Decoding the Rolex: Supply, Demand, And Value

Rolex worked hard for the better part of the centuryphone and hand held device has made checking the
not only pushing the boundaries of timepiecetime a trivial matter. As a result, cell phone usage has
capabilities, but also maintaining the perception of value.increased and wristwatch sales have declined. Rolex
You might think the term "perception" of value ashas largely escaped this fate due to its position as a
implying that Rolex watches are really not as valuablestatus symbol. While it is true that Rolex makes a
as they're made out to be. I would argue quite thesuperb timepiece, a large part of the Rolex appeal is
contrary; perhaps no other consumer product on thethe message of prosperity it sends. Bluntly put, a Rolex
market lives up to its reputation like a Rolex.is a symbol of success. The exclusive price tag and
Rolex, the original inventor of the wrist worn watch,brand status of the watch keeps the Rolex on a
has also innovated the attachment techniques thatplaying field all its own, immune to advances in
created the waterproof and dustproof watch, as welltechnology and the trends of the moment.
as the advent of the self winding watch. In addition, theMany Rolex critics have contended that a high quality
Rolex is one of the few watches that is certified as aquartz watch keeps time at least as well as a any
genuine chronometer; the highest distinction (of timegiven Rolex. Though this matter has been hotly
keeping accuracy) a timepiece can receive.debated, the critics are missing the point. A Rolex
Rolex has also cultivated their value by creativesends a message of exclusivity that no other
marketing. Rolex - a privately held company - hastimepiece can equal. Some might deride Rolex
always avoided traditional advertising such as print andownership as ostentatious showboating, and perhaps
TV commercials. Rolex has instead opted for creatingthey would have a point. But Rolex always justified its
a type of advertising which is a hybrid of publicvalue by its unparalleled construction standards, elegant
relations and product placement. For example, not onlyand understated aesthetic, and last but not least an
has Rolex been worn by both Sean Connery andincredible time keeping accuracy. Another key
Roger Moore in various James Bond movies, but thedistinction of this brand is that a Rolex holds onto its
famous watch has graced the wrists of famousvalue better than any other timepiece. Providing that
adventurers while exploring the South Pole, plumbingyou bought the watch used, a well cared for Rolex will
the depths of the ocean and swimming the Englishincrease in value, while much cheaper brands like Seiko
channel. The net result of this type of productand Casio will, with few exceptions, rapidly plummet
endorsement creates a glamorous image that istowards worthlessness.
difficult to resist. Another technique the company hasWhile other watch brands scramble to maintain their
employed is a tight control in its supply chain. Rolexedge in a rapidly changing market, Rolex , the father of
only allows watch retailers to sell at most twoall wrist watches, has reaped the benefits of rigorous
watches a year. This ensures that the supply ofconstruction and marketing methods. Odds are that
Rolexes will never outstrip the demand.Rolex will continue to enjoy a status that few other
Rolex's prestigious position in the timepiece market hasproducts achieve: instead of Rolex changing to pursue
also enabled it to escape the precipitous drop in theits market, the market changes to pursue its Rolex.
worldwide sales of wristwatches. The rise of the cell