The Real Reason No One Can Buy A Rolex or Patek Right Now - A Breakdown of the Shortage

[@TeddyBaldassarre]

Hi Everyone, I hope you enjoy this video. Since shooting this, there have been some updates with the story with Rolex finally making a public statement. I wanted to be as thorough as possible with this video as there is a lot involved in this equation. Thanks for watching and leave a comment with your thoughts regarding the subject.

[@theChrisCroft]

what did Rolex say??

[@jorbraz]

Good video Ted

[@kalinicd]

They say that they cannot ramp up production because they are assembling watches by hand, so they can do 800000 watches per year and they cannot make 5000000 "by hand". They make approximately 3174 watches per day by hand, how many people do this, 3500? What I am thinking is that they are afraid to invest in new people and then while producing a lot more watches interest for it will fall so much that they will start to lose profit.

[@evkoum]

@@theChrisCroft it's the AD's fault.

[@viniciusacmauro]

I think it is simpler. As demand for a product rises, companies usually expand production. However, when luxury brands do that, they lose part of their appeal. The alternative is to raise prices to contain demand and increase profit. So why aren't retail prices going up? Well, that is for Teddy to explain.

[@Podcastage]

Came for the watches, stayed for the economics.

[@randylahey5875]

hi bandrew

[@robertschmidt9584]

You hit the mail on the head!! Great comment!

[@StellarAudyssey]

Didn't expect this comment lol

[@mohnnadmercedes8246]

Woooleexx Parrreeeekkk Odemarz be gay

[@manny9992]

Gang shit

[@kurtkomaromi3690]

One of the best videos I've seen. As a marketing professor, I appreciate your inclusion of the fundamental economic forces driving this current market. The biggest risk I see for Rolex is the failure to bring in new customers because of supply shortages and waiting lists. I recently bought a luxury sports watch and wanted to include the Oyster Perpetual on my short list. The local AD had no inventory to show but plenty of Omega, Breitling, and TAG watches. I bought a Seamaster Diver 300 and am very happy with my purchase. Watching your videos has helped me become a more educated consumer and appreciate the many brands and product options out there. Thank you, Teddy!

[@algernonwolfwhistle6351]

Your experience has been replicated thousands of times. I think it's a huge problem for Rolex. The categories of customers who have traditionally bought their watches, which are the same groups that their advertising still targets, are being frustrated by the grey market flippers, dodgy dealers and fast buck merchants. Not the kind of pool that Rolex want to swim in.

[@salmana4239]

Omega is superior product than Rolex imho. Wear it with health and prosperity sir

[@dannysimenauer5745]

Kurt, ditto from my experience. However, I bought the alternative brands at discounts from the gray market. If the AD’s continue to have empty cases and expect me to buy alternative brands at full list, then I can see the AD's disappearing over the next five years. I see their value add (and lousy attitude) diminishing.

[@dannysimenauer5745]

@@puck8434 You hit the nail on the head!

[@willh1082]

I would say that's a potential problem, but being a high end brand i don't think it'll be a problem because it will remain the "grail watch" for many people. Look at ferarri, they've always been an exclusive brand and a few years ago cut back the number of cars they make every year by like 15-20% (i don't remember the exact number) because they felt like they weren't exclusive enough at the numbers they were producing. Seems to be working well for them. (Plus them marketing the ferarri name to many many products)

[@Marco-cd7jb]

Many 'KZbinrs' continue to comment on this complex issue - 'Teddy's Take' is on another level. Wise words for a young guy; keep up the great work!

[@seanmarietta9059]

The inability to get the watch I wanted has caused me to look elsewhere. I now have a small collection of Omegas and am perfectly happy with them.

[@Reignunlimited]

Grey market Rules. Same watch, Sometimes lower cost, No BS Preferred Client List. Order - Pay - Receive. No kissing ass at an AD.

[@BennyOcean]

Omegas are nice watches. It would be nice to get a Patek or AP or some other super luxury brand, but for normal people something like an Omega is just fine.

[@TheJosephhomere13]

@@BennyOcean exactly I love vintage Omegas and the Speedmaster line. I always wanted a Rolex Dayton I could afford one at retail but have accepted I’ll never own one because I can’t justify paying double retail.

[@LuxLazar]

Just got a Planet Ocean! Amazing watch.

[@seanmarietta2999]

@@BennyOcean It would be nice to pay at least retail for some of these watches. However, I don’t think normal people pay $8000 for a watch. I’m just happy that I could buy one if I wanted to.

[@bravo1224]

12:54 is this so on point. I’m finally reaching a stage in my career where I can afford some of the nicer things in life and I was ready to dive into higher end watches as a new hobby but what’s going now is ridiculous. As he states, doing the research and jumping through a few hoops is par for the course, but all this crap with these dystopian ‘lists’ and having to form relationships with AD reps (“Hey I’m back…how youuuu doin’ [wink]) is just too much for now. I think I’ll look into other things. And yes you could say say ‘Rolex doesn’t give sh*t whether they get my business or not’ but eventually it’s going to come back to bite them in the rear b/c when a brand stops becoming accessible then it eventually ceases being aspirational.

[@TeddyBaldassarre]

Well said! Completely agree.

[@Neetabeeta1972]

Quote of the century, "when a brand stops becoming accessible then it eventually ceases being aspirational." this says it all!!

[@mcnuonuo]

If a restaurant tells me that my waiting time for the table depends on how much money I've spent there before, I will never return to that restaurant.

[@perryteo1406]

We should really look into other brands...

[@charlesmckinley29]

Check out the thread above about counterfeits. The vacuum in supply will be met from other makers or different goods.

[@snazzy]

This is money. Everything about it is great. Nice work, Teddy!

[@CYC_JP]

See who I found here. Snazzy you should make some watch related content too. I would definitely watch.

[@Cheesydude813]

@@CYC_JP pun intended lol?

[@krishnar3493]

Wow! Snazzy’s here. Come on, Bro. You can do a video on Grand Seiko or Rolex surely.

[@jonathansaraco]

This situation with Rolex, Patek, and AP has made me uninterested in ever trying to obtain one of their watches. Why would I want to be associated with people who care only about status? I couldn't imagine a more insufferable community. The watch industry has no shortage of other brands at all price levels that are available to people for MSRP at a moment's notice. There is no problem unless you are someone obsessed with status. If not being able to get a Rolex or a Patek means you're not interested in watches, are you really a part of the watch community?

[@ravib3494]

Fair point, anyone seriously into watches should/could consider Blancpain and Vacheron Constantin.

[@blackburnheart]

Amen

[@yankeesandgiants1886]

So true- never liked Rolex because every rich bro had one or aspired to one. I've owned VC, IWC, GO, JLC and have been very happy with the quality, the value, the buying experience, and believe it or not the anonymity of owning something only watch people get.

[@Chief_5]

Believe me if one shows up at my AD for MSRP I’m buying it! 🤡

[@flectz]

i feel you're overthinking it. i keep seeing people mentioning snobbery, but i've never seen it. not with rolex, at least. it literally just comes down to the watch hobby taking off the last year or two and supply hasnt increased much to meet the demand. i bought a submariner in 2018 fairly easily, i had no purchase history with the AD or anything. just walked in as a 26 year old kid with scruff on my face wearing a patagonia fleece. they were even offering me discounts on non-professional models. i think because theres not enough watches to go around nowadays ADs are just playing the game and being more selective with who they sell to, obviously they'd prefer to sell to those who can buy more watches. combine that with all the degenerate low-lives reselling and flipping it created a perfect storm for the shortage.

[@richarddebeer9081]

40 years ago I bought a paper thin Seiko for myself and a normal one for my Dad while in the Orient. My paper thin one actually "bent" as most own them did so Seiko apologized and said they wouldn't repair it any longer. I just selected another like Dad's and gave it to my Brother. I think each watch was ~$150.00 then. 20 years ago I was going to buy a used Rolex Sub from my local Jeweler for $3,000.00 but sadly my Dad passed away, so I took his Seiko and started wearing it. It still runs perfectly and I noticed today you can buy a new one for $275.00 I also went to look for a Rolex today, but when I heard about the prices, I am walking away. Great article Teddy. Like you say, the new generation like my Grandson doesn't want ANY watch since his phone tells time just fine. Watchmakers beware the next generation!

[@mikew4646]

Absolutely spot-on analysis and the best explanation I've heard to date. Unfortunately, this amounts to a sad situation for the true watch collector and lover chasing watches made of unobtanium. On the positive side, this redirects the focus to the lesser-known and hidden gem watches that may have been otherwise ignored. Keep up the great work.

