Where have all the steel Rolex watches gone?
If you want to buy a new steel Rolex sports watch - you will wait a long time - here is why
Over the last ten years it has become increasingly hard to find a Rolex steel sports watch in an official Rolex retailer. Historically there was always a drought of new release steel watches and we just accepted it and waited. Long waiting lists and pre-order watches on reserve only for repeat customers were the norm. But in the last 2 years this lack of steel watches has changed from a drought to full blown crisis. Finding new steel watches is now almost impossible.
I have spoken with a fair few friends who run Official Rolex retail outlets and they are as much in the dark as anyone else. Rolex are simply not saying what is going on. The has led to speculation and rumours about why there are so few steel watches in Rolex retailers windows. A popular myth is that Rolex are experiencing ‘production problems’ - now let’s be clear, Rolex have just about the best manufacturing process of any business, in any industry in the world. The idea that Rolex can’t make watches fast enough is highly unlikely.
This begs the simple question: if Rolex are so good at making watches then why are they not selling them?
My theory is that they simply do not want to for two very good reasons.
First, and least importantly, Rolex want to end the problem of the grey market - that is to say, people waiting for a Rolex to come into stock who buy it and instantly sell it for a profit. They have already partly tackled this problem by retaining the paperwork on a watch sold and then holding onto it for a year before passing it on to the owner. This has limited this practice somewhat but not entirely. Limiting the supply of popular watches stifles this market and forces the grey market dealers out of business. But, I believe the grey market has actually taught Rolex a valuable lesson in that people will pay over the list price for a Rolex. Why should some second hand dealer receive the premium when Rolex could?
Second, and most importantly, Rolex are gradually raising its prices to the point where many potential buyers are forced out - £8,000 for a Rolex Submariner is a lot of money. The great watch makers like Patek Phillipe have always had a scarce supply - that is what makes them so expensive and so desirable. By withholding supply and continuously raising pricing Rolex could be trying to elevate its brand to sit alongside the great watch makers. In this tough manufacturing climate what business wouldn’t want to spend less on materials and staff to make fewer items that sell at a higher price? If any brand could execute this strategy it would be Rolex because they own Tudor watches which is now receiving a huge brand push. Tudor make great mid priced watches, so the mid market they lose out on with their Rolex brand they could simply pick up with the lower cost Tudor range. For Rolex, and only Rolex - stopping selling watches may be the greatest marketing strategy ever deployed by a watch brand.
So, if you want to buy a steel Rolex you are in for a long wait. But worse than that - it is just possible that when it is in stock, you might not even be able to afford it. But it is not all bad news, if Rolex really are moving their brand even further up market then anyone with a vintage Rolex will see its value continue to rise.