A story this week about shortages of Rolex steel sports watches has become WatchPro‘s most read article of the year and sparked fierce debate on both sides of the Atlantic.
The conversation was kicked off by Danny Govberg, owner of authorised dealer Govberg Jewelers in Philadelphia, who said that the current demand for Rolex professional models is greater than he has seen for 30 years.
Mr Govberg suggests that the demand for models like the 2018 GMT Master II and perpetually over-subscribed models such as the Daytona is part of a lifestyle trend where people want to wear the same watch all day at the office and then at the weekend on the beach or golf course.
But David Alabaster, manager of Cheshire-based jeweller C.H. Moody and Son, thinks that the rise of internet forums has stirred up a frenzy for certain Rolex models. That excessive demand causes prices to rise on secondary market sites like Chrono24 and Chronext. When new and boxed Rolexes are being ‘flipped’ on these sites at double or more their price at authorised dealers, it creates a viscous circle that increases demand even more and pushes prices up to stratospheric levels. “The internet and watch forums are making people crazy,” he says.
Mr Alabaster accuses people on forums of falsely accusing Rolex of restricting supplies in order to drive up prices on the secondary market. “Look at the watch forums and see all those agitated “victims” of Rolex not making enough steel professional watches for them to get their hands on,” he scoffs.
Rolex cannot throw a switch that it immediately manufacturers more steel sports watches at the expense of higher volume Datejusts and Day-Dates,” Mr Alabaster argues, although he is as frustrated as his customers that he can’t get his hands on more of the hottest models. “As a Rolex AD the requests I get daily for steel professional watches is equal to the number I am allocated annually from Rolex. I have to spend an increasing amount of time telling people what they can’t have. It is very frustrating,” he describes.
Grey marketeers who want to buy in the UK and sell in other countries, and flippers that want to buy from anywhere and sell online, are transforming the market for the most popular watches. “The advantages that the secondary/grey marketeers have over Rolex ADs include being able to source their watches globally and retail them online, at the same time hiking up the second-hand prices so high that consequently there is a huge demand for these easily resold watches by many people wanting to flip them and make a quick big profit. This is at the expense of people wanting to wear them for their own pleasure,” Mr Alabaster says.
As a provincial authorised dealer in Nantwich, Cheshire, Mr Alabaster accepts he will be allocated fewer watches than the major multiples and London power players, and does his best to keep customers happy in his local area who buy Rolexes for the love of wearing them. That is not easy when demand is so much greater than supply. “We have a three year waiting list for 2018 GMTs,” he reveals. “During my meeting with Rolex at Baselworld this year where I was trying to get as much allocation as possible, I was being passed notes from my secretary with orders for 35 GMTs. We will get three. I have to pull names out of a hat to keep it fair,” he reveals.
Mr Alabaster struggles to come up with any solution to the shortage while internet forums and stellar prices on secondary markets continue to generate a frenzy of demand. “There is a sense of youth entitlement that everybody should get the watch they want immediately, but 75% of them will be flipped. London is the biggest source of flippers,” he says.
All he can do is speak to customers as they make inquiries and try to separate genuine watch lovers from opportunists. As a practical measure, he also takes the security stickers of the watches he sells; something real customers would welcome so they can try on the watch, but flippers hate. “I’ve turned down a sale of £30,000 in the past because I could tell I was dealing with grey marketeers,” Mr Alabaster states.
Rolex demand hotter than at any time in the past 30 years says authorised dealer
Thank you Mr. Alabaster. I am the watch manager of an independent jewellers in Hampshire and a Rolex AD. Thank you for writing a bit of common sense. We are frustrated with the exactly the same situation you are experiencing.
Rolex’s product is amazing, but it seems a pity that its reputation is being tarnished by the frustrated comments of greedy watch dealers, who don’t really care about what is actually in the box!
Yes, Mr. Alabaster, Rolex clearly hasn’t cut down production, despite delivering only 10% of their usual shipments to dealerships in large metropolises. What happened to that other 90%?
