Rolex begins selling used watches, but at a premium

Rolex is looking to cash in on high demand and low supply by now offering used watches – at a premium– at its flagship boutique in Geneva, reported Bloomberg on Tuesday.

The boutique currently has no watches in stock and waiting lists that weeks, however, they are offering used watches – “certified pre-owned (CPO)” – for a sharp premium.

A close equivalent from 2020 of the platinum Rolex Daytona with a light blue dial and brown ceramic bezel that’s listed new (but unavailable) at 74,400 Swiss francs ($87,600) on the ground floor, can be bought second-hand for 110,000 francs, added the report.

Rolex is by far the biggest Swiss watch brand, making more than 1 million pieces a year.

In 2022, Bloomberg had reported how Rolex is going to begin issuing certificates of authenticity to authorised dealers selling its pre-owned watches.

This unprecedented move was seen as giving the Swiss company more oversight of its products and stir up the $20-billion market for secondhand luxury timepieces.

The luxury pre-owned watch market is expected to grow to $35 billion by 2030, according to Deloitte.

This recent development is being hailed as “arguably the most significant move a manufacturer could make to legitimize the secondary market,” according to Joshua Ganjei, chief executive officer of Boston-based European Watch Company.

Rolex representatives in Geneva said the CPO program aims to give customers “the opportunity to buy official pre-owned watches while benefiting from the quality and excellence integral to the brand.”

It also opens up a whole new avenue of sales and customer reach for Rolex.

Earlier this year, it was reported that prices for Rolex, Patek Philippe and Audemars Piguet fell 23% as they slipped on the secondary market, extending a two-year decline, as post-covid buying cooled.

Secondhand retailers face a number of hurdles to scale up this new market.

One is finding enough watches for Rolex technicians to authenticate watches, despite the fact that there are some 30 million of them in circulation.

Then there’s the question of profitability. Authorized dealers typically earn gross margins of more than 30% on a new Rolex.

For used pieces, it’s much less. Prices also have to reflect Rolex fees for authentication, typically about 10-15% of the sale price.

Demand for the majority of new Rolex models still outstrips supply, creating a flow of desperate contenders, added the report.