Why are Rolex Watches so Expensive?

If you are one of the few who are looking for a brand new or used Rolex watch, you may find that your search for a new or used Rolex results in an exorbitant cost.

The cost of a Rolex watch is based on many factors. One of these factors is the quality of material and construction of each watch made. As expensive as Rolex watches are, one reason that keeps their price high is that they are made with serviceability in mind. This means that as your watch grows older and requires service from a watchmaker, the service is easier for the watchmaker because of the manufacturing process of each Rolex watch made.

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Rolex President Datejust 69178 26mm 18K Yellow Gold White 2 Years Warranty #177
Authenticated by WatchFacts. Grade Rating: 88 / Condition: Very good
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Some of you may think that this would result in lower prices for those Rolex watches, however the high price of materials used in the quality of those materials does bring the value up tremendously. The fact that your Rolex watch is easy to service means that it will last much longer then less expensive mechanical or automatic watches.

Don’t be fooled however, as labor rates are also expensive to maintain these watches. The cost and time involved in disassembling cleaning and reassembly of each watch can take as much as 8 hours.  Testing the watch after it has been serviced for accuracy, water resistance etc., also adds to the time and cost of the repair.

Quality of material

Let’s not forget that Rolex is a master of marketing. They market their watch to an exclusive buyer, and the used market for Rolex watches is marketed to a very specific buyer, usually the upcoming professional.

That being said, the fact that these watches are excellent examples of mechanical quality, means that they will last a very long time and with few problems. For example, Rolex often invents new materials to be used for mainsprings, hairsprings, and many of the other parts. Each part manufactured is made with exacting precision. Watchmakers manuals for disassembly cleaning and service of each watch are very detailed and explain processes for the service of each watch with exacting detail.

Rolex Datejust 31 Silver Jubilee Diamond Dial Ladies Steel and 18K Everose Gold Oyster Watch 178341SJDO

Stainless steel case with a stainless steel Rolex oyster bracelet with 18kt everose gold center links. Fixed domed 18kt everose gold bezel set with diamonds. Silver jubilee dial with 18kt everose gold hands and diamond hour markers. Dial Type: Analog. Date display at the 3 o’clock position. Rolex calibre 2235 automatic movement with a 48-hour...

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Can you find an inexpensive Rolex? Yes of course you can. Sadly, about 60% of all Rolex owners fail to maintain their watches to the standard of which Rolex asks for. Many of these watches are abused, neglected, or just left in a drawer to dry up and having their parts disintegrate overtime with age.

Costs of restoring a watch that has been neglected overtime commands astronomical once you get an estimate for those features. However, when done correctly each Rolex watch once restored, will be worth approximately 80% of its original or replacement value of the newest version of that same watch. This itself is an amazing feat.

Why are some Rolexes more valuable than others?

Just like any product made in multiple versions, the appeal of those versions or other versions will drive the price is lower or higher based on their desirability for instance almost any version of a Rolex submariner with a blue dial will come in the highest prices both in the new watch market and the used watch market.  Occasionally those watches fall in price based on the availability of those watches in the market.

There have been many times that I have seen watches in the market as the economy falters that the prices of those same watches falls tremendously. Similarly, as the economy improves the prices of the watches will increase dramatically and quickly in the open marketplace.

For the young entrepreneur the status of owning a Rolex watch can sometimes mean that they have achieved a goal. Just the mere fact of these people achieving a small goal can often drive the price of watches to new high levels.

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Similarly, as people move through social hierarchy some of these watches become status symbols, again driving the prices to new levels that we often don’t see on a regular basis.

Recently, Rolex distributed a new version of the submariner. This new submariner, comes with a dark green dial and is similar to the blue dial submariner in shape and style. This watch however does not command the same high levels of pricing that the typical submariner has in the past. The green dial, is less attractive to most buyers of Rolex watches then is either the blue or black tile version. However, because the green dial is new, it is attracting a new buyer to the market.  I foresee that these green dial Rolex submariner watch is will command lower prices in the future based on the fact that they are not as desirable as the more traditional version of the same watch.

