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Showing posts from July, 2019

Scarcity as Strategy in Horology

Watch industry observers have spent a lot of time dissecting the unavailability of steel Rolex sports models this year (submariner, GMT, etc). These timepieces are presently impossible to buy at the manufacturer's suggested retail price (MSRP). You can acquire them outside official channels but only at a multiple of retail. For one summary of this topic check out episode 48 of Hodinkee radio below. I've listened to a lot of explanations and, frankly, almost all of them miss the point. While I don't know everything I should about perlage I do know something about economics. And economics explains almost everything about this watch industry phenomenon. Horolonomics 101 Rolex is involved in rationing: a shortage which is, for the most part, manufactured and intentional. With this discussion I will explain two things: 1) what rationing does and, 2) why Rolex would do this. The TL;DR on what follows is that the shortage: is inefficient. Creates profit for watch bu