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Rolex Shortage: The Secondary Market Guide on Supply & Demand

Paul Altieri

Anyone with even a passing interest in Rolex watches is probably fully aware that we are currently experiencing a widespread shortage of them. Despite producing more watches each year than the one before, the global demand for Rolex watches far exceeds supply, and many of the brand’s most desirable models now have multi-year waiting lists at retailers around the globe. Gone are the days of being able to walk into a Rolex boutique with cash in hand and leaving with the model you want.

But how exactly did this Rolex shortage happen? What factors are to blame? And is there actually any way of getting around the dreaded waitlists that now sit between countless collectors and their dream watches?

Rolex Shortage - Stainless Steel Daytona

The Short Answer to the Rolex Shortage

The quick explanation to the Rolex shortage is that there is a combination of factors on both the demand side and supply side that creates for a ‘perfect storm’ kind of scenario, where the end result is a lack of inventory available at retailers. Rapid increases in demand, combined with a relatively fixed supply will often create an unbalance, but there are also a number of other factors that play into why the global Rolex shortage that we are currently experiencing is so severe.

Key contributing factors:

  • Increased interest in luxury timepieces among the general public
  • Exponential rise in demand for Rolex watches
  • A relatively fixed supply
  • A concentration of public interest in the same handful of Rolex models
  • Record-breaking auction prices for collectable vintage Rolex watches
  • Significant barriers to ramping up production
  • A positive feedback loop of growing interest as collectors are unable to secure select Rolex models
  • Rolex temporarily shutting down factories and facilities due to COVID-19

Rolex Shortage - Ceramic Pepsi GMT-Master

A Brief History of Rolex Watches Supply

Rolex is the world’s most famous watch manufacturer, and the brand is internationally recognized as being synonymous with success, luxury, and exclusivity. While there are many brands whose offerings cost far more than those of Rolex, the fact remains that a Rolex watch is the number one timepiece for individuals to aspire to own.

Generally speaking, brands want to maximize their profit, and this typically means selling more units of whatever item they produce. For 99.9% of all companies in existence, this typically means promoting their products through various marketing efforts to try to raise demand to the level that meets their current supply of the product.

For many years, this was entirely the case for Rolex. Despite always being considered a relatively high-end brand, Rolex originally did not enter the watch market as a luxury manufacturer. Instead, the brand built its reputation producing reliable wristwatches that were used in some of the most demanding conditions on this planet.

Rolex Shortage - stainless steel Sky-Dweller blue dial

During this period of time, and continuing right up until the last several years, Rolex watches were (for the most part) readily available both at the retail level and on the pre-owned market. While certain ultra-exclusive ‘halo pieces’ have always been in short supply, Rolex’s core collection, particularly its standard stainless steel watches were all relatively easy to purchase.

You often hear stories about former members of various armed services units buying watches like the Rolex Submariner, Explorer, Sea-Dweller, or GMT-Master at PX stores on military bases, and wearing them into battle. While vintage examples of these models are now some of the most coveted timepieces on earth, they were simply regarded as high-end ‘tool watches’ while they were originally in production.

Additionally, just like any purpose-built tools, these Rolex watches were not difficult to obtain. They were by no means inexpensive, but they were never hard to find – either pre-owned or brand new. Anyone with the funds to purchase a Rolex was virtually guaranteed that they would be able to buy the exact watch they wanted and certainly, no one was paying above retail price for any of them.

Rolex shortage - Batman GMT-Master II Jubilee Bracelet 126710

Financial Benefit of Pre-Owned Rolex

Rolex’s reputation for producing quality wristwatches made the brand a popular favorite for many individuals all around the world. Celebrated as the company that created the first truly ‘waterproof’ watch, Rolex made reliability a priority, and Rolex watches stayed with their owners, offering many years of reliable performance, rather than getting replaced once they started to exhibit signs of wear or damage.

The financial benefits of a highly durable and reliable watch are obvious. Greater reliability and durability directly translate to less money that owners will have to spend on maintenance and repairs. However, the financial benefits of pre-owned Rolex watches stretch far beyond the savings that stem from less required maintenance.

The vast majority of the items we own in life immediately start depreciating the movement that we purchase them, and for many years, this was also true for Rolex watches. However, as the notoriety and desirability of Rolex grew, the brand started to make the transition towards becoming a luxury manufacturer, rather than just a producer of high-end precision wristwatches.

Rolex Shortage - Vintage Red Sub Submariner

Not only were Rolex watches able to stay in operation longer than many of their counterparts, but over the decades, as Rolex started to become an internationally-recognized luxury brand, the value of its older watches increased too. Due to inflation, the price of nearly all goods and services has increased over time, but even accounting for inflation, the price of Rolex watches has gone up over the years, and they now occupy a very different category of timepieces than they originally did several decades ago.

Many of the individuals that originally purchased their Rolex watches from military bases years ago are now in possession of watches that are worth tens of thousands of dollars. Exponentially more expensive than even brand-new Rolex watches, the notoriety of the brand has resulted in vintage Rolex models reaching unparalleled levels of value and collectability in recent years.

