Rolex – The Truth About Rolex

Rolex watches crown pendant (courtesy shopicydrip.com)

I’ve been buying, selling, owning and valuing Rolex watches for over twenty years. In that time, I’ve worked for no less than four authorised distributors, as well as several second-hand specialists. I used to be a Rolex fan; I loved the history of the brand, the industry-leading developments, and the exciting watches used by explorers, specialists and professionals. As the years have passed, my love for the brand has slowly waned . . .

When I came into the UK trade in the late 1990s, Rolex was the signature aspirational watch brand. Their watch collection was relatively modest in terms of size, and their price point wasn’t anywhere near as ridiculous as it is today. They were expensive, but obtainable.

You could walk into any authorised Rolex distributor anywhere in the world and take your pick of models. It didn’t matter if you wanted a classic or a professional model; availability wasn’t an issue and everything was in the window. The only watch that was a little tricky to obtain: the ‘Zenith’ Daytona ref 16520. Rolex used a third party movement, so it wasn’t necessarily their fault.

So what has exactly gone wrong with Rolex? From where I sit, the main issue is that they’ve become complacent. Their brand is so well established and successful they no longer have to work for the business. Specifically . . .

1973 Rolex Submariner (courtesy bobswatches.com)

Rolex used to make watches for specific purposes 

Whether it was a Milgauss, GMT, Submariner or Explorer, every Rolex had a purpose, often purchased by someone in that respective field. I use to sell GMT’s to pilots and Submariners to divers. Because of the excessive price points and so-called limited availability, you’re more likely to find these watches on the wrist of a footballer or TV chef. Rarely will a Rolex encounter anything close to its predecessors’ purpose.

Rolex boutique Macau

There is no such thing as a waiting list

There’s no waiting list, or ‘list of interest,’ or whatever they’ve decided to call it this week, and don’t let anyone tell you otherwise! Rolex could flood the market tomorrow if they wanted to. The simple fact is they choose not to, so they can maintain a patina of ‘exclusivity.’

Availability simply comes down to who spends the most money. Rolex gives AD’s (Authorised Distributors) an allocation list every month. The watches on this list depends upon how much money they spend with Rolex annually. If they don’t spend a lot, the list will be full of nondescript watches with the odd professional piece to keep them sweet. If the AD spends a lot of money the variety increases, as does the number of professional watches.

Many if not most AD’s have adopted this ‘he who spends the most gets the best’ approach. In-demand watches go to the highest spending clients. I’ve worked in AD’s where the safe was full of so-called ‘hard to get’ watches. GMT-II? I had five of them. Daytona;? I had eight of them. Steel Submariner? I had nine.

It didn’t matter if you were the first or last person to put your name on the ‘list.’ The deciding factor always came down to how much the client had spent and how much the decision-maker liked them.

Rolex drought (courtesy watchprosite.com)

Rolex makes too many watches – they are neither exclusive nor rare

There are only so many people and, therefore, wrists in the world. And yet Rolex keeps churning out unit after unit, year after year. The myth that Rolex’s are exclusive, with specific models being hard to obtain, never goes away.

Professional models- your GMT’s, Subs, Daytonas, etc. – aren’t even remotely rare or exclusive. Take a look at any number of non-Rolex online platforms; they’re available in abundance! At the time of writing, one popular website offers a choice of one hundred and two steel GMT-II’s, registered in 2020. We’re only ten weeks into the year.

To put that into perspective, ignoring the premiums that these watches attract, there are only nine Patek Philippe Nautilus 5711, registered in the same period on the same site.

Rolex repair

Rolex doesn’t do refurbishment; they replace

A lot of brands will sympathetically restore a customer’s watch. Rolex prefers to rip out anything that is not up to its standard and replace it with a ‘service’ replacement part.I’ve lost count of how many matt dials or naturally aged bezels amongst other components that I’ve seen replaced by sparkly new service replacements, detracting from the watches value. Why can’t they just leave it as it is?

Rolex GMT on Oyster bracelet

Rolex giveth, Rolex taketh away

I swear Rolex canvas for opinions on what watches they should update or bring back and then do the complete opposite. I imagine that a meeting with one of their focus groups goes something like this.

Rolex: We’d like to know what you think of the GMT-II on the Oyster bracelet.
Focus group: We’d love to see is a Jubilee bracelet version.
Rolex: Excellent! We’ll launch a Jubilee version next year.
Focus Group: Wow, that’s brilliant!
Rolex: Wait, it gets better! At the same time as launching the Jubilee version, we’re going to discontinue the Oyster version.
Focus Group: Wait. What?
Rolex: It’s a fantastic plan.
Focus Group: You’re going to lose some buyers to the secondary market for no reason, and you’ll push the secondary values up, which won’t benefit you at all.
Rolex: Nobody will expect it, and that’s why it’s such a genius idea!

Rolex Air King

Rolex watches – unjustifiable price points

In any industry, there will always be a certain amount of parts and model interchangeability. It helps to keep production costs down. It’s why you find the same caliber movement in various watches in a manufacturer’s catalogue. For the most part, I’m OK with that. What I abhor: virtually identical models where the smallest difference raises the price.

The Rolex Air-King ref 116900 has a 40mm Oystersteel case with twin lock crown. It’s water-resistant to 100m, attached via an Oyster bracelet with an Oyster clasp, and powered by the 3131 calibre movement. The Air King retails for £5,150 ($6,695).

Compare it to the Milgauss ref: 116400GV. It also has a 40mm Oystersteel case with a twin lock crown (water-resistant to 100m). It comes with an Oyster bracelet with an Oyster clasp, powered by the same Rolex 3131 calibre movement. The Milgauss retails for £6,650 ($8,642). A clear £1,500 ($1949) more.

All you get for the extra money is a slightly green-tinged glass and a somewhat different dial with a ‘lightning’ second hand.

Rolex watches

Rolex has the world’s laziest design team

Don’t get me wrong: I like the fact you can see the evolution in Rolex design over a few decades. But the changes are glacial. Rolex hasn’t come out with anything inspiring for years. The most you get: the same watch in a marginally different diameter case or dial option. Or, if you’re fortunate, the same watch but in a steel and gold combination.

If you want a stainless steel Datejust on an Oyster bracelet with a silver dial and a fluted bezel, you can choose between a 28, 31, 36, and 41mm case size. Or the same style (albeit in a ‘Date’ version) in a 34mm case with a different movement. So Rolex makes the same watch in five sizes spanning a diameter of 13mm. As opposed to something genuinely new.

Rolex watches are overpriced - Stainless Datejust for $7k+

The stainless steel Rolex Datejust is overpriced

Launched in 1945, the steel Datejust was a groundbreaking timepiece. Now it’s nothing more than an automatic watch with a date function and water resistance to 100m. Everyone is making these kinds of watches now, and the majority of the buying public doesn’t give a hoot about Parachrom, or whether the watch is +2/-2 seconds per day.

A 36mm steel Datejust ref 126200 retails at £5,650 ($7,344). That’s an obscene amount of money for what it is. An Oris Divers Sixty-Five – a fantastic modern watch full of vintage style – offers the same size case. The Swiss water-resistant (to 100mm) automatic, complete with a date function, will set you back £1,550 ($2,015).

The DJ’s power reserve is longer (70 hours vs. 38). But is the extra 32 hours side table time worth an extra £4,100 ($5,329)? An additional £128 ($166) per hour? If you took ‘Rolex’ off of the dial, nobody would pay that kind of money for a mass-produced watch.

Rolex Daytona

You can’t customize your Rolex

When I was working at an AD, you’d have 20 odd watches in stock. If a customer wanted something different, you traded from the master catalog. We could also modify our ‘stock’ watches: change the dial or bracelet. Clients would look in the window and say “I like that watch with the fluted bezel, but I like it with that dial, and I’d like it on the Oyster bracelet.” And off the watch would go to the workshop.

