The phenomenon of flippers selling off valuables with the slightest change in market and demand dynamics is not new. The world of Rolex is a fascinating arena where trends and prices fluctuate in a jiffy. Over the last few years, we’ve witnessed extreme volatility in the market. However, some specific players managed to remain strong.
What is the current situation?
Before the slow-down, the watch market went overboard with a huge imbalance in supply and demand, the Crypto craze and supply chain issues. Certain watches, like the Rolex Daytona, sold nearly double the retail price. It seemed that auction houses were hammering record-breaking deals almost daily, and flippers purchased these hype models with the intention of selling Rolex for quick profits.
This kind of insanity was never sustainable in the first place.
Following buyer fatigue, Crypto collapse, inflation, market uncertainty and oversaturation of sellers, the watch market has entered its ‘Correction Phase’.
What is happening?
Is the market correcting itself?
The values of brands like Rolex, Patek Philippe and Audemars Piguet have decreased by almost 20%. Flippers who bought watches like the highly sought-after Rolex Oyster Perpetual with Tiffany Blue dial are now aggressively looking to offload to stop the bleeding of price premiums. The same goes for the Nautilus and Aquanaut.
Omega watches like the Speedmaster Moonwatch dropped by 1.2%, while Cartier models like the Santos and Tank have achieved the slightest decrease of 0.4%. Tudor’s, which is Rolex’s sibling, has a more subtle decline of 1.8%.
Another thing happening is that transactions are taking longer to close as sellers and buyers are not on the same page. Sellers obviously do not want to sell at a loss, and buyers are actively looking for good deals.
Impact On Sellers & Buyers
Sellers, particularly flippers, are finding themselves in a challenging position with the rapidly decreasing prices. While there’s nothing wrong with investing in watches, the main objective should never be to fetch money later.
On the other, for people like us who take great interest in watches and love them for their intricacy, the watch market correcting itself is a good thing! In fact, very good!
The Vintage Watch Market Is Safe
Surprisingly, the vintage watch market is steady and giving excellent results. Today, anyone investing in a vintage luxury timepiece can sell watches quickly and at a good value afterwards. This is the reverse of what we witnessed over the past few years when the value of contemporary pieces grew much faster than the vintage ones.
What now?
- It is estimated that by 2026, online watch sales will take up almost 60% of the total sales. This means with numerous platforms selling watches, the online space is sure to become more saturated. Even Rolex has recently announced its entry into the secondary market. It now sells pre-owned certified Rolex timepieces in selected Bucherer stores. This extension will significantly impact auction houses as customers will be unwilling to pay the high premiums the auction houses require.
- Due to the massive boom in the watch industry recently, one side effect that has proliferated is the number of fake watches and fraud sellers circulating the market. These fraudsters are keen to take advantage of the newcomers who lack proper knowledge. Clients are now returning to trusted dealers and trying to develop relations to buy their favourite timepieces confidently.
Watch Industry Forecast
In 2021, the watch market was valued at $75 billion; pre-owned watch sales accounted for $22 billion, one-third of the sales.
A recent report stated that by 2026, the global market for luxury watches will be more than $100 billion, of which second-hand sales will make up $35 billion.
The luxury watch industry depends on various factors, one being the state of the economy. So, if the given numbers are correct, there is great growth potential in the coming years.
However, what may change is how sellers do the business. With so many sellers joining the market, lower margins and higher supply, companies will have to be more creative to remain competitive in the market.
But as of now, it is truly a bombshell effect on the industry.
CONCLUSION
Market fluctuations are not uncommon in the world of luxury watches, and understanding the market trends is key to making wise investments or sales decisions.
As prices of Rolex watches continue to drop, both sellers and buyers need to adapt their strategies. Whether you're a flipper adjusting your approach or a buyer looking for a good deal, staying informed and mindful of market dynamics is essential.