[@Cortesevasive]

Well its the same with Iphones, it sells well but not for the sharpest tools in the shed

[@treborkroy5280]

I can't even remotely feel empathy for anyone chasing these watches. It's status over "love of watches" and we all know it.

[@matthewb9935]

I have to admit, I find the whole epidemic of “flex culture” and constant Instagram-fueled narcissistic bragging totally nauseating…. It has to a large extent ruined what once was a sophisticated hobby of learning about, collecting and appreciating fine watches. I probably sound grumpy and cynical, but I truly hope the tulip-bulb-like bubble bursts very hard and very soon.

[@watchingbrief7072]

100% agree. Many folk just want to show they can afford precious metal. They would not know the difference between a keyless works or pallet fork. Just buy Grand Seiko and be done with it!

[@donquique1]

And it will. Read the manias and delusions of crowds. Great book on human psych.

[@donquique1]

I make good money but I cannot justify purchasing a wat h for maybe 2500 or more. My most expensive right now is less than 500.

[@JayandSarah]

@@donquique1 well that is the thing, it's not about making money to buy truly expensivive goods. I made really good money when I was younger. But I couldn't afford to spend at that time on watches. Watches in the luxury and higher expense segment (say $20,000 and upwards) are in categories of wealth per se. You don't buy a $30k watch because you earn enough, you buy it because you are wealthy enough. If you look at it from a net worth standpoint, you better be pretty wealthy in liquid cash and assets to be spending that kind of money on what is essentially art. This is the disconnect with the young crowd, you have people renting apartments, buying $15k watches and leasing cars. They truly own nothing. When I got to a net worth position where I no longer even had to look at bank balances or even care how much money was in the bank anymore, that is when I could buy this stuff. When spending $50k on jewellery or art didn't mean THAT much, anymore than losing the money to be honest. $100k in watches, you should have net worth liquid, not real estate, in the 2 million range.

[@j.burgess4459]

In fairness, people who are just purely appreciative of the watches have the option to buy Omega, JLC, Grand Seiko, Glashütte Original, Blancpain instead of Rolex.

[@WATCHVICE]

This is the most valuable KZbin video about luxury watches - period!! Amazing job and great inspiration!

[@jimmyprovenza9437]

I never comment on KZbin videos, but in this case I need to. I have an economics degree, and Teddy is spot on with all of his analysis. I was especially surprised and delighted to see the discussion around Veblen goods, a concept few know about and even fewer understand. Great work Teddy.

[@sdiver68]

I have an Econ degree also. Agree mostly spot on with the theory, forgot to mention quantitative easing and under represented the rise of Asian wealth in demand factors.

[@mohammedntarmal2961]

I learnt Veblen goods in high school lol, doing my undergrad now, yes it was a quite an in-depth review especially with the rise in social media and our shift in culture making a huge difference in demand perspective, which also makes people of lower income brackets more willing to purchase a watch to attain a higher 'prestige' level.

[@lndyrd]

same as Mohammed, I learnt about Veblen goods in high school, I don't think these concepts are as far out as you're making them out to be.

[@KingMinosxxvi]

@@lndyrd The simple answer to this that they cost to much money, they are a rip off, they are status oriented crap. Call it whatever you want. Also they are produced in Switzerland. Do you know what the minimum wage is in Switzerland?

[@lndyrd]

@@KingMinosxxvi did I even ask you anything?

[@malikknows3510]

This is an absolute master class in producing a quality, well-researched video. Well done, Mr. Baldassarre!

[@TJDiBella]

Finally, a cogent and relatively thorough explanation of the current watch situation. Like many luxury manufacturers who have set up direct to the public stores, I bet the watch companies will follow suit. Porsche attempted it in the late Seventies and the dealers sued to keep their franchises, and Weisach backed off. But they were ahead of the game and wanted to put their customers ahead of dealer concerns. Thanks Teddy!

[@GearZenChannel]

I was on the Omega wait list. It was brutal! I had to wait for the AD to take it out of the display case and hand the watch to me.

[@zevongrie1402]

I had the same experience. So stressful. But glad I stuck it out.

[@blackheavymetalman]

AD?

[@blackheavymetalman]

Nvm I found out.

[@alexanderstefanov6474]

I got a new speedy hesalite at 20% discount

[@RadoDani]

When 15 seconds feel like eternity. I feel your pain.

[@ChristopherJMBrown]

I've been collecting luxury watches since 2011 - mostly Rolex and Patek. I'm now so frustrated with Rolex & Patek that I've moved on to other watch brands such as Vacheron. The watch supply/demand issue has been a blessing for me because I discovered how much I love Vacheron and possibly wouldn't have taken a look if it wasn't for this supply/demand issue. So for my watch collecting experience, it's been great! I'm discovering new brands that I wouldn't have otherwise looked at. I am now the proud owner of some IWC, Tudor, Vacheron and soon Grand Seiko.

[@owl23452]

Isn't it the same with Vacheron though? Thinking of the Overseas especially. Almost impossible to get, isn't it?

[@ChristopherJMBrown]

@@owl23452 that’s a recent event but it’s still not as bad as Patek or Rolex. Not even close.

[@ikirikchi]

Just curious, why not Breguet? Everything is there - history, heritage, timeless designs, complications, perfect finishing, etc.

[@ChristopherJMBrown]

@@ikirikchi I don’t have a dealer nearby that sells Breguet :)

[@closer71]

Vacheron treated me like shit because I wanted a rose gold Overseas. And I've been collecting Rolex since 2012. So I moved on to Parmigiani and love it started! And I started looking at Cartier seriously again too.

[@shaidayan5602]

If only my college Economics 101 professor presented supply and demand the way you just did Teddy. Always easier to learn about something when put in the context of something one can relate to. Keep up the AMAZING content Teddy!

[@bighands69]

Increasing supply is more complicated than people realize. It can cost resources to do so and all a business might be doing then is following market trends that can change very quickly. All those whiny watch flippers who complain would turn their back on a brand in a second.

[@SteveBrill]

Excellent explanation Fo supply and demand. I spent many years in the car business, where new models were often in short supply. But it’s about managing that demand and not pissing off long standing, loyal customers.

[@Optimus19]

After watching countless videos but Teddy, I decided to get the Omega AT as my first luxury watch. Wanted to get the Rolex oyster but with no stocks and crazy prices, the Omega was the way to go. The Omega is no less of a watch and wearing great on my wrist for the last 2 weeks. And so true, my friend wants to buy apple watch when she can buy a watch at the same price they will last her much longer. So yes watch makers are loosing out to technology

[@johnstockdale1148]

The spike in all the higher end brands has made me appreciate mid - entry level brands even more. Seikos and Tissots to Oris, Tudor, and Omega. You can’t go wrong with any of these watch makers. Great video by the way!

[@randomocityvideos]

Agreed. High end brands are admittedly incrementally better than mid-tier, at an incrementally higher price. Now we’re talking about a basic 3 hand rolex selling for 3-4x the price of an Aqua Terra or BB58…

[@JayandSarah]

Your list of brands is great, but let's be clear on one thing - Omega are not in the category of those others you have listed. Not even close.

[@mulesa101]

@@JayandSarah As in it's worse or better?

[@diavalus]

@@mulesa101 clearly better.

[@Kkorkykatt]

I've given you a thumbs up because i get the gist of your post, BUT for example Omega isn't a mid level brand-it may well sell some cheaper pieces, but they have very expensive timepieces as well. Their main 'problem' (not all of us see it as a problem) is that they cater to the 'masses' (as Teddy said), ergo they have forgone exclusivity - i knew this before i saw Teddy's vid, but it wasn't going to be a factor in my choice-i buy what i like if the price is right because i like it, i have no intention of paying extra for all of the hype. Just my 2c worth.

[@thomasmoll8822]

Fully agree with one of your last points: The current situation is alienating an entire generation of potential future (watch) consumers from that space in general. And that’s a dangerous game to play…

[@juliend5047]

I don’t agree because retailers are actively growing their consumer base by allocating sought after pieces to this new generation and therefore binding them to them as you already have a client relationship which will last even longer because you provided a highly commended product

[@rp-wn5or]

These brands playing icarus

[@javahaxxor]

I don't know any millennials that would wait for years to buy a product. They want to go to the website, pay with Paypal, and have it within 5 days.

