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Why are Rolex prices so inflated?

ReptileWatch

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22/7/20
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I wanted to see how much a gen Rolex Hulk Sub was going for and to my surprise, they're going for upwards of $23,000! A couple years ago they sold for $15,000. I mean, c'mon, who's buying these things anyway and aren't we in a global financial crisis? Despite all circumstances, I don't understand how Rolex manages to stay on top. Day by day, reps are getting better and better, the demographic for these watches are getting older while the younger generations are more in to things like minimalism, so the demand should be low enough to keep the prices stagnant at least. I think Panerai pretty much got knocked out of the park because of reps more than anything, because even dealers couldn't tell them apart. Somebody please sense of this for me!

20181011_234915.png
 
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P..DR..D

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Supply and demand.

Maybe a little bit of fomo.

Relatively more disposable income in this generation with perhaps a focus on material things to symbolise wealth / position.

Maybe just because people really like them and are prepared to pay the dictated price (or a multiple in the gray market)

Multitude of factors, but thankfully we have RWI:D
 
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ReptileWatch

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22/7/20
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Maybe a little bit of fomo.
C'mon mayn, even a homo has more fomo when he walks by a used jock strap in a locker room. As with watches, I get it because they are seen as investments and all, but right now it just seems like a bad time for that kind of investment.
 

P..DR..D

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C'mon mayn, even a homo has more fomo when he walks by a used jock strap in a locker room. As with watches, I get it because they are seen as investments and all, but right now it just seems like a bad time for that kind of investment.

I never spend more than I can afford to lose, pure disposable income & done solely for fun (or maybe to mark an occasion etc)

It's a hobby & never an investment for me, as have never sold a watch, but everyone's different.

I actually saw the below in one of the other members signatures, and stuck with me as a funny way of looking at it:-

I'm paraphrasing, but the gist was:-
"A guaranteed way to become a Millionaire from watches, is to start as a Billionaire"
 
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GreatWhite

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26/2/21
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The way Rolex intentionally and falsely creates scarcity in the market place also keeps the prices up.
 
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M_Hall

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The AD’s are knowingly selling to grey dealers most likely for some financial gain. I think this is the main problem.

Rolex aren’t scarce, the grey markets are saturated and they control the price.

In London the only way to even see Rolex sports models is by visiting the grey dealers. They all have every desirable steel sports models and I dare say more that aren’t on display.

I used to think the issue was created by Rolex but now I’m not so sure.

I hope it’s a bubble as if the prices ever went back to under retail they would actually seem like rep prices.


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M_Hall

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The AD’s are knowingly selling to grey dealers most likely for some financial gain. I think this is the main problem.

Rolex aren’t scarce, the grey markets are saturated and they control the price.

In London the only way to even see Rolex sports models is by visiting the grey dealers. They all have every desirable steel sports models and I dare say more that aren’t on display.

I used to think the issue was created by Rolex but now I’m not so sure.

I hope it’s a bubble as if the prices ever went back to under retail they would actually seem like rep prices.


Sent from my iPhone using Tapatalk
 

diamant

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Exactly this:

-Either u walk to an AD buy alot of watches until u get what u want for retail. (Might take years)

-or buy from grey market and pay alot more but again u dont have to buy several watches before u get what u wanted in the first place.

-Hulk 116610LV u cant get anymore at rolex ad.
therefore prices will always go up for this one, if u buy one today for 25k, it might be 30k nest year.

crazy but it is how they want it.
 

ShiroTenshi

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The effort that one has to go through just turn me off even though I can afford to buy on msrp. Buying from grey marke and paying more than retail is even a more turn off (usually one pay lesser from grey for other brand).

Screw Rolex, buy other brand.


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rwacc

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Are the younger generations really minimalistic? Even the up-and-coming Asian youth?
 

architekt

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To be honest I think its wrong to just give all the blame to any single factor like ADs/GreyDealers/Rolex/etc.
Especially Grey dealers and AD's selling to them preferably are, in my opinion just symptoms, but not the reason for all of this

I think its just a combination of factors that kinda amplify each other to the point where we are today:

Reps have gotten really good in the last years.
Like, compare "the best" reps from a few years ago with what we got now. Passing of high tier reps or especially frank ens in sales on eBay, Craigslist, whatever, got easier and easier over time. Most Rolex owners wouldn't be able to tell the difference because, lets be honest, they don't care. We're a forum of nitpicking watch nerds that realize details on a microscopic level which no gen owner would ever mind (just look at the reasons people RL QCs sometimes). You simply can't expect people to be that knowledgeable about stuff. Combine this with people that even fall for DHGate shitters and you'll see that there is a serious pull away from large parts of the second hand market and a push towards TDs and the likes of Chrono24 (due to its insurance) because of the rep market.