We also offered a free dial exchange within six months of purchase. A client could come back a say, I don’t like the plain dial now. I want the diamond set one instead. All the client would have to do is pay for the new dial and service if it was over six months old. The key was to sell the product and to keep your client happy.

Rolex no longer allows modification. If a watch comes with a black dial, you’re married to that dial for life. Modify your watch and Rolex won’t even service it – unless they can change everything back to the way it was the day it left the factory, at your expense.

On our end, if we didn’t have a watch in stock, we’d pick up the phone to Rolex’s sales department and bang, they were on it. If they had the watch, they’d get it to us ASAP. If they didn’t, they’d find an AD who did and see if they could redirect it to us. Rolex would go to extraordinary lengths to help us sell a watch.

Not anymore, I know of AD’s who wanted to order a watch for a direct sale. Rolex wouldn’t allow it until the AD had sent something back in exchange. That kind of mentality blows my mind.

Rolex Datejust just in case - Rolex watches overrated?

Rolex watches are soulless

Rolex sells vanilla watches – they’re about as exciting as magnolia paint. Everything in their factory is hands-off. The majority of production automated, with a bit of hand assembly at the end. The watches lack individuality and passion; they’re clones. Compare Rolex’s old advertising to their current campaigns. There’s absolutely nothing exciting or interesting about them now – all that died years ago.

Rolex used to be bold, daring, and adventurous. Now they’re plain-old automatic watches with a date. There will always be people who aspire to own a Rolex. With ever-increasing competition, along with the growing demand for pre-owned watches, unless Rolex takes a long hard look at themselves, they’re in for a tough time.

11 thoughts on “Rolex – The Truth About Rolex”

  1. Fascinating perspective, Gareth. The dial-swap world sounds like a better one to live in. Maybe it speaks to something about a post-consumerism world where Rolex used to be the brand that ~got~ marketing in ways the rest of the watch industry didn’t, but it backed up a genuinely exceptional product. And increasingly of late Rolex just happens to be the only watch brand the average person can point a finger to and say “that is a nice watch worth having” because it’s about the only one that’s known, so they rest atop a tidal surge of branding and the customer becomes generally rich that wants a nice thing not a discerning one that wants superior qualities.

    Anecdotally, Rolex in the nineties has come up for me in reading frequently, particularly around the context of the Gulf War/Somalia, where having a Rolex really did have a different intent.

    1. Good Morning Mark,

      I am pleased that you found the article of interest. I can’t tell you how many sales were pushed over the line by giving the client an option of a ‘dial swap.’ And taking that option away, I think, was a genuine mistake by Rolex. I agree, and like you, I believe, Rolex got marketing back then and appreciated their clients more. Now, they know people are going to buy their watches regardless, so they no longer have to try.

      As for the Gulf War/Somalia topic, yes, Rolex’s were used for more than just timekeeping. I once sold a Rolex to an ‘international’ travelling client who referred to them as his “Get out of jail free card.” I’m not sure if they carry such kudos now, though.

      All the best,

      Gareth

  2. Your ideas are intriguing to me and I wish to subscribe to your newsletter.

    I don’t have any Rolex watches in my collection and probably won’t be adding any as I’m a cheap bastard who wants any watch I buy to have a strong price/quality correlation that other manufacturers better hit. Rolex never really appealed to me both from a desirability or value for money standpoint. Now, if I inherited a vintage Rolex GMT Master, I’d never sell it, but jumping on the bandwagon now when Tudor has better-looking pieces for half the price seems isn’t my thing.

    I hear Grand Seiko boutiques just give Rolex wearers a loupe to inspect what’s on their wrist to compare to a GS, which strikes me as a very effective way to sell zaratsu polished hands and cases.