[@rp-wn5or]

@@javahaxxor you also can save up for years AND buy it online, paid with PayPal. Faster shipping and easier means of purchase don’t directly correlate to instant gratification when it comes to things priced at these levels lol and if this hypothetical millennial IS buying watches out of instant gratification and has that kind of money, that’s EXACTLY who watch brands probably want lol

[@thomasmoll8822]

@@rp-wn5or - You're missing the point, IMHO… No one really doubts that there are buyers out there at current list price levels. But you CANNOT buy these watches at these prices, be it online or offline, with PayPal or pearls, or whatsoever. “Instant gratification”? - Only at current grey market prices (which the brands have no direct control over). And how many (millennial) buyers are still left at these?

[@iaincook4672]

The one variant at the moment that is unique since the industrial revolution is the pandemic. We have high GP per capita and the majority of first world countries have been in and out of lockdown and limited avenues for discretionary spending. As a result, luxury products are one of the few products you can spend your money on as you can’t go on lavish overseas holidays.

[@bennyvictory3483]

Excellent topic covered from multiple perspectives ! Fortunately, if you do love watches there are many other brands that are just as fantastic and much more affordable and attainable at some point when this craziness dies down you could always come back and pick up the grill watches that are so unattainable at this point. Your channel has introduced me to a few different Brands that were not on my radar and I enjoy them just as much as the more expensive ones that I have !

[@gilbertrose7147]

Thank you again, Teddy, for your very thoughtful analysis of not only basic market forces but also the psychology of exclusivity and insecurity. We are all flawed individuals and some of us will spend whatever it takes to try to deceive others and ourselves of this fact. True luxury is inner peace and independence. Great job!!!

[@toninobelimussi296]

We are all flawed individuals and some of us will spend eternity in the company of God because they chose truth over deceiving others and themselves and thus perfected themselves. True luxury is avoiding enslavement and the one setting the traps.

[@Portia620]

Peace is a luxury!!!!!! Independence is awesome too!!! ❤️🥂 my goals! I have peace now need to sell stuff! 😂🤣🥂

[@murraypollard]

I've worn a watch since I was 6 years old; I have always liked watches. My first Rolex was purchased in 1991, when I finally reached a goal in life and was able to buy one. I bought a Polar in 2008 during the recession, and got a discount! I bought my 3rd one (Submariner) in 2018, no problem, BUT now good luck getting one. I recently went to a major Rolex store, they had 2 watches for sale, that's all. Will I buy another one? No. Am I going to sell any of the 3 I bought? No. I did not buy them to sell. It's just getting ridiculous.

[@paulwheat4557]

I think maintaining a “luxury status” by ensuring lower supply v/s demand is meaningless when it comes to Rolex as they were considered luxury even when you could buy any model off the shelf at any AD anywhere. Scarcity isn’t doing them any favors on that count at least. For me the issue with Rolex is the appalling arrogance and in your face superiority that many ADs show. Just because it’s a sellers market (for now) is no reason to treat potential customers with disdain and make them feel like idiots for even asking about popular models. What goes around comes around and a lot of these self important dealers will one day wish they hadn’t disrespected so many genuine potential customers. I for one will never even go near their stores again,

[@dannysimenauer5745]

Amen Brother! I feel the same way. Paybacks are hell and the AD’s attitude will boomerang and hit them in the face when the pendulum of demand swings back.

[@Santor-]

The arrogance is weird, as you come to buy a $20k watch, and they ooze an aura of doubt if you can afford it or not. And yet, most live in houses costing over 10-20 times this. Buy a new car for 20k, they will look down on you for buying such a "cheap" model. Buy a watch for 20k, they look down on you for not affording it. Its like, do we need to prove our net worth to buy a Rolex? How much net worth is acceptable? 1 million USD? 2? 5? 100? The watch is only 20k, so its really just kind of rediculous.

[@dannysimenauer5745]

@Dave In MSP I also am offended by the AD’s tactics and lack of stock. That is why Grey Market dealers are taking off.

[@hb1338]

One of the problems with dealers is that they are like estate agents - they sell to the vast majority of their customers just once and they have little incentive to establish good relationships with them. I was treated with disdain by a dealer when buying the only expensive watch I ever expect to buy. My take was that the salesman was trying to push me into spending more than I had planned - this tactic works well with people who are very wealthy but my price limit was based on what I could actually afford. The salesman did not take it well when I asked him politely to offer me only watches which matched my stated requirements.

[@hb1338]

@@dannysimenauer5745 Sellers are used to being able to hustle very wealthy customers into spending much more than they planned. Very few know how to sell to a customer operating to a fixed budget.

[@clayjohanson]

There is a concept I call the "Outback Model", which I first started talking about back when Outback steak restaurants were a new thing (late 1980s, early 1990s). The concept basically goes like this: Outback restaurants ALWAYS, at that time, had long lines. You might wait an hour or two to get a table. A lot of people would get angry and demand that Outback build MORE restaurants, so that there would be no wait, or at least shorter waits. But Outback wouldn't do it. Why? First, if every restaurant has a line ALL THE TIME, then that means your restaurant is operating at or near 100% capacity. That means you are probably maximizing your profit, since the number of customers you are serving (and getting paid by) is at or near the maximum possible. Second, if you open another restaurant nearby, then there is a lot of overhead involved: Construction, equipment, etc. Basically, your operating costs double. And there is the almost absolute certainty that the new restaurant will take customers away from the old restaurant, thereby reducing ITS profit potential. Third, the fact that people are willing to wait an hour or two before they are even seated means they WANT what you are selling. Don't lessen the value of that. People who don't want to wait will go somewhere else, but that's OK. And fourth, what happens if the demand for steak goes down? Now you have more restaurants, whose operating costs are somewhat fixed (rent/mortgage, power, staffing, etc.), but less customers coming through the door. That's a great way to overextend yourself and fall into a financial hole. As Teddy pointed out, these watch companies take a VERY long view of their business: Centuries in some cases. They know for a fact that they can continue to operate as they are (making X number of watches per year and generating a tidy, almost predictable profit margin that makes everyone there happy) and it's not hard to sell every single watch they are capable of producing. If they over-expand their production capacity -- which involves building new facilities and having very expensive, bespoke equipment built -- then they will absolutely lessen demand AND they run the later risk of having those facilities sitting idle and having to lay off staff. That's the last thing they want. So it is smart for them to be VERY conservative about expansion -- in many cases, they absolutely should avoid expanding and just keep doing what they do so well. Let the market decide what their pricing should be. In the case of that Patek Philippe, it wouldn't surprise me if PP are keeping track of all of that secondary market pricing and if they raise the MSRP on that watch. Obviously demand is high enough that they can justify raising their pricing -- it would mean more money for them AND more money for their authorized dealers. Why should watch scalpers be making more off each watch than PP or the dealers do?

[@TeddyBaldassarre]

Great comment! Thanks for watching.

[@muffemod]

Demand to justify price raise is a slippery slope with many moral implications that go beyond the scope of churning profits for a business.

[@clayjohanson]

@@muffemod Assuming you're referring to my comment about PP, obviously they would not raise their prices to the levels shown in the secondary market pricing. There are certainly people willing to pay $35K for a watch -- but the number willing to pay $350K for the same watch is undoubtedly far, far less. (I am reminded of a Richard Pryor quote: "Cocaine is God's way of telling you you have too much money." Paying $350K for a $35K watch falls into the same bucket.) I'm thinking they'd raise their price by 10% or so and see what happens -- if sales don't decrease, then PP and the dealer just made an extra $3,500 to split between them. If sales DO decrease, then they'd just have to accept the irrationality of the secondary market and look at other options for making sure dealers sell to customers who actually want to own the watches they are buying. (For example: Can a secondary market buyer be denied service on their scalped watch? These watches are all registered with the brands -- they know who bought what.) I would suggest the possibility that PP don't care, but clearly they do -- retiring one watch and replacing it with a virtually identical watch at a much higher price shows that they DO want to get more money out of this.

[@clayjohanson]

@@TeddyBaldassarre Great video! Your videos are very informative and well produced. I got rid of my first-gen Apple Watch a few years ago (decided I didn't like being told what to do by a watch) and went back to analog watches -- I'm up to four Hamiltons (incl. Cooper's watch from "Interstellar", a black titanium field auto, and the new PSR), a Laco Bell X-1, and a Sternglas Topograph -- nothing very fancy, I know, but they're all very cool. I just bought an Omega Speedy Moonwatch (3861 with sapphire) -- I'd had a Moonwatch on my personal wish list for years and finally pulled the trigger on it, through my local Omega dealer. (Your video on this watch was VERY cool.) I can't imagine buying something so nice and then flipping it for a profit. It just seems rude.

