It would be fair to ask why you should buy a second hand Rolex instead of walking
into your local Rolex store and buying the brand new version without any concerns
as to the authenticity of the watch. That is certainly a legitimate question,
so I thought I would take the time to outline some of the reasons. There is only one venue to buy a new Rolex. That, of course, is a Rolex dealer. Rolex keeps a tight reign on their supply chain, which is one of the reasons that the watches hold their value so well. Because of this control, Rolex dealers are very limited in what they can do with their Rolexes. First, they are limited in the kind of discount that they can offer to any potential buyer. This keeps the dealers competitive and insures that the prices stay high. Second, they cannot wholesale their new stock to "gray market" dealers as they can with other brands. Brands with less control over the dealers often see their stock sold off at wholesale to these gray market dealers if the watches sit around too long without selling. That does not happen with Rolexes. The Rolex franchise is too important to the dealers to risk losing the brand. And make no mistake, Rolex will and has pulled its watches from major jewelery stores. Finally, Rolex dealers are prohibited from selling their watches to anyone who does not walk into the store to buy the watch in person. That safeguards against dealers undercutting - even within permissible ranges - other dealers outside of their geographical region. That allows your local dealer to worry less that her failure to discount the watch as much as you would like will result in you calling a dealer 100 miles away and getting the better price. You can get the better price, but you will have to drive to the dealer 100 miles away to get it. Since Rolex allows for such small discounts, chances are that it is not worth your while to make that drive. All of these factors - combined with a tried and true design that changes very little over time so that a watch from 1970 is very hard to distinguish from one from 2000 - contribute to Rolex watches holding their value. Thus, while Rolex watches keep their value over time, there is one point where the watches depreciate fairly dramatically. That point is the time of purchase. |