Fratello Talks: Rolex Certified Pre-Owned Watches — How Does It Work?

Fratello Talks: Rolex Certified Pre-Owned Watches — How Does It Work?

Daan, Thomas, and RJ talk about the Rolex CPO program

Robert-Jan Broer

December 08, 2022

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In this week’s Fratello Talks podcast, we’re talking about the Rolex Certified Pre-Owned program that was introduced on December 1st. I wrote an article about it here, but Thomas, Daan, and I would also like to share some afterthoughts.

Authorized dealer Bucherer is the first partner offering Rolex watches with this certification. But what is it exactly, and how does it work? In short, authorized Rolex dealers can now have their pre-owned stock certified by Rolex technicians to guarantee the authenticity of each watch. Rolex will also ensure that the watch functions properly, but the certification doesn’t include a full service. If a Rolex watch meets all requirements, it will receive the Rolex Certified Pre-Owned seal and a new two-year factory guarantee. We also received some comments and questions about the consequences of this certification process, and we try to answer them in our podcast.

Wrist check — Oris, Cartier, and Squale

As always, we start the podcast with a wrist check. What watches are we wearing during the podcast recording? I am wearing the new Oris Divers Sixty-Five Fratello Limited Edition on a beige Tropic-style strap (both available in the Fratello Shop). The watch is a limited edition of 300 pieces in total, with 250 allocated to our shop and the remaining 50 to Oris boutiques.

Daan is wearing his beautiful Cartier Santos Galbée XL in stainless steel. He covered this particular watch in this article. Thomas is wearing his Squale Subino, a collaboration watch from his previous job at Amsterdam Watch Company. This watch was a limited production from back in 2020. You can read the story about it here. With only 60 pieces made, it is long sold out.

Fratello Talks: Rolex Certified Pre-Owned

Is the new Certified Pre-Owned program an intelligent move from Rolex and its authorized dealers? Instead of people buying pre-owned Rolex watches from online platforms and non-authorized dealers, it might drive more people to the official boutiques and ADs. We also discuss the pricing of the Certified Pre-Owned Rolex watches and what effect it might have on the existing prices of pre-owned and vintage Rolex watches.

You can also listen to our podcasts via Spotify, Apple Podcasts, Google Podcasts, and Buzzsprout. We hope you enjoy this episode!

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Fratello Talks: Rolex Certified Pre-Owned Watches — How Does It Work?

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Warky says:

Dec 08, 2022 at 08:46

The logic behind this is simple as far as I see it.

Kill the grey market.

Rolex (via its ADs) will pay better prices for your piece and still make a decent profit. Even more so if you don’t have box and papers as they can repackage it and provide their guarantee certificate.

It benefits both Rolex and it’s existing customers and helps protect against fluctuations in prices on the secondary market (both up and down) – which in turn maintains demand for both new and pre owned.

It won’t happen overnight, but grey dealers are going to be both starved of new stock and at a disadvantage on resale due to the lack of certification. I reckon they won’t exist within a couple of years?‍♂️

Reply
1. Robert-Jan says:
  
  Dec 08, 2022 at 08:56
  
  It doesn’t kill the grey market, in my opinion, because it doesn’t concern new watches. Rolex CPO watches are at least 3 years old according to their communication.
  
  Reply
  1. Warky says:
    
    Dec 08, 2022 at 09:06
    
    For now…..
    
    Rolex references are generally made for several years before changes, so that would mean the grey dealers would only have an “advantage” on the newest pieces.
    
    And who is going to get the newest pieces? The guys who don’t flip their watches instantly and/or sell their 3 year old watches back to the AD (or perhaps buy a CPO one?) and maintain a relationship.
    
    You know how this is going to work RJ.
    
    Grey dealers are going to run out of stock.
    
    Reply
    1. Robert-Jan says:
      
      Dec 08, 2022 at 09:24
      
      Grey market is, per definition a new watch, never worn, offered by a non-authorized dealer. I don’t see how a pre-owned watch can be “grey market”.
      
      Anyway, in my opinion, the success of this CPO program will heavily depend on the effect on the prices. We also discuss this in the podcast. So far, the prices of these Rolex CPO watches are (very) far from attractive, so let’s see what it does. If Rolex wants to properly fight the grey market, they need to work on how their authorized dealers behave, or, start their own boutiques (instead of franchise) and control the market themselves. As long as ADs work with weird waitlists, make clients buy a watch from a slow moving brand before they can buy a Rolex, or sell the watches themselves at 2x retail price to their “best friends”, it’s pretty hopeless.
      