[@muffemod]

@@clayjohanson Right on! Once wealth gets to exceeding levels though spending on luxury goods becomes less of a flex than donating large amounts to charities and humanitarian causes.

[@dylandavies3634]

This situation impacted my buying decision just a few days ago. I was looking at the tudor black bay chrono and had to deal with the whole waitlist situation, I left the outlet with a bad taste in my mouth. I walked across to the Omega outlet and was treated much better, I was able to get 20% off the retail price and picked the watch up that day, so I ended up with a seamaster. Couldn't be happier with my decision.

[@bighands69]

Omega is going to have the same issues down the line in that their production will not able to scale for demand. Rolex has not increased their production and what has happened is that world demand has increased. I do not think Rolex has the capacity to enable its demand.

[@escanor9920]

@@indusingh2013 Dude if you think Omega can mass produce while Rolex can’t, then you’re either very naïve or very stupid… Perhaps you thought Rolex watches were handmade by a bunch of a few watchmakers in the back of a shop 🤣. Rolex is a giant and makes 1.2 million watches per year ! So believe me if they want to increase, they can ! So please spare us from stupid comments like the one you made.

[@ronmcmohan]

Good choice with the SM. IMHO Tudor is overrated. They didn't even have a clue about the date wheel issue with the GMT

[@AjiriOneil]

I had a great watch buying experience with Rozett this week. He responded quickly to my inquiries and shipped the watch out immediately. It even arrived one day sooner than expected. Thank you for being excellent to work with. Would do business with you again in the future.

[@Claimjumper55]

I love the amount of detail that goes into your videos. During the upcoming crash in the stock markets the demand for these watches will plummet and the used market will be flooded. I have a 2 ozt gold bar set aside that I will use to buy the new Rolex I've been wanting for some time. It won't be the first time, or last, that I've used this strategy to buy something nice.

[@chanemin]

Probably one of the best videos you've made to date. As for transparency, I feel it'll always be secretive as none of the big brands need to disclose anything. It's a matter of who they prefer to own their watches

[@alexnayeri2757]

Hello Everyone, as a long term collector of luxury and high quality timepieces such as Patek, A. Lange and Rolex I must admit that I am totally turned off by the current situation with supply and demand of these brands and similar ones to the point that I completely turned my back on them after 25 years of loyalty. Instead, I turned my attention to the middle of the road brands like Omega and Grand Seiko and I believe there are thousand of watch enthusiasts like me whom are fed up with games authorized dealers have been playing and sadly manufactures have been turning a blind eye. The bottom line is if brands like Rolex and Patek continue moving along in this road, they will be losing more loyal clients and possibly damaging their brand's image. I believe these brands must eliminate the middle man, in this case the AD's, and start offering their products directly to the consumers through their own on line channels or their own boutiques. This could put an end to all the games and abuses of authorized dealers.

[@tapirdeaalex7104]

In the past, people made money and celebrated with a watch, now they make money just to buy the watch. We are seeing a crisis for wealth aknowledgement from strangers, its all about the bragging rights in 90% of cases unfortunately.

[@TeddyBaldassarre]

Very true. Human behavior is a huge part of this equation. Thanks for watching!

[@bto7779]

This is such an insightful statement. And very true.

[@starfthegreat]

Which is ironic, since the majority of the population will probably not notice you're wearing a fancy watch

[@MAELOB]

@@starfthegreat these watches AP, Richard Mille, Patek are starting to get recognized because celebrities wear them. But ask one of those celebrities about a reverso or el primero and they won’t have a clue

[@DarthMalaks_Missing_Lower_Jaw]

Very well said. Also, I’m the 69th like-alright!

[@naimeva]

Loved the video, explains a lot of things. My love for watches started when I was gifted on my graduation a luxury watch; ever since, every couple of years I buy one and not necessarily the same brand. But with all the premiums being requested and no stock at dealers; they made me hate the watch brands, which never have stock. So, I bought myself an Apple Watch and all the other watches are now in storage.

[@razvanyke]

Awesome video, Teddy! This should be included in current MBA classes, 100%. On the spot, specific and easy to understand!

[@MiguelGarcia-sk5zt]

I’m an MBA student currently and I agree 100%

[@balthus9265]

A comprehensive video Teddy, one of the best I’ve seen about the scarcity theme. In my opinion one of the current problems of the market is people buying these watches as investment, like stock or commodities that you buy an hold waiting for their value to increase. Too many are taking this approach instead of buying the watch to use an enjoy it. Add that to the rising Asian market where consumers are crazy after exclusive items to own and pile up and the speculation of the grey dealers. A long time ago i decided that the only watches I’ll buy are the ones I’ll actually use in my daily life. No paying premium above MSRP and no safe queens locked on a bank. All my watches get wrist time.

[@steelstunners1862]

Great analysis, personally for me pieces from these brands have become so difficult to obtain that I've lost interest and am considering selling my collection and putting the money into other things.

[@2steaksandwiches665]

I’ve been finding more joy in the watches $1000 or less.

[@Chief_5]

@@2steaksandwiches665 just bought a Seiko automatic diver, wear it more then my submariner,

[@pedrocamacho4661]

This was and remains a very informative piece. It has also confirmed that to tell the time you don’t need an expensive watch. I firmly believe that a good quality Casio, performs better than any luxury watch. These expensive brands are more like art that you collect and hang on the wall, but are not practical to wear daily. As a collector of time pieces, I appreciate the work that goes into these luxury watches, but as daily watch user, I would much prefer something less attention seeking and more practical. Hence my absolute devotion to the Casio brand. Truly a watch for the masses with extreme reliability.

[@richarddebeer9081]

Fully agree Pedro, however I substitute Seiko for Casio.

[@agill2103]

You bought a device to tell the time. Accodring to the rich, highend swiss watches tell a story......

[@pedrocamacho4661]

@@agill2103 well maybe the rich should read more books. The stories are normally better.

[@timlo5367]

@@richarddebeer9081 sure Seiko much better to compare

[@TmaterShow]

Watching this makes me realize how lucky my dad was to be able to just walk into a Rolex store in 2007 and walkout with a Sub, and how lucky I'll be when that watch is passed down to me, since I won't have to be on a years long waitlist, or spending crazy prices.

[@xadvtrail]

So you re w8ing for your dad to die 🤣🤣🤣 wtf...

[@TmaterShow]

@@xadvtrail I mean put it like, sounds bad. 🤣

[@xadvtrail]

@@TmaterShow 🤣🤣🤣

[@Serena_9]

You dad might sell the watch before he could pass it to you.

[@stevenmark4492]

I came here to learn how to trade after listening to a guy on radio talk about the importance of investing and how he made $460,000 in 4 months from $160k. Somehow this video has helped shed light on some things, but I'm confused, I'm a newbie and I'm open to ideas.

[@bellajohn2258]

Having monitored my portfolio performance which has made a jaw dropping $360k from just the past two quarters alone, i have learned why experienced traders makes enormous returns from the seemingly unknown market.

[@bellajohn2258]

@Adams Cody Am trading with expert Bell Elizabeth, a regulated broker in UK. Met her sometime early last year at a start up funding event. She has some interesting things to say about the state of algorithmic trading today. Obviously I'm seeing the results.

[@mclarendavid5935]

@@bellajohn2258 That's impressive. Are you giving her your money or it does stay in your trading account? What's really the idea behind copying trades.

[@bellajohn2258]

@@mclarendavid5935 My money stays right in my trading account, my account just mirrors her trade in real-time. That's the idea behind copying trades.

[@mclarendavid5935]

@@bellajohn2258 Does her service available outside the UK? As her broker is registered in UK.

[@NicoLeonard]

Great Video Teddy💪

[@TeddyBaldassarre]

Thank you Nico!

[@CYC_JP]

Make Hublot great again.

[@dhavalparekh5088]

@@CYC_JP tf 🤣🤣

[@maheshthapa920]

GOD TIER

[@NTRMAN-bh2bd]

bruh

[@bbrebozo6417]

I’d point out that the “hard to get” watches are actually easy to get from grey dealers for the market price. I’d also point out that the number of grey dealers has gone up (Sharf says by 25%), suggesting this is a speculative bubble. During the tulip build mania, the bulbs were not planted, they were sold to another speculator.

[@TheGreektrojan]

Ditto with the real estate, sports cards, etc... speculations going on. Rich people have money and don't full trust the stock market so any and all "investment" opportunities are flourishing right now. Most of it isn't based on anything.