Economic Boom = Economic Downturn. It doesn't matter
Watch Buyers are not a uniform Group of people with the same motives. I think I won't have to explain why an economic boom since ~2010 would increase sales of luxury articles.
But one might think that, especially with the coronavirus and other reasons for an economic downturn, these would hinder watch sales but actually there are some pretty good reasons to put your money into watches in those times of uncertainty (btw. 'rona made most really rich people even richer but not going into that here). If you don't trust the economy, if you don't trust banks, if you don't trust governments or your currency as states made the money printers go brrrrr, people tend to go into stuff like gold to store their wealth. Watches mostly share the same properties plus a few extras. They are small, can be carried with you at all times, are relatively easy to sell and are a well accepted product (for sale). Think about it, if shit hits the fan and you have to leave your company/city/country/continent, a watch can be a good way to always have a "I can start over new somewhere else"-capital at your disposal.

Increasing restrictions on cash (heavily depends on your country)
Especially in some European countries and generally in lots of places in the world cash is getting more and more restricted. With more and more restrictions laundering money and tax evasion gets harder and harder (at least for regular people/lower-mid tier criminals - contrary to especially big companies which have way easier methods). Buying watches with this "dirty" money is a viable option in lots of places. Once again, it's a proper store of value, it's small, it's easy to sell if needed and most of all its easy to hide if needed.

Increasing demand causes increasing prices which cause increasing demand.
For a long time (rolex) watches where really not that much of an "investment". Besides some legends and vintage classics prices did actually depreciate over time and not like now increase.
More and more people just try to get rolexes to make money on them because the increasing scarcity means that if you are one of the lucky guys that gets MSRP from ADs you will (at least in the short term) make money on that purchase. Heck some Gen owners I know made thousands and thousands just "flipping" watches. I got a whole circle of friends/acquaintances that only buy from one share friend as he has the best AD connections because he was always a good customer. This causes them to get gens quicker but also makes that one guy kinda have a monopoly on buying with the AD whith wasn't even his intention. But he would be stupid to not embrace the status he has now and make some money of this crazy market.

Increased demand did not always encounter increased production.
This is only somewhat true and depends on your country but let's be honest. Compare how many watches ADs had just a few years back for showcasing and which models they had.
I really think most ADs also don't like that they simply can't put lots of nice models (or even any for smaller ones) to display. Due to lots of factors, the demand grew and grew and Rolex won't give them more watches despite this, because there's a very fine line for rolex to balance between fulfilling the demand but also not loosing its "scarcity" as this is pretty much a fundamental property why luxury items are expensive. Like hinted before having a limited supply also amplifies the fact that only "well-established" customers receive watches. Just think in the perspective of the AD: you got a limited supply from the factory, do you sell (or better said cater) to the guy that already buys 10-20 models a year from you or do you try to satisfy every new customer that might not even come back after his first watch?

Combine this with loads of other factors (like social media making it easier and easier to flex your wealth and the clout and social status that comes with it - but also increasing the propability of getting called out with a fakes) and you got yourself an ever-increasing black hole (or maybe bubble?) that drives up prices more and more.
 
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ReptileWatch

Horology Curious
22/7/20
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To be honest I think its wrong to just give all the blame to any single factor like ADs/GreyDealers/Rolex/etc.


Reps have gotten really good in the last years.
Like, compare "the best" reps from a few years ago with what we got now. Passing of high tier reps or especially frank ens in sales on eBay, Craigslist, whatever, got easier and easier over time. Most Rolex owners wouldn't be able to tell the difference because, lets be honest, they don't care. We're a forum of nitpicking watch nerds that realize details on a microscopic level which no gen owner would ever mind (just look at the reasons people RL QCs sometimes). You simply can't expect people to be that knowledgeable about stuff. Combine this with people that even fall for DHGate shitters and you'll see that there is a serious pull away from large parts of the second hand market and a push towards TDs and the likes of Chrono24 (due to its insurance) because of the rep market.

Lol, those nerds are so full of shit. The rep they'll review looks so dead on to the naked eye, they start getting in to consumer morals, as if Rolex is such a saint of a company that gives a shit about them as a consumer to begin with. Most of them are dealers themselves anyway, so of course they're bias.
 

joeyc

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I can’t agree more datejust 41mm submariner 10-15k for a 904 stainless watch which cost 1-1.5k to produce, use an inflation calculator, I think sub no date ref 5513 1970 cost back then around 300 bucks, which now is 2500-3000
rven 4-5k would be reasonable they do the same
shit with diamonds controlled market, I’m sure they play games , dealers , Rolex, ect.. I paid 3500 for my datejust that’s all it’s worth with a diamond face mop dial, and 8500 for my Daytona which I bought as an investment, 116520 I hate the fucking watch, i
wear my omega speedmaster, people always say how over engineered a Rolex is the fit the finish, it’s ok good but not perfect you’ll see dials with mistakes seriously there’s a Daytona on eBay with a mistake in the letter spacing it’s oem, anyone who wants to argue that about Rolex has never felt or used a grand seiko, that finish and quality is a amazing, if I get a dive watch it’s gonna be the original - blancpain fifty fathoms, I also love 007 no time to die omega seamaster, as far a chronograph zenith rainbow, I use my Pam 127 super rep a lot even the holy grail 6263 Daytona I really like but it’s grossly inflated reminds me of air cooled Porsche market and I own one I’m a fan, in conclusion 14k for a sub 11k for a 41mm datejust that looks like 3k watch they can keep I’ll buy another arf and save 10,500.
 

