Is Supply Really a Global Issue?

[georgekart]

The answer to your question is layered. Is the supply a global issue? Absolutely. Is it the same everywhere? Absolutely not. For example, you're not getting a SS Daytona at retail with no prior history anywhere in the world. You're just not. That being said, in some locations a SS Datejust may not be available on the spot and you may have to wait a month or two, whereas some other places you might be able to walk in and buy a Datejust. Don't think you're getting a GMT without a waitlist anywhere, but if I had to make a guess, GRNR will end up being the most produced out the bunch and the hype will die down so maybe you'll be lucky to get on the waitlist and source one within the next year or two.

[Krash]

Originally Posted by njlam

Is this analysis or guessing?


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It’s a little of both.

They make 1.2 million watches. If they double production, that amounts to 2.4 million. So that’s simple math.

My guess is that there would still be a supply vs demand problem even if they doubled production.

Let’s extrapolate this out to individual ADs. If each AD got twice the amount of watches, would that move the needle? I don’t think so.


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[77T]

There is an element to this availability question that goes beyond a two dimensional supply/demand model. That element is "place". It represents the distribution model.

In England, Rolex UK gets a smaller slice of production than Asia or USA. Lists don't matter much if less product is arriving at any given place in your country.

I have an idea for the OP and those in likewise circumstances...

There has been an uptick in ADs losing their Rolex contract. Most of them have new Rolexes in the safe. That inventory will get sold after the expiration of the contract as "Pre-Owned Never Worn Timepiece" CPO (not the Rolex CPO but the jeweler's own version).

For example, if you'd like a never worn bi-metal RG/SS CHNR, one is for sale locally by an ex-AD for $22K (almost $5K over MSRP).

If you consider the games some ADs play with "share of wallet" (coercive purchases of jewelry), that $5K over MSRP is a pittance.

Just my

[ChronoZach]

Op, Mate, things have really changed in the past 10 years, I had a similar experience as I was away for a while during the craze of Covid. Now is all about spend history and exhibition only signs. But there is hope you can start a relationship with a new AD or go to the AD where you purchased your last Rolex. The process will require some patience and luck on the piece you are looking for, you may get lucky as some on TRF do and get the call quickly. Stock is getting better, not with all models. Try it can’t hurt.

Now, if you want it right now then a grey dealer is the way to go, instant gratification!

Cheers,

[rolexnerd]

London has stock but they will only sell to those who have purchase history or are considered VIP. Same everywhere in the world.

[azmousss]

my feeling is in europe our waiting times stretch into the years . i waited 3 years for a date just fluted bezel and jubilee bracelet but in america it seems its always a question of months and i feel thats due to the fact its simply a bigger market and more important market to cater to.

[Patekaholik]

It’s not a supply issue, this is solely a decision from Rolex
themselves based upon the fact they want the brand to be exclusive. The news coming from some of the SAs is that Rolex will cut the delivery even more 2025.

[Krash]

Originally Posted by Patekaholik

It’s not a supply issue, this is solely a decision from Rolex
themselves based upon the fact they want the brand to be exclusive. The news coming from some of the SAs is that Rolex will cut the delivery even more 2025.

But if each AD got an allocation that is twice as much as they get now, would that really move the needle?

I’m thinking that if they double production output, the demand would still outweigh the supply.


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[Dave O]

Originally Posted by Patekaholik

It’s not a supply issue, this is solely a decision from Rolex
themselves based upon the fact they want the brand to be exclusive. The news coming from some of the SAs is that Rolex will cut the delivery even more 2025.

They sell more than 1.2M watches a year, more than any other watch brand, and they still can't keep up with demand. They sell every watch they make. And they are opening up additional production facilities to increase production.

Companies are in business to make money. As a business goes, holding back on production makes absolutely no sense when you sell ever item you make. And even as their production increases, they still won't be able to keep up with demand. No need for them to cut back to be exclusive - they already are!!!

Originally Posted by Krash

But if each AD got an allocation that is twice as much as they get now, would that really move the needle?

I’m thinking that if they double production output, the demand would still outweigh the supply.


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Exactly

[Patekaholik]

Originally Posted by Dave O

They sell more than 1.2M watches a year, more than any other watch brand, and they still can't keep up with demand. They sell every watch they make. And they are opening up additional production facilities to increase production.

