Why Is Rolex SO Expensive?

for over a hundred years rolex has been one of the most popular watch companies in the world what started as a simple idea to make more accurate timepieces evolved into one of the most secretive and exclusive luxury brands not only did rolex get to the top of their industry but they did it while maintaining a james bond level of security about their practices so what's going on behind the laser beams barbed wire and 10 foot high concrete walls well we don't know but we did a bit of digging and this is what we found out [Music] rolex is known as a fancy swiss watch company but it was actually founded by two british brother-in-laws brothers-in-law brothers-in-law hans wilsdorf and alfred davis founded the company in 1905 and after a terrible branding choice naming it after themselves willsdorf and alfred they thankfully renamed the company to rolex and then a few years after that in 1919 the gentleman moved the company from london to geneva switzerland to avoid import taxes they chose the name rolex a word they totally just made up because it sounded easy to pronounce in any language hans was on a double-decker bus in london when he said a genie whispered the name in his ear so there's that i guess our buddy hans who was the brains behind the operation while alfred was more of the sugar daddy in this situation envisioned a watch worn on the wrist now to us in 2022 that may sound like the dumbest sentence in the world but you have to remember that back then people were still using those fancy time pieces with the chain attached to it and these things were actually not that accurate at all they were mostly used as a status symbol for the wealthy huh bit of foreshadowing there perhaps however time did matter for those who actually had to work and for those workers they needed to get to early shifts at factories back then there were no alarm clocks so they had to make sure that their employees woke up on time and they would employ knocker uppers to knock on the windows of people that needed to get up makes my iphone alarm seem actually kind of tolerable so this idea for a watch that you wear on your wrist was really kind of revolutionary at least for men women were already wearing wrist watches but they were marketed as bracelets at the time the high society men at the time stuck it out with their fancy gold chains and laughed at poor hans for his crazy idea because you know jewelry's for girls that's how they talked back then but hands did not give up on his dream and he quietly tinkered and perfected his idea until the world was ready and then the world was ready suddenly we were at war and people started to realize that having a timepiece tucked into your waistband wasn't exactly efficient in battle so they strapped their watches around their wrists when the war ended and it became evident that wearing timepieces on your wrist was actually on fleek hands did not miss his shot rolex was right there at the brink of all these cultural shifts with big put me in coach energy i'm ready to go in coach just give me a chance i know there's a lot riding on them and their watches were instantly popular the demand for accuracy also increased because men got used to operating on strict time schedules during the war and from the get-go rolex has won several awards for their innovation and their accuracy now remember in a previous video where we talked about how carhartt went from a reliable workwear brand to a luxury streetwear brand with a strange amount of universal appeal rolex's story is kind of like that just more double-oh-seven the company has always been extremely focused on perfecting the wristwatch one of their original goals was to produce utilitarian watches that athletes and extreme adventurers could wear in 1926 the company released the oyster which was the first ever waterproof watch they partnered with a professional swimmer who wore the oyster while she swam across the english channel proving that it still worked after 10 hours in the water this marketing plan worked so well that they kept added and in the next few years rolex watches were being worn by pilots flying over mount everest drivers going 300 miles per hour in motor races divers going meters and taking part in other extreme sports the company was doing everything that they could to prove that their watches could survive any type of extreme situation while this did prove that their watches were very durable it also kind of built some hype around the brand these guys were like the original red bull energy drink but like a fancy watch you wear on your wrist with an already established reputation for high quality extremely durable products in the 1960s rolex very deliberately moved into the luxury watch market over the years they had been perfecting their watches and over time slowly raising their prices but the rolex brand had more than practical ambitions to solidify their luxury status they needed ice and in case you aren't a hip 30 year old millennial like myself that means diamonds cut the burp out rolex started adding gemstones to their watches in the 60s and that bling put them in luxury territory but it wasn't just some fancy rocks that demanded thousands to tens of thousands of dollars for their watches rolex watches are legendary because nobody really knows how they're made rolex like every brand has a corporate persona that drives the image in the lifestyle that people aspire to when they purchase their products rolex by being extremely secretive and elusive elevates their brand status by playing the sort of 007 character that they're so famously associated with which was a marketing plan that they definitely did on purpose didn't say goodbye to felix uh man talk yikes they make all their watches in-house at their headquarters in switzerland which is heavily guarded and has a no photos policy we're talking underground safes iris scanners heavily armored trucks and all that other fort knox style it sounds kind of awesome every single watch takes a year to make and goes through extremely rigorous testing to make sure that it's up to snuff before it can be sold they even have their own science lab where they have their own gemologists quality checking every single diamond and gemstone before they put them in their watches now of course bear in mind that this is the information that news agencies and industry reps have been told and assumed to be true because nobody has actually seen all of this for sure visitors are strictly not allowed at their facility but a super spy watch factory built into the mountainside is just one part of this amazing story rolex also controls the way that their watches are bought and