Rolex a marketing company

Let’s not be mistaken, Rolex is one of the best marketing companies in the world. They have found a way to appeal to a specific crowd and marketing to that crowd directly in more ways than you can imagine.

Rolex is not the best watch ever made, most of their appeal comes from the ability to build desire among young professionals and the wealthy. Their watches had become the epitome of status in society. Pick up any magazine that’s targeting the young rich and famous as well as old money professionals, and you will no doubt see two or more ads marketing Rolex watches in a variety of ways including pictures of professionals in meetings, on the golf course, and performing other mundane tasks throughout their lives.

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This is one of the ways that Rolex was able to build appeal and value into their product and keep it there for an extended period of time. There is no lack of desire to own one or more Rolex watches and show them off to friends and family as an achievement of what they have created in their lives.

In a more common way, we can see the mirror image of this marketing plan used by BMW to sell cars to many professionals and create value in a product that may not have the actual value that it proclaims to have. This is not a poor example, this is a real example. BMW has become very successful and marketing their cars and even their motorcycles to professionals around the world as a status symbol of achievement. Does it necessarily make their product better? Not really, but it does keep the value of these products high and generally keeps the quality of these products high because they are maintained by those who own them.

Will prices for Rolex Watches ever stabilize?

With any desirable product, price stabilization is based on market saturation.  Any smart economic student can tell you this.

Rolex has already stabilized the market by limiting production of popular watches.  The production numbers match demand for these watches resulting in a consistent and stable price for a desired product, of course.

Several years ago, Rolex tried to release a product that was very undesirable in the marketplace.  This product price dropped heavily, and the retail outlets which sold them, discounted them to basically eliminate them from inventory.  No further production was necessary as no further orders where requested by those retailers.  The price of that model watch still, to this day, remains low, as very few watch collectors are interested in it at all.

Rolex is not Kodak, Xerox or IBM.  It would take major changes at the head of the board of directors to change their methods, and a complete idiot to convince the rest of the company to change it into a company that would choose to walk away from a tried and true brand.

Why is it hard to find someone who can repair my Rolex?

As I mentioned earlier, Rolex Marketing and Branding, and their concept of exclusivity requires the organization to limit both retailers who are Authorized Sellers, and watchmakers who are Authorized service centers.  By limiting these two factors in access to product and service, the open market demands more for pricing, both when purchasing and servicing a Rolex watch.

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As a watchmaker, who is not authorized directly by Rolex, I can say from first hand experience that getting parts is near impossible.  Many watch repair shops will buy on the black market.  Others will be more open and purchase both genuine parts from retailers who will sell them to us, or after-market products that perform the same function.

This is just another major factor that keeps the price higher.  The cost of service from an authorized service center is far more then you will get from a very good and reputable watchmaker.  However, keep in mind, when a Rolex comes through the door, most watchmakers raise the price of service.  This is done for two reasons…  First, the Brand brings in more money.  Secondly, the expectation of the consumer is higher, and watchmakers realize this.  They often have to spend much more time performing even the simplest service to meet the demands of a customer, who has spent a small fortune for a watch.

When will the price of a Rolex drop?

Probably not for a long time.  Rolex has been around for over 100 years.  This is a long lasting brand, that continues to see growth in its sales and service categories.

A new watch company would have to come along with a large fortune to knock this brand off the top of the hill.  I personally do not see this happening in my lifetime, however, it is possible just not likely.

Can you find a cheap Rolex Watch? Yes!  Should you buy it?  Probably not until you’ve personally had the watch check out.

The lower the price of a watch typically means that there is something wrong with it.  This has never been more true then when regarding the purchase and use of a Rolex watch.  If you can find one, in good working condition, buy it.  Enjoy it.  Cherish the status in brings, and the quality of its parts.

Happy Watch Hunting!

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