Let’s say you are a wealthy business man 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 possibly get home in your German-built luxury sport 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 in. one piece “- a Rolex.
Well I’ve got some bad news for – you probably can’t get it.
The great Rolex shortage
There are shortages in the world these days – from cars and the microchips that make them up, to coffee beans and even toilet paper. The pandemic supply crisis has fueled much of this, and this goes even for high-end wristwatches.
While sales of these wristwatches plummeted during the height of the pandemic in 2020, purchases have recently increased. According to the FHS, a research group on the Swiss watch industry, sales of Swiss watches rose 7.6% in July from the pre-pandemic benchmark of 2019. Sales growth jumped 48.5% % in the United States in July compared to 2019 levels, and even 75% in China.
Today, global sales of Swiss watches are on the rise, but for private company Rolex, the situation is more complex. Paul Altieri, CEO of online watch retailer Bob’s Watches, says Rolex’s history in particular has spanned many years, even before factory closures that reduced supply. (Yahoo Finance has contacted Rolex for comment, but is still awaiting a response).
“The supply to some extent due to COVID, where the plant was closed for several months, made the problem worse, but the [supply] problem already existed before, ”Altieri said in an interview.
“Global demand has steadily increased over the past five years and supply has remained somewhat constant, this is a classic situation between supply and demand,” he said, which exerts a “upward pressure on prices”.
Altieri does not believe Rolex is deliberately withdrawing the offer; it’s just that the demand is so high for a luxury item like Rolex watches, he said.
Case in point: Bob’s Watches uses an email alert system to notify buyers when the watch they’re interested in is in stock, and once that email is sent, those watches are picked up – quickly.
“New models that arrive on the site can sometimes sell out in 15 minutes,” says Altieri. If you arrive too late, even within minutes or seconds, “They can be gone. “
“A perfect storm”
Watch expert and journalist Eric Wind of Wind Vintage sees a confluence of factors that are pushing Rolex prices up and availability down.
“I think it’s really a perfect storm,” he told Yahoo Finance Live. In addition to supply constraints and increasing overall demand for the product, he says, there are now more ways for regular owners, and resellers, to sell across the world.
“There are a lot more ways to sell these watches online than ever before – so anyone could buy, say, a [Rolex] Daytona or Submariner can easily do that and sell it for thousands of dollars more than they paid for, ”he says.
“It’s a bit like the sneaker mentality with StockX and the ability to resell sneakers online a lot more easily; 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]”, said Ariel Adams, founder of the famous watch blog aBlogtoWatch in an interview.
Rolex has made it clear that they will not increase 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 those things, “Adams says. Plus, the pandemic has reduced the supply of watches by 70%, and” there really are fewer watches to go through. “
The problem of scarcity of supply and demand is, in Adams’ perspective, exploited by both “scrupulous and unscrupulous” dealers.
Some Authorized Dealers, or AD as they are called in the industry, will sometimes ask their potential customers to buy a less popular watch first, before they can be put on the dealer list for desirable Rolex models – such as a Submariner, GMT or Explorer – when watches are available. It is a common phenomenon in industry; it is not illegal but can be very frustrating for a buyer.
Less scrupulous dealers will take these popular Rolex models, sell them above cost on 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, Adams says, is because there is no official Rolex list of buyers who are on a waiting list. As stated, 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 whomever they prefer: long-time customers, big players, 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 privileged customer lists at the dealer level.
Rolex could solve all the frustrations from a buyer’s point of view, Adams said, if Rolex created an official waiting list or a guaranteed way for people to buy the watches they want at retail. This would solve the problem, even if potential buyers had to wait.
“The majority of overspending would go away,” Adams explained.
While an official waiting list would be great news for fans of Rolex watches, the instant gratification of getting your hands on this Rolex “Batman” GMT, even when you have thousands of dollars in your pocket, is going to be delayed. .
Pras Subramanian is a reporter for Yahoo Finance. You can follow it on Twitter and on Instagram.
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