There is no faster way to lose money on watches than trying to improve them.
No one makes Rolex watches better than Rolex.
That statement might sound obvious, but it is an important reminder to the thousands of people spending millions of dollars modifying their watches with custom accoutrements and new parts. That guy posing with his arms crossed (let’s call him Rick Ross) and a diamond-encrusted Oyster on his wrist doesn’t know that his statement piece is making a very strong statement indeed: This guy just flushed a lot of money down the toilet. Paul Altieri, owner of Bob’s Watches, a major player in the used Rolex market, says he’s seeing mod-jobs with increasing frequency and breaking a hell of a lot of bad news.
“People pay so much for custom watches and then, when they go to sell them, they think they’ve got this investment, but that $80,000 watch is worth $5,000 or $8,000 to us,” he explains. "It’s just not worth the work."
When Altieri says, “the work,” what he’s talking about is tearing all those jewels off, ordering new bezels and faces and restoring aftermarket watches to their former glory. Under American law and Rolexes official policies, any watch that contains foreign parts is no longer a Rolex. It’s technically a counterfeit. That means that unless he can get a good price selling diamonds – and good luck with that – Ross’s iced–out bling is actually worth less than his original watch.
Ross has a very particular problem, but it’s illustrative of a bigger issue facing more restrained collectors and musicians. Let’s take, for instance, the saga of John Mayer. The crooner and boyfriend of many famous ladies sued his watch dealer earlier this year after finding out that many of the $5,000,000 worth of vintage watches he had purchased incorporated non-Rolex parts. These “frankenwatches” (a colorful bit of industry lingo) were worth millions less than Mayer had paid. They were – thanks to Rolex’s official policy on the modification of its timepieces – no longer Rolexes at all.
It’s easy to mock Mayer (on a number of levels), but he’s hardly the first to get taken for a ride. In fact, Altieri says fully 20 percent of the watches he buys need to have parts replaced. That’s a lot of watches and a lot of parts, which makes sense because we’re talking about a lot of money.
“People go to add a link and they find out it’s $2000 for a factory link so they get one made.” Altieri says. "Years later, the bracelet isn’t fitting right so the customer sends it to Rolex and they look at it and say, ‘We don’t stand behind this.’ It’s like any other luxury good, the brand is associated with quality so it hurts them if people think it’s not aging well.”
There’s a reason Rolexes come with warranties and there is a reason smart investors don’t skimp even after those warranties expire. The value of a watch is a product of its perfection. If it doesn’t work like, well, clockwork, than it isn’t a luxury product. If it lets water in, it isn’t a luxury product. If it has diamonds on it that weren’t put there by Swiss technicians than it isn’t a luxury product. It’s just a super shiny watch.
"Rolex has spent billions on technology so they can control the gold and steel they use,” says Altieri. "Aftermarket shops are never going to be good as the actual factory.”
And that’s your perspective for you. That link you can buy at the local dealer for a couple thousand dollars didn’t cost a couple thousand dollars to make, but the first one Rolex made cost way more than that. Small jewelers only ever make first models. They are cheaper, sure, but they are also cheaper.
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