[@kronikinsomniak]

It's the same thing. A prohibitive high grey dealer price still maintains the exact same exclusivity as a barrier of entry. So in other words, no they are not "easy" to get because most people don't have $120,000 to drop on a 5711. Calling something easy to get as long as you have the money is misleading.

[@williamnicholas9979]

And no doubt some of the barriers to entry are being overcome, in the short term, by new grey market dealers borrowing the money to build inventory

[@danielz8925]

@@TheGreektrojan I think you nailed it. People are being pushed further out the investment risk curve in an environment where bonds yield less than 2% while inflation is probably several multiples of that, and stock markets have been inflated with massive gov money creation. Ppl are looking to diversify into things they may never have otherwise considered

[@GustapoGomez]

Here's a little inside info. Flippers mark up price extensively. If not sold they mark as sold. Goes to friend flipper and next person increases prices. Rinse and repeat. To the unknowledgeable public it is always "sold" hence driving up the grey market prices.

[@commonsenseplease836]

I'm an economist and I must say this is a fantastically well-executed video! Amazing job.

[@k31rifleman]

The fact that this video is amazing to an economist……tells me we are failing teaching about money bin this country

[@yfour]

How I see the top watch brands is that they are producing products as liquid as CURRENCY. The stability in resale value or even potential appreciation of watches is also one of the most important factors determining its demand. Luxury watches could also be used as a mean of money laundering. You could wear or carry luxury watches over custom without needing to declare its value and covert into cash again without losing much of the value.

[@clintonj.johnson9879]

Investing your time and effort in activities and investments that will yield a profitable return in the future is what we should be aiming for.

[@kelvinl.3875]

You can say that again.

[@kelvinl.3875]

I have achieved many things, since I started investing. It's a great example people should follow.

[@chloemorello1680]

What kind of business, or investment would you two motivational speakers suggest to your audience.

[@kelvinl.3875]

@@chloemorello1680 Anyways, I'm into real estate investing.

[@kelvinl.3875]

Real estate investment lets people grow their net worth by amassing more properties. Its a good long term investment due to appreciation.

[@docgeo1779]

Great video. I think “hype” in certain watches is the biggest factor. There are many Patek and AP watches that are brilliant, but sell for less on the grey market than list price. It’s is what it is.

[@acknasty]

I’ve been watching the channel for years now, best video by far. Well done Teddy. Love the MBA level macro/micro economics lesson.

[@theejpp]

Great video, and I absolutely agree! Too many people are upset that they can’t buy what they want and jump to blame the brand. In reality, I feel the brand is the least to blame between them, the retailers, the buyers, the resellers, and those paying market price. Rolex already makes 800,000+ watches per year, more than any brand out there, and certainly more than other brands with astronomical resale value. If they go and boost production, they will likely diminish their quality due to rushing things or hiring inexperienced workers. When that happens, people no longer feel the product is worth it’s cost, and they lose their place on the ladder. Rolex has just over 1,700 ADs, and they have 14 distinct models in their catalogue. If you do some simple math, that is 33 of each model per store, per year - assuming an even distribution to all stores of all models (which we all know isn’t the case). That doesn’t include all the watches that are given away to brand ambassadors, sports events, etc. and it doesn’t include the fact that there are different configurations of every model. To me, the biggest issue is the person willing to pay market value. We live in a world of instant gratification, and for people with more money than patience - buying market value seems an easy out to get the “clout” they’re after. If people stop paying $15,000 for a $9,000 Submariner, then the people flipping them quit going to ADs and scooping them up. When that happens, the wait list disappears, or at least gets significantly shorter, and those that really want the watch to wear and enjoy are now happy.

[@Xiris8878]

Thank you Teddy, this is by far the most intelligent and wholistic analysis that I've ever seen on this topic. Really appreciate it , and looking forward to more of these series going forward. Cheers mate.

[@Phil-p7p]

Excellent survey of the issue Teddy. My take on these Veblen goods in the watch industry is that they have now become: "An inessential , desirable item which is excessively expensive and near impossible to obtain". As such, watch lovers and collectors should simply stop buying these watches until the brands demonstrate a willingness to find a better balance between maintaining their precious long-term exclusivity and actually serving their customers. These brands are blatantly serving their own interests and not those of their customers. As such my view is that they lack integrity and should be shunned until they get their houses in order.

[@ClemsonTigerMom]

I’ve had many Rolexes over the last 30 years and each and every one of them has either gained or lost time for me. Whenever I bought a new one, I knew that, before long, I’d have to send it back to Rolex for an adjustment. With some of them, I’ve had to have them adjusted 2-3 times. This year, I decided to forget about Rolex and buy an Omega (Seamaster 600). What a difference!! It’s well made, a third of the price of Rolex, and ACCURATE!! Imagine that. Why the heck didn’t I do this a long time ago…

[@dannysimenauer5745]

I love my Omegas too! They wear well and are affordable too. My final turnoff about Rolex is that the entry level Oyster Perpetual with the colorful dials are unavailable.

[@ClemsonTigerMom]

Same! Hopefully, the other brands making great watches will benefit. Rolex should be paying attention….

[@markusackermann1961]

My wifes rolex bought in 2018 gained ca. 15 minutes per day after two years, it was fixed with a new two years guarantee. But should this even happen with an expensive watch? One of my so-called plastic watches, an automatic Swatch from 1994 has obviously never seen any maintenance (these watches cannot be opened) and is now gaining up to 10 seconds per day after 27 years. Other automatic Swatches of a similar age have a biger deviation, but none more than 45 seconds.

[@ClemsonTigerMom]

@@markusackermann1961 Not surprised…. Swatch uses ETA movements. Until recently, ETA supplied their mass produced movements to many luxury watch makers, including Cartier, Breitling, and Omega. I have a 3 year old Tudor with an ETA movement and it runs better than my Rolexes.

[@markusackermann1961]

@@ClemsonTigerMom Yes. I have worked for ETA in 2003 and in the section where the Swatch watch is produced (the only watch which ETA produces entirely in its factory except the straps). I was a financial contoller in the development dept. I left after one year because its far from where I live and because though they treat their employees well they expect a lot of discipline and are somewhat bureaucratic. I know what quality tests the movements and the entire Swatch watches are subjected to, even the FlikFlak modell for children. I have seen this with my own eyes. They are unforgiving and very surprising if you think of the selling price of the Swatch brand. ETA is an extremly efficient producer. Still we can expect from luxury producers to maintain the same or higher standards for their inhouse produced movements as well?

[@stevedelgado9128]

Love luxury watches and as a high school economics teacher, I appreciate the blend of the two topics! Great use of examples and flow of graphics! Also, I think you are spot on with your take on younger consumers. By creating the extreme exclusivity but "devoid" of the "tech" those younger users are use too, they risk losing future consumers to the market. The students I deal with use their phone as their watch and many would have difficulty telling time without a digital display!

[@bighands69]

I do not buy into the tech argument that people claim young people are not interested in watches. Even before the smart technology came along young people were not buying watches on mass but they were also not buying a lot of other things as well. I suspect it has more to do with the fact most people when they are young cannot afford to buy a lot of things. And therefore have no interest in many of those things.

[@stevedelgado9128]

@@bighands69 I work with a lot of 30 somethings and all I see them wear are apple or samsung watches. Why, because that's where they check their text messages. I don't look at my phone all day most days. They are constantly! Different mind set. I focus on what I'm doing. 30 somethings are always looking at texts, snapchats, instagrams, news etc. Just saying!

[@MinuteMon]

Thanks so much for this video Teddy, one of my favorite videos you’ve done so far. You give clear rational points on all sides involved in what’s happened in the recent years of luxury watches specifically steel sport luxury.

[@kg-dfw3657]

Love the Thorstein Veblen reference - Conspicuous consumption! Perhaps the prestige watch makers may decide to cut out the ADs and begin to sell their products all themselves to control distribution and pricing better as well as maximizing their profits. They would be following the airline industry (seen many travel agents lately?) and pro sports teams that control ticket prices that vary according to demand (dynamic pricing).

[@mdleweight]

I was fascinated with watches starting at age three, but social media and the internet have contributed to my personal interest and access to luxury watches.

[@ronaldchampagne3625]

This is the best KZbin video on watches I’ve seen all year! Thank you for putting this together. The point on future generations who are not growing up with the need for watches is key for all watch brands to address. This was addressed in one form years ago with the Swatch watches. I suspect the situation today and going forward will be much more grave.