I’m an authorized dealer myself in New York. We used to get many GMTs and we would sell them just fine, without needing to mark them down. These days, we might get one every 6-8 months. I’m not the only one- you could ask any AD in the area, and I would put money on any AD in the entire United States saying the same thing: Rolex scaled back inventory SHARPLY.
As an AD, it means substantially less business for me. Not only am I competing with people flipping the watches, but now I cannot price the watches higher to dissuade such flippers.
Don’t try to make Rolex SA angels out of this insane bubble.
what a load of crap
Mr Alabaster is an idiot. I could give two fat craps what he says.
Thanks for highlighting what he’s said. I’ll know now to not pay attention to anything he says.
Mr Alabaster is making very valid comments, I tried to purchase a Submariner or a Deepsea recently after waiting 30 years and was very disappointed the availability was next to zero all over the Northwest of England. The internet and YouTube channels are becoming very popular and are increasing the interest in these must have Rolex sports watches. It is the people flipping the watches that are the real shits spoiling the experience of buying a once in a life time watch for the honest man. Well done Mr Alabaster.
Mr. Alabaster is unfortunately quite incorrect.
Rolex is deliberately cutting supply to bring the prices up and make the brand much more prestigious.
AP and Patek have been doing this for years.
What is happening, is the buyers on the waiting lists have realized that the prices have soared due to supply shortage, and this brings about greed, and instead of keeping and wearing the beloved watch that they just waited for for a long time, they sell them to grey market dealers at a much higher price, and they in turn mark them up again to make a hefty profit.
Money talks, and money drives and controls everything.
Its all due to GREED
First of all Rolex is not a proper horological watch manufacturer. You pay for gold, platinum and diamonds. Most of all their marketing. AP, Patek, Vacheron, Breguet, Jager, Piaget, Ulysse and Girard are top manufacturers even Lange from Germany is a great watch. Rolex don’t make complications nor flybacks. Tourbillon is only a day dream for Rolex fans. My personal opinion is that Rolex buyers not grown.
Having bought my fill of Rolex steel sport watches over 10 years ago, beginning in the mid 90s I am in a position to abstain. The new watches are nice but I can’t help suspect that this is Rolex doing what they used to do on Daytona’s and back in the day Explorers and Explorer IIs (now is Subs, SDs, GMT2s etc) which was to restrict supply, push up the grey market price and then increase the MRSP to match the grey price. I’ve seen them do this in the last 30 years and this time is no different. One way is to be patient. Another is to stop feeding a company that behaves like this and go buy a Seiko.
Did you yet find a plausible answer to “what happened to the other 90%”? If Rolex does not deliver them to AD (at least in western countries) they would either build up stock (makes no sense, because of necessitiy to update models with new calibre) or deliver them to other markets (e.g. Asia). Which is it? Or is there a third option?
The hysteria is being fed and sustained by idiotic buyers who just have to have it and have it now, and will gladly pay significantly over retail price, in some cases, like the ceramic Daytona, double retail or more. As long as there are enough suckers out there, the gray market sellers will continue to feast. Only the buyers can stop the insanity.
Interesting to read the comments on here. I think it’s simple economics demand and supply all controlled by Rolex, and dealers told not to display sports models in the window to create the demand. Dealers do to get the watches, I personally have been on a waiting list at the Nantwich store I think for over 2 years for a GMT Pepsi and a Skydweller. However dealers they want you to serve the existing customer base whom have been buying from them for years! The question is how do you get to become a existing customer you have to start somewhere everyone once was a new customer. As a customer dealers don’t not help how are so many available on the grey market. These have to come from the dealers supplying there own existing customers who then flip on or are AD cashing in this game by selling to the grey market for above retail markups!
I was on my travels 2 years ago stayed in Mumbai India for a few days they have a Rolex dealer in the Taj hotel were I stayed, they blatantly say non available but when we do we sell over the list price !! Crazy.
Nevertheless I shall wait to see if and when I get a call from Mr Moody or Mr Alabaster.
