Horological Meandering

rdenney
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I think it’s a bubble.

Too many other brands have the same quality reputation among the knowledgeable, but lack the status offered by a Rolex to the emerging wealthy. The perception that they are good investments feeds the frenzy (until the next downturn).

And Rolex collectors have lost their minds. (I collect Ebel watches, so I know insanity when I see it.)

But it is evidence that the AD sales model isn’t as dead as many claim.

I like Biver’s principle that the only sale that counts is the final sale to the end customer, not the wholesale transaction to the dealer. I wonder how much Rolex understands that principle and takes action accordingly. They certainly understand his principle of limiting supply to support exclusivity.

Simply raising prices is the short-term solution. But once raised, they are hard to lower when the next downturn comes, without undermining brand value. Rolex has already fed the lower price points with their Tudor brand. It’s not like Rolex hasn’t raised their prices in the last decade or so. Rolex likely puts more weight on long-term brand value than on profits—a remarkable long-term perspective that would be difficult to sustain if they were publicly traded

I seek unique buying opportunities that present a strong value proposition, and Rolex rarely provides that. Even secondary prices are high, and many other makes give up nothing in quality, at least at their production scale. (It’s remarkable that Rolex can sustain their quality model at such a large scale, but that’s their unique talent more than anything). I’m not insensitive to status symbols (and I’m honest enough to acknowledge it), but that doesn’t mean I want to pay that kind of premium to get it.

—Rick

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