      The CPO is mainly there to drive more traffic to the authorized dealers, but if the prices are far out, the grey market dealers and non-authorized dealers of pre-owned watches will “win’. It’s all about price for most customers.
      
      Reply
      1. Warky says:
        
        Dec 08, 2022 at 10:28
        
        Ah – I didn’t realise there was some sort of official definition of grey market dealer so we are probably talking at cross purposes.
        
        I am simply referring to any and all non AD commercial sellers who vend Rolex for way north of retail.
        
        I agree price is key – but I think the price they offer to take it off your hands first is the real issue here. If they offer more than a dealer (and they should be able to for a number of reasons) then nobody is going to sell a 3+ year watch to anyone else (unless just doing it themselves on c24 etc).
        
        As you rightly pointed out initially that leaves the new/less than 3 year old pieces. I reckon those will become increasingly hard to come by for the dealers and so they will be starved.
        
        Reply
      2. JF
        Jmzf_2021 says:
        
        Dec 08, 2022 at 14:29
        
        Useful definition of “grey market” as a seller of unworn, otherwise NiB watches.
        Hadn’t thought of it that way.
        Significantly affects the arguments.
        
        Reply
2. AF
  Freeza says:
  
  Dec 08, 2022 at 12:55
  
  What evidence is there that they will pay better prices Warky?
  I would have thought Rolex and their AD’s will have a lot more overheads and admin than the Grey Market dealers….. Many who I suspect don’t declare all income.
  
  *I see your point regarding this model possibly turning into a watch “swapping” business between existing Rolex customers and the AD’s.
  If successful it’s good for the rich who can afford whatever Rolex charge for a 2nd hand watch and for the people who already “have a relationship” with an AD.
  For everyone else……. They will be s**t out of luck (which is how it currently works anyway).
  
  Reply
  1. Warky says:
    
    Dec 08, 2022 at 13:29
    
    None as yet – the scheme was only just announced and thus far it’s only Bucherer.
    
    My AD tells me they will be signing up to it next year, and he invariably offers me better prices when I have “shopped around” in the past for my pieces as PX.
    
    None of those were Rolex, but I would expect the pattern to continue because they will be able to charge more so that seems logical.
    
    Plus you will be scratching his back by PXing a model he can make good money on….so he is likely to scratch your back by supplying a new steel sports?‍♂️
    
    My point to RJ is that this is the price that matters – to the sellers. There will always be buyers and many will happily pay a bit more to get that bit of paper.
    
    Like you say – maintains the status quo which is what Rolex and existing owners will want. Like I say, it does that by removing other dealers from the equation.
    
    Reply
  2. JF
    Jmzf_2021 says:
    
    Dec 08, 2022 at 14:32
    
    I can imagine getting a call from the local AD, “Mr Smith, we hope you’ve been enjoying your sub acquired four years ago and we noted you inquired about a gmt 2. We have one in stock and would like to offer you a trade-in plus opportunity to move up… interested?”
    
    Reply
    1. Warky says:
      
      Dec 08, 2022 at 21:05
      
      Bingo.
      
      This is how it’s going to go I reckon. What other dealer can compete with that? Only the AD can sell you a new one at list ?‍♂️
      
      Reply
VMIyanks04 says:

Dec 08, 2022 at 22:43

I think you hit the mark when saying that the CPO program is mostly for the general public and not the watch enthusiast that typically knows what they are buying before they ever step foot in an AD. Although I wish it would bring down the cost of pre-owned Rolexes since they are sitting next to new Rolexes at MSRP, sadly I think it will now increase the price of those pre-owned Rolexes since is has the CPO tag and warranty. Also, I think the phrase that you should “buy the seller” is great advice. I’d much rather go to a watch-enthusiast pre-owned dealer (like Bob’s or Theo & Harris) that knows their Rolexes than my local AD that’s just looking to make a sale to the general public. I’ve talked to some and sometimes I know more than they do!

Reply
AG
Armandgjr0874 says:

Dec 09, 2022 at 23:48

In my opinion, gray market of NEW Rolex wont end because the ADs sells them to their most important customers, who, gray market!!!
The only way to see them disapear is with more production or with a global economical crisis….
This strategic seems ok, will help to lower prices a little, but I do not expect to go back 4 years ago where visiting AD was a great experience!!!

Reply

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