Why Are Rolex Watches So Expensive?
When it comes to luxury timepieces, one of the most common questions you are likely to encounter is “why are Rolex watches so expensive?” The simple answer is that Rolex watches are expensive because they are some of the very finest timepieces in the entire world. In addition to the advanced proprietary technologies and immaculate […] The post Why Are Rolex Watches So Expensive? appeared first on Bob's Watches.
When it comes to luxury timepieces, one of the most common questions you are likely to encounter is “why are Rolex watches so expensive?” The simple answer is that Rolex watches are expensive because they are some of the very finest timepieces in the entire world. In addition to the advanced proprietary technologies and immaculate levels of finishing found on every single model, the Rolex brand itself is accompanied by such prestige and universal acclaim, that a Rolex watch is an internationally recognized status symbol that is synonymous with excellence, success, and exclusivity. Producing a timepiece of this immense quality is inherently expensive and as you might expect, the cost of purchasing one for yourself similarly requires a relatively significant investment.
Below we are going to be going over exactly how much a Rolex watch costs and what it is about these iconic luxury timepieces that makes them so expensive. Additionally, we will also be discussing why used Rolex watches often cost more than brand new models, and breaking down why buying a Rolex might not actually be quite as expensive as you think. Rolex watches are relatively expensive because they are some of the best timepieces in the world, but truly understanding what goes into the production of a Rolex and why the brand charges as much as it does requires a bit more explanation. So, let’s dive in and fully answer the question: why is a Rolex so expensive?
Is a Rolex Watch Actually Expensive?
How Expensive Are Rolex Watches?
Rolex price information isn’t nearly as universally known as the Rolex brand itself. With that in mind, there are usually two words that spring to mind when people hear the word Rolex. The first is “watches” (obviously), and the other is generally “expensive” – But is that fair?
Luxury watches are generally rather pricey items, and no Rolex watch can ever be considered inexpensive. When purchased brand-new at a retail level, prices for Rolex’s least expensive models start out at around the $5k mark, but Rolex is by no means the most expensive luxury watch brand in the world. In fact, there are many manufacturers who charge far more for their watches than Rolex, and given the long waiting lists present for many of the brand’s top models, there are many people who believe that Rolex watches are actually underpriced.
Additionally, the large premiums that people are willing to pay in order to skip the waiting list let you know that there are many people who value a Rolex far beyond the monetary value of its retail sticker price. If you take into consideration everything that goes into a Rolex watch – the quality of the materials used, the craftsmanship poured into each one, the legacy of innovation behind them, and the global status of the brand – are they actually as highly priced as they are perceived?
How Much Does A Rolex Cost?
Like any manufacturer, Rolex produces a range of products, covering widely diverse price points. The least expensive men’s model, the Oyster Perpetual, can currently be found brand-new for between $5,000 and $6,000. That amount will secure you a stainless steel, time-only watch (if you are lucky enough to be able to find one available for sale).
At the other end, a 39mm Pearlmaster ref. 86409RBR, the heavily bejeweled member of the Datejust family set with over 700 diamonds, costs somewhere in the region of a quarter of a million dollars (although on the plus side, you do get the convenience of a date function with that one). In between, the majority of the brand’s offerings sit somewhere in the $8,000 to $40,000 space, but many of them have waiting lists and trade hands on the open market for values up to three times their brand-new retail prices.
Given this Rolex price range, none of the watches the brand sells can exactly be described as ‘cheap’ – and that is before we start looking at the vintage market, where the sky really is the limit. Particularly rare pieces and those with intriguing backstories often sell for incredible amounts, until we reach the Daytona owned by Hollywood movie legend Paul Newman, which sold at an auction in 2017 for approximately $17.8 million.
Why Does A Rolex Cost So Much?
In all fairness, Rolex’s reputation for producing expensive watches is one that the brand has cultivated, in many ways, itself. Since the 1980s, Rolex has shifted its focus from being merely a manufacturer of high-quality timepieces to the purveyor of the ultimate aspirational lifestyle – and the average price of a Rolex watch has increased with it.
