Engineering Marvels: Why Are Rolexes So Expensive?

Are Rolex watches just a regular timepiece with the "luxury" label markup, or is there more to it?
Christopher McFadden

Have you ever wondered why a Rolex is so expensive? One of the world's most popular brands, these Swiss luxury watches are the envy of many. But have you ever thought about why, exactly, they demand such a high price tag? What makes them better?

At the end of the day, aren't they just a regular timepiece with the "luxury" label markup? As it turns out, you are not just paying for the name but also the materials and the "time" of a master craftsman in every watch.

Why are Rolex watches so expensive?

If you want to know why the brand is so expensive, you may want to watch this demonstration of a Rolex Submariner being disassembled. The video shows intricacies involved in the making of the timepiece in exquisite detail.

The demonstration is, of course, performed by a professional watchmaker, who meticulously picks apart the watch with great skill. It goes without saying, unless you are prepared to risk a huge investment, you shouldn't try this at home.

Engineering Marvels: Why Are Rolexes So Expensive?

You will quickly come to appreciate that this is a very sophisticated piece of kit and nothing at all like something you might get out of a Christmas cracker. Not only that, but it is quite literally a work of art containing hundreds of individual parts.

In that sense, Rolex watches can be compared to vintage timepieces such as those created by Patek Philippe. But let's expand a bit on what is involved in making a single Rolex.

Can Rolex prices really be justified?

Although Rolex watches demand a high price tag, you'll likely be hard pushed to find another product with the same level of quality in each piece. This is an interesting fact and one reason why the watches are so popular in the luxury market. Over time, Rolex has developed a reputation for quality that is well justified, they largely manufacture mechanical watches, which by their very nature are incredibly time-consuming to produce. 

Mechanical watches, not only those by Rolex, generally command a higher price because of the nature of the product. Here are some of the main reasons that a Rolex watch commands such a high price.

Please note, this list is far from exhaustive and is in no particular order.

1. Rolex watches cost a lot to design

Watchmaking is a demanding profession and Rolex watches are no exception. A Rolex watch has very high in-house development costs in terms of both design and craftsmanship. It not only costs a lot to develop the design of the movements and assemble them, but the materials used in the actual construction are also not cheap either. 

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Rolex even has its own research and development lab department — well, several actually. These are well equipped and highly professional facilities. They spend their time developing more efficient manufacturing methods and develop new techniques to keep ahead of the curve. 

To make their watches some of the best in the world, Rolex employs some highly sophisticated and sensitive pieces of equipment, like electron microscopes and gas spectrometers. As the parts can be pretty small, it is very important the materials used are up to the task. Their stress room tests individual parts to literal destruction. 

2. Mechanical watches are expensive to build

Engineering Marvels: Why Are Rolexes So Expensive?

Mechanical watches are also not the cheapest things to build. Owing to the small size of most of the parts, there is a high failure rate during assembly and manufacture. 

Most are also polished and finished by hand as well. Also, factor in that they are made in Switzerland, with its high labor costs, and you should start to get an appreciation for their overheads. 

3. Rolex seems to buy into the philosophy of "no expense spared"

Mr. Hammond of Ingen would blush at the lengths Rolex goes to when building a single watch. The materials are very expensive. Rolex, for example, tends to use 904L steel which is leagues ahead of even most luxury market equivalents, which tend to use the cheaper 316L steel. 

This 904L steel makes the watches harder, shinier, and also more expensive by default. Dials are often made of white gold and bezels tend to be ceramic. The numbers themselves are often made of sandblasted platinum, and the movements and bezel include real gemstones. These are all expensive materials in their own right.

4. Rolex is a "control freak"

Engineering Marvels: Why Are Rolexes So Expensive?

As previously mentioned, and proof positive (so to speak) when handling one, the quality of Rolex watches are unparalleled. When you compare one to their competitors like, Tag Heuer or Omega, they do stand a "cut above".

The quality makes it obvious that they are worth the price tag. Rolex watches also hold their value very well on the resale market, providing they are genuine, of course. Rolex makes around 800K watches per annum. 

Every single part of the production process is quality controlled, as you'd expect from a luxury item. For example, the handles of the Rolex bezels on some watches must be so precise that the stones should not miss their ideal position by no more than a quarter the thickness of a human hair. Rolex even controls the melting down of precious metals, like gold and silver, that are used in their products. 

But, like any QA system, it can fail on occasion. 

As an aside, their symbol has a very interesting origin. Quite incredible really.

5. But Rolex watches weren't always expensive

Engineering Marvels: Why Are Rolexes So Expensive?

Back in the '50s, Rolex watches weren't actually that expensive. Their price started going up over the years and before long, they had become one of the most expensive watches in the world. 

Back in the 1950s, according to some sources, a Rolex Submariner would set you back around $150 (that is around $1,460 in modern money). To put that into perspective, an entry-level Rolex watch today would cost you around $5,000. Most pieces people buy, however, tend to range in price between $8,000 and $12,000.

In this sense, a Rolex watch back in the day would have been no more expensive than buying a mid-to high-range "affordable" mechanical watch today. However, as time has gone by, it is clear that such an investment back in the day has certainly paid dividends over time, excuse the pun. 

Despite their enormous price tag compared to other watches, you are actually paying for a lot more than meets the eye. Rolex watches are not just a practical object, they are also a literal fusion of engineering and watchmaking

Collectors simply love this brand and will pay lots of money to wear it. In fact, Rolex Daytona holds a record for the most expensive wristwatch sold on auction. The stainless steel watch belonged to Paul Newman and was sold in Phillips Auction House, New York for a total of $17.8 million trumping the previous record set by Bao Dai Rolex ($5 million) and Patek Phillipe ($11 million). Paul Newman's Rolex is just an example of how special and cool this brand actually is.

So to answer the question "Why a Rolex is so Expensive?", people must understand and appreciate the craftsmanship, material costs, and time consumed in each and every single piece.

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