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Why Do Rolex’s Sports Models Cost More?

Pound-for-pound, your Submariners, Milgausses, Explorers are likely to be more exclusive and come with higher price tags. But why?

When Hans Wilsdorf (below) established Rolex in 1905, he did so with a single goal: to produce the most reliable wristwatches ever. To achieve this, he identified three objectives: optimum timing precision; resistance to the elements such as water and dust; and robustness with emphasis on shock resistance, and minimising wear and tear.

This philosophy led to Rolex becoming one of the earliest proponents of the tool watch: by making utilitarian instruments fit for professionals. The Submariner’s impressive water resistance and dive features; the Explorer’s no-nonsense legibility and 24-hour hand; the GMT-Master II that can keep track of three time zones – all these watches boast features that designed to cope with the rigours of professional use.

Look closer and you will see that each watch’s functionality is so specific, that the added feature is there only to perform a particular task. There is no room for fluff. Hence, there’s no date display on a Daytona (below) , no chronograph on a Submariner and so on. In a nutshell, the watches are all killer, no filler.

As the saying goes, ‘If it ain’t broken, don’t fix it’. To a certain extent, Rolex is a flag-bearer for this adage. But one can also argue that Rolex doesn’t so much fix stuff, but improves them.

And when a new improvement is deemed significant enough, the entire range is overhauled. The underlying implication is that in that exact moment in history, it is Rolex’s perfect version of that model.

Take the GMT Master II (above), the first Rolex to debut the Cerachom bezel made of high-tech ceramic. Originally introduced on the solid gold models in 2005, the new bezels were very quickly rolled out onto the half-gold models the next year, and then the steel models in 2007. By then, all new production GMT-Master IIs boasted the ceramic bezel, immediately antiquing models with the aluminum bezel. A complete model range overhaul in three years is a significant, not to mention, cocksure, commitment.

Every new model is a few percentage points better than the old one. Having said that, Rolex takes pains never to imply that the old model had any shortcomings, as that was the best possible iteration of its day.

Also, by immediately discontinuing the previous model upon release of a new one, Rolex ensures the collectability of previous iterations. It might take a few years, or even decades, but it’ll get there. Rolex all but guarantees this by keeping true to this strategy of renewal, topped with a steadfast resistance to market trends.

By doing so, Rolex naturally creates a whole lot of want in the consumer pool. And the brand is the master of carefully managing this supply and demand balance.

Ever been to a Rolex shop that’s loaded to the gills with hundreds of watches in the windows and tables, but doesn’t have a single steel Daytona or green Submariner (below)? That’s the highly oiled machine at work, protecting the value of the new watches, and at the same time, its past catalogue.

Here is a fact: due to the ridiculously high demand for certain sports models, prices can get inflated to the point where consumers are willing to pay over the retail price just to get their hands on a particular piece.

The most significant consequence of this is that such demand extends the perceived value across most of the range of Rolex watches. So while you may have purchased a Submariner at a fair price, it’s value is held up because someone else is more than willing to pay a premium for a steel Daytona.

To further elevate this value proposition, Rolex never drops its retail price. There is no rule, but recent history suggests that there is a modest two to five per cent price increase every 18 months. With every price increase, the corresponding model’s used prices inch up too. It’s safe to assume that if you purchased a steel sports Rolex new, you could probably sell it used in about 10 to 15 years, very close to the original price you paid.

From an investment perspective, this is pretty decent figure for a mechanical watch. And not many other investments can boast similar returns. More importantly, you get to wear a bitchin’ watch on your wrist for a decade and a half that consistently gets cooler by the day.

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