Despite producing and selling over 1 million units annually, Swiss watch giant Rolex, which has waiting periods of months or even over a year for most of its models, has begun selling pre-owned Rolex watches in its own stores. A Bloomberg reporter visiting the Geneva store of Bucherer, a watch retailer owned by the Rolex Group, describes both the peculiar supply-demand situation in the luxury watch market and this surprising move by Rolex.
“Anyone who walks into Bucherer’s flagship store in Geneva looking for a new Rolex Daytona is almost certain to be disappointed.
There isn't a single watch in stock; the waiting time can be weeks, months, or even years. However, if you go up to the fourth floor of the store, you might feel lucky. That is, of course, if you are willing to buy a used watch and pay much more than you would for a new one.
THE SIZE OF THE PRE-OWNED WATCH MARKET IS 20 BILLION DOLLARS
The list price for a 2020 platinum Rolex Daytona with a light blue dial and brown ceramic bezel is 74,400 Swiss francs on the ground floor, but there is no such watch in the store's inventory. It is possible to purchase the pre-owned equivalent of this watch on the fourth floor by paying 110,000 francs. This figure means an additional price of 9,000 francs for every floor climbed.”
Rolex calls this new service "Certified Pre-Owned" sales. Customers are satisfied and confident that they are not being scammed and are truly receiving a Rolex. According to the report in Bloomberg, the annual size of the certified pre-owned luxury watch market is approximately 20 billion dollars. According to Deloitte, the market will reach a size of 35 billion dollars in 2023. Rolex, which grants retailers a profit margin of approximately 30 percent on new watches, reduces the margin to 15 percent on pre-owned sales.
News Source: 12punto
