Is Rolex Overrated?
A controversial subject the question of “is Rolex Overrated” well this question is really based on the person. The person who is looking into the value and perception of the Rolex to determine if Rolex is overrated or not.
The dictionary definition of “overrated” is “rated or valued highly” and we all know that that Rolex is valued highly, just look at the supply and demand of Rolex sports models. It is nearly impossible to get a sports model Rolex at retail anywhere in the World. But its quite easy to get any sports model Rolex you want on the grey market. That said, depending on which model you want, be prepared to pay up to 4 times the retail value of that Rolex sports watch.
So, with the above said, the definition does mean that Rolex is overrated, as the watch is worth more on the second-hand market (due to demand) than it is when its bought new. But I think the real question people are asking when they ask “is Rolex overrated?” is “is Rolex over valued?” i.e., is it worth paying 2,3,4, or even 5 times over retail price for a Rolex.
Well, I have personally been collecting watches for many years and I am obviously a fan of Rolex, but would I pay much more over retail price for a Rolex I really wanted. No, not really, I might pay 10-15% over retail for a watch I REALLY want but there is no way I would pay anything near double retail value for a Rolex, never mind any multiples above that. After all I am not an investor working on wall street although I have a pretty good net worth.
The current hype surrounding Rolex has been going on for a few years now. It is what is referred to as a “bubble” like the housing bubble or the dot com bubble, and we all know what bubbles do right, yep, they burst and the way interest rates are going presently mean things are going to get worse.. And if you buy into the Rolex bubble it could be you that is left holding the loss, and the more you overpay (above retail price) for a product (~be it anything not just a Rolex) the bigger loss you are left holding if the bubble bursts on you.
In todays world where the rich are getting richer and the poor are getting poorer, I believe this is what is driving the upward trend in Rolex prices, this is also the same for Patek Phillipe, people with more money than sense are buying into the watches showing them off on Instagram and driving up the second-hand value of the watches. People are willing to pay crazy amounts of money just to own such watches, and anyone who can obtain these watches at retail is seen as a god.
I really do struggle to see what Rolex are trying to achieve by having huge demand for their products and not even attempting to meet the supply, I am not sure how this positively impacts their business. Surely Rolex want to increase their profits, like any normal business, don’t they?
So why not increase the price of their watches at retail by 50% and meet the demand for them. This way they are making an additional 50% profit on their watches and selling them to people who genuinely want to collect them. Rather than letting the flippers and grey market dealers make more money than Rolex do on the original retail sale and taking all of the trading and profit of the watches out of the hands of Rolex.
You see what this is doing is creating a market outside of Rolex, where Rolex have no control, and they make no money from any of these grey market sales, I just don’t get it. I’m not even sure why they waste any money on marketing if they can't meet demand. I am often targeted by Rolex ads on Instagram, and I always comment “why the hell are you marketing a product to me which I can’t buy” It’s like a space agency marketing a house on the Moon to me. I can’t buy it so why advertise it. "Normal people" cannot buy these watches at retail so why bother advertising them at all.
We all know that Rolex dealers have their special little list of preferred clients to sell any sports models to, and the people on these lists are always going to snap them up so just stop advertising altogether and save some money Rolex.
Phew, I feel like I have just gone off on a tangent rant there, but this is all relative to the is Rolex overrated question. In my view Rolex are overrated, there are better watches out there with better build quality at a better price.
But the whole name of Rolex is associated with success, and everyone, even those outside of the watch world know if they see the word “Rolex” on someone’s wrist they must be rich and successful. Which is not always the case, anyone with a credit card can buy an expensive watch.
We all know that a Rolex will hold its value if bought at retail price, hell if you get it at retail, we know it will at least increase by 50% for the foreseeable future. But I have always said you shouldn’t buy a Rolex to make money, on they are to wear and enjoy.
If you by any swiss watch brand second hand, chances are you can enjoy them for a few years and sell them at around what you paid for them, but they aren’t going to go up in value. Buying a Rolex at the “overrated” price if you like is a sure-fire way to make someone else a lot of money and chances are you will probably lose on it long term when the bubble bursts.
I have just purchased a Jaeger Le-coultre Grand Master Reveil which has a number of impressive complications. The Grand Master Reveil can be bought on the second-hand market for less than it retails at. But in terms of build quality, it far surpasses Rolex in my opinion. Anyone who knows watches or collects watches knows that. But they want to buy a watch to be seen in and not to go unnoticed with a superior lesser known watch.
But the value in owning a Rolex is really to impress friends and family who know nothing about watches as it says look at me, I’m rich, in some circles. But the people who truly know watches will know that a second-hand AP Royal Oak Offshore Diver is a better buy than a Rolex Deepsea James Cameron at its inflated price, yet people will continue to buy a grey market Rolex at an inflated price, because they don't know any better. So is Rolex overrated? At grey market price yes, but if you can get one at retail you would be an idiot not to buy it. Rolex value is at retail price and not at grey market price.
Would love to know what you guys think, hit me up on social media, thanks for reading.
Lee Scott
Founder
Vulcan Watch Straps