joeyc

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Lol, those nerds are so full of shit. The rep they'll review looks so dead on to the naked eye, they start getting in to consumer morals, as if Rolex is such a saint of a company that gives a shit about them as a consumer to begin with. Most of them are dealers themselves anyway, so of course they're bias.

like the YouTube videos where these idiots are retail dealers of Rolex and show how scary close the replica is and put its 1k when it’s really 600 and say it’s about how the watch makes you feel, I spit out my drink
honestly I feel smart that I saved 10500 and bought a arf datejust instead of the real
thing and it looks the same i
mean honestly most people don’t even know your even wearing a watch I’ve compared it with the gen honestly just the datewheel it’s so hard to even tell l, love your post new man
 
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derjenigewelcher

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I can’t agree more datejust 41mm submariner 10-15k for a 904 stainless watch which cost 1-1.5k to produce, use an inflation calculator, I think sub no date ref 5513 1970 cost back then around 300 bucks, which now is 2500-3000
rven 4-5k would be reasonable they do the same
shit with diamonds controlled market, I’m sure they play games , dealers , Rolex, ect.. I paid 3500 for my datejust that’s all it’s worth with a diamond face mop dial, and 8500 for my Daytona which I bought as an investment, 116520 I hate the fucking watch, i
wear my omega speedmaster, people always say how over engineered a Rolex is the fit the finish, it’s ok good but not perfect you’ll see dials with mistakes seriously there’s a Daytona on eBay with a mistake in the letter spacing it’s oem, anyone who wants to argue that about Rolex has never felt or used a grand seiko, that finish and quality is a amazing, if I get a dive watch it’s gonna be the original - blancpain fifty fathoms, I also love 007 no time to die omega seamaster, as far a chronograph zenith rainbow, I use my Pam 127 super rep a lot even the holy grail 6263 Daytona I really like but it’s grossly inflated reminds me of air cooled Porsche market and I own one I’m a fan, in conclusion 14k for a sub 11k for a 41mm datejust that looks like 3k watch they can keep I’ll buy another arf and save 10,500.


I understand your frustration. But in fact the list price of a date sub 41mm is, for example, 8700 CHF.
Imagine that the Swiss have also made progress economically and no longer work for the same money as they did 50 years ago. You see, a computer game on CD, for example, also costs money, even if a CD costs 30 cents to produce. They pay wages, development time, even the free coffee in the branch with the 8700.
But if you don't want to, you should buy a rep like all of us. But shut up and don't cry if his boss doesn't give him the annual raise.
It's like in a restaurant: you pay the cook for the rent of the house, for the meat on the plate, for his work, etc.

But not everyone knows the rule of three.
 

Copterguy

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The AD’s are knowingly selling to grey dealers most likely for some financial gain. I think this is the main problem.

Rolex aren’t scarce, the grey markets are saturated and they control the price.

In London the only way to even see Rolex sports models is by visiting the grey dealers. They all have every desirable steel sports models and I dare say more that aren’t on display.

I used to think the issue was created by Rolex but now I’m not so sure.

I hope it’s a bubble as if the prices ever went back to under retail they would actually seem like rep prices.


Sent from my iPhone using Tapatalk

^^^^^
This
I'm waiting for a Datejust 41mm white dial Roman numeral with fluted bezel and Jubalee. The AD contacted me when one came in, minus the Roman numerals. I declined it like a dumbass. I could have sold it at the grey market price and baught what I wanted at the same price. Next time they offer something close, I'm taking it.... I'm not getting anything at grey market prices unless it's below msrp.
 

joeyc

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I understand your frustration. But in fact the list price of a date sub 41mm is, for example, 8700 CHF.
Imagine that the Swiss have also made progress economically and no longer work for the same money as they did 50 years ago. You see, a computer game on CD, for example, also costs money, even if a CD costs 30 cents to produce. They pay wages, development time, even the free coffee in the branch with the 8700.
But if you don't want to, you should buy a rep like all of us. But shut up and don't cry if his boss doesn't give him the annual raise.
It's like in a restaurant: you pay the cook for the rent of the house, for the meat on the plate, for his work,

But not everyone knows the rule of three.

your right that’s a very well put point !
 

ReptileWatch

Horology Curious
22/7/20
7
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like the YouTube videos where these idiots are retail dealers of Rolex and show how scary close the replica is and put its 1k when it’s really 600 and say it’s about how the watch makes you feel, I spit out my drink
honestly I feel smart that I saved 10500 and bought a arf datejust instead of the real
thing and it looks the same i
mean honestly most people don’t even know your even wearing a watch I’ve compared it with the gen honestly just the datewheel it’s so hard to even tell l, love your post new man

Not even $600, the good old TDs on this site are selling for around $300-500 tops. It must keep 'em up at night. Meanwhile, the only thing I think keeping you up at night is that wad of $10,500 under your mattress :biggrin-new:. I don't care how rich you' are, that's still a good chunk of change. I rather go on an excursion or buy a new motorcycle. :thrasher::stuvetjee:
 
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