Companies are in business to make money. As a business goes, holding back on production makes absolutely no sense when you sell ever item you make. And even as their production increases, they still won't be able to keep up with demand. No need for them to cut back to be exclusive - they already are!!!



Exactly

What i wrote comes directly from Rolex themselves while visiting one of my SAs last week. Many changes will follow 2025 and the supply is one of them, they will not meet its demand even if they could do it not once but twice as much compared to previous deliveries.

They want to become even more exclusive than historically, many news will follow at this W&W.

[bluestreak]

Originally Posted by Patekaholik

What i wrote comes directly from Rolex themselves while visiting one of my SAs last week. Many changes will follow 2025 and the supply is one of them, they will not meet its demand even if they could do it not once but twice as much compared to previous deliveries.

They want to become even more exclusive than historically, many news will follow at this W&W.

“Directly from Rolex, lol”


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[BraveBold]

Originally Posted by Krash

But if each AD got an allocation that is twice as much as they get now, would that really move the needle?

I’m thinking that if they double production output, the demand would still outweigh the supply.


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Demand curve is fixed* and the supply curve would “shift right” as we say.

Currently you need to draw a demand curve for each model to have an accurate view but supposing a production increase is proportionate, you could draw an aggregate curve. An aggregate curve for Rolex watches won’t look the same as what we are constantly discussing on here.

The curves for the “excess demand” models intercept their supply curves at prices higher than msrp. You would need to look right on the demand curve to see what quantity is supported at msrp (it will be higher or further right on your standard supply / demand chart where x axis is Q and y axis is P).

The curves for many other Rolex watches are much closer to matching their msrp. So an increase in supply would require lower prices… note these differences drive the current grey market as buyers are clearly bundling.

So while there is clearly a massive market for Rolexes, in aggregate the msrp is not nearly so far disconnected to allow a doubling of production today with no ill effects on their ability to hold prices.

*The other part is demand is not truly fixed as some is driven by scarcity and perceived scarcity. So a known large increase in supply may in fact hurt demand.

In short, Rolex (my opinion without doing deep analysis) would not be able to hold msrps across lines with an immediate production doubling. This despite the end market being many many multiples of current production (likely a factor of 80:1 to 250:1 globally. Because their msrp already accounts for this massive market… and because of the supply / demand dynamic above.

Now a 25% increase by end 2029 is different and will likely do little more than help offset additional natural demand.

[Patekaholik]

Originally Posted by bluestreak

“Directly from Rolex, lol”


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Yes apart from you I have a very close relationship with my shop as we are within the same family. Rolex are paying many shops a visit the upcoming months in order to inform about volume of allocations and strategies 2025.

[bluestreak]

Originally Posted by BraveBold

Demand curve is fixed* and the supply curve would “shift right” as we say.

Currently you need to draw a demand curve for each model to have an accurate view but supposing a production increase is proportionate, you could draw an aggregate curve. An aggregate curve for Rolex watches won’t look the same as what we are constantly discussing on here.

The curves for the “excess demand” models intercept their supply curves at prices higher than msrp. You would need to look right on the demand curve to see what quantity is supported at msrp (it will be higher or further right on your standard supply / demand chart where x axis is Q and y axis is P).

The curves for many other Rolex watches are much closer to matching their msrp. So an increase in supply would require lower prices… note these differences drive the current grey market as buyers are clearly bundling.

So while there is clearly a massive market for Rolexes, in aggregate the msrp is not nearly so far disconnected to allow a doubling of production today with no ill effects on their ability to hold prices.

*The other part is demand is not truly fixed as some is driven by scarcity and perceived scarcity. So a known large increase in supply may in fact hurt demand.

In short, Rolex (my opinion without doing deep analysis) would not be able to hold msrps across lines with an immediate production doubling. This despite the end market being many many multiples of current production (likely a factor of 80:1 to 250:1 globally. Because their msrp already accounts for this massive market… and because of the supply / demand dynamic above.

Now a 25% increase by end 2029 is different and will likely do little more than help offset additional natural demand.

Why would we assume a production increase would be proportional?


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[BraveBold]

Originally Posted by bluestreak

Why would we assume a production increase would be proportional?


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It is a simplifying assumption. But why wouldn’t it be proportionate? Btw, Rolex is too savvy to ever do a sudden increase of this magnitude.

But if they did as far as assumptions go, it is likely the correct one. They would still need halo watches to maintain brand equity and interest. That would require maintain relative dynamics between watches.