[@pw7900]

Hey Teddy. Great video. I think you hit the nail on the head when you said these luxury brands manage for the long term. As a result I think consumers are now looking to other brands when they can’t find the watch they want from Rolex or Patek. Zenith and Tutor are two brands I think are well position to gain market share from this lack of supply phenomenon coming from Rolex and others.

[@ralphimbrogno9239]

GREAT video. This was a fantastic lesson in applying economics and marketing to the watch market. Thanks. Cleveland rocks!

[@mattwall3267]

The fragility of the economics of Rolex is fascinating tbf, it’s less about the usefulness of the product and more about the potential investment that it could deliver. Buying a Rolex these days is almost the same as buying a share in the Rolex company itself, the market is held together solely by the belief that demand will continue to rise. Honestly really interesting, would love to see more videos on the economics behind it as I think Rolex is a rare case, not many items have this type of sustained hype about them. Great work Teddy!

[@martinbacon847]

There are 1,719 new Rolex GMT Master IIs for sale on Chrono24. Meanwhile, I haven’t been able to buy one from my AD for 2 years. I can only assume, that some ADs are selling out the back door, but who knows?

[@jeffhirata]

This is one of the most thoughtful and accurate descriptions of the current watch industry/culture! Very well done video!

[@colewalliser]

What do you think the exhibition pieces are going to do? Annoy or appease?

[@gmakcon]

One key reason is AD’s are first offering these watched to their existing customers, and these customers are consuming all the steel watches and putting it in their safes unworn. When the market tanks these watches will flood the market. I look forward to buying a SS Daytona for $12k again.

[@jaybee4636]

If it tanks. I'm praying....

[@Connor-lc7gj]

Why would the market ever tank? Supply and demand man, it’s never going to happen!

[@mikhaeljoey]

not going to tank

[@HarvestingTV]

@@Connor-lc7gj Of course its going to tank, there are cycles, just like everywhere in economics. Demand is at peaklevels right now, also because of strongly inflationary tendencies. After Rolex and Patek arent the hot flavour of the Instagram-Month anymore and markets as a whole will correct, while expanding monetary policies make way for the return of actual interest rates, luxury watch markets will cycle back to a normalized demand with tons of safe watches flooding the market at the same time

[@pattinsr]

@@HarvestingTV wishful thinking...

[@cousinslim]

Great video essay. Editing done very well and the script was amazing to hear.

[@avayu2289]

I think those who espouse nouveau riche shallow status mentality have ruined owning fine timepieces like Rolex and Patek etc…for me. In my family, these time pieces were earned at career and life milestones NOT purchased just for show. Also if you are a collector, these things also should be done with discretion for personal reasons. At the end of the day, there are knock off fake or copies which cost very little to “show”, if impressing the ignorant masses is what one is after.

[@Nefville]

This is such a good video, AD's should just have it playing on loop when you come in. Put a TV in the Rolex case and just have this playing because this is doing a lot of the hard work that the salespeople have to constantly do, ruin other's days. And I don't mean that in a bad way, its just the crazy times we're living in. Great job, this is top notch.

[@hlee2]

Would be also nice if they could show their preferred flipper list, oops I mean preferred client list

[@WestCoastAce27]

Selling R’s at MSRP is hard? Which planet are you on? Only the little dress watches. Which is what they try to BS you into buying to build allegiance.

[@Nefville]

@@WestCoastAce27 Yeah you should read that comment again and actually listen to what I'm saying. Or maybe you didn't click "Read More", either way you take a chill pill, these are luxury toys we are talking about.

[@WestCoastAce27]

@@Nefville wow, don’t cry. I’m just laughing that you think selling an ultra hot luxury item is hard work. Please provide proof. And don’t gaslight - I never said these were necessities.

[@Nefville]

@@WestCoastAce27 Here is what I said: " this is doing a lot of the hard work that the salespeople have to constantly do, ruin other's days". I'm not referring to selling the watches as hard work, just constantly having to crush people's dreams, which most people would agree is not easy. Now if someone said selling Rolex's is hard work, I would disagree too but that is not what I said. Now, I have seen you around, I have probably even talked to you before in some comment section or livestream. If you are offended, then take a different approach. I'm am fine with criticism when it is relevant and considerate, neither of which your comments have been.

[@skzion2]

There's another element, with an unknown relationship to the other elements: bubbles. The most ridiculous and well known is the tulip bubble some centuries back. Tulip bulbs were bidded up incredibly, with small differences making a huge difference in price. This "investment" ultimately ended with incredible speed. That applies, certainly, to the flippers of watches. On average, watches are poor investments, as, even if they appreciate, they do not do so as well as stocks. They are also not diversified. This whole thing will tank. Meantime, I am offended by watch companies requiring me to prove my merit and then wait a long time. Who are THEY?

[@JayandSarah]

For sure. One thing he didn't touch on, was the organized crime element. Crime and luxury goods are often in bed together.

[@romanmichaelhamilton8729]

@@JayandSarah Precisely just like this Patek that sold for 11 times retail price. Just another way to hide money.

[@romanmichaelhamilton8729]

Yes, precisely. With the upcoming energy shortages in the EU (and Switzerland) as well food shortages all around the globe, the luxury watch bubble will absolutely tank. Then adding the issue with Joe the Hair Sniffer mandating a disastrously evil "vaccine" and you have the making of a global catastrophe. We'll be lucky to keep the lights on not to mention the needed staff to man and operate those tricky nuclear power plants.

[@PhilbyFavourites]

@@romanmichaelhamilton8729 disastrously evil vaccine….. Wearing a monstrously expensive watch on your wrist and “flexing” your wealth like a twat is unlikely to ensure your safety in the longer term……..

[@Randomguy86204]

You can’t get them because scalpers have shady agreements with dealers and offset some of their profits with them. A $35k Patek brand new goes for about 4x the retail cost, you think a store manager earning 50k/year will not want some free cash on the side? Nothing more. Nothing less. There is no need to complicate this topic.

[@davidofglenbrook4487]

It’s more complicated than that. For example, people are willing to buy a new Submariner Date for $15,000 in sufficient numbers to clear the market of them. Therefore, the actual market clearing price for new Submariner Dates is $15,000. What this means is that Rolex should simply increase the price of Submariner Dates to their market clearing price ($15,000) and they would be readily available at ADs. If Rolex is to be criticized for anything, it’s for how they ignore market realities by maintaining artificially low MSRPs to the detriment of their retail dealers. Ditto for AP and Patek. So sorry, but the law of supply and demand rules and retail prices for these models must rise to solve this problem.

[@TeddyBaldassarre]

There is no question shady practices by some dealers have caused prices to rise but saying that is the only thing happening here is an oversimplification. This all starts with production and human behavior. Dealers selling into secondary channels exacerbated the problem, but it did not start the problem. Also, a person who owns the watch has nearly just as much temptation to sell into secondary market channels and much less to lose. This entire phenomenon is a small window into what our society has come to value. All sides fueled this storm but the production is what drives everything else. Even if you played musical chairs and sold everything right through secondary market channels, regularity in production would oversaturate those channels and prices would come down. I think brands are going to need to step in at some point and do something with laying out rules for allocation or working more formally with a list, but the truth is, these brands don't want to have to do that.

[@2b_0r_n0t_2b]

as someone who is in the "other world" this is 100% accurate. The author has nailed every point, congratulations..

[@gregs.2679]

When I was in college in the early- to mid-1980s, I was looking at an Omega at a jewelry store on Kansas City’s Country Club Plaza, and a middle-aged gentleman and his wife next to me were examining a Patek Philippe Nautilus. I already knew what Omegas cost in those days, but I was curious about the Patek, and since the couple seemed afraid to ask, I did for them. The store owner said $6000. The gentleman remarked, “I could buy another boat for that” as he handed the watch back to the jeweler. If he’s seen what used ones go for now, he’s probably kicking himself. By the way, I still think $6000 is too much for a watch with no complications other than a date window and a bracelet held together with pins. That something that even a lower middle class college guy saw as unworthy of the Patek marque is now going for $37K+ just confirms that there’s no accounting for taste . . . especially among people with more dollars than sense.

