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As with many aspirational goods, it's incredibly difficult to secure certain Rolex or Audemars Piguet watches at retail.
Jeez, that is perhaps the most "first world problem" sentence ever written. Life is just that little bit harder when you can't flex for retail prices.
Whether due to a scarcity strategy or just production constraints, demand persistently overwhelms supply, and just like that, a bustling secondary market is born.
While robust resale markets for watches are nothing new, they grew tremendously in size in 2020 and 2021, buoyed by many of the same forces that propelled other markets higher. For marketplaces and third-party dealers, secondhand sales are big business, leaving many to wonder: why aren't the brands responsible for these markets getting in on the profits?
It's the same question that's been asked of Nike for years as sneaker resale grows more and more significant. Why let StockX and GOAT ride your momentum to unicorn status? I
n watches, that's all set to change, as in recent weeks and months, both Rolex and Audemars Piguet have announced their intent to introduce certified pre-owned (CPO) programs. In Rolex's case, the program will work through authorized, participating retailers who will acquire the watches and send them to Rolex for certification and authentication. At present, the retailer will set the price, though there will be a cost to the certification and a corresponding two-year warranty.
Details around the Audemars Piguet program are less clear but are similarly expected to include an authenticity guarantee and some level of collaboration with authorized retailers. The company had previously attempted to roll out a CPO program before the pandemic struck.
These programs, if successful, have the potential to change the secondary watch landscape dramatically. To start, it introduces an additional layer of confidence to a market that can be plagued by fraud and counterfeiting, factors which are particularly damaging to new collectors. It may not move the needle for seasoned veterans, but lowered barriers to entry for newcomers could drive accelerated audience growth.
It also seems quite likely that CPO watches will command a price premium to those that haven't been certified by the brand itself. Early indications from Rolex retailer Bucherer suggest the premium can amount to 20-30%. Again, the old guard, pure-collecting base could be reticent to act at these levels if their savvy avails them of more attractive pricing for pieces in which they're confident. For the financially-motivated, though, a new standard may be difficult to ignore.
The programs could also help to alleviate the stresses of a system that sees authorized retailers struggle to keep clients satisfied given the dearth of watches available to meet their demand. It's difficult to maintain and cultivate a stable of clients when there's nothing to sell to them.
Again, can you imagine how freaking ticked off you'd be if you couldn't buy a Rolex from your Rolex dealer? For years on end? Argh, it's enough to make us want to Hulk smash our keyboard right now. But that wouldn't get us any closer to a "Hulk" Submariner...
Finally though, the programs mean new and fierce competition for unauthorized dealers and platforms. On the one hand, uncertified pieces may become markedly inferior goods. On the other, the ability to compete on price (particularly of a market-dictated nature) and inspire trust in other ways could leave the brands flummoxed.
The news comes at a challenging time for platforms like Chrono24. After watch values plummeted to end 2022, the online marketplace cut 13% of its workforce in January. The reduction in workforce is a correction of sorts to over-hiring in 2022 in response to the 2021 boom. A rightsizing of businesses leveraged to the alt asset explosion and subsequent correction has unfortunately become a commonality in recent months.
Still, there's little doubt that demand will continue to outstrip supply of sought-after watches. In Audemars Piguet and Rolex's case, the time has come for an attempt to more directly reap the benefits of the dynamics they've sewn.
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