Rolex Secret Plan: How Their New Factories Could Crush the Grey Market!

[@davidbenett1]

Great video but i don't agree with you. I bought a black dial Daytona after saving for a year. It was one of the greatest moments of my life, flying from Amsterdam to London just for a coffee and the watch. Now, I'm curious and going to do my research about its current value. I wouldn't want my watch everywhere, though it's special and holds its value. Increasing production would take away that uniqueness.

[@mywatchjourney6579]

Congrats on the watch! It will always be special. The market is irrelevant.

[@Mega-zi7ys]

It's everywhere in Asia ... The real ones. It's not unique...ALS and PP Chronos are rare/unique... But definitely not the Daytona. Most of my friends have Daytona.

[@borisVladimir2]

Great that will fetch you some cash. *I used to be a collector, but I liquidated my collection to venture into real estate. In January, I acquired homes in Malibu for $32million, and the returns on investment far exceed what I earned as a collector.

[@tobiasJason-gl1sc]

How did you grow your portfolio to $32m, I'm impressed, I have a lump sum in the bank, the rates are not impressive so I'm moving it, what's your cash flow like?

[@borisVladimir2]

I have a financial advisor (trader) she grows my liquid assets and I reinvest the weekly payouts back into real estate and long-term ETFs like VOO and SCHD. I have also started acquiring some tech ETFs, including IITU and IUCM.

[@cunawarit]

Rolex's strategy is straightforward: they continually engage in practices to artificially inflate the prices of their watches. The solution for collectors is simple: consider exploring other promising options. It's worth remembering that Rolex started as a tool watch company, known for making durable and reliable watches. Brands like Hamilton continue to offer similar robust timepieces today. For those seeking something more refined, Omega or Cartier are excellent alternatives.

[@poolmonkey]

Rolex has evolved from a tool watch company to a status symbol company. Most people who want a Rolex don't cross shop Hamilton or other less expensive brands (even if they are better watches) simply because they do not serve the purpose that Rolex does, which is to flex wealth. The quality of the product is secondary for these customers. I want a Rolex Explorer and I have rationalized it by saying it's an iconic watch and beautiful in its simplicity and understated elegance, but if I'm being honest with myself, other brands make watches with the same attributes but I don't really want those, because it's not a Rolex.

[@Seolfor007]

You are forgetting scarcity illusion and psychology of human beings. This is a balancing act. Having too many Daytonas flooding the watch market making them look like a Ford will be damaging the brand just as much as far too few. I'd also argue they could have easily switched making unpopular models to higher production 'hot models' 2,3 or 4 years ago in existing factories. Why haven't they? Has Hermes started ramping up production of their much sort after handbags? If not, why is it that that model of marketing and sales works for them for a prestige item yet not Rolex?

[@dd-dd2co]

Can't wait to show the middle finger to flippers and grey dealers.

[@dannysimenauer5745]

and the AD's who treated us like dirt because they think they could.

[@dannysimenauer5745]

This is great news, and long overdue. However, I am from Missouri, the Show Me State: I won't believe it until the ADs remove all the Exhibition Only signs and show me watches for sale! Hoping this video comes true soon.

[@gmarks1559]

The muppet boiler room watch market is dead 😂

[@mywatchjourney6579]

They will try to balance but it is hard even for Rolex. They really don't control the economy.

[@alangc76]

😅

[@stevenbrown4060]

Rolex like many consumers is far from happy with the current situation. On one hand the consumer is told by Rolex that the only way to buy one of its watches is through its AD’s but many are museums with the exhibition signs next to them. The AD experience has actually sworn some away from AD’s altogether preferring the gray market despite the inherent risks of fake or franken watches. Rolex isn’t known for knee jerk reactions. It doesn’t want mistakes, just careful evolution. I’m certain that before the new factory is up to full capacity, that the experience buying Rolexes will be much better than present, but how exactly I can only speculate. If Rolex doesn’t transform the experience, then even if they double output, it will be no better than before.

[@mywatchjourney6579]

Rolex aims to reduce the absurdity in the market with steel pieces. It's the only way to recover their image.

[@dannysimenauer5745]

Well said

[@dannysimenauer5745]

@@mywatchjourney6579 But I thought they wanted to be the next coming of Patek Philippe (customers getting on bended knee to be interrogated for the privilege to buy a Patek) and enjoyed the run up in gray market prices. If not, why wouldn't they price CPO under RRP, not 17-45% above it? I hope you are correct in Rolex making the supply even with demand, and FINALLY treating customers ie customers before the pandemic.

[@danb8877]

I found a super easy solution. I bought other brands. I just got a Moser Pioneer and that is way way way cooler than a Rolex. And I wouldn't know about Moser if I could have just walked into a rolex shop and get a rolex.

[@SavageZR1]

Whiskey world couldn’t solve it , neither will watch world

[@WeLoveYouStrongTime]

Interesting & good take. My guess is that there is no significant price difference in production with changing colors. Perhaps increasing ss sports “base” colors for availability, but still preserving the brand desirability and scarcity with dial and/or bezel colors may be course direction? 🤷

[@mywatchjourney6579]

Good thoughts. But I would prefer they introduce new models. But we both know they are incrementalists.

