Why is a Rolex so Expensive? Here’s the Answer!

Why is a Rolex so Expensive? Here’s the Answer!

This is a really interesting question that we both receive consistently but also see being asked across the web.

Therefore, we thought we would try to answer it in an article.

It’s no secret that luxury objects cost a lot of money in relation to non-luxury variants of the same type of product. For example, a t-shirt can cost 5 euros, but a t-shirt can also cost 500 euros.

There are also expensive and there are costly, and there is a difference between those two.

It’s no secret that a Rolex watch costs a lot of money in relation to what you can buy a watch for. But at the same time, a Rolex might be perceived as cheap when you compare it to the likes of brands such as Patek Philippe or Richard Mille.

The conversation of expensive vs cheap is always interesting and quite difficult to discuss because what determines whether something is cheap or expensive is actually yourself and your perception of the product.

In this article, we will try to answer the question ”why is a Rolex so expensive?”, and give a nuanced picture of the many ways you can answer this question. If a Rolex costs so much more than many other watches, are they so much better? Are they just regular timepieces with a huge markup that you pay only because of the brand?

All of that and much more we will be answering in this article. This is going to be an interesting article so keep on reading.

What does ”expensive” mean?

Now, when it comes to expensive vs cheap, we really need to sort out what expensive really means, as well as what cheap really means.

The fact is that what someone perceives as expensive is considered cheap by another person. And this does not only have to do with how wealthy a person is. It can also depend on other factors.

Merriam-Webster’s definition of expensive is:

“commanding a high price and especially one that is not based on intrinsic worth or is beyond a prospective buyer’s means”. The word “intrinsic” is a keyword in this sentence because it is the perceived value of something. Meaning, some people perceive something as value whilst others do not. This is true for watches but also for basically all other items, from cars to a limited edition t-shirt design and everything in between.

Take for example a person who knows nothing about watches. Something we hear quite often is ”why would I buy a Rolex for thousands of euros when a watch for a hundred euros can do the same thing?”. And while that is true in its most basic form, it’s not only about doing something. It’s how something is done.

First of all, a person who says that fails to see what a Rolex really is. The hundred euro watch has most likely been assembled in Asia, most likely by a factory worker who works under poor working conditions and who does not pay close attention to the small details. These watches are mass-produced and don’t have any level of craftsmanship as well as limited quality to them.

A Rolex, on the other hand, consists of hundreds of parts, all assembled by hand in Switzerland, by individuals who earn a reasonable income and who work under good working conditions. Each and every single Rolex watch is carefully inspected, tested, and goes through countless steps to ensure full reliability and perfect functioning quality. Manufacturing a Rolex watch does not take five minutes, but rather countless hours.

Rolex states that it can take UP TO a year to build a Rolex movement, the bezel takes 40 hours according to their site as well. Each and every single Rolex part is made to perfection without any compromise. And in order to achieve this level of perfection, you need time and great attention to detail.

Ultimately, this will be reflected in the price.

When you perceive something as expensive, it is because you fail to see the actual cost reflected in the product that you get. However, this does not necessarily mean that it is not there. And there’s a fine difference here. One person will happily spend a million euros on a watch, but others simply do not understand why anyone would do that. The best way to get a better understanding of why a Rolex watch is so expensive is to simply learn more about the product that you are buying.

Now, even if you learn everything there is to know about a Rolex watch, you may still perceive it as expensive, and that is fine. Because even if you know what it is, you may not get the same enjoyment from a Rolex watch that a watch enthusiast gets, and thus finds it worth it.

In that sense, most things are relative. Of course, if something is clearly overpriced and nobody is buying it, then it is clearly too expensive as the price is higher than the value it brings. But Rolex manufactures up to a million watches a year, so clearly, people are buying them.

What makes Rolex watches expensive?

As you can expect, there are many factors that affect why a Rolex is so expensive, but let’s look at some of the things that make Rolex watches cost a lot of money compared to many other watches.

1. Design

Rolex watches take years and years to design, with countless designers working on them. Every single detail of a Rolex timepiece is designed with great attention to detail. And doing something like that takes both resources and time.

Rolex takes development so seriously that they have established their very own research and development lab where countless of people work, solely on developing, refining, and improving their products.

This is what makes Rolex watches designed and manufactured to perfection.

2. Materials

Striving for perfection, Rolex only uses the best possible materials for its watches.

