In 2022, Rolex made a considerably stunning announcement (though finally fairly sensible from its perspective): Consumers would have the ability to buy used Rolex watches with the additional benefit of a Rolex guarantee and assurance of high quality. They known as this system Rolex Licensed Pre-Owned (Rolex CPO), and it was slowly rolled out to numerous Rolex licensed sellers around the globe. Certainly, you’ll be able to solely buy a Rolex CPO watch the place new Rolex watches are licensed to be offered. When Rolex initially introduced the Rolex CPO program, there have been quite a few unanswered questions starting from what Rolex watches could be out there below this system to who truly certifies them, and the way a lot a Rolex CPO watch may cost versus one which didn’t have the flamboyant hanging white Rolex CPO hold tag.
Beginning earlier than the pandemic however accelerating throughout it, Rolex demand outpaced provide, and folks started paying a premium for used Rolex watches. This was half of a bigger pattern that resulted within the creation and failure of quite a few used watch platforms and the acquisition thereof (many manufacturers additionally launched their very own CPO applications throughout this time). Within the case of Rolex watches, sellers who needed to profit from the elevated demand complained to Rolex that there was cash to be made and that they needed Rolex to extend manufacturing. The draw back to growing provide is flooding the market with too many items and eroding the exclusivity and status of proudly owning and shopping for a Rolex.
In contrast to these misguided used watch companies that finally failed or have had a tumultuous trajectory, Rolex has a longer-term imaginative and prescient and is aware of higher than to quickly improve the manufacturing of watches to fulfill a short lived bubble in demand. Rolex’s licensed sellers additionally grew to become jealous of unbiased third-party sellers and merchants who offered pre-owned Rolex watches and didn’t have any guidelines utilized to how they do enterprise (Rolex licensed sellers work inside very strict conduct agreements). Thus, Rolex made the choice to start a program that permits its licensed sellers to do extra enterprise within the type of promoting licensed pre-owned Rolex watches.
Rolex doesn’t provide the watches, nor does it certify these watches, in lots of situations. Fairly, Rolex licensed sellers who’ve in-house watchmakers full a certification coaching that permits them to certify a pre-owned look ahead to this system. Rolex sellers are roughly capable of provide you with the pricing they need, however given their very own price to certify every used Rolex as an authorized pre-owned Rolex, Rolex CPO watches naturally price greater than non-certified pre-owned watches. Rolex deliberately launched its CPO program slowly, with just some retailers to begin. In the present day, it’s estimated that solely round 80 Rolex licensed sellers worldwide are eligible to promote Rolex Licensed Pre-Owned timepieces. From the beginning, it was clear that these shops had been pricing Rolex CPO fashions excessive — that was to be anticipated. However how excessive? That’s the attention-grabbing query.
The evaluation of used watch costs and industry-related market efficiency remains to be in its nascency, particularly for an organization like WatchCharts which is only some years previous, however has not too long ago put out a report in collaboration with Morgan Stanley on the secondary watch market. The excellent news is that a whole lot of knowledge on used watch costs may be scraped from the web (although that knowledge normally consists of extra listing costs than offered costs). Utilizing machine-assisted automation, analysts have more and more highly effective instruments to get bigger units of comparatively exact knowledge. Once more, these are evolving instruments and no system can observe all related knowledge, however the present outcomes are attention-grabbing.
In late 2024, a lot of the uncertainty across the Rolex CPO program has been resolved, notably because of the reporting achieved by WatchCharts: We typically understand how a lot Rolex CPO watches price over non-Rolex-certified used Rolex timepieces. I say “typically” as a result of I’ve been studying such studies for quite a few years and have realized what we will and can’t glean primarily based on out there knowledge. Not all watch {industry} efficiency studies have dependable knowledge as a result of accessing correct related knowledge is difficult. I say this as a warning to novices who get ahold of any of those studies: They shouldn’t be wholly relied upon. With that in thoughts, I have to advise that used watch costs and value developments within the watch market, general, are a transferring goal. The information referenced in the latest WatchCharts report goes as much as the third quarter of 2024. A yr or six months from now the image is perhaps totally different or comparable — we actually don’t know.
It’s additionally essential to know and talk about the general efficiency of Rolex watches in late 2024, as, in fact, the worth of latest Rolex watches has a direct influence on the worth of used Rolex watches. Just a few years in the past, quite a few used watches had been being offered at a premium due to excessive demand. That pattern has steadily decreased as provide has elevated and demand for brand spanking new luxurious watches has cooled. In line with WatchCharts, used watches from solely three manufacturers persistently promote for a premium over retail: Rolex, Patek Philippe, and Audemars Piguet. In my view, this shall be decreasingly true within the coming years, and whilst it’s, that solely consists of sure fashions. All different manufacturers have had costs return to extra regular, secure ranges. So, whereas Rolex watches nonetheless command a premium over market worth, that’s much less true than it was a couple of years in the past, and its costs appear to be headed in a downward course.
