Today we want to talk to you about how the watch market and more specifically the Rolex watch market has reacted to the coronavirus pandemic. We will first discuss reports around how authorized dealers are behaving, then we’ll jump into the numbers and see what story they tell before we any my prediction on how things might look at the end of the year.
People come to tend to have different opinions on this topic
We think it is important to remember that everyone has their own agenda and there are a lot of people who are in the watch industry or who own a large collection of Rolexes, that will have an interest in downplaying any news about a supposed price crash.Similarly, there are a lot of people who aspire to order a Rolex and want to make this story seem bigger than it is. We are going to strike a balance but like always you should think for yourself and remember this article is not financial advice.
How AD’s are reacting to this situation
We investigated and picked up stories and reports from forums, Facebook groups, and YouTube channels like Paul Forbes and David Khalil’s and more. We can’t authenticate is all individually but the amount of similar accounts all coming out are at the same time makes us think it’s definitely an element of truth to them.
The story is about a large, if not the largest authorized dealer in the UK, offering stainless steel Rolex Sports models to wait-listed customers. It catches that customers are expected to pay a 50% deposit and then collect the watches in store once stores reopen, furthermore the payment is through a third party payment company meaning this may affect your ability to do a chargeback.
This begs a question, where are all the wait-listed Rolexes suddenly coming from. In my opinion, prior to the coronavirus situation, AD’s had used wait lists as a tactic to generate more revenue. By getting a Rolex customer to believe that it is the only way for him or her to obtain a stainless steel sports model, the AD has made almost double the profit and also got rid of hard to move pieces. Now that business is fallen, they’re opening the safe doors and let more of these coveted pieces go in order to stay in business.
It also helps Rolex to maintain these whispers about how difficult they are to obtain. Humans always want what we can’t get. Exclusivity builds brand power after all. and Rolex is the undisputed leader when it comes to building and maintaining that brand. We don’t believe there is a genuine shortage of Rolex Stainless Steel sports models and we can investigate this further by looking into production numbers. Previously it was easy to know how many Rolex watches were manufactured each year, as COSC, the Swiss nonprofit organization which certifies the timekeeping ability of all Rolex models would release an annual report detailing exactly how many watches by the manufacturer they had certified that year.
However, it stopped detailing in the manufacturer in 2016. What we know from the last report which contained the manufacturer released in 2015 is that COSC certified 795,716 watches for Rolex. Omega meanwhile 511,861 watches certified in the same year.
Now while this doesn’t prove that there is a sufficient amount of Rolex watches to meet the demand, it does disprove the notion that Rolex watches are somehow uncommon or rare.
How does the market react
Moving on to how the market is reacting in terms of price. Fortunately, due to the internet, we have a huge amount of access to data from Chrono24, eBay, forums, and social media. Watchcharts is a website which amalgamates this data and puts it into some nice charts. if we look at the Rolex Submariner Ref. 116610LN, we can see that the average used list prices have fallen from just below £8500($10650) in January to just £7500($9400) in May. A drop of 1000 pounds in just four months an effect on this whole situation hasn’t really hit yet, in our opinion. The Submariner date retails for £7150($9000) so currently, the used market is just sitting £350($400) above retail. It isn’t all bad news though, if we look at the time to sell we can see are roughly at this price it takes only five and a half days to sell the Submariner, which means that there is a lot of liquidity left in this market.
What does this mean for the future of the Rolex watch market? Rolex ceases production since 5:00 p.m. on March the 17th due to the current situation, surely this means things will swing back around and Rolex prices should increase again. This is not the first market crashed survived by Rolex, and definitely not the last. It is a great time to buy a Rolex at a cheaper price.
Whatever happens to the Rolex market, the replica market is stable and always has a demand. Even more in situations of crisis, clients are trying to save every penny and look to save some money. You can have your Rolex Submariner 116610LN for around $200, which is a great deal.