Are Today's Rolexes Overpriced?

[BristolCavendish]

All things considered and taking into account that there are many outstanding watches in the -$5K range.

Some attribute the exorbitant pricing to Rolex SA's extensive and costly marketing program. Others say one is strictly paying for the name and visual recognition.

At one time, a Rolex was affordable (for those who really wanted one) by either being frugal or eliminating other miscellaneous/unnecessary expenditures. It's a seemingly different story today as $8-10K+ represents a bigger chunk of change even when accounting for current inflation and higher salaries/wages.

A co-worker bought his 1675 back in the mid-1970s while working at a minimum wage job (about $2.00/hour). It took him roughly six weeks + some overtime to accrue the necessary funds. Today at minimum wage (e.g. $5.50/Georgia to $11.50/Washington), it would take close to a year's wages (and that's not even allowing for basic living expenses).

Over the past few decades, Rolexes have become an 'elitist' commodity rather than a somewhat affordable high-end wristwatch that was once realistically and readily attainable by the masses.

Those days are over.

[Sub King]

The drastic price increase occurred because the meaning of a Rolex shifted. It went from being a solid tool watch to being a luxury status symbol item. However, all things considered, I think Rolex remains a good value even to this day.

How many other luxury watch brands have as rich a history, designs that are as iconic, durability that is on par, and the innumerable other excellent attributes that Rolex watches have, for the same cost as a Rolex?

Let’s take Audemars Piguet for example: They charge for a stainless steel watch what Rolex, the most well-known and prestigious (in the eyes of common folk) watch brand in the world, charges for a solid 18k gold watch. If you wanna talk about overpricing, I think AP and PP are better brands to look at!

[TimeToWatch]

An item's worth as much as one is willing to pay. On that basis, I would say Rolexes are priced just right. I don't really understand the point of your post.. Of course you can have a fine watch for much less than a Rolex. It is, after all, Rolex.

[rebel_1]

To my knowledge, the US Federal minimum wage is $7.25 / hour. While I’m not disputing Rolexes are expensive, the minimum wage position doesn’t hold as much water as you think. The way the US is set up, minimum “compensation” supersedes the minimum wage via wealth / tax redistribution. IMO, the redistribution stops somewhere around the $40,000 / year mark.

As for the price of any item, the manufacturer has to include in its overhead All the costs of the sale including advertising.

I’m ok with the price of a Rolex personally. Other brands, forget about it.

[SpyShopsNYC]

If you was in the Amazon forest and had a Rolex on they would know it. I went to my high school reunion and I wanted to show my status so I wore the Rolex not my IWC. I wore my YM2 116688


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[GradyPhilpott]

Originally Posted by BristolCavendish

Are Today's Rolexes Overpriced?

Rolex is still what it has always been in terms of Wilsdorf's philosophy of "a crown for every achievement."

If you want one bad enough, work hard, and save, most people can indeed eventually own a Rolex.

I did.

The prices today reflect inflation and also the improvements to the whole line that of course will be paid for by consumers.

[kauffee]

Rolex has evolved into a full-on luxury brand. Even the “tool” watches are basically luxury goods at this point. At the same time, one could make a very good argument that Rolex is the best value in the watch market. From a standpoint of price vs build quality, design, durability, longevity, resale value, etc, Rolex wins handily versus most other brands.

[Investr]

Originally Posted by SpyShopsNYC

If you was in the Amazon forest and had a Rolex on they would know it. I went to my high school reunion and I wanted to show my status so I wore the Rolex not my IWC. I wore my YM2 116688


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Oh brother......

[TimeToWatch]

Originally Posted by Investr

Oh brother......

[wildcat465]

. . .and if you factor that over time they lose little of their value and, depending upon the model, are almost like cash.

[jmrxtr]

Originally Posted by Sub King

The drastic price increase occurred because the meaning of a Rolex shifted. It went from being a solid tool watch to being a luxury status symbol item. However, all things considered, I think Rolex remains a good value even to this day.

How many other luxury watch brands have as rich a history, designs that are as iconic, durability that is on par, and the innumerable other excellent attributes that Rolex watches have, for the same cost as a Rolex?

Let’s take Audemars Piguet for example: They charge for a stainless steel watch what Rolex, the most well-known and prestigious (in the eyes of common folk) watch brand in the world, charges for a solid 18k gold watch. If you wanna talk about overpricing, I think AP and PP are better brands to look at!

couldn't agree more

[jmrxtr]

Originally Posted by SpyShopsNYC

If you was in the Amazon forest and had a Rolex on they would know it. I went to my high school reunion and I wanted to show my status so I wore the Rolex not my IWC. I wore my YM2 116688


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don't you new yorkers usually stack the love locks?

[Eva123]

Rolex became fully luxury brand and accordingly prices went up very significantly. They are not related to the cost of production, advertising but are based on maximum amount that willing customer is going to pay.