Models that had once been an essential tool for individuals doing specific jobs or activities were now status symbols. A mechanical watch was no longer something you needed, but rather wanted, and the notion of exclusivity became the brand’s major USP. Going hand in hand with that was a new cost structure. The average Rolex price steadily rose faster than ever before, until buying a Rolex watch became something of an event – a reward for achieving a significant personal milestone.
However, at the same time, Rolex started offering more for the money. Billions were spent on research and development in order to perfect every aspect and each individual component. This gave rise to a series of innovations, such as a range of proprietary materials and lubricants, specially designed for longevity and performance. Whether they are subjected to the enormous pressures found deep under the surface of the ocean, or the extreme temperatures on top of a mountain, a Rolex watch will stay ticking.
The Highest Possible Standards
Rolex developed a new alloy for its hairsprings called Parachrom, which is antimagnetic and offers improved resistance to shocks and temperature variations. It also produced Cerachrom, a revolutionary type of ceramic material used for bezels and inserts that is both scratch-proof and fade-proof. Additionally, Rolex forges most of the metals used in its watches from inside its own in-house foundry to ensure the utmost quality, durability, and aesthetic beauty.
Unlike just about every other manufacturer, Rolex uses 904L stainless steel, an unbelievably strong material that is exceptionally resistant to corrosion and pitting, and that holds a polish like no other. It is also particularly difficult to machine and required Rolex to make a massive investment in new tooling and machinery. Rather than being confined only to the premium models, the brand’s 904L alloy (now called Oystersteel) is used on all of its steel watches, from the most humble to the most advanced.
In addition to that, Rolex is one of the very few companies that creates and builds every one of its movements in-house, rather than buying in generic calibers from the likes of ETA and modifying them, and this gives them complete control over every aspect of their construction. Rolex also has its own standards for precision, which are above and beyond the typical Official Swiss Chronometer Certification endorsement. While COSC specifications guarantee a movement’s timekeeping to between -4 and +6 seconds a day, that wasn’t enough for Rolex and so the brand introduced their Superlative Chronometer benchmark, which promises timekeeping of -2/+2 seconds a day. With that level of obsessive dedication to the art and engineering of watchmaking, Rolex price tags start to make sense.
What Do You Get For Your Money With A Rolex?
When you really break down the costs, a Rolex watch isn’t actually expensive at all. Yes, you might look at the entry-level model and decide you could spend $5,000 on something else. However, you will have a hard time finding something that retains its value as well over the years – especially in the luxury industry.
Certain Rolex watches sell for significantly more than their original retail prices, but this only applies to a handful of models. If you buy brand new, many of the watches that Rolex offers will depreciate a tiny bit once you leave the store with them – that’s just a fact of life. But there is a definite financial glass floor beyond which they won’t drop – unlike, say, a top-of-the-line car.
However, if you buy your watch from the pre-owned market, that monetary hit has already been shouldered by someone else, translating to a substantial saving on the price – and chances are that you will be able to sell your piece in the future for roughly the same sum, should the need arise or should you want something different in your collection. You could buy a Submariner today and offload it again in 10-year’s time for an amount similar to what you paid for it, meaning you have worn an icon of horology for a decade, completely for free.
However, choose the right Rolex model and you also stand a very good chance of making a profit. A number of the Rolex’s stainless steel sports watches only keep growing in terms of desirability, and the amount collectors are willing to pay for them increases in tandem. Even if you don’t want to part with your Rolex, you still have the peace of mind knowing that, if looked after properly, your watch will easily outlast you and can be handed down to the next generation to enjoy – and there are very few other items that can make a similar claim.
Why Used Rolex Watches Are More Expensive Than New Models?
Visiting the Rolex site might give you sticker shock – some watches reach deep into the tens of thousands of dollars, while others are simply listed as “price upon request.” And for those who are new to collecting, it’s probably confusing to see every single reputable second-hand website (including ours) selling certain Rolex watches at prices that are significantly higher than their brand-new, retail counterparts.
There are a lot of factors that play into the price of a pre-owned timepiece, so we wanted to give you some insight into what determines the value of a used Rolex. Keep in mind, not all used Rolex watches are more expensive than new Rolex models. If a used Rolex is selling for more than its retail price, it is probably vintage, rare, or highly desirable.