    In lieu of a Sub, I’ve been thinking about an Eterna Super Kontiki, which uses an ETA movement. If it worked for Shayetet 13, I’m sure it will survive on my wrist.

    1. Hi Nick,

      I am pleased that you enjoyed the post. I don’t have a newsletter myself, as this is my first post on this website, one of many, I am sure. But if you email Robert Fargo (robertfarago1@gmail.com), who’s site this is, he might be able to sort something out for you.

      I certainly agree that the price/quality correlation with Rolex is miles out. Don’t get me wrong, they make quality watches, but they are far too expensive for what they are. And like you say, there are better options out there.

      I’m a big fan of Tudor myself; the balance between product and price is better than most. But aesthetically, I can’t get on board with the snowflake hand, which is the only thing stopping me from buying one.

      Grand Seiko, in terms of quality, is up there with anything the Swiss can pull off, in most cases, better. The issue Seiko has here in the UK, is they lack the brand image, as a lot of people associate them with their lower price point models. They do have a solid following, with people who appreciate watches, but to the general public, they struggle.

      The Eterna Super Kontiki, is a solid watch with a great vintage feel that won’t cost you a kidney. Best of all, depending on which one you go for, they use either a Sellita or an ETA movement, so getting it serviced won’t financially cripple you either. A very nice watch for sure.

      All the best,

      Gareth

  3. A couple of points on a very excellent article.

    1. Rolex has been a huge beneficiary of “the flight to quality” that the Apple Watch has wrought on the Swiss watch industry. Combining decades of brand equity with identifiable designs means that a purchaser doesn’t have to justify *why* they bought a Rolex besides “It’s a Rolex”. Harder with some more recent or smaller brands. This is actually *helped* by their lazy design team, because Rolexes are immediately identifiable by anyone who has even looked at a watch. In this case, it is very much like Porsche.

    2. Because of this, certain Rolex models are *wildly* underpriced, creating these “waiting lists” and secondary markets, etc. But they’re stuck. If they hike prices, they’ll get killed when the market turns around (and it will because it always does) because nothing destroys a luxury brand faster than cutting prices to maintain demand. If they keep going the way they’re going with the supply imbalance of dress and sport watches they’re turning off their next generation of customers and driving them to other brands (which, as you point out, there are no shortage of).

    In a sense, they are caught in a trap that many dominant firms experience in a declining market. Their short-term value is extremely high but the long term is uncertain since at some point the market won’t support their volume at the current product balance. It would be one thing if they were a boutique manufacturer but 750k+ units annually is too much production, fixed costs, etc.

    1. These are some excellent points, and thank you for commenting. I agree Rolex has been living off of their brand equity for far too long. And more people buy a Rolex because of what it represents socially than anything else.

      Although I do think there is some validity to your point on Rolex being underpriced, especially when compared to the pre-owned sector. But I still think their RPP is grossly excessive when you consider what the watch comprises. The GMT-II ref 126710BLNR, as an example, currently retails in the UK for £7,750 ($10,100), which is a ridiculous amount of money for what it is. But when you compare that with the secondary market, the same watch is £13,950 ($18,180). So it’s hard to disagree, and you can see why Rolex put their prices up in January. This is very much a chicken and egg scenario.

      But I will say that the second-hand prices here in the UK have cooled slightly over the past 6-12 months. Before Christmas, the 126710BLNR was trading over £14K, and at one point, one well known second-hand website was discounting because they had far too much stock.

      It’s going to be interesting to see how all this pans out over the next few years.

      All the best,

      Gareth

      1. Yeah, I completely agree that at RRP, most of their watches are grossly overpriced when you compare it to what you can get elsewhere. Like, is a GMT II worth nearly double a Grand Seiko Spring Drive SBGE201? Certainly not in movement quality or finishing!

        On that note, when I bought my Explorer II a couple of years ago, I had the chance to get a BLNR from the same dealer at RRP. I chose the explorer because it was less obvious what I was wearing – the GMT was too flashy. I chose poorly 🙂 🙂

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