I am thinking on moving on from getting a Rolex to a Tudor. At least its available. Been saving my money for a long time for a Rolex and now just about have the funds, and have decided which model I want; but no Authorized Dealer in my city(Toronto) has any in stock, and they can’t tell me when they will.
Meanwhile legitimate buyers like myself are told I have to wait six years to purchase the models I am interested in. I say thank goodness for the gray market and the Internet forums. Without them it is unlikely I’d ever be able to purchase the Rolex I want. I don’t feel sorry for you ADs. If you can’t supply the watch I want, how can you possibly sell it to me, and why should I have to wait six years to buy one. Working with my nearest AD has been the most frustrating waste of time.
If you want to be an existing Rolex customer, you’d better buy non professional models. I have never waited that long to get my hands on Submariner and Daytona. I do buy some other models like Datejust and Oyster Perpetual from time to time before I request for the professional ones.
I find that stores in Knightsbridge including Harrods are helpful and eagle to keep their customers happy.
It’s all about the numbers, so here are a couple if things to ponder…
From my source, president of four ADs, Rolex does make about a million watches a year, and to do so, they run 3, 8 hour shifts, 6 days a week! They are at production capacity.
Rolex produces 15 models, 7 in their “Classic” line and 8 in the “Professional line. Of those there are over 1,100 variations with regard to size, material, dial, bezel and bracelet combinations. The Datejust alone has over 500 combinations, and the Sky Dweller has 30 combinations, the Submariner and the GMT have 8 each. So let’s do the math…
There are about 1,600 ADs worldwide in 100 countries (the USA has 331 alone). With a million watches produced, each AD conceivably receives 625 watches per year, and 52 watches per month! Yes, some get more allocated than others. But there are 15 model lines, so if divided somewhat equally each AD may get 3-4 of each model per month. I’m certain they get more Explorers than Lady Datejusts. So, if there are 8 Submariner combinations, an AD may get 1 “No Date Sub”, or 1 “Pepsi GMT” every other month! BTW, this is assuming Rolex makes by percentage slightly more Professional than Classic models but who knows.
As Tim Mosso recently stated, and I agree, Rolex could double or triple its production (Fat chance, as why would they invest millions with no shareholders to answer to, and they sell everything they make) and there would still be a shortage. So to all you self-entitled 20, 30 and 40 somethings out there whining that you can’t get a Rolex at retail… Tough! It’s not Rolex’s obligation to step up production for you.
Hell, I want a McLaren 570GT too, but those A-holes won’t produce enough to make them reasonably priced! I guess I’ll buy a nice Jaguar F Type instead… Same for watches!
Mate you’ve got the cart first there. It’s the grey market that’s causing this. Look in Chrono 24, just one of many such sites. There are today nearly two thousand Post 2000 to 2019 model Submariners for sale ALL are above the 2021 price. There are even about 50 brand new Subs listed at nearly twice retail. There’s no shortage, thesy are being gobbled up by the grey market. It’s criminal. And I don’t get it. The Sub is a great watch for sure, if used as intended but as a dress watch nah there are so many divers that are more svelte than that.
Thanks David
Great to see the figures.
I’m writing from the future lol 2022 and it got worse when Rolex closed biz for the pandemic. But recently a waddle bird tells me they are training more watch techs to step up production. Great news except it takes three to five years to train each watchmaker so……….
Rolex hysteria is fueled by a number of factors. Firstly, Rolex has a long history of producing high-quality, durable watches that are built to last. The brand is known for its attention to detail and rigorous testing, which ensures that each watch meets the highest standards of accuracy and reliability.
Secondly, Rolex watches are often seen as a symbol of success and achievement. Many successful individuals, including celebrities, business leaders, and politicians, have been spotted wearing Rolex watches, which has helped to cement the brand’s reputation as a status symbol.
Thirdly, Rolex has a relatively limited production capacity, which means that demand for its watches often outstrips supply. This has led to long waiting lists for some models, as well as premium prices on the secondary market.