[@SRG7796]

When the new factory starts production?

[@mywatchjourney6579]

3 temp factories in 2025. And the permanent one starts up in 2026. But it will take some time to ramp up production. They have to maintain quality.

[@loo9407]

Honestly Rolex is so much bigger than a watch brand nowadays they can flood the market with watches and still sustain the hype😂😂😂 Also very true the grey market capitalizes on their scarcity. Great Vid 🫡

[@Real_Natural]

I agree Rolex is in the most enviable position of any brand. And since Rolex are not run by quarterly focused shareholders, Rolex have the freedom to play the long game. It's not even fair versus the other brands (excluding Patek of course).

[@Bastian-g6o]

My issue: I’d be happy to receive the pieces from my wishlist sooner, BUT higher availability takes away even more from exclusivity (ok, what exclusivity considering an annual output of +1m pieces already…). Also: I’m buying to wear, not to invest, but it feels good knowing that I’m not losing significant %, in case I’d need to sell some day. This safety net may be gone soon, too.

[@samuelburton5576]

Good points. Rolex is not stupid. They know following what this guy is explaining would destroy any cache they have. He assumes Rolex wants to over produce to make money and only cares about profit, nothing else. Don't believe this BS

[@dannysimenauer5745]

I have a different perspective, and I am not saying you are wrong. Either you want to buy a Rolex to wear and enjoy, or you want to see the value increase by decreasing the number of units. Remember that before the Pandemic started in January/February 2020, most Rolex stainless steel sport models were available, and the value did increase overtime because Rolex made dramatic improvements to drive demand. The Daytona being an exception -- it has been in high demand for the last decade. My point is if Rolex wants to keep the supply way below demand, and keep the resale value high, then Rolex should not spend a $ building more capacity. In fact, cut production in half like A. Lange did. Again, I am not saying your perspective is wrong, but producing over a million units and growing is not a rare product.

[@Bastian-g6o]

@@dannysimenauer5745 100% understood and agreed. If I needed to chose, I‘d go to „wear&enjoy“ 10/10 times, as this is what I‘m doing anyway. And yes, I‘d appreciate the watches even more if there were more rare. But this would prohibit myself from growing my collection, as less supply would push grey market prices, which would push more flippers to the AD and increase demand for an already reduced supply. Can‘t have it all, I guess 🤷🏼‍♂️

[@dannysimenauer5745]

@@Bastian-g6o Agreed

[@Blastoise-rx3qv]

Great analysis as always and I agree! Will be nice to see some normalcy brought back to the Rolex market…one day!

[@WestCoastAce27]

Great analysis. I’m old enough to remember the Vegas mega resort building boom - they had the construction teams working OT to get the hotel/casino (factory) up ASAP so they could open and start raking in the cash. Having said that: I thought Rolex could also have dealt the greys a death blow (or at least a hard kick in the nuts) by raising prices on many of the popular SS models 15-20%. That would have eaten quite a chunk of the flippers’ profits. Yes, some would have grumbled - but I still think there are plenty of affluent watch geeks that they would still sell everything.

[@mywatchjourney6579]

I do think that some of their price hikes squeezed some of the margins from the grey market, but yeah, not enough. This is their big play to capture all the excess demand.

[@Eric-i1r]

If they were regularly available at retail I’d collect multiple GMT’s, Subs, DJ’s, etc over time. The hassle to get one has me not running out to try. I’ve been buying and collecting other brands. I’d like to return to Rolex, if they make it worthwhile. For now, Omega, Tudor, Nomos, Glashutte Original, GS, Cartier, etc are getting my money.

[@mywatchjourney6579]

It's fine to wait. You'll have better luck next year.

[@patrickjean-philippe7679]

At some point I wanted their titanium Yachtmaster but I could not even see it at AD so I gave up. I do enjoy the chase after some pre-war racing cars of interest but I am definitely not prepared to go that way for anything new and mass produced.

[@mywatchjourney6579]

I didn't see that titanium staying hot in the used market. You'll prob get a deal at some point.

[@patrickjean-philippe7679]

That would be great as I found the steel Submariner quite heavy in comparison with my Omega Seamaster NTTD.

[@donnaskelcy]

I am curious about how the current lawsuit against Rolex for refusing to allow ADs to sell Rolex online will impact their expansion plans. Any thoughts on this?

[@mywatchjourney6579]

It should have not any impact. Whether you sell online or boutique, the production lvl will be driven by the need for a high ROI; Rolex would need to recover their cost quickly. And the need to maintain production lvls above the fixed cost will be the deciding factor.

[@donnaskelcy]

Understood. Thanks

[@patrickr2686]

What's the word on the law suit for selling online?

[@mywatchjourney6579]

Check my video on this.

[@danielb3863]

You forgot to include the Explorer line in your chart.

[@koolpep]

They already publicly announced the new factories will help them achieve 25% more output. It was in the Swiss newspapers.

[@mywatchjourney6579]

I think they will have to boost production more. They are intent on squeezing out the grey market, I think.

