Rolex is finally getting into the secondary market.
On Thursday, the world’s most famous Swiss watchmaker announced the start of its own certified pre-owned watch program, under which it will sell authenticated watches, first through the luxury retailer Bucherer, before expanding to other authorized dealers.
Which Rolex watches will be eligible for the program?
Only Rolex watches purchased from ADs and more than three years old will be eligible for the pre-owned program, in an effort to curtail newer models being flipped in the gray market. And here’s where the Crown is really leveling up from your typical secondary market experience. When you purchase a Rolex certified pre-owned watch, you’ll receive a certificate of authenticity and a new, two-year warranty card. You’ll even get a coveted Rolex “wax seal” tag.
Where will Rolex CPO watches be available?
Rolex certified pre-owned watches will initially be available at Bucherer boutiques in six select markets including Switzerland, Austria, Germany, France, Denmark and the UK beginning this month. In 2023, the Crown will expand the program to other Rolex authorized retailers, hopefully including some outposts in the States.
What other brands are already selling their own secondary merchandise?
In the past two decades, there’s been a notable surge in the pre-owned watch market (one that’s expected to continue thanks to millennials and Gen Z shoppers), and Rolex isn’t the first major player to claim its own slice of the pie. One of the biggest moves came in 2018 when Richemont entered the second-hand space by acquiring Watchfinder. In 2020, Watches of Switzerland purchased Analog/Shift. Then, just last year, Hodinkee got into the pre-owned watch game by purchasing Crown & Caliber. (Some other brands, including Moser, Vacheron Constantin, Cartier, Audemars Piguet and MB&F, also operate their own CPO programs.)
Pre-owned watches and retailers have often carried a certain stigma. There’s arguably a greater risk involved when buying a luxury watch outside the sphere of an authorized dealer or directly from the brand. While many brands have historically wanted to distance themselves from the second-hand market, others have recognized the value in being a part of it, whether to bolster security and trust or to control the segment. Certified Pre-Owned (CPO) is an approach that has long been used in other luxury sectors, like cars. Companies like Porsche and Ferrari have been putting their stamps of approval on pre-owned vehicles for years.
What does it mean for the brand and collectors?
At first glance, Rolex’s move into the pre-owned market may come as a bit of a surprise, but it’s actually a logical next step for the brand. In the past few years, Rolex boutiques around the globe have run dry with display cases marked by dreaded “For Exhibition Only” signs and employees breaking the news that a particular watch might not be available for months or even years. The Crown recently gave collectors hope that the tides might be shifting with the announcement of plans to build a new $1 billion factory in Switzerland. But until it’s up and running, certified pre-owned Rolex watches may help fill the gap in the supply.
Rolex dealers (of both pre-owned and vintage) share their thoughts on Rolex’s new program:
Eric Wind, dealer and owner of Wind Vintage
“I’m mostly focused on vintage watches, so I don’t see it affecting me at this point. Vintage buyers don’t even like to see a Rolex service card when they are buying a watch as that means it has likely been polished and had parts replaced. I can see this affecting buyers of newer pieces who may eventually want to see the Rolex Certified Pre-Owned card with their watches. I think Ferrari makes more money from certified pre-owned models than new ones, so perhaps Rolex feels it is a great revenue source or, at least, can help their authorized retailers make more money.
I don’t think they’re going to control the secondary market, I think they’re just going have to play in it. It’s a value-added service for their retailers. Being able to offer a value-added service about why people should buy there versus from any of the online secondary market resellers is a positive and will allow them to maybe charge a little bit more and be more competitive. My understanding is it’s really up to the retailers to put their own money behind it in terms of purchasing the watches. It’s not like Rolex is giving them a checkbook to buy watches. It’s a retailer decision, at the end of the day. They have to put their own money behind it.
Generally, I think it’s a good thing for the market. Rolex will be tracking all the serial numbers. They already do that when watches come in for service obviously, or other things, but getting more watches into their system and being able to track them is important data.”
Paul Altieri, owner of Bob’s Watches
“I think it’s positive to see the brand embrace the pre-owned category of the business. It’s a Validation of the category. In a general sense, it’s positive to see Rolex finally embrace the pre-owned secondary market for their products. What remains to be seen is how it will affect the existing secondary market dealers like us. Execution will be key so it will take some time to see how this all flushes out. Rolex is an iconic brand like Gucci Louis Vuitton, Porsche and others. They all want and need to do things proactively to protect their brands, their products and their image. So, I wouldn’t necessarily call it controlling as much as protecting. I think most clients want a safe and convenient place to sell their pre-owned timepiece at the best value. Competition is good.”