Most Expensive Rolex Watches

  1. Paul Newman’s ref. 6239 “Paul Newman” Rolex Daytona – $17.8 million 
  2. “Unicorn” Rolex Daytona ref. 6265 – $5.9 million
  3. “Bao Dai” Triple Calendar Moonphase ref. 6062 – $5.06 million
  4. “The Legend” Rolex Daytona Oyster ref. 6263 – $3.718 million
  5. “The Neanderthal” Rolex Daytona ref. 6240 –  $3.01 million
  6. Rolex Antimagnetique ref. 4113 – $2.466 million
  7. “Oyster Sotto” Rolex Daytona ref. 6263 – $2.036 million
  8. Stainless Steel ref. 6062 – $1.988 million
  9. Marlon Brando’s GMT-Master ref. 1675 “Apocalypse Now” – $1.952 million
  10. Stainless Steel ref. 4113 and Pink Gold ref. 6062 – $1.952 million (each)

A perfect example of this is the market for vintage Rolex Daytona watches. Many of the stainless steel models originally sold for several hundred dollars during the 1960s and 1970s; however, those same watches today are all worth tens of thousands of dollars – even for the least rare and desirable models. Additionally, the most expensive Rolex watch ever sold was a vintage ‘Paul Newman’ Daytona that previously belonged to Paul Newman himself. That exact watch sold for a record-breaking $17.8 Million at an auction in 2017.

Rolex Shortage - Paul Newman Daytona

Demand Increase

While Rolex prices had been on the rise for many years prior to the sale of Paul Newman’s very own, ‘Paul Newman’ Daytona, demand (and in turn prices) really started to blow up after this record-breaking sale thrust the pre-owned Rolex market into the awareness of the general public.

Rolex had just released a new version of its stainless steel Daytona the previous year at Baselworld 2016, and the new watch created waiting lists at retailers around the globe the morning it was announced. The hype surrounding Rolex and the massive desirability of its most famous watches had been steadily building among collectors and enthusiasts for many years, but the $17.8 Million sale of Paul Newman’s Daytona showed everyone outside the watch collecting community exactly how profitable used Rolex watches could be.

Rolex Shortage - Hulk Submariner Green

Additionally, another key detail that helps explain the massive demand for Rolex watches is the price point that they occupy within the luxury watch space.

Certain timepiece manufacturers require a minimum investment of tens of thousands of dollars to obtain one of their watches. However, the vast majority of Rolex’s products fall into a price bracket that is still relatively attainable to most people. No Rolex watch can ever be considered ‘inexpensive’ but the price point that Rolex watches occupy is not so high that it is something that cannot be reached should an individual decide to save up and purchase one.

The sheer notoriety of the Rolex brand has allowed its timepieces to be viewed on the same level of those from brands such as Patek Philippe and Audemars Piguet – both of which cost several times more than the price of the average Rolex watch. This combination of being ultra-desirable yet still somewhat attainable has resulted in the desirability of Rolex watches shooting through the roof, creating multi-year waiting lists for the majority of its most desirable models.

Rolex Shortage - Rootbeer GMT-Master II

So why doesn’t Rolex just make more watches?

An obvious solution would be for Rolex to simply produce more watches, particularly the models that have the greatest levels of demand at the retail level. However, this is far easier said than done, and in reality, it is not in Rolex’s best interest to even do so.

Rolex produces nearly every aspect of its watches entirely in-house. From the designs of the cases and movements to the specialized alloys that get used to create the individual components, virtually all parts of a Rolex watch are manufactured by Rolex.

This means that significantly ramping up production takes time and production output – and the rate that it will increase – is carefully calculated. Additional factories need to be created, watchmakers need to be trained, and supplies of raw materials need to be secured. Each year, Rolex produces more watches than it did the year before, but the truth of the matter is that demand for Rolex watches has grown far more quickly than the supply of them would ever be able to react.

Additionally, Rolex sticks to strategically chosen percentages of its total output for the production numbers of its stainless steel sports models. This means that desirable models such as the new stainless steel Rolex GMT-Master II will always make up a relatively set percentage of the total number of Rolex watches produced each year, which only makes it more difficult to obtain these models at a retail level.

With that in mind, not being able to purchase the Rolex watch you want does not make you desire it any less. In reality, the effect is quite the opposite, and you will likely want to get your hands on that model more than ever, simply because you’ve been told that you cannot have it right now. It is precisely for that reason why prices for Rolex watches on the secondary market have increased so dramatically in recent years as their availability at retail has decreased to the point of virtual non-existence.

Rolex Shortage - Sea-Dweller 43mm

The Shortage Rolex Steel Professional Models

To call the current situation a ‘Rolex shortage’ is a bit misleading. Not all Rolex watches are in short supply. Instead, the actual reality is that the vast majority of Rolex buyers are now all after the exact same models – both on the retail level and on the secondary market.

The Rolex models that typically have the most extreme shortage are the brand’s stainless steel sports watches. While not the outright least expensive models in the brand’s portfolio, these stainless steel Professional watches are significantly less expensive than their two-tone or solid precious metal counterparts.

