In 2022, Rolex made a considerably stunning announcement (though in the end fairly sensible from its perspective): Consumers would have the ability to buy used Rolex watches with the additional advantage 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 may solely buy a Rolex CPO watch the place new Rolex watches are licensed to be bought. When Rolex initially introduced the Rolex CPO program, there have been quite a lot of unanswered questions starting from what Rolex watches could be out there below this system to who really certifies them, and the way a lot a Rolex CPO watch may cost a little versus one which didn’t have the flamboyant hanging white Rolex CPO dangle 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 own CPO programs throughout this time). Within the case of Rolex watches, sellers who wished to profit from the elevated demand complained to Rolex that there was cash to be made and that they wished 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.
Not like these misguided used watch companies that in the end failed or have had a tumultuous trajectory, Rolex has a longer-term imaginative and prescient and is aware of higher than to briefly improve the manufacturing of watches to fulfill a short lived bubble in demand. Rolex’s licensed sellers additionally turned jealous of unbiased third-party sellers and merchants who bought 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. Moderately, 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 kind of in a position to give you the pricing they need, however given their very own price to certify every used Rolex as a licensed 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 start out. Right this moment, 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 hight? That’s the fascinating query.
The evaluation of used watch costs and industry-related market efficiency continues to be in its nascency, particularly for a corporation like WatchCharts which is just a few 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 number of information on used watch costs could be scraped from the web (although that information often contains extra checklist costs than bought costs). Utilizing machine-assisted automation, analysts have more and more highly effective instruments to get bigger units of comparatively exact information. Once more, these are evolving instruments and no system can monitor all related information, however the present outcomes are fascinating.
In late 2024, a lot of the uncertainty across the Rolex CPO program has been resolved, significantly because of the reporting accomplished by WatchCharts: We usually know the way a lot Rolex CPO watches price over non-Rolex-certified used Rolex timepieces. I say “usually” as a result of I’ve been studying such experiences for quite a lot of years and have discovered what we are able to and can’t glean based mostly on out there information. Not all watch {industry} efficiency experiences have dependable information as a result of accessing correct related information is difficult. I say this as a warning to novices who get ahold of any of those experiences: They shouldn’t be wholly relied upon. With that in thoughts, I need to advise that used watch costs and worth tendencies 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 12 months or six months from now the image could be totally different or comparable — we actually don’t know.
It’s additionally vital to know and focus on the general efficiency of Rolex watches in late 2024, as, after all, the worth of recent Rolex watches has a direct affect on the worth of used Rolex watches. Just a few years in the past, quite a lot of used watches had been being bought at a premium due to excessive demand. That pattern has regularly decreased as provide has elevated and demand for brand new luxurious watches has cooled. In accordance 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 can be decreasingly true within the coming years, and at the same time as it’s, that solely contains 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 just a few years in the past, and its costs appear to be headed in a downward course.
In accordance with WatchCharts, as of the top of Q3 2024, the common used Rolex watches can commerce for round 20% above retail worth. That is a median that features a few fashions which have elevated in demand, together with a larger variety of fashions which have decreased in demand. An fascinating facet be aware is that one of many strongest performing fashions is a Rolex watch that was as soon as very simple 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 bought) has elevated in that final 12 months, 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 12 months in the past.
To know the worth of Rolex CPO watches versus run-of-the-mill used Rolex watches, WatchCharts in contrast the listed worth of Rolex CPO watches on-line with the pricing from a non-CPO vendor. WatchCharts discloses that a lot of the information 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 may reveal a special consequence. WatchCharts even admits that their evaluation of the listings for Rolex CPO watches as a part of their latest 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 as a consequence of its worth premium and client fragmentation.”
What’s fascinating 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 worth premium for a licensed 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 worth premium for a Rolex CPO watch is about 33% greater than what you’d in all probability pay for a similar watch with out the CPO dangle tag, whether or not it was from a CPO vendor or not (or instantly from the earlier proprietor). The very best was Watches of Switzerland, who between their vital UK and US markets charged a median premium of 44% over non-CPO Rolexes; the bottom was The 1916 Firm at 15%. After all, these numbers differ based mostly on elements equivalent to situation, regionality, mannequin reputation, and present market exercise.
Because the used watch market stabilizes and returns to regular — together with for Rolex, Patek Philippe, and Audemars Piguet — evidently Rolex CPO sellers are no less than partly leaning on their licensed pre-owned inventories to offset income decreases. The typical premium of 33% for a Rolex CPO watch doesn’t, for my part, appear sustainable. Even with used vehicles, the common premium for a CPO is simply 1.8%. My perception is that these sellers might want to ultimately deal with market realities and that almost all of even Rolex CPO watches can be priced beneath the unique retail worth. As of 2024, that’s how it’s with most wristwatches in the marketplace, that means that used items are all the time valued beneath that of recent items.
What could in the end power Rolex CPO costs down is the excessive price of holding on to stock. It isn’t precisely recognized 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 all the used watches out there are listed on-line. What is thought, is that lots of of thousands and thousands of {dollars} value of used Rolex watches are sitting ready to be bought to somebody. Finally, the price of that stagnant stock will power 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 could be the nice time to purchase until you’ve “acquired the decision” from a certified vendor who you understand has one thing in inventory they’re prepared to promote you at retail worth. Individuals who have been on ready lists for years are beginning to get calls extra typically, and indicators point out that the supply of many new Rolex watch fashions is growing. That may in flip have a downward impact on used and Rolex CPO costs, even when Rolex stays among the many few watch manufacturers in a position to command profitable worth premiums for his or her luxurious merchandise. You may visit WatchCharts to learn more.
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