[@dannysimenauer5745]

@@mywatchjourney6579 If Rolex want to squeeze out the gray market dealers all they need to do is lower CPO prices to sell below RRP.

[@craciunu]

Two directions: steel sports models, plus some new models and limited editions to keep the brand in the news and hype zone.

[@vietmontague]

Looking forward to hopefully getting that Pepsi sooner rather than later!

[@michaelduldner2262]

Cool video and analysis

[@michaelduldner2262]

Favorite Rolex is the deep sea sea dweller , love that dial

[@wowlsj]

I do believe your analysis is spot on, and the most exciting opportunity for us collectors, as you pointed out, is for Rolex to develop something new; because at this point in rounded collection Rolex is not making anything that I want. "And as collectors, we always want something else...😅"

[@mywatchjourney6579]

Yeah, after the Sub, I'm not attracted to anything else. I don't need a GMT.

[@manuvns]

I want Rolex for the price of Tudor possible?

[@mywatchjourney6579]

No, Rolex will maintain product segmentation. But possible on the used market.

[@samuelburton5576]

Rolex does not operate like a conglomerate, which thos guy assumes is their philosophy. They dont focus soley on profits. They are a foundation. No shareholders, no stress to over produce for profits.

[@mywatchjourney6579]

They're not spending $1 billion for low returns. Not going to happen.

[@samuelburton5576]

Gaslighting at its finest. This guy assumes Rolex is a short term planner. Why would they over supply the market and destroy their brand in the process. The elimination of premuims means reduced demand as second hand prices go hand in hand with demand and cache. Just ask Hermes. This video is total BS. Clickbait

[@Seolfor007]

Totally agree. Much of this in the luxury space is validation, vanity and a lot of other human traits and sins to impress and feel I'm a success. I bet half the demand would vanish if anyone could walk in for one.

[@mywatchjourney6579]

They have been planning this for years. Watching the grey market capture all their profit. That's coming to an end.

[@dunnybrush]

I don’t understand your argument. Agree that Rolex is a long run player, but why do you think they would invest in more production capacity?

[@dannysimenauer5745]

@@Seolfor007 Pause for a minute. Patek Philippe makes 60,000 watches/year. A. Lange makes 2,500. F.P. Journe makes 900. Rolex makes 1 million + watches and will hit 2 million by 2029. In short, 2 million watches per year is not a limited number of watches. Rolex has always had a goal to sell every watch it makes, every year, as opposed to limiting production to drive up gray market prices. Rolex watches are not made by hand like A. Lange & Patek. They do not hand engrave their movements. A Rolex is for high achievers to celebrate their success. Rolex has earned its success and market dominance by treating every customer with respect before the Pandemic. Turning away customers for a mass produced product is not a long-term recipe for success. IMHO.

[@patrickr2686]

The gal who works at the Rolex AD told me I have a better chance of buying a watch from a flipper then I do from them.

[@ph8077]

I've bought over £50k of watches from my AD in the last 2/3 years...& I had to wait 22 months to get my YM 40 126621...& I actually wanted a 622, but I still snapped his hand off when I was offered it.

[@mywatchjourney6579]

Didn't fall for the bait. It's going to keep getting easier.

[@waynemoore9951]

Rolex can go swing for my business. On th other hand I had a wonderful experience with IWC in London's Battersea Power station. Let me try on perpetual calendars and any watch I asked about. Rolex on the other hand, don't even want to open the door to you.

[@mywatchjourney6579]

I respect iwc but haven't been attracted to their watches yet. Maybe one day.

[@xchazz86]

Lets just hope they dont jump on the lets make plastic watches fad.

[@mywatchjourney6579]

Haha that would be funny; but it would never happen. Rolex Swatch collab? Collectors would be howling in out rage lol.

[@patrickr2686]

Rolex has a "shake hands" agreement with the flippers markets so everyone makes money

[@Seolfor007]

Total BS. They close down dealers caught in the practice and that's a fact.

[@999NINE99]

Beanie Babies did the same thing, do you even know what they are now? When a secondary market is strong, it is better to let that be free advertising for your brand and continue to highly profit than it is to try to manufacture more product in order to capture all secondary transactions. Nothing sells more than high demand created through hype. There are better, more inexpensive ways to indirectly capture secondary sales revenue ie Certified Pre-Own. Rolex's current strategy is another glaring indication that bloated middle management salaries trying to justify themselves steer companies into the ground. They are going to diminish exclusivity one Datejust at a time that comes out of the new facilities.

[@mywatchjourney6579]

Beanie Babies were always a fad. Rolex has been around a lot longer than that. They have no fear that demand will suddenly dry up. And their CPO program is not competitive. Market analysis will show that they are only getting a small slice of the secondary market. In fact, I should do a video on that.

[@Peltwerk]

Rolex is so has been. Holy Trinity and rarer brands are way better product and way to go. Bought two Rolex at retail and sold them both. Personally not interested in the watches everyone has. They make as many Rolex each year as Tesla makes cars. They've been making that many a lot longer and you see how many Tesla's are driving around these days.

[@mywatchjourney6579]

And Rolex production will go up, min 25% prob 50% total by 2028.