Furthermore, it is also these exact same models that have rich histories intertwined with the early days of pioneering exploration and military use. When it comes to vintage watches, providence and heritage can be major factors that influence price and desirability, and stories of Rolex Submariner or GMT-Master watches being used by soldiers and adventurers only further fuels the demand for these watches among collectors.

Rolex Shortage - Submariner Kermit Green Bezel

Stainless steel Rolex Professional models reign supreme, but not all stainless steel watches experience the same levels of desirability and collectability. Additionally, not all of Rolex’s Professional models are unattainable, and the two-tone and precious metal ones are significantly easier to purchase brand-new at retailers.

With that in mind, a solid 18k gold Rolex sports watch will cost more than 3 times the price of its stainless steel counterpart. This significantly decreases the number of people that can afford the watch, and with fewer prospective buyers, these precious metal Rolex Professional watches become significantly easier to find.

Most stainless steel Rolex sports watches retail in the neighborhood of $8,000 to $10,000 and while this price range represents a rather significant purchase by most definitions of the term, it still remains something that the average person can save up and reach, should it be something that they are committed to obtaining.

As if the supply to demand ratio for Rolex watches was not already out of balance enough, Rolex was forced to temporarily shut down its factories and facilities due to the COVID-19 pandemic. Rather than releasing new models for 2020 to distract buyers from the same ultra-desirable steel sports watches, supply of those models was constricted even further, while global demand for them continued to grow.

With multi-year waiting lists for these stainless steel Rolex Professional models present at virtually all authorized retailers around the globe, buyers turn to the secondary market to skip the wait and get the watch they want on their wrist immediately. However, avoiding the waitlist comes at a cost, and the open market prices for used examples of these watches can often be significantly higher than their original retail prices. For ultra-desirable models like the current Rolex GMT-Master II or Daytona, this can mean that used prices can be nearly double the price of a brand-new version of the exact same Rolex watch.

Rolex Shortage - Black Ceramic Daytona 116500

Rapid Short-Term Appreciation for Modern Rolex Watches

The vintage Rolex market has been experiencing sky-high prices for quite some time, but it has only been in more recent years that we have started to witness rapid, short-term appreciation in value for modern Rolex models that are still in production.

Many Rolex models hold their value incredibly well, and it is rather common to hear of someone buying a Rolex, wearing it for 20+ years, and then selling that watch for as much, or even more than what they originally paid for it. Additionally most contemporary Rolex models – particularly those crafted from stainless steel – can be sold on the pre-owned market for values that are close to their current retail prices.

However, for models like the current-production stainless steel Rolex Daytona, GMT-Master II, or “Hulk” Submariner, the difference in cost between retail pisces and open market prices can be incredibly significant, and there are many people who buy and sell these watches, speculating that the models they select will drastically increase in value – just like playing the stock market.

For those that bet on the stainless steel Daytona – and were lucky enough to be able to purchase one at retail – a profit of over $10,000 can be realized should they decide to sell their watch, and there are countless buyers that are happy to pay significantly above retail price to get around a lengthy waiting list.

Therefore, the actual retail prices for these ultra-desirable stainless steel Rolex Professional models are effectively meaningless. They simply cannot be purchased for those prices (without waiting out the cue). The only way to get your hands on the Rolex models you’ve been after is to buy one pre-owned and pay whatever the current market price is for it.

Rolex Shortage - no-date Submariner Black

Tips on Scoring the Best Rolex Watches

Unfortunately, there is no magic recipe for how to score those Rolex watches that everyone is scrambling to add to their collections. If there was, then everyone would be doing it, and there would be no Rolex shortage at all.

If you are set on purchasing one of these ultra-desirable Rolex models at retail, your only real viable option is to start cultivating a relationship with your local authorized retailer. With that in mind, there are likely countless individuals that are doing the exact same, and there will almost always be other ‘preferred clients’ that will have a spot on the waiting list above you.

Additionally, having a spot on the waiting list is no guarantee that you will actually be able to purchase the watch that you want. There are many people who spend years on a waiting list for a specific model, only for Rolex to discontinue it before their name ever has a chance to surface to the top of the list.

Rolex Shortage - Batman GMT-Master II BLNR 116710

Furthermore, you will also hear stories about how retailers will try to strong-arm you into purchasing other watches or jewelry from them, with the subtext that if you do so, you will be able to get a higher spot on the waiting list for whatever watch you want. Again there is no guarantee here, and there are many people who fall prey to this tactic, only to still face a multi-year waiting list for the Rolex model that they want.

Ultimately, the only way that you can guarantee that you score the Rolex watch you want right now is to shop the pre-owned market. If you are one of the many people that are after a stainless steel Professional model, be prepared to pay whatever the current open market price is for it; you will almost certainly not be getting it at its original retail value.

However, despite paying a price premium to get your dream watch on your wrist right now, you can guarantee that you will actually be able to get the watch that you want. Additionally, should you later decide to sell it, it’s important to remember that you will receive the open market price for it, and there is a chance that it may be more than you originally paid for it.

Rolex Shortage - stainless steel Daytona watches

Paul Altieri
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