Vintage Rolex Watches
There are no real regulations around what qualifies as vintage, but within the watch world, we typically consider a watch as “vintage” when it’s at least 25 to 30 years old. These watches tend to hold greater value because as they reach a certain age, there are just fewer of them still in existence (let alone in collector-worthy condition). On top of that, the vintage models that are typically worth the most – sometimes three, four, and five times more than retail – are exceptional because of their excellent condition despite their age. They have desirable features like patina and production variations, and if you’re really lucky, a paper trail of its purchase and ownership.
Of course, there are also rare and discontinued features on certain vintage pieces that make them worth more. Some vintage attributes that can make a watch worth more are the coveted ‘Red Sub’ text on Submariner 1680 watches, an exclamation point dial, meters first dial, or a case with pointed crown guards (just to name a few). Some might just consider these outdated features, but first and foremost they’re rare and vintage – and if you have them on your Rolex, it just might be worth a whole lot more because of them.
When it comes to Rolex watches, rare and vintage can go hand in hand – but not always. There are Rolex watches that aren’t vintage yet but are still hard to find – for example, maybe their reference number didn’t last in production for very long. One watch that serves as a perfect example is the reference 16610LV Submariner (nicknamed the “Kermit”) – which was released back in 2003 for the 50th Anniversary of the Submariner but was discontinued by 2010. A couple of things make this watch rare, the first being that iconic, green aluminum bezel. Not only was it the first Submariner to feature this color, but after they discontinued the Kermit, Rolex began making ceramic bezels. The other thing that makes this watch rare is the sheer fact that there aren’t a ton of them around since it had a production run of fewer than ten years (compared to more than two decades for the all-black version of the Submariner 16610). So, how does the Kermit’s rarity play into its price tag? Today, the most recent stainless steel Submariner with a date complication and green bezel goes for $9,550 retail. Comparatively, prices for the older Kermit, with its black dial and green bezel are on average 50% more than the retail price of a brand-new Rolex Submariner (assuming that you can even find one available for sale at all), simply because of its rarity.
One of the biggest factors responsible for used Rolex watches costing more than their brand-new counterparts is the simple fact that most of Rolex’s top models are entirely sold out at retailers. It might sound crazy, but you can’t simply walk into a Rolex store and buy the watch you want. The waiting list for many models is several years in length and even with your name on the waiting list, there is no guarantee that you will receive a watch before the model gets discontinued. While some are happy to take their chances and wait, many other people are willing to pay well above retail to skip the waiting list and add the Rolex watch they want to their collection today. Since demand for Rolex watches significantly exceeds their supply, the secondary market is the only place to buy the model you want without the wait, and this drives up the open market price for these highly desirable models.
Some Rolex models simply hold their value better than others. Think of buying a luxury watch like buying a car – the minute you take it out of the store, it depreciates in value. However, just like cars, some luxury watches (in particular, Rolex) might actually be worth more after buying due to the market demand. For example, the Submariner is one of the best-selling watches in the Rolex lineup, and even the most run-of-the-mill used Rolex Submariner is going to hold its value incredibly well. You can even find some excellent condition models that are several years old that are worth more than their original retail price. Additionally, with the Rolex Submariner being entirely unavailable at a retail level, there are countless buyers willing to pay top dollar to ensure that they can add one to their collections without the wait
The True Value of a Rolex Watch
To sum it all up, there are many reasons why a Rolex watch costs as much as it does. While it can initially seem like a lot of money, once you look below the surface and take into account the quality of the materials, the timelessness of the designs, the more than a century of heritage, and the fact they hold their value so well, the price of Rolex watches are extremely reasonable.
Additionally, the simple fact that countless individuals all over the world are willing to pay well-above retail prices for pre-owned Rolex watches lets you know that regardless of what Rolex is charging at a retail level for its watches, the true value of them is even greater. Additionally, with Rolex prices continuing to get higher and higher each year, the amount you pay today might end up being worth a whole lot more several years down the line.
The product of the biggest and most successful watchmaker in the world, there’s nothing quite like a Rolex.
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