll pay you for a slightly worn 3 month old version of the watch you are looking at. That is what your new watch will be worth the moment you walk out of the store. (Try the same thing with a new Porsche.)

So, what are the alternatives? Obviously, vintage Rolexes. I don't need a 41mm Sub when there is no significant difference between it and a 38mm Sub. Yes there is a big difference in the new Yacht Master vs the older classic model. But not between a new Milgauss vs a vintage 1019...except for the size...or the 41mm Date Justs, or Day Dates vs. the 36mm. It is amazing to realize that in the early 1960s, a very high end watch maker, Vacheron Constantine (founded in 1755), was making their watches thinner. They even had an autowind dress watch with a movement that would fit inside a silver dollar. Cartier, Patek, VC, IWC, a large portion of the Swiss watch industry was trying to meet the demand for watches that were thinner lighter on the wrist. In the Vietnam war soldiers went into battle with 34 and 36mm watches on their wrists, they didn't need nor want something big and clunky.

If you are frustrated by the price/supply/demand of new watches...take a look at the values and styles in vintage ones.
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johnireland

Rolex made its reputation the old fashioned way. It worked for it. The following is a brief look at my knowledge of Rolex...imperfect as it might be.

There are two Rolex markets...vintage models and new ones. Often they attract very different customers. In the vintage arena, the normal size of a Rolex was 36mm for a Date Just and Day Date, 34mm for the Date and regular OPs, and 38mm for Subs and GMTs and Cosmographs (also known as Daytonas). When the "big watch craze" hit about 20 years ago, Rolex began losing customers to what I call the "cans of tuna fish on a wrist" trend. Finally Rolex followed the trend and enlarged their line up to reflect the fashion driven market. The stainless steel Rolex is a less expensive watch, so they outsell the gold ones. And Rolex has been introducing lots of "special" models to created "instant collector" pieces. This has caused more demand for the stainless steel ones...usually sport models...and so the dealers can mark up the prices more. The gold Rolexes have more competition from other luxury brands...Royal Oak, Patek Philippe, and the ultra low volume boutique brands like Harry Winston, for example. Rolex has always had a good sense of the market and they produce enough to keep prices for themselves and their dealers at a good profit level...and to keep their customers wanting more. Porsches, Ferraris, Mercedes...the price is what the price is.

The Rolex reputation isn't based on sales, it is based on solid design and construction. When Has Wilsdorf began the company he saw two flaws in watch design...water and dirt entering the snap back cases and destroying the watches. He solved both of the problems with the Oyster Case. It simply was superior to any other design by any other manufacture attempting to address those problems. You could say that those Rolexes became the first truly successful tool watches. However the weakness was that owners often forgot to screw down the crown after they set and wound the watch. Enter the Perpetual movement...(based on a Harwood design that Rolex bought out)...and now as long as you wore the watch, you didn't have to wind it. This was so much better than any design out there (1930s) that it became the standard for all other tool watches. But they had to come up with their own solutions because Rolex patented every aspect of their watches. There were lots of good watches being made by other manufacturers, but none that could match the Rolex designs.

That takes us to the Rolex vintage watch market which was really starting in the 1980s as a major trend. The vintage watches often had aesthetic qualities that fans liked better than the new models...dauphine hands, markers, etc. The Explorer was a big seller among American soldiers serving in Vietnam...and that was part of its popularity two decades later. The Submariner was setting the standard as a dive watch in the fifties, and in the 1960s was the James Bond watch. Rolex fans began to like the first versions that would be in excellent condition and collect them. The best examples began to get higher prices and trends followed. The Rolex DateJust was the business Rolex and became the watch to have as a sign of success. For awhile the two tone gold and steel was a big hit, later fell out of favor over either pure steel or pure gold. The collectors rediscovered the early versions of the Oyster Perpetual...the Bubblebacks...and those, in all versions became very valuable, even though they had relatively small 33mm cases. I also believe that it was the attraction to vintage Rolexes that made the collection of other vintage brands take off...IWC, Omega, etc.

Rolex also did something only one or two other watch makers did...they survived the Japanese digital/quartz/battery trend of the seventies. Patek Phillipe and maybe Vascheron Constantine were the two others. The rest of the Swiss watch market went into free fall, with almost all the manufacturers sooner or later dying...only to be resurrected during the 1990s by two or three large holding companies that bought up the names (and other assets) and reintroduced the brands to cash in on the new vintage watch generated interest in mechanical watches. But Rolex didn't miss a beat during the seventies...the Japanese digital watches had no effect on them, in fact they grew and prospered. To a great degree because they have always been a private held (family trust) company. That company has had generations of strong management and leadership.

Yes, Rolex commands a higher dollar value for their products than most other companies. And they've earned it. I think there is a vintage vs new divide among Omega enthusiasts as well. The Omegas of the 30s and 40s and 50s and 60s has a very unique role in the history of the mechanical watch...and certainly was an equal builder to Rolex of quality time pieces. As a long time Rolex collector and enthusiast, there aren't many I have wanted that I haven't owned. But all new watches leave me cold. That is what has brought me (a little late to the party) to begin pursuing my interest in the amazing watches made by Omega. And this forum is a rich source of knowledge to that end. Hope this helped those who are new to Rolex.

S Shay

cvalue13

No doubt for me that keeping grey market prices above msrp is a key business aspiration.

I find it hard to believe, though, that Rolex doesn’t care about ‘unscrupulous AD’s taking kickbacks in back door sales’? That doesn’t square with the stories I’ve heard about Rolex’s treatment of ADs.

But, hell if I know[/QUOTE>]
Rolex were compelled to act. Otherwise they'd be seen as condoning such corrupt practices. If they truly cared about corrupt ADs, they'd maintain an official wait list at HQ in Switzerland and take the power to allocate watches out of the AD's hands.

ckhaing

i am not clear how secondary market (both gray and used) higher pricing helps Rolex SA directly, maybe indirectly?