At this year’s Baselworld watch fair last week, the dominant watch brand in the world, Rolex, unveiled its newest collection of watches. And while the reveal was impressive for anyone looking to buy a watch from one of Rolex’s many authorized retailers, it may have been even more exciting for resellers.
Rolex dominates the pre-owned watch market to an almost absurd level. While Rolex owns about 20 percent of the new watch market, its market share in pre-owned watches is closer to 75 percent, according to Paul Altieri, founder of pre-owned watch market Bob’s Watches. The total pre-owned watch market is estimated to be valued at $17 billion.
Altieri said Rolex makes up about 80 percent of Bob’s Watches sales, which neared $50 million last year.
“There’s a lot of things going for it,” said Altieri. “The quality of the product and engineering is amazing. It’s relatively affordable for a luxury watch — obviously still very expensive, but less so than some others. And they market it so well with endorsements from Tiger Woods and so many others. Rolex is aspirational, you get it to commemorate a special occasion. On top of all that, the vintage market has exploded in the past six years.”
Compare Rolex’s strategy to Nike, the closest comparison for a single brand that dominates the resale market for its chosen category. While Nike has had success with limited-quantity drops, it is also willing to turn the factories back on and make more sneakers if it sees that one pair is selling well.
Rolex, Altieri said, does not do this. The brand makes a set amount of watches — around 800,000 a year, in Altieri’s estimation — regardless of how those watches sell. Some people have to wait three or four years for certain models, based on Rolex’s extremely limited supply.
“All new Rolex watches are sold by authorized retailers only,” said Altieri. “You can’t buy a new Rolex online at all.”
This has created a need for online Rolex resale, a demand that Altieri said has driven Bob’s Watches to 40 percent growth over the last year.
“We were actually very intentional about not just becoming a Rolex factory,” said Hamilton Powell, founder of another watch reseller, Crown & Caliber. “Customers want variety and diversity, so we made that a key part of our strategy. But even then, Rolex makes up the largest share of our sales, at about 30 percent of our inventory.”
While Rolex may have a massive influence over the resale market, it has taken little public interest in it. Powell said that neither Rolex nor most watch brands have taken any official part in resale.
“The brands have not taken an active role in the pre-owned watch market, unlike with cars or some other categories,” said Powell. “But [resellers] do play an active role in preserving the brand’s integrity. We can preserve pricing, maintain customer loyalty and keep people engaged with the brand.”
But Aliteri thinks that will change. Last year, TrueFacet, another watch reseller, became the first online watch marketplace to offer pre-owned watches officially certified by seven brands: Zenith, Roberto Coin, Raymond Weil, Fendi Timepieces, Fabergé, Frédérique Constant and Ernst Benz.
“I think in the next few years, you’re going to see brands and resellers come together at some point,” he said. “We are such a big part of the industry now, and it’s always better to work together rather than against each other.”