Danny Govberg, Executive Chairman of Watchbox
(Govberg also owns Govberg Jewelers which is an authorized Rolex dealer)
“I applaud Rolex and fully support their CPO initiative. In addition to showing real leadership, Rolex is demonstrating their commitment to the customer who continues to crave lasting quality and authenticity. Rolex is best positioned to educate, serve, and service clients seeking the perpetual excellence that Rolex represents.
I have been an outspoken champion of the secondary market for almost 40 years. It underpins the new watch market by showing the lasting value of fine watches. I’ve always said that the customer deserves the same transparency and quality experience when purchasing a pre-owned watch as they get when purchasing new. Bravo to Rolex for recognizing this, taking a bold and revolutionary move, and supporting the wants and needs of the customer.”
Erik Ku, dealer and founder of Loupe This
“It’s a good way for Rolex to instill trust in the secondary market, but I’m not sure it’s going to change much of anything. Pricing on the secondary market is very competitive (think single digit margins) and for Rolex ADs to buy the watches, send them in for service, wait, then resell for a retail margin, it seems highly unlikely they can overtake the existing grey market and be competitive price wise.
What this does though, is allow buyers (who don’t care about price) to have confidence buying used watches from their authorized dealers that they may not have previously considered it. It also allows for ADs to have at least “something to sell” customers if their new stock is thin…at a price though. Bucherer already has pieces on their website and I’m not sure how you convince a customer to pay CHF 21,000 for a GMT Master Batman that is used, when the RRP is possibly half of that.”
Cameron Barr, founder of Craft & Tailored
“I specialize in vintage watches and rare collectible watches that fall outside of the more normal consumer grade watches so, I think this won’t have much effect on blue chip nonconsumable grade luxury watches. I think that this program is great for the more “modern” segment of Rolex watches circa year 2000 and on but I don’t think this will affect the true vintage or collectible market. With that being said, I think it will actually be good for the modern market and will put Rolex in the driver’s seat to further control pricing within the secondary market. There is also a certain consumer that will put great value and trust in the Rolex CPO offering such as the CPO offerings that many automotive manufacturers have demonstrated success with over the years. If I were to guess, I would say that most of the Rolex CPO stock will come from the Rolex AD’s customer base that they have sold new Rolex production stock over the past 20+ years, similar to the used car market.
Rolex AD’s traditionally haven’t been able to offer secondhand watches as Rolex’s biggest competitor is pre-owned Rolex via the secondhand market but I think this now gives Rolex a way to try and control and capture revenues as well as profits from the secondary market that they haven’t been able to capture before. I think it will provide AD’s with stock and sellable offerings that they “haven’t” had access to for the past few years.
I think that this is ultimately a sales strategy for Rolex AD’s to offer watches that don’t compete with the current production watches and without a doubt, the modern Rolex pricing within the secondary/pre-owned market has been coming down for sure. Matter of fact my local Rolex AD offered me a few brand new offerings that once were not “available”
But what is interesting specific to Rolex CPO pricing is this when I looked at one of the current Rolex AD’s that was currently offering CPO Rolex (Bucherer) I compared 3 pricing segments, CPO pricing, Brand new pricing via a Rolex AD, and pre owned pricing via C24 and the secondary dealer network.
I looked at the Rolex GMT Master II “Batman” Ref. 116710BLNR as my example reference. The Rolex CPO pricing is set at 21,000 CHF ($22,424.16) for the Batman. The current brand new AD pricing for a “Batman” via the updated Rolex Ref. 126710BLNR is $10,550 USD and the pre-owned pricing via sources like Chrono24 or the secondary independent dealer network for a Rolex GMT Master II ref. 116710BLNR is around $16,500 USD on average making the CPO offering the most expensive.”
Tim Stracke, Karlsruhe, Germany-based Co-CEO of Chrono24 via a press statement
“I believe it will incentivize even more first-time buyers to try to get their hands on their first Swiss trophy timepiece. Already we see Rolex making up 44%+ of all purchase requests from our 18-34 users. I anticipate this announcement will only fan the flames of demand for Rolex on our platform, and we’re very excited to see how Geneva’s other luxury brands will respond.”