A watchmaker creating their owned pre-owned sales program isn’t something new, Richard Mille have already implemented one, but with Rolex entering the mix, serious talks about what this means for the second-hand market are underway. There are serious talks because what Rolex have told us about their programme has left us with more questions than answers.
What we do know is that Rolex are admitting that the second-hand market is significant and that their watches might be too difficult to get right now. With a certified pre-owned programme, Rolex are attempting to alleviate the exclusivity slightly while possibly earning a little more revenue. But that’s where things get confusing. We don’t know anything about pricing, how the buybacks work, or how Rolex benefits.
According to the press release, “In concrete terms, the Rolex Certified Pre-Owned programme attests the authenticity of second-hand Rolex watches – that are at least three years old – at their time of resale by an Official Retailer displaying the special Rolex Certified Pre-Owned plaque. It guarantees that these watches benefit from the quality criteria inherent to all Rolex products and from the full know-how and professionalism of the brand’s worldwide network of experts.”
What we can gather from this is that you want to resell to participating boutiques, the watch has to be at least three years old, and they will be refurbished to meet Rolex quality requirements. That’s all well and good but they continue in the release to say that these watches will “offer customers a tangible and immediate opportunity to become part of the world of Rolex.” This suggest that they are trying to reduce the impact of flipping.
Flipping watches hurts the availability of new releases for customers who actually want to keep them, forcing them to pay often exuberant prices on the second-hand market. Rolex have made clear that their aim is to improve that but limiting the time to resell to three years means that new releases will still be heavily affected by flipping. Sure, it may help with older watches, but the fundamental problem will still persist.
That brings us to the next issue, how much will these pre-owned watches cost to sell at boutiques and how much will they be bought back for? If Rolex buys back the watches at an uncompetitive price point only to sell them at a huge mark-up, how will that incentivise people to use the program if they could sell it elsewhere for a much better price? The benefit seems to only be a guarantee of authenticity and quality for those wishing to buy them, but there are scant few benefits for sellers as far as we know at this stage. There will no doubt be a few people willing to sell their watches back to Rolex, but for those prized models, it won’t be enough to soothe demand.
A smaller question is how Rolex will treat vintage watches? Their plan is to refurbish pre-owned watches, but a vintage watch’s value comes from it having all its original parts. Will exceptions be made for these cases? We simply don’t know.
Where does the money go? Rolex now will have complete ownership over all their points of sale, but if authorised retailers are purchasing the pre-owned watches, and then selling them after certification, do all the proceeds go to the retailer? Does Rolex receive a portion of the revenue? The latter seems the most likely scenario, but the profits surely can’t be that large once you take into account the cost of buying back the watches and refurbishment. Perhaps Rolex is simply being altruistic in this endeavour and genuinely trying to improve things for new buyers? It’s possible that there is greater value for the brand long-term by making it easier to attain a Rolex instead of allowing only the most hardcore to achieve them putting more Rolex’s on more people’s wrists.
As you can see there are far more questions than answers surrounding the programme, but we are sure everything will become clear as the program begins in Switzerland, Austria, Germany, France, Denmark, and the UK. These countries are the first to have access to the programme likely so Rolex can iron out any kinks before going international in Spring 2023.