[@marcgirard7551]

Thanks for this discussion, Teddy! In my opinion, its a great summary of everything wrong with the watch world and a chunk of what's wrong in the world generally in one video. I already wasn't very interested in Patek, Rolex, and AP and this flex culture and flash is a big part of the reason why. The brands are tainted by these charletains in my opinion and the sad part is that they brands are then catering to them on top of it. I fear Omega is getting pulled into this, unfortunately, because I've always been a fan of theirs and viewed them as superior to Rolex. I hope not. Honestly, I prefer Tudor's designs to current Rolex and see just way more value in brands like Nomos, Tudor, and Grand Seiko than any of the 3 above and we get to pay attention to watch making and engineering and design with them instead of flexing.

[@WillertMorris]

Perhaps the second tier will eventually elevate in price a s behave like the first tier watch brands discussed . We don't buy a watch to tell time. It is an accent piece .

[@idid1866]

@@WillertMorris You mean "you," don't buy watches to tell time!

[@bighands69]

@Marc Girard No body out there things Omega is superior to Rolex.

[@MaurizioAzzalini]

Outstanding video! The most thorough explanation on the current watch market developments. Bravo!

[@garym2604]

When you go to non-authorized Brokers, 24/7 they have any watch you want... they have a ton of watches for you if you are willing to pay way more than MSRP. Basically, there is enough supply for the demand. This bubble is created by authorized dealers so they can backdoor their supply and sell through their secondary retailers and make an extra profit.

[@cjack202003]

Rolex should mandate it to be one watch buy limit per customer, not one of each model, but one watch total, per month. This will prevent greys from buying up all the inventory. To track it, they will run your information in the system, and if they see that you made a purchase already, you won't be allowed to purchase another watch until the following month.

[@bighands69]

@@cjack202003 You are all full of dirt on this issue. There is a supply and demand issue. Rolex is not interested in upping the production as they probably are not interested in short term market fads.

[@justinbarnard8749]

If there wasn't scarcity they couldn't sell for more than msrp

[@LuisAlvarez-zk1go]

Good video but it does not address one of the most important questions, why the brands do not increase prices to reduce margins for middle men and so AD go back to deal directly with consumers?

[@harryhirsch3637]

First of all, kudos to you, Teddy, for laying complicated economics out so simple and easy to understand. When it comes to watches, i don't care for these luxury pieces anymore because the moment they are hard to get, counterfeiters start selling more fakes. That completely brakes exclusivity because e.g. Submariners are everywhere even on the wrists of ordinary schoolboys. So it's no big deal anymore. Designwise there are lots of great ideas and layouts to admire, but when it comes to buying an outstanding piece for me, brands like Tudor, Sinn or Fortis come to mind.

[@tackontitan]

The "Annoyed Consumer" segment was spot on for me. I got fed up with waiting for Rolex to call me and have gone to other brands. Omega, Blancpain and IWC have been more than happy to take my money over the past 2 years. I don't think I'll ever buy another Rolex even if they begged me and had a full pallet of steel Daytonas.

[@cjack202003]

Bullshit. If you walked in an AD just to see and to your surprise, they had the exact model you been looking for, just chillen right there collecting dust...you would buy it.

[@JC-hu3yj]

My condolences 💐

[@tackontitan]

@@cjack202003 at this point I won't because fuck hype culture.

[@roberthiers5606]

@@cjack202003 Your wrong. There are to many other great watches I would rather have. Example; purchased a Vacheron Overseas Blue dial last year about this time. Fantastic luxury sports time piece. It has now about doubled in value. Did I flip it? NO! The love of my watches is not for sale.

[@cjack202003]

@@roberthiers5606 Suurrree. That's what everyone says when they can't get...hard to get pieces at retail. You and everyone else is saying that, because the SS you would buy is not available at retail prices. Guarantee you if a Daytona, GMT, or Submariner was available at retail right now...you would get it. Let's be honest, people are only looking at other brands because the Rolex they want is not available at retail prices. Of course, there are other great brands, but people are only looking at other great brands because the Rolex SS they really want is not available at retail prices or at ADs.

[@TajCars]

This was extremely well put. Prior to the pandemi, I was heavily trading in the Rolex gray market. Now I’m almost exclusively in the custom Seiko market because my Rolex/Tudor rep flips the watches themselves.

[@bluebox303]

The irony is that for a brand like Rolex, there's a disconnect between what the brand presents to you and what you see. Almost nobody on Instagram presents photos of them using a Submariner to explore the ocean deep, a Daytona to compete in a race, or an Explorer II to go spelunking. By appealing to a ... different clientele, Rolex is destroying its brand because its watches will never get sold to the people who helped build the image they use today. Would Paul Newman have gotten a Daytona if his wife had to wait over a decade to get one? The brand may not have given in to the temptation to create vintage remakes, but their watches will always remain the timepieces of yesterday - simply because that is when their stories were written.

[@bluebox303]

@Nigel Molesworth Inclined to disagree. One of Rolex's themes throughout their marketing is the story of a person *rising* to excellence. When these stories fade, when the general populace forgets about Paul Newman, Steve McQueen, Jacques Piccard and all the others, Rolex will lose a decent chunk of the appeal that makes it unique. Unless something is done, it's only a matter of time before the story of the crown, one of achievement, struggle, and accomplishment, is eclipsed by its association with wealth, opulence, and status.

[@TheSandipDev]

Paul newman wasn’t using his daytona to race. And that disconnect you are speaking of is actually pretty intentional. Rolex is selling you a lifestyle, an idea, an image. It knows that almost no one in its clientele is going to use a submariner to dive (besides today divers use dive computers) or explorer to climb a mountain. If they wanted that, their entire pricing, retail channels and availability would be very different. Its the same with say a buggati or any high end. Most rich guys buying those will never use the car to anywhere close to its limits. Rolex isn’t destroying the brand, quite the opposite. If you don’t agree, just look at the secondary market prices. You sir have no clue what you are talking about.

[@ThatBoyMGee]

Very good point. The brand Rolex just isn't the same anymore it was back then. Now it's a fashion watch brand. Back then it was a tool watch brand. It is what it is.

[@varanid9]

@@ThatBoyMGee Yeah, back in the day, I bought a Rolex subbie and wore it through jumping out of helicopters, diving, skiing, mountaineering, even car wrecks and fights. I always just considered it a tool and, when I discovered how much better quartz watches were, I sold it. Years later, I bought a GMT Master and found it to be a rather soul-less fashion watch any more. Now I have no doubt it would still have performed as well as my Subbie, but that "feel" was gone, it had now just become an expensive piece of men's jewelry. I recently got an Omega Seamaster and, though I like it better than that GMT, I think that they're going the same route as Rolex. I think you're right, this ballooning of "luxury" watches may be the final flare before burn-out. I mean, how long can you keep an obsolete tech popular as people become more and more knowledgeable about this stuff?

[@thegraciefighter102]

I’m juts on the way to the moon wearing my Speedmaster…. Biggest problem with the community is the amount of spoiled whiners complaining and throwing their tools out the pram - as we can see here

[@AlfredoRGuillen]

It is very likely that people paying crazy figures for a watch that was several times less expensive some years ago might be seen now as fools rather than intelligent and exlusive buyers, so particularly Rolex has to think if they want their clients to be seen as new rich fools. Very...very dangerous move.

[@macmerc1556]

Spoke to a Rolex AD retailer whilst on holiday this week and they said they make 1 million watches/year and estimate there is currently a demand of 40 million buyers particularly from the Asian market. Daytona - 10 year+ wait, no waiting list available Date Justs - 2-3 years, no waiting lists available. They only had 3 (not particularly attractive) watches available in the whole shop for sale.

[@t0rnt0pieces]

The problem with the "they're not making more watches so they can maintain prestige" theory is that brands like AP, Rolex, and Patek were still considered prestige luxury brands back when you could walk into a store and buy one.

[@MrShinobi797]

Enjoyed this type of content Ted...a slight twist from the norm. Keep up the Excellent work 👌🏽

[@kentan8536]

I just got the AP the other day, wow its a long wait. It just looks stunning, the excitement when I wore it, its just rushes to my core emotionally being. Im suddenly whole, I feel secure, I feel successful, and proud of myself... I just stands out among others. Its not every day I got a Pagani Design you know.

[@andrevanrensburg3639]

Thank God that I am not so shallow!

[@pettisk28]

Well said Teddy, thanks! I believe that that there should be more direct to consumer selling by the luxury watch makers. I am not sure what value the ADs contribute in the information age that we are in today. I would love to make my next purchase directly with AP or Rolex, rather than a secondary seller!

[@nelsonenrique3]

Great content. I really enjoyed watching this. Interesting to see if watch manufacturers decide to go with the direct to consumer business model. I think this should be carefully thought and use the sneaker industry as an example to avoid the same problems they did (such as bots) when using this type of business.

