Updated: Mar 22
This isn’t a very complicated question at all. The basic rules of economics drive the sometimes insanely long waitlists at authorized Rolex dealers. If you want to buy a Rolex, you’ll soon discover that many of the most popular models with the most popular variations won’t be available to you. In fact, you might not even be able to get on a waitlist! What in the world is going on? Here are some thoughts for you.
The Law of Supply and Demand Is in Full Force with Rolexes
The bottom line is that there are more people who want to buy a Rolex than Rolex produces. This means the supply is low while the demand is very high. Basic economics tells us when there is greater demand than supply, the price of an item goes up. That’s how the stock market works. That’s how the price of milk works. That’s how the housing market works. That’s how any free market works. However, authorized Rolex dealers are forbidden to sell at a price above retail.
So, authorized Rolex dealers sell out of the watches and put people on waitlists. Because the way they do that is arbitrary, many people wait for a very long time. Supply and demand still impact price, though. Many people who wait on the waitlist are surprised to obtain their watch and learn they can make a very nice profit by immediately selling it to a pre-owned Rolex dealer. The dealer than sells it for even more. Many brand new Rolexes are sold on the secondary market for thousands of dollars more than their suggested retail price.
Why Doesn’t Rolex Just Make More Watches?
The simple answer to this question is that the company can’t. Rolex has very exacting standards, standards that go beyond what manufacturers in just about any industry. Here are just a few examples of what they do: They have an in-house foundry because they only trust precious metals they smelt. They use a special kind of stainless steel. They grade all of their precious gems internally. They put together all of the watchworks by hand. Those are just a few examples! Rolex is unwilling to compromise when it comes to their manufacturing. At this point, the company does not believe it can meet it’s very high standards and increase production at the same time. Until they increase capacity, it won’t happen. So, the supply is constrained.
The situation with waitlists at authorized Rolex dealers is unlikely to change any time soon. If, like many others, you decide to buy one of the watches in high demand from a seller on the secondary market, you need to understand two things. First, you will pay a great deal of money over and above the retail price. Second, it is critical for you to find a trustworthy Rolex seller. Keep those two things in mind and enjoy having that fine luxury watch on your wrist.