Rolex has been the world’s dominant luxury watch brand for over 50 years now, but they haven’t always been hard to buy at retail price. Since 2019, demand for Rolex has been extraordinary, to the point that the “Rolex wait list” has become legendary (and often memed about). But what is Rolex’s supply chain doing to address the issue? While watch enthusiasts frequently complain about “artificial scarcity” and joke about authorized dealers keeping watches in safes, Rolex insists that the undersupply of their product is not an intentional strategy. Is the Rolex supply chain really pushed to its limit? Can we expect a new Rolex factory in the near future? We’ll address all of that below.
Wait List Woes: Is the Rolex Waiting List Real?
Let’s talk through what we know about Rolex’s manufacturing and distribution strategy to understand the development of the Rolex demand-supply imbalance in recent years.
In this article
Why Doesn’t Rolex Increase Production?
Short answer: they are. A new Rolex factory will likely increase output significantly by 2029, and three new temporary facilities will likely be online by 2025. Rolex told Bloomberg that “the new production site in Bulle, just like these three temporary installations, will allow Rolex to expand its production capacity, support growth and meet ever-increasing demand.” Don’t expect Rolex to double or triple their supply, though–these developments might only increase output by 25%.
While Rolex’s list prices are higher than most competitors producing watches for similar uses, the company has implemented an integrated manufacturing process that uses in-house resources for much of its production. For example, the gold and platinum used in Rolex’s precious metal models are produced at Rolex’s small in-house foundry and made to be anti-corrosive and to polish to a very high luster. Oystersteel – Rolex’s durable and highly polishable stainless steel – while not made in-house, is proprietary, as are their fairly recently introduced and virtually indestructible Cerachrom bezels. This all said, we haven’t heard about a materials supply shortage – can’t Rolex just buy more gold and steel and ceramic and make more watches?
What’s more, as you’ve probably heard, Rolex’s parts manufacturing is largely automated, with watchmakers assembling the timepieces with care and precision – “hand-made industrial” it’s sometimes called. This suggests that the company likely has more flexibility to tighten or loosen production quantities than its pure hand-made luxury manufacturer competitors such as Patek Phillipe, whose production depends almost exclusively on the work of skilled laborers.
While we can theorize that it may be possible for Rolex to increase production, Rolex has confirmed that it has no intentions of ramping up output at its existing factories. In a rare public comment, Rolex addressed the global Rolex shortage in a Yahoo! Finance article:
“Our current production cannot meet the existing demand in an exhaustive way, at least not without reducing the quality of our watches – something we refuse to do as the quality of our products must never be compromised. This level of excellence requires time, and as we have always done, we will continue to take the necessary time to ensure that all our watches not only comply with our standards of excellence, but also meet the expectations of our customers in terms of quality, reliability and robustness. Rolex does not compromise on what it takes to produce exceptional watches.”
The Company’s claims about absolute quality in its field are valid and proven. The movements, cases, and bracelets of Rolex timepieces are virtually flawless. They represent a standard of quality that so many other companies try to achieve. Even so, a handful of defective Rolex dials known as “error dials” have made their way to the hands of consumers in the past few years, and to some, that’s evidence that Rolex’s QC is being pushed to its limit already.
Is Every Single Part of a Rolex Made In-house?
All except two: the hands and the crystal. Rolex is notoriously secretive but supposedly they still outsource their sapphire crystals, and E. Fiedler is rumored to be their hand supplier. Every single other part of a Rolex watch is made in-house.
It should be noted that, while Rolex’s movements have been thought of as “in-house” for as long as watch collectors have used that term, the Rolex movement factory in Biel/Bienne was formerly a third party called Aegler SA. Although Aegler had already been exclusively supplying movements to Rolex for decades, Rolex didn’t formally absorb them until 2003.
Does it Really Take a Year to Make a Rolex?
