How can one expect a profit from buying and reselling luxury bags? Business analysts found four main ways how luxury bags can gain value over time and are therefore worthy investments.
Kelly. Speedy. Birkin. Saddle. To someone unfamiliar with the intersection of fashion and luxury, these are just random words that don’t really mean anything. But to those privy to the world of luxury, these names represent larger than life icons that have been around longer than the celebrities and influencers that tote them around oh so casually. These names refer to none other than the most coveted luxury bags from the world’s most prestigious designer houses. These bags represent not only a glamorous accessory to put one’s belongings in, but also a specific lifestyle and status in society.
More recently, these luxury bags have also come to represent an opportunity to make an investment. Our typical conceptions of investments usually come in the form of stocks, bonds, real estate, or even cryptocurrency. But it need not be limited to that. The principle behind investing is expending money on something that has foreseeable profitability in the near or far future. Meaning, we can invest in anything that we think can increase value over time. When it comes to commodity investments or investing on tangible assets, old school investors usually turn to luxury watches or jewelry. For younger generations however, most notably for Millenials and Gen Z, preloved or second hand luxury bags have become the more popular investment of choice.
How can one expect a profit from buying and reselling luxury bags? Business analysts found four main ways how luxury bags can gain value over time and are therefore worthy investments.
The designer’s reputation
The continued success and status of designer houses are owed to their reputation for providing craftsmanship and service at the highest possible quality. By employing the best craftsmen, using the finest materials, and providing a luxurious shopping experience, well-loved designers have been able to maintain their desirable reputation for decades. Another crucial aspect of this is their maintenance of their air of exclusivity. Not everyone can simply walk in in their stores and purchase any bag of their choosing. This makes their items even more sought-after, as everyone wants to be part of that exclusive club.
The bag’s reputation
In a similar way, even the bags themselves have their own reputations stitched to their bodies. As mentioned previously, there are bags such as the Hermès Kelly and the Louis Vuitton Speedy that have achieved the status of iconhood. This means that no matter how many trends, seasons, and fashion renaissance come and go, they remain to be in style and therefore coveted. Apart from how it’s made and what it’s made of, a bag’s long standing desirability usually comes from the historical or cultural background of their rise to popularity. A classic example of this is the Lady Dior bag from the house of Dior that gained its cult following thanks to Princess Diana’s noticeable affection for it.
Material used
When talking about any item’s value, one cannot skip out on the significance of the materials used to make such an item. For luxury bags in particular, the material that forms the bag’s body as well as its hardware accents can really drive up the number on its price tag. This is especially because designer houses love reinventing their classic pieces to come in different colors and types of leather. The Hermès Birkin for example, is already an icon in and of itself and is therefore, already incredibly expensive. Once we’re talking about its editions that come in special materials such as dyed crocodile skin and diamond encrusted hardware, its resale price can go up to over 300,000 USD.
Rarity at retail
Finally and perhaps one of the most significant causes for a bag’s increase in value over time is its rarity in retail. This refers to how many units of a certain bag was sold through the stores when it was first launched. If the bag was sold in limited quantities and was no longer made available after the initial launch, then one can expect this model to sell for much higher in the resale market since interested buyers no longer have the option to purchase it from the store. Another form of rarity that drives up the price of luxury bags is when the designer associated with a specific piece has retired or passed on. This is the case for Chanel’s late designer Karl Lagerfeld, whom some of the House’s most iconic pieces come from.
This is how luxury bags have come to be a lucrative investment opportunity. As time goes by, these bags gain value thanks to their designers, long standing reