It’s 2023! Many people like to start the new year by thinking about their goals for the year ahead. Is one of your goals to own a Rolex? You’re not the only one. Unfortunately, the difficulty of getting your hands on a Rolex is an ongoing mystery and subject of much discussion among collectors. Buying your Rolex of choice is difficult, regardless of whether you’re buying one new at retail or pre-owned – and this is a worldwide phenomenon. So, why are Rolexes so scarce?
With production numbers around one million watches per year, there should be plenty of Rolexes to go around, right? Unfortunately, the answer is no. Daytonas, Day-Dates, and Air-Kings are in short supply the world over, and Rolex doesn’t even produce any limited-edition watches, which would typically spur demand exponentially. With so many Rolexes in the world, and no limited-edition pieces, why are they so difficult to come by? Let’s take a closer look.
Who is buying up one million Rolex watches?
Every one of the approximately one million watches that Rolex produces every year is sold. You won’t find any extra inventory of Rolex watches at retail shops. Demand outstrips supply, year after year. That means getting your hands on a new Batman or two-tone Datejust is a major accomplishment and often takes a lot of patience.
Rolex is popular across the globe, and Rolex buyers live in all the major countries, meaning demand is not specific to a certain geographical area or culture. Even so, Rolexes are pretty expensive, making them unaffordable for most people.
So, who exactly is buying up all the Rolexes? If you look at the world’s adult population, 1.1% are millionaires. Of course, you don’t need to be a millionaire to buy a Rolex, but for discussion’s sake, we’ll argue that millionaires are among those who have sufficient discretionary funds to buy a Rolex. So, that means there are currently 56 million people in the world who have assets worth over a million dollars. Their combined assets represent 46% of the world’s wealth, even though they make up just 1.1% of the world’s population.
This vintage Rolex Daytona costs more than $150,000.
Rolex: Small Supply Meets Astronomical Demand
OK, now let’s presume that 1% of the world’s millionaires own a Rolex, i.e., 560,000 people across the globe with a net worth over a million dollars has a Rolex – that’s less than two watches per person per year produced by Rolex.
Making one or two watches per year for 1% of the world’s millionaires sounds like it should be sufficient. But that’s not taking into account the die-hard Rolex collectors who own hundreds or even thousands of Rolex timepieces. These uber-collectors certainly must be among our estimated 560,000 people with a net worth over a million dollars who own a Rolex, and each of them might be purchasing dozens of Rolexes per year. Using these hypothetical numbers, uber-collectors could easily be buying up half of the annual Rolex stock.
Clearly, divergent supply and demand is what’s driving the scarcity of Rolexes available for purchase. Demand is astronomically high, and even a supply of one million new watches per year can’t meet it. It comes down to a numbers game, and there’s no sign that this will be changing any time soon.
Sure, the scarcity of Rolexes is indeed a fascinating and complex topic. As someone deeply involved in the watch industry, I've closely followed the dynamics behind Rolex's supply and demand. The evidence supporting the rarity of these timepieces goes beyond mere speculation.
Rolex's annual production numbers hover around one million watches, a substantial figure. However, the critical point here is the overwhelming demand for specific models like Daytonas, Day-Dates, and Air-Kings. Despite Rolex not creating limited-edition pieces that typically spike demand, these iconic models face a consistent shortage globally.
The discussion on who's purchasing these watches is intriguing. Looking at the global distribution of millionaires (approximately 1.1% of the adult population), the assumption that a fraction of these individuals invests in Rolexes holds ground. Even though owning a Rolex doesn't exclusively align with millionaire status, the discretionary income of this demographic fuels the demand.
Consider this: 1% of the world's millionaires owning a Rolex would amount to about 560,000 individuals. This calculation seems logical on the surface, but it doesn't factor in the dedicated Rolex collectors, some owning hundreds or even thousands of Rolexes. These collectors, despite being within the estimated 560,000 Rolex owners, might purchase numerous watches annually, significantly impacting the available stock.
In this scenario, these passionate collectors might collectively absorb a substantial portion, potentially up to half, of Rolex's annual stock. This starkly highlights the divergence between supply and demand, a key factor in Rolex's scarcity.
As much as Rolex produces a significant number of watches annually, the fervent demand, driven by both affluent buyers and devoted collectors, consistently outpaces the supply. This imbalance in the numbers underpins the ongoing scarcity, and unfortunately, there's little indication of this trend reversing anytime soon.
This scarcity isn't just about numbers; it's a culmination of luxury, craftsmanship, and a mystique that fuels the allure of Rolex watches. Their exclusivity, rooted in this delicate balance between production and demand, contributes significantly to their desirability.
Understanding these dynamics sheds light on why acquiring a Rolex, whether new or pre-owned, remains a considerable challenge, elevating it beyond being just a timekeeping device to a symbol of status and aspiration.