[@TheDobbermn]

Yep, just like the Xbox. You're just going to have bots buy everything up and sell everything at 2-4x and up on Ebay and nobody will get anything for retail.

[@nicolacaprirolo2958]

There's a company that solves a lot of these dilemmas, including wait lists and supply shortages. Have you heard of 4K? They have a bunch for sale.

[@seamusbreen8209]

Seems cool, but are they legit?

[@digitalxp4]

What's the exact name of the company ? (I can't find it online)

[@Santor-]

Oh yeah, you mean like MVMT and Daniel wellington? Sure, you get great LUXURY 4,000 carat gold watches with genuine printed on turbillon, with Italian, lasagna fed cow leather, at a disruptive, no middleman price of only 199.99! Did I mention its LUXURY? LUXURY right down to the 2 cent battery and plastic battery holder.

[@providename]

Another aspect which is responsible for the madness is the heavy money printing undertaken by central banks since 2008 and more recently as a response to the pandemic. Consider the fact that almost 40% of USD in circulation have been created since Feb 2020. With this level of inflation and currency devaluation many educated and wealthy people are looking for scarce, hard assets to park their money in as a store of wealth. Look at the price chart of almost anything desirable and scarce (prime real estate etc) and you will see the same phenomenon.

[@JayandSarah]

In terms of absolute dollars, you could not even park a remote FRACTION of that in "luxury watches". More of what you are seeing here is market manipulation. A much more expensive version shall we say, or junior sitting in his parents basement buying releases of jordans.

[@providename]

I agree that the watch market is small but it doesn’t mean some of those excess dollars haven’t gone into watches. In fact it proves my point that a tiny amount of this additional liquidity has flown into the watch market which is seen as a niche, alternative investment by many and has had a huge impact on prices.

[@JayandSarah]

@@providename yes but the entire segment is not up. Real estate. Up. Stocks Up. Comodities Up. Watches? Not up. Only a very small few. IT's market manipulation, intentional or not. There is no significant demand for Cartier bracelets in gold.

[@providename]

@@JayandSarah The brands covered in this video which have the highest demand to supply dynamics are up. There may be elements of manipulation but that also applies to other markets. If there wasn’t as much liquidity in the world I don’t think prices would be up as much as they are.

[@bighands69]

@@providename I would have to disagree with your argument that the money supply is causing the problems. The current issue with economies of supply has more to do with the self impossible production limitations placed on western economies over the last 30 years. The current just in time model that is global is not under the control of anyone government and right now it is all coming to a bottleneck. ANd when that bottle neck bursts we will see what comes out the other side.

[@tariqabudhabi]

Thanks, Teddy. Eventually, after really fed up with getting any of the 3 Star Watches you mentioned, I've settled for an Omeag, Alinghi Edition. Omega is and always has been a trustworthy watch besides Rado which I own, too.

[@MrVoayer]

Knowledgable, elaborate and plausuble explanation of current state of the affair. Quite probably the best of its kind on YT ! As for the solution... Internet and social networks pushed it all... beyond repair !

[@dakotaxu4792]

One of THE MOST comprehensive eye opening videos on the subject ever done!

[@male272]

Factually, the wealthy are seeking all kinds of 'real Estate' to hedge against inflation. Yachts, waterfront property, jewelry, ingot and...watches. It isn't so much that they did not purchase these things before...it's the stress on the market that those who can afford these products are now seeking multiples. Take note of this. Trickle down economy is not relevant to growth...but it is relevant to decline.

[@MartininitraM]

After lusting for a Rolex Explorer 1, having the patience to wait in line for it, but been met with the regular AD “buy shit you don’t want and maybe you get an allocation” I’ve totally changed my mind. I will find a far cheaper watch I lust for and forget about the holy trinity.

[@peterlorimer3552]

Rolex isn't regarded as a member of the "holy trinity.". I expect it slipped your mind in the haste to add your comment the sentiment of which I totally agree with. I couldn't afford to go near the "holy trinity". Vacheron Constantine, Patek Philipe and Audemars Piquet. Please forgive any typos as well as not being able to afford such a piece Ive most likely spelled their names incorrectly too. Right it's back to the jolly old Vostok catalogue for me! Toodle Pip old bean.

[@dhanipersaud6227]

Rolex makes nice watches but not part of what most horology enthusiasts would consider the holy trinity. Horologically speaking, they're probably at least a couple levels out of that realm.

[@bighands69]

@@dhanipersaud6227 I do not think he is saying that Rolex is part of the anointed trinity.

[@dhanipersaud6227]

@@bighands69 Not sure about that. Especially, given the last sentence they wrote in their post.

[@autothrust330]

Totally lost interest in watches, when people started flipping for quick money, and people who just use it for flexing on social media. The current hyper inflated price is just a total rip off. I hope the price bubble would burst.

[@AG-nj3ky]

You hit the nail on the head. Same for me. I started collecting in 2010 were the market was normal but i have lost interest over the last years. Only the stupid waste their time to go through all the hustle. I sit nice and comfortable with my 5 luxury watches and enjoy spending my money on many other great things life can afford. I appreciate the 20min video but i can give you the reason in a nutshell. It has to with the explosion of attention on both youtube and IG over the last 10 years. People need to buy these things to show off on their page, talk about it etc to attract more viewers. The crazier you are the more views and the more money you generate. Its the same principal as people eating diner at nusret for 10k. Its not for the food, experience or anything. Its mostly to take pictures for social media to generate views and money. Thats todays reality and i am not the idiot who will support them in this.

[@dwtbrown]

Thank you Teddy this is very informative and well done. I had already decided to go with a new Omega Seamaster rather than another Rolex, in this case the GMT Master ii. At some point I felt like Rolex does not want me to buy the watch, or the Yacht Master ii, and I never like to go where I am not welcome. Not to mention that the Omega movement is fantastic and in my opinion underrated. I see from your video that my participation in the market is something that is not only know to Rolex, but in fact created synthetically for market effect. While bit disheartening, it does solidify my decisions. Cheers to you Teddy, d

[@tuffin2]

Best watch video I've seen for a while! Love that you get the whole picture and can articulate it to us. Not convinced every watch KZbinr could explain these concepts!

[@Brandon.Murphy]

Who would’ve thought Teddy would be teaching us econ

[@MagnumMuscle1000]

The Submariner was, until recently, a mid-tier luxury tool watch. Rolex apparently decided to move the line to pure luxury. Historical prices adjusted for inflation and accounting for better build quality and materials, the Sub should cost about $3,500. Rolex apparently wants to keep the prices high in the name of exclusivity. Omega and Tudor fill the spot the Sub once occupied quite nicely.

[@gasgod7404]

You’re living in the 90’s

[@dereksbooks]

Rolex is an exception. It can charge even a lot more than it currently does, so why shouldn't it? It's a business.

[@suitcafe]

The exclusivity lasts much longer over time, through generations of buyers. That is much more valuable than pumping out more product year after year. Keep it exclusive you keep prices high, however, you MUST keep the quality top notch otherwise the brand loses credibility. Luxury clothing brands are notorious for this when they get greedy and start over licensing.

[@hb1338]

In my experience, the quality of luxury clothing is usually very low - the same cannot be said of watches.

[@suitcafe]

@@hb1338 That all depends on what you consider luxury. The top suits in the world that are made the best meaning by hand and have the best fit are Canali, Kiton, Brioni, Corneliani, Belvest, D’Avenza, St. Andrews. All are Italian. I do not include a designer as Tom Ford because he is not producing anything. He does not own the factory as the brands above which are mostly family owned for many years. Brioni was sold to Kering. Tom Ford is made by Ermenegildo Zegna. You may have heard of Bijan. One store in Bev Hills & one store in Las Vegas. Suits start $10,000. A tie is $950. But he makes nothing. He buys the D’Avenza with his own name and ups the price 10x. Excellent quality because it is D’Avenza but the price should be more than half. However he made his big success in perfume & cologne. Having the top two worldwide for many years. His men’s fragrance was the Michael Jordan. Watches are similar in that only a few brands make their own movement. Patek, Rolex, I think AP also. Those are the most desirable. Hope that helps explain it. Stay safe.

[@bighands69]

@@hb1338 It really depends on that brand and what is meant by luxury clothing.

[@yoshanthraaj5228]

Can’t remember being so intrigued on a topic for 19 minutes, amazing stuff.

[@vicrod5]

You knocked it out of the park! Your content is generally very good but you managed to do a conprehensive yet concise, very informative video.Well rone