We truly believe that when it comes to value, there are few luxury items that can compete with a Rolex. In this article we’ll go over our reasons for this and elaborate on why prices are on the march and how their popularity is always climbing.
Founded in 1905 by a then 24-year-old Hans Wilsdorf, few people (if even Hans himself) could have anticipated how Rolex would one day become an indispensable style item for the rich, famous and powerful.
Since moving to Switzerland after the first world war, the brand has gone from strength to strength. With this success comes a question frequently heard when talking about Rolex watches: “Why are they so expensive?”. This is a question that we can hopefully answer below!
So, there are a lot of people out there who may think Rolex watches are overpriced, especially when looking at the meteoric rate that prices are rising in the secondary market. Let’s take a look at some of the factors behind these prices:
- Brand Recognition – If you asked a random person what they thought the best watch in the world was, 8 out of 10 would more likely than not say Rolex. The Rolex brand is as much an intrinsic part of modern culture as it is an indicator of individual success. Rolex wristwatches have found their way onto the wrists of some of the world’s most famous and influential people, forever creating the illusion that a Rolex is the essential accessory for high achievers. This makes them more and more desirable for individuals determined to achieve this same level of success in their own lives.
- Scarcity – Let’s face it, it has become extraordinarily difficult for the average consumer to walk into an authorised dealer and find the watch they want without having to go to the secondary market. Phillips auction house, a place usually reserved for the most rare and valuable goods that cannot be bought through standard sales channels, recently sold a selection of steel sports watches from the Rolex Oyster Perpetual collection that only came out last year! In doing so, Phillips were also acknowledging that new, stainless-steel Rolex watches are virtually unattainable.
- Rolex themselves! – If you load up Instagram and head over to Rolex’s page, you’ll find an endless supply of negativity on the challenge of getting hold of a watch. Common themes include the endless ‘waiting lists’, unscrupulous authorised dealers and the fact that many are instantly sold on to the secondary market. The question must be asked of Rolex, are they intentionally dangling these elusive pieces in front of frustrated collectors as a marketing strategy? Does this matter to Rolex, or do they just see the endless hype around their watches as further proof of the brand’s mind-blowing success?
Now, is it just a case of supply and demand, next level branding and hype? Or is the face value (pun intended) more than surface deep?
Well, for starters, Rolex is more than just a brand; it is also an extremely innovative company. It currently boasts more than 500 patents. To put that into perspective, that’s more than each of Nissan Motor Co. Ltd, MIT, Nike and Exxon Mobil had registered in the US as of 2021.
Here’s another interesting fact about Rolex: they literally make their own gold and platinum! They are one of the only large manufacturers to have an in-house foundry. As you can see, Rolex is more than just an ice bucket challenge or TikTok twerk. Rolex is to the luxury watch market what Friends or Game of Thrones (except the last season) are to the TV world – a bench mark to aspire to.
Still not convinced? Ok, then let’s cover 5 more reasons why we believe a Rolex is truly worth the money:
- The Looks! – There are very few luxury, high end items that look great no matter the setting. The right Rolex can look as sexy with a t-shirt and jeans as it does with a £10,000 tailored suit. For some people this, more than the investment potential, is the true value of a Rolex.
- Quality and Prestige – In 1910, a Rolex was the first watch to receive a Swiss Certification of Precision by the Official Watch Rating Centre in Bienne. Rolex were also awarded a class A certificate by Kew Observatory in the UK. At the time, these certifications were usually reserved for marine chronometers, something used in the determination of a ship’s position by celestial navigation. So, it would be an understatement to say that unfaltering precision was the admission price for these clubs.
- Perceived Value – Whether an item is considered expensive or not really comes down to the person buying it. Some people would wince at the thought of spending thousands on a watch “which only tells the time, your phone can do that”. But as a collector, Rolex is a brand you either have a passion for or you don’t. If you’re happy with checking the time on your phone, great, but others want to tell the time from a luxury engineered time piece because of the brand and all that it stands for.
- Investment Value – As discussed in our previous article, ‘Should I Invest in Luxury Watches’, you can be pretty sure that a Rolex watch will always increase in value (unless it’s damaged in some way). A Rolex essentially increases your wealth as well as your style.
- R&D – The overall research and development setup at Rolex is on par with any modern-day tech firm. Rolex has several state of the art, well equipped science labs at their factory. They are constantly perfecting more effective, innovative ways to craft their time pieces, whilst also improving quality at every opportunity. All the materials used by Rolex are inspected using electron microscopes and gas spectrometers to look at the microstructure of the metals. To put it bluntly, they aren’t messing around!
Now, we know what you’re thinking – the above is all very well and good, and a Rolex bought at retail price is certainly worth the money! The issue lies with the inflated secondary market! Not being one to shoot ourselves in the foot, let us counter this.
Prices are set by the market, and the secondary market with Rolex is booming. The blame for this should rest less at the door of us dealers, and more with Rolex themselves. Supply is simply not meeting the demand. And before you think that most dealers are getting these pieces at retail price and placing a high markup on them, we can assure you this is not the case! Most authorised dealers cannot and will not directly sell to resellers. Most of the stock on the secondary market comes from individuals being offered a Rolex, then deciding to sell. A Rolex Daytona will retail for around £10,500 – can you honestly say you would then turn down the opportunity to make around £20,000 profit in one day? For an avid watch collector, the answer is probably no, but for most consumers this is something too tempting to pass up.
A final point to consider is that the mythical ‘waiting lists’ for these pieces can be years if not decades in length, and to get on these waiting lists you’ll often have to spend as much money on jewellery and other watches (that you didn’t really want) than you would have if you’d just gone direct to the secondary market. At the end of the day, you will rarely lose money on a Rolex, regardless of the price you pay. However, the secondary market can be a scary place, full of potential pit falls (we will discuss this further in an upcoming article). So, if you’re still dreaming of owning a piece of Rolex history, please allow us to guide you in order that you can discover the watch that was always meant to be yours! Also, let us know whether you think a Rolex is good value or not in the comments down below.