And if a material that Rolex is looking for does not exist, they will go out and make their own. Take for example their Oystersteel and their Everose gold.

 When you go to such great lengths that you develop your own materials for your watches, then naturally, that will be reflected in the price. At the same time, the result is that you have timepieces that hold an extremely high quality and which can last for generations.

Not only does Rolex manufacture much of its materials in-house, but they also use many expensive materials for its watches. This of course naturally increases the price. For many watches, Rolex uses things like 18K gold, diamonds, mother of pearl, and other expensive materials.

3. Almost everything is done in-house

Almost every single part of a Rolex watch is made in-house. This means that Rolex has had to invest an immense amount of resources in order to be able to manage the whole manufacturing process in-house. But at the same time, managing every part of the production itself means giving them great quality control and the ability to fully charge over each step of the production.

4. Mechanical movements

All Rolex watches are made with mechanical movements. Not only that but Rolex only uses in-house movements that they themselves have developed, improved, and innovated.

Developing a movement takes a lot of resources, and so does assembling a movement.

Assembling a movement can take many hours as it consists of hundreds of parts. And it has to be done by a highly-skilled watchmaker.

5. Rolex goes above and beyond

Rolex goes above and beyond in its use of materials.

For example, rather than using regular 316L stainless steel, Rolex uses 904L steel 

This steel is stronger and shinier than its counterpart. This steel is not only expensive to purchase, but its machining is much more complicated as well.  Most importantly, 904L steel is corrosion-resistant which prevents rusting.

Furthermore, to prevent tarnishing, Rolex uses 18K white gold for its indices rather than steel.

It is small details like this that separate Rolex from its competitors. But it is also reflected in the price.

6. Quality control

Rolex has extensive quality control for its watches. Each and every single timepiece is carefully examined and inspected for flaws of any kind. Furthermore, the watches also go through tests to ensure their durability and reliability. They are drop-tested, COSC-tested, temperature-tested, and much more.

Rolex is a luxury object…

Now, we cannot deny the fact that a Rolex is a luxury object, and for a luxury object to being just that, the price does matter. 

With luxury products, quality and durability tend to play an important part. Rolex pays immense attention to detail when manufacturing its watches, accepting no deviation and mistakes, no matter how small they are. And this attention to detail is reflected in the price tag. A Rolex can last for generations, but a cheap watch will only last a few years if you are lucky.

Rolex watches hold their value very well

An interesting discussion to have when talking about why a Rolex is so expensive is secondhand value.

For example, if you buy a timepiece from a brand like Breathing brand new, it is like a car that will decrease in value significantly the moment you purchase it and walk out of the store.

Now with Rolex, if you buy a Rolex and walk out of the store, your watch may or may not depreciate when walking out of the store. And if it does, it is by only a few percent in comparison.

At the same time, over time, Rolex watches have proven to be good investments as the demand for them on the secondhand market has been continuously high.

This is a really interesting topic since even if a Rolex is expensive, you can still break even or even make a profit from your Rolex watch over time. And if you define ”expensive” based on how much the product depreciates, then Rolex does not fit into that category too well.

Rolex watches have not always been as expensive as today

You may or may not be surprised to hear that Rolex watches have not always been expensive.

Back in the day, wristwatches were nothing more than the necessary tools that you needed to keep time. But over time, the purpose of a wristwatch slowly changed into becoming a status symbol, a fashion accessory, and something that allows you to express your personal style. Sure, watches still allow you to keep track of time, but they are now so much more than that.

And as wristwatches have transitioned from tools to accessories, Rolex watches have moved more and more towards being luxury objects. One part of this has, of course, been to improve and refine the watches year by year, but another has been to increase prices.

Rolex regularly increases its prices, about once or twice a year, normally by about 5 percent. And this price increase is of course not in relation to inflation. The price increases are rather to maintain the reputation of a status symbol and to make a Rolex watch something that people strive towards and dream of owning. And once they have the financial means to do so, it becomes a big moment.

Conclusion

With all of this in mind, we hope that you have gotten widened view of Rolex prices, and perhaps now see the value of a Rolex watch, and perhaps see what the price tag reflects.

Perhaps you’ll wonder why Rolex watches are so cheap now that you know what is behind the manufacturing of a Rolex timepiece, rather than asking ”why are Rolex watches so expensive?”.