In line with WatchCharts, as of the tip of Q3 2024, the common used Rolex watches can commerce for round 20% above retail value. That is a mean that features a few fashions which have elevated in demand, together with a better variety of fashions which have decreased in demand. An attention-grabbing aspect notice is that one of many strongest performing fashions is a Rolex watch that was as soon as very straightforward to get, the Rolex Datejust. The Datejust is the one Rolex watch mannequin tracked by WatchCharts whose worth retention (the common quantity over retail for which it may be offered) has elevated in that final yr, leaping 1.4%. Even hit fashions just like the Submariner and the Daytona are down 4.5% and 19.4%, respectively, in comparison with a yr in the past.
To know the worth of Rolex CPO watches versus run-of-the-mill used Rolex watches, WatchCharts in contrast the listed value of Rolex CPO watches on-line with the pricing from a non-CPO supplier. WatchCharts discloses that a lot of the info is definitely taken from simply 4 Rolex CPO retailers: Bucherer (now owned by Rolex), Tourneau (now owned by Rolex by the use of Bucherer), Watches of Switzerland (US and UK), and The 1916 Firm (previously Govberg/WatchBox). That ought to point out {that a} nearer evaluation of costs for Rolex CPO watches not revealed on-line might reveal a distinct final result. WatchCharts even admits that their evaluation of the listings for Rolex CPO watches as a part of their current report “nonetheless solely represents round 1% of the full worth of Rolex stock [CPO or otherwise] on the secondary market and that the CPO market stays comparatively unbiased from the remainder of the pre-owned Rolex market on account of its value premium and client fragmentation.”
What’s attention-grabbing to me is to see how costs have modified since extra Rolex sellers have entered the CPO program, and because the bigger timepiece market has stabilized. WatchCharts concludes that “Rolex CPO retailers proceed to cost vital premiums from CPO stock.” Weighing the common value premium for an authorized pre-owned Rolex versus a conventional pre-owned on the Rolex licensed sellers who’ve on-line listings, WatchCharts means that on common, a Rolex CPO prices from 15% to 46% greater than a non-certified used Rolex. Throughout the market, the common value premium for a Rolex CPO watch is about 33% greater than what you’d most likely pay for a similar watch with out the CPO hold tag, whether or not it was from a CPO supplier or not (or immediately from the earlier proprietor). The very best was Watches of Switzerland, who between their essential UK and US markets charged a mean premium of 44% over non-CPO Rolexes; the bottom was The 1916 Firm at 15%. In fact, these numbers range primarily based on elements similar to situation, regionality, mannequin recognition, and present market exercise.
Because the used watch market stabilizes and returns to regular — together with for Rolex, Patek Philippe, and Audemars Piguet — plainly Rolex CPO sellers are at the very least partially leaning on their licensed pre-owned inventories to offset income decreases. The common premium of 33% for a Rolex CPO watch doesn’t, for my part, appear sustainable. Even with used automobiles, the common premium for a CPO is simply 1.8%. My perception is that these sellers might want to finally deal with market realities and that almost all of even Rolex CPO watches shall be priced under the unique retail value. As of 2024, that’s how it’s with most wristwatches in the marketplace, that means that used items are at all times valued under that of latest items.
What might finally drive Rolex CPO costs down is the excessive price of holding on to stock. It isn’t precisely identified what number of used Rolex watches are being collectively held by Rolex’s licensed sellers or the actual ones that WatchCharts examined for his or her newest report. That’s as a result of not the entire used watches out there are listed on-line. What is understood, is that a whole bunch of hundreds of thousands of {dollars} value of used Rolex watches are sitting ready to be offered to somebody. Ultimately, the price of that stagnant stock will drive retailers to lower their costs. In my view, it’s only a matter of time. As a lot as I like Rolex, I wouldn’t say that proper now’s the nice time to purchase except you’ve “acquired the decision” from a certified supplier who you realize has one thing in inventory they’re prepared to promote you at retail value. Individuals who have been on ready lists for years are beginning to get calls extra usually, and indicators point out that the supply of many new Rolex watch fashions is growing. That can in flip have a downward impact on used and Rolex CPO costs, even when Rolex stays among the many few watch manufacturers capable of command profitable value premiums for his or her luxurious merchandise. Chances are you’ll go to WatchCharts to study extra.
