Why do people say Rolex makes 1 million watches per year?

I think you've just put your finger on why prices are so high. Even if they made two million a year demand would still massively outpace supply.

In a way the production number itself is irrelevant because we can all see the effects in the secondary market.

What I find more interesting is Rolex's long term pricing and production strategy. How are the shortages affecting perception? Does it make the brand more exclusive or just annoy people? How does their certified preowned play fit in?

I’ve tried to make this argument a few times. But some people just love to hate Rolex without considering these factors. Yes some of the ADs and their practises are underhanded. But to think they are just hoarding dozens of each sought after model is unlikely.

People think the market is just the US/North America and Europe - which themselves are huge markets in the 100s of millions. Forgetting the booming luxury markets in East Asia, South Asia, and the Middle East with aggregate population well north of 3 billion. Now if just a fraction of these markets want or have interest in a Rolex, well the inability to acquire one via walking in an AD is pretty clear.

Paying anything over retail for a Rolex makes zero sense. They don't even break into the top 10 brands.

To add to the discussion... https://www.watchcrunch.com/UnholiestJedi/posts/rolex-makes-how-many-watches-yearly-14332

True, though I'd argue that Rolex's being a slow-moving, conservative company that scrupulously respects traditional boundaries between them and ADs hasn't helped.

Had they wanted to, they could have been much more proactive in stamping out ADs' dubious sales practices which are arguably damaging the brand.

Impossible to know whether Rolex think they're damaging or not.

Maybe they don't care and are just happy that demand is currently sky high? But somehow I doubt it given they're wholly owned by a foundation which will have a much longer perspective than the owners of a publicly listed or private equity owned company.

Just like the car industry…the good, the bad and the ugly. If the itch is hard enough and you can afford that Rolex, well…the numbers confirm the demand and love

We have beat this one to death, but yes, most ADs only get a few hundred total a year. They also have no say on which models they get. Bigger ADs in larger cities get more than smaller independent shops in the middle of no where. To others points; people love to dump on the who they perceive as the rich. There are almost 60 million millionaires in the world. A million watches is nothing.

Rolex is selling a luxury good. In order for it to remain a luxury good it has to be exclusive. Supply must therefore never outpace demand, not yesterday, not today, not tomorrow, and also not during the next economic downturn.

The risk of an oversupply is far more damaging to the brand than an undersupply.

Why don't other watchmakers do the same thing? Because you have to show that you are willing to make sure that your luxury products remain exclusive, and are being perceived as exclusive. Something that Rolex has done well for a long time.

No comment on Rolex, just that you really love using this photo! At least you’ve cropped it tighter now. 😆

I will use it at every opportunity 😂

I’m on your side of the argument. They make a million watches but most of them are not subs GMTs and Daytonas.

They also are privately owned and don't have shareholders seeking short-term profits. They are free to have a long gaze and do what benefits them most in the long term without worrying about numbers for the quarterly or annual report.

Yes yes yes. Once again Brandon @WatchandUnwindOffical knows the score.

I did the maths on this some months back (link to my comment here)

Since then i've looked a little further. As we've worked out, if all the ADs are allocated their watches to the average number, they might get as many as 660 watches in a year. Sounds like quite a lot, but if someone decides that they want a Datejust 41mm, there are one hundred and ten permutations of that watch.

I won't list them all, but the category choices are: which metal, bezel, bracelet and dial you want. When you expand all the options, for this one model, you have 110 variations.

Let us then play out a scenario whereby "Big City AD", a reputable London-based Rolex AD has twenty customers that have requested a DJ41mm with a blue dial (just blue, not fluted motif or Azzuro). That doesn't seem excessive in a city like London with nearly 9 million people (and over 250,000 millionaires).

Ten of our made-up customers have asked for a Fluted bezel, Jubilee bracelet model. Ten have asked for a Smooth bezel, Oyster bracelet.

We're going to be generous with the numbers, right? This made-up AD does a lot of business, so they get alloccated three times the average number of watches for an AD.

Our AD therefore gets 1980 watches a year. An average figure would get them 165 Datejusts, but in this scenario let's double it, just for fun. 330 Datejusts from a total of 1980 watches.

Of those 330 DJs, we're saying Rolex makes more with a blue dial than any other. You can only get a blue dial with a Steel or White Rolesor case, with either an Oyster or Jubilee bracelet, so four distinc variations. That means these two variations make up only 3.6% of the total range of DJs available.

We're going to say that those four variations get produced at twice the rate of the rest of the models. In our batch of 330 DJs, 24 of them are one of these blue dial models. Let's assume each of the four variations are made in the same numbers, so we have 12 on a fluted bezel and 12 have a smooth bezel. Of each of those 12 watches, 6 are on an Oyster bracelet, and 6 are on a Jubilee bracelet.

Now, this AD gets their entire years worth of watches delivered in one go. They check the numbers and start making phone calls.

For the twenty customers that requested a blue dial DJ 41mm, the AD has 24 watches. Only 12 out of our twenty customers are going to get what they asked for. The rest can either take a variation they didn't want (right bezel wrong bracelet, or right bracelet, wrong bezel), or they can wait until the next years delivery.

So when the AD told each of those customers that they might have to wait a year, it wasn't because they wanted them to buy some diamon earrings, but because they just can't supply the watch the person wants.

So yes, Rolex makes in excess of one million watches every year. Unless they scale back the catalogue to only a few watches, in a few variations each, people are going to have to wait to get the model they want.

But of course, even laying it out like this, there'll still be the ignorant folk who just complain "i WoNt PlAy Ad GaMeS"

Good, means i'll be closer to getting my next one.

Sporturawus is that you?

please cut out the crocs for next times...it always make my stomach turn 😎

Yeah but it turns the girls on

then those girls must be very seriously under the influence of heavy drugs