If not proportionate you need to redraw the demand curve. But the implications can be understood by my explanation above regardless.

[Dave O]

Originally Posted by Patekaholik

What i wrote comes directly from Rolex themselves while visiting one of my SAs last week. Many changes will follow 2025 and the supply is one of them, they will not meet its demand even if they could do it not once but twice as much compared to previous deliveries.

They want to become even more exclusive than historically, many news will follow at this W&W.

First off, your AD is wrong. But I do believe one thing you posted. And that is, they will not meet demand. If they want to be more exclusive, they can simply raise their prices - which they did. There is no way in the world that Rolex, or any other company for that matter, would deliberately cut production when they already sell every item they make. Now if their items weren't selling, then yes, they might cut production. But in case you were not aware, they are in the business to make money. And the more units you sell, the more money you make. And like I said, if they want to be more exclusive, all they have to do is raise their prices even more.

I'll be waiting on bated breath to hear Rolex's announcement that they are going to cut production and cancel their multi million dollar project(s) to build more production facilities which when completed could push production close to 2.0M units a year. I mean, if they are going to cut production, there is no need to build new production facilities. Right?

[Charlie_26]

Well it has been an interesting week. A visit to another WoS who told me that there is no embargo on registering an interest for the GMT across the group, and they were happy to register me.
But… they said that I had to show some commitment first and purchase another Rolex (at least it wasn’t another bit of jewellery). To be fair I understand this stance, and as I’ll be retiring this year I don’t see the harm in indulging, so I registered an interest for the Submariner date too. They said this is likely to be 6 to 9 months which is fine by me.

Thanks for everyone’s input, I’m truly grateful.

[NigeG]

Interesting comment from the WoS you went to.

Goldsmiths nearest to me said there was no expectation that you have to buy anything that you don’t want in order to go on the “expression of interest” for any of the Stainless Sports Watches. Having said that; they cannot or will not give me any clues on when I might be offered anything that I asked for.

I updated my wish list a few weeks back. I have Submariner 124060, GMT 126710GRNR and added Explorer II 226570 Polar. The latter replacing Sub Date. The SA said no guarantees on any of them.

I should add that I’ve no recent purchase history with them.

The other AD nearest to me, where I have reasonable purchase history on Rolex, Omega and a couple of other brands, will not add me to their list for Sub or GMT unless it’s two tone or PM. These list have been suspended since 2020!

Couple of weeks ago I asked about Explorer II Polar and I’ve been invited in to look and possible purchase next week.

Last year I went into WoS Heathrow T5 and they had a good selection of Sports models for exhibition. I was wearing my 16610. When I asked about purchasing something the SA said “well, you should build up some purchase history with us. Buy something like a Tudor from our sister shop here, or another brand, maybe a DJ from us in time and then we’ll be able to supply a GMT”. “We have regular customers who will book an internal flight to somewhere like Manchester or Edinburgh to come pick up and have a day out somewhere”.


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[avidflyer]

Originally Posted by Charlie_26

Well it has been an interesting week. A visit to another WoS who told me that there is no embargo on registering an interest for the GMT across the group, and they were happy to register me.
But… they said that I had to show some commitment first and purchase another Rolex (at least it wasn’t another bit of jewellery). To be fair I understand this stance, and as I’ll be retiring this year I don’t see the harm in indulging, so I registered an interest for the Submariner date too. They said this is likely to be 6 to 9 months which is fine by me.

Thanks for everyone’s input, I’m truly grateful.

some commitment…..wtf….NO

[UK_]

Originally Posted by inadeje

Since you’re in or approaching retirement, how about a quick trip across the pond? Come to Florida, Orlando is popular with brits, right next to Orlando you have DavidSW and here in Miami we have numerous top-rate dealers too. Unless it’s the BLRO (aka Pepsi) you seek you are going to be getting a brand new unworn example at or around your UK MRSP. Largely due to your absurd 21% VAT and exchange rates. Nothing like a dual focus vacation, eh?

What is the real price difference? There is no VAT on second hand goods in the UK, so I don’t think there is a massive saving to be had in flying to the US from the UK for a BLRO, even unworn from a grey dealer.

Full set in UK is about £18k.

Seems about the same in the US, even slightly above when converted to £.

Given the worldwide market and liquidity of these watches, I don’t think you will ever see big savings between countries.

[SVH]

Originally Posted by avidflyer

some commitment…..wtf….NO

Agreed, don't go down that road