Well, Rolex did make that claim, but it’s probably the result of some creative “time accounting.” Considering the hundreds of parts in a watch, adding up the time for various phases of testing etc, sure, it takes a year to make a Rolex…but it also takes a year to make a million Rolexes. Rolex, like any manufacturer producing millions of units, makes products in batches. That’s why you might occasionally see clusters of users on watch forums receiving their Kermits around the same time, and maybe tons of people get calls for Air-Kings the next week. Rolex maintains an excellent standard of quality, but make no mistake: they manufacture a very high volume.
The Endpoint of the Supply Chain: Rolex Boutiques and Authorized Dealers
Like everything Rolex does, not much is publicly known about its distribution strategy. We do know that there are two main types of stores in the Rolex distribution system: the traditional multi-brand stores (called Rolex Authorized Dealers or ADs) and the newer mono-brand stores (called Rolex Boutiques).
Both types of stores are generally owned by independent entrepreneurs or jewelry chains. Historically, Rolex only actually owned one boutique–the one on Rue de la Fontaine in Geneva, formerly known as “Chrono-Time.” But in August of 2023, they announced their acquisition of Bucherer/Tourneau, which represents about 4% of Rolex’s authorized dealer locations worldwide. While they still depend on that dealer network for the vast majority of their sales, Rolex SA can no longer say they are entirely uninvolved in the retail side.
Rolex Buying Guides:
Rolex Submariner Price Guide
Rolex Daytona Price Guide
Rolex Day Date Price Guide
Rolex Datejust Price Guide
Rolex Sky-Dweller Price Guide
Rolex’s Distribution Model
However, what Rolex customers often don’t know is that the Rolex distribution model is very strict – Rolex delivers watches in batches, and the dealer has no control over how many of those are in-demand models. The AD won’t even know what Rolexes they’re receiving until shortly before the shipment arrives. Dealers can’t just buy all the models they want in the quantities they need. If they want a particular hot Rolex sports model for a client, they simply have to hope that reference is in their next shipment–which usually comes every week or two. They might get a few coveted steel models, but they’ll almost certainly get plenty of Datejusts and solid gold models along with it.
Not all Rolexes are on the request-and-pray plan, though. Rolex has increasingly started to allow proper ordering of some models again (no sports models), although it never comes with a guaranteed timeframe. But if you want a Rolesor Rolex Datejust 36 with a particular dial and bezel, most AD’s should be able to make that happen within a few months.
According to a confidential Luxury Bazaar source who is a Rolex Authorized Dealer, the wholesale price of any Rolex model is about 65% of the retail price. This means that to a Rolex Retailer, selling a Yellow Gold Submariner Date is worth about 4x more than selling the coveted steel version of the same watch. Thus, AD’s understandably tend to “reward” big-spending customers with favorable allocations for steel models–the same ones the moderate-spending customers want the most. This is part of what contributes to the common man’s struggle to get the most popular Rolex watches.
Are Grey Dealers and Flippers Hoarding All the Good Rolexes?
No, not really. Grey dealers and watch resellers aren’t in the speculation business; it’s a volume business. We’re not giving away any trade secrets by telling you that when Luxury Bazaar buys a watch, the goal is to sell it as soon as possible. Watch resellers buy at wholesale market price and sell at retail market price, irrespective of MSRP. Greys react to supply and demand; they do not control it.
More on Watch Resellers: What is a Grey Dealer?
Sometimes, watch enthusiasts get frustrated seeing 20,000 brand new Rolexes listed for sale on Chrono24, but keep in mind that represents less than one week of Rolex production (and many of those listings are not truly in stock). Some people see a window full of Rolex sports models in the NYC Diamond District and think “hey, this is where all the Rolexes are going!” Well, it’s where a certain percentage of Rolexes are going. But there’s a massive number of Rolexes being sold, simply, to customers that want them every day. Spend ten minutes in any authorized Rolex dealer, or even a secondhand watch store that sells Rolexes, and you’ll see the demand is very real. People come in, and they ask about Rolex. Again and again.
Loading, please wait…
Rolex Buying Guides:
How Does The Rolex Waiting List Work?
How to Spot a Fake Rolex
Guide to Rolex Serial Numbers
How Many Links Does a Rolex Come With?
How to Sell My Rolex Watch