Rolex was a tool watch company which produced good quality and reliable watches which were actually used for diving, racing. However, today nobody uses Sub or SD for dives (you can use cheap dive computer and forget about dive tables and manual calculations). Nobody uses Daytona Chronograph for measuring racing time, etc.

Recently there was a very good article in The Economist which analysed why Birkin bags are sold for more that USD 10,000 when actual maximum costs to produced it are less than USD 1,000. The same analogy could be applied in watch industry.

Watches, handbags, sun glasses are the most overpriced items where customers are mainly paying for brand name only. Also, there is a very uneven distribution of income between people around the world when some people get extraordinary amounts of money (e.g. sport stars, famous actors and etc.) and these branded products are used by them in order to distinguish from general society and show their status.

Nobody buys Rolex, PP, AP or other watches for their accuracy, functions - these items became status, achievement symbols. That's why their prices and costs do not correlate.

[oldman2005]

Originally Posted by Eva123

Rolex became fully luxury brand and accordingly prices went up very significantly. They are not related to the cost of production, advertising but are based on maximum amount that willing customer is going to pay.

Rolex was a tool watch company which produced good quality and reliable watches which were actually used for diving, racing. However, today nobody uses Sub or SD for dives (you can use cheap dive computer and forget about dive tables and manual calculations). Nobody uses Daytona Chronograph for measuring racing time, etc.

Recently there was a very good article in The Economist which analysed why Birkin bags are sold for more that USD 10,000 when actual maximum costs to produced it are less than USD 1,000. The same analogy could be applied in watch industry.

Watches, handbags, sun glasses are the most overpriced items where customers are mainly paying for brand name only. Also, there is a very uneven distribution of income between people around the world when some people get extraordinary amounts of money (e.g. sport stars, famous actors and etc.) and these branded products are used by them in order to distinguish from general society and show their status.

Nobody buys Rolex, PP, AP or other watches for their accuracy, functions - these items became status, achievement symbols. That's why their prices and costs do not correlate.

Well said...Buying a Rolex in many ways it means you're buying a status symbol.

[BristolCavendish]

Originally Posted by rebel_1

To my knowledge, the US Federal minimum wage is $7.25 / hour.

That's what I always thought but click on the map of Georgia. There's some sort of exception.

https://www.dol.gov/whd/minwage/amer...m#stateDetails

[tyler1980]

Originally Posted by BristolCavendish

That's what I always thought but click on the map of Georgia. There's some sort of exception.

https://www.dol.gov/whd/minwage/amer...m#stateDetails

that only applies to employees not covered by the fair labor standards act. So yes, you could have employees as independent contractors which many companies do, and pay them less than federal minimum wage and would pay them the state minimum which is less. That lower rate only applies to those not covered by the FLSA and those covered by the federal act must be paid the federal minimum.

[asiparks]

They're now about 10% watch / 90% jewelry.
You are paying for the touchy, feely, warm and fuzzy status stuff, not so much the durable, tool watch bits.
They have done a fantastic job of brand management. Possibly the most recognized watch brand, but then McDonalds is probably the most recognized burger brand...

[JacksonStone]

Originally Posted by oldman2005

Well said...Buying a Rolex in many ways it means you're buying a status symbol.

No doubt this is true in a broad sense, although I went with a Rolex over a number of other, similarly priced brands because of its blend of function, appearance and quality. I held off for a long time because of the perception a lot of people have with the brand. To me, Rolex is an outstanding watch manufacturer, even if the price does reflect a brand premium; but to most people close to me, it's ROLEX, and I was hesitant to invite the judgment that would incur. Case in point, nine months after I started wearing my SubC, my girlfriend finally noticed it for what it was. Although she never batted an eye at my Omegas or Breitlings, when she got close enough to see the printing on the dial, she almost shouted, "Is that a ROLEX!!!???" It was not an exclamation of joy.

[adg31]

Originally Posted by Eva123

Rolex became fully luxury brand and accordingly prices went up very significantly. They are not related to the cost of production, advertising but are based on maximum amount that willing customer is going to pay.

Rolex was a tool watch company which produced good quality and reliable watches which were actually used for diving, racing. However, today nobody uses Sub or SD for dives (you can use cheap dive computer and forget about dive tables and manual calculations). Nobody uses Daytona Chronograph for measuring racing time, etc.

Recently there was a very good article in The Economist which analysed why Birkin bags are sold for more that USD 10,000 when actual maximum costs to produced it are less than USD 1,000. The same analogy could be applied in watch industry.

Watches, handbags, sun glasses are the most overpriced items where customers are mainly paying for brand name only. Also, there is a very uneven distribution of income between people around the world when some people get extraordinary amounts of money (e.g. sport stars, famous actors and etc.) and these branded products are used by them in order to distinguish from general society and show their status.

Nobody buys Rolex, PP, AP or other watches for their accuracy, functions - these items became status, achievement symbols. That's why their prices and costs do not correlate.

It seems like you are saying yes they are - but so are a lot of other brands?


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[GB-man]

Wildly

[Eva123]

Originally Posted by adg31

It seems like you are saying yes they are - but so are a lot of other brands?


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Let's look from conceptual point of view. What is a difference between Rolex and AP? Rolex is more sturdy, bump resistant, however, AP costs more. Also, compare Rolex to Omega. I really doubt that Omega produces worse quality watches than Rolex, however they cost less.

Everything is about perceived value. Paul Newman Daytona was bought for few hundred USD and recently sold for more than USD 17 million. This confirms that every brand / model has its own perceived value in customers eyes and value depends on a number of factors, which the most important are brand management and marketing over many years.

When people hear Rolex, their brain automatically associates with elite, rich, James Bond (I have to admit that for me Omega and James Bond have much stronger association).

When ordinary person hears AP, PP, A.Lange & Son, usually these firms do not have strong associations. However, in case you know something about horological word, you automatically look at people wearing these watches differently.... as you understand about their status in society, wealth, etc. ..... or you understand that person is a fake and is wearing a fake watch

Also, it is very hard to get into the top. For example, many people think that A.Lange and Son should replace VC in horological trinity, but due to many years customer perception it is almost impossible to A. Lange & Son to take VC place.

[JacksonStone]

Originally Posted by Eva123

Also, compare Rolex to Omega. I really doubt that Omega produces worse quality watches than Rolex, however they cost less.

Get hold of a SubC and a Seamaster 300, turn the bezels, and report back.

Originally Posted by Eva123

I have to admit that for me Omega and James Bond have much stronger association.

Watch Dr. No, Live and Let Die, and License to Kill, and report back.

[Uncle00Jesse]

Is a submariner 2+ times a watch than a black bay? To me, absolutely not. I spent a lot of time with each to make damn sure that was the case and it wasn’t just in my mind. To someone else I’m sure it is. It’s only worth what someone will pay for it.

[Dirt]

It's only natural that Rolex is after a bigger slice of the available watch buying public's budget.
After all, if they don't get it then some other manufacturer will.

No one is compelled to buy them at the current price point and i would assume there's no one that feels as though they've been coerced into buying them any more than with any other items associated with discretionary spending.
It's a better situation than having a substance abuse/addiction issue.
In contrast, a Rolex watch could be viewed as an investment under the right circumstances.
It's up to tbe individual to determine the value for money proposition and spend accordingly.
The materials and specifications of todays 6 digit models is a far cry from the 4 digit models you mention.

[prozac51]

Rolex watches are not cheap, but they are fairly priced for what they are.

And the likes of Panerai, Omega, IWC etc can start packing their bags if Rolex prices were to drop instead of rise.

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[adg31]

Unfortunately I think that you are making a comparative analysis - 'yes Rolex are overpriced but other manufacturers are even more overpriced'.
However the original question was phrased more as an absolute, which at it's most simplistic depends upon what multiple of cost is deemed acceptable.
Disruptor brands such as Christopher Ward may say that they see this as a three times multiple of cost which would certainly make Rolex appear overpriced.
Similarly the other brands you quoted, AP and PP, could make the argument that their pricing is reflective of increased mechanical complexity.
In contrast Rolex rely on the same basic calibre for the majority of their product range - in which case the pricing of their TT and PM models could certainly be seen as overpriced in comparison with their SS models given current bullion prices.
Leaving all this theory aside, if the buyer is ultimately happy to pay the price asked then it is not overpriced to that individual at that point in time!


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[superstarmar]

Short version ...

Kinda , sorta it’s complicated...

[G'ed]

Omega is overpriced relative to Rolex, if you ask me

[Art 1]

IMO Rolex steel sports watches are 10% underpriced.

[Switch]

Originally Posted by JacksonStone

No doubt this is true in a broad sense, although I went with a Rolex over a number of other, similarly priced brands because of its blend of function, appearance and quality. I held off for a long time because of the perception a lot of people have with the brand. To me, Rolex is an outstanding watch manufacturer, even if the price does reflect a brand premium; but to most people close to me, it's ROLEX, and I was hesitant to invite the judgment that would incur. Case in point, nine months after I started wearing my SubC, my girlfriend finally noticed it for what it was. Although she never batted an eye at my Omegas or Breitlings, when she got close enough to see the printing on the dial, she almost shouted, "Is that a ROLEX!!!???" It was not an exclamation of joy.

So what was it, disgust, dismay, distraught, defiance? Just give her a Dj to keep quiet

Originally Posted by Dirt

...
It's a better situation than having a substance abuse/addiction issue
...

Well about that addiction, some TRF member collections and incoming posts beg to differ