sold they don't sell any of their watches online so you have to find a certified retailer near you to buy one but it's not just as easy as going into a store and picking out a watch despite their constant production the demand for rolex is so high that retailers are frequently out of stock and you'll most likely end up waiting on a multi-year wait list to get the watch you want and this is not a flaw though it's a feature given the secrecy around rolex production practices they could easily increase the number of watches they make by tomorrow and make a ton of money in the process but they don't by limiting the supply of watches that enter the market they create scarcity which if you know literally any economic principle means higher prices this drives shoppers with big wallets to the pre-owned rolex market which is often more expensive between speculative markets due to the shortage of supply and the exclusivity of the brand we see rolex becoming a wearable investment vintage rolexes sell for way more than their original listed price and often become wrist worn collectors items for the wealthy similar to having a banksy on the wall in their mansion but you would think with the literal millions of dollars being spent on these watches the influential investors would be more keen to know a bit more about the mysterious practices that they used to create them but they're definitely not turns out if people are getting rich off of stuff they don't really give a how it's made and this applies to basically everything that comes under that luxury label if you're buying a rolex it's probably for two maybe three reasons one you want to look rich two you want to invest your money into something that will likely make you more money down the road and three you needed a watch given those reasons argue with me if you want you don't really care how it's made and in fact knowing how it is made might actually reveal some less than desirable realities about your purchase that would affect its value negatively so it's actually in the rolex owner's best interest to avoid any potential issues and continue buying into the hype to solidify their investment and their public image and we have seen this before every once in a while a luxury brand gets called out and just like when malfoy tries to kill dumbledore but still somehow gets to come back to hogwarts the punishment rarely matches the crime louis vuitton was recently found out for burning their unsold bags to create a sense of exclusivity and avoid having to sell them for a discount but despite pretty serious backlash and headlines about this controversy people are still looking the other way and spending five thousand dollars on a handbag and this brings us to rolex's practices which obviously we can't tell you anything about because just like the cartel they're not exactly bringing their business plans to show and tell like honestly if a rolex exec had to do a bring your kid to work day that poor little twerp would just end up spending eight hours with a burlap sack over their head rolex uses a variety of gemstones gold and stainless steel in their watches and we all know by now that mining those minerals are often linked to extreme human rights violations not to mention the environmental harm that they cause from extraction but since rolex doesn't divulge any information about their mining processes it's hard to know how bad it is across the board traceability is a huge problem with rolex materials in that it basically doesn't exist when it comes to their gold rolex is very proud to let us all know that they have their own in-house gold foundry to refine their gold which apparently makes it even higher quality somehow but once again we have no idea where they get their organic materials but here's one of the things about rolex that actually blows my mind they're a non-profit that's right this is amazing i i can't freaking believe this back in the 1960s hans moved the entire business into this non-profit model and we don't entirely know why but this is my theory so the whole company is technically owned by the wilsdorf foundation and it owns and controls a hundred percent of the company now by definition a non-profit is in existence to create revenue for a particular cause but one side benefit of the non-profit structure is that you don't have to disclose anything about how the company works including your financials now they have a very fancy website that includes a bunch of different initiatives that they contribute to but they don't have any details about what those initiatives do or how much money they spend to support them now as a devil's advocate here i have to say that building a business around a non-profit structure is typically going to allow you to avoid that shareholder pressure basically if you own 100 of the business and you don't have to tell anybody how it's doing financially you can make more long-term investment decisions and build the business with more longevity in mind and that seems to be what rolex is doing because they don't seem to be overly invested in making as much money as physically possible and so far the business seems to be doing well despite the fact that we don't know anything about it now as society seems to be constantly introduced to more terrible things that we need to care about we want to feel like the money that we're spending is supporting companies that don't make things worse you hate to find out that your nespresso coffee pods are supporting child slavery he's already dead which means that you have to be careful about how you're spending your hard earned cash this vote with your dollars mentality has demanded more transparency from large and small companies about their production processes but there is a major difference in the companies who are openly transparent because they actually care and the ones who begrudgingly clean up their act because they were found out for doing something terrible and then in the middle of all this are the luxury brands rolex operates a secret service like business model because yeah they're probably doing some sketchy but also because that mystery actually increases the intrigue and helps them sell more watches so if you need to know what time it is just use the phone in your pocket like everybody else and if you like this video give it a like and we'll see you in the next one

Channel: Future Proof

Views: 214,794

Keywords: rolex watches, rolex watch, rolex daytona, rolex cosmogramma, rolex, rolex review, rolex secret, rolex conspiracy, watch, watches, watch industry, metal, diamonds, gold, silver, precious metals

Id: PCZMwsaefyk

Length: 13min 48sec (828 seconds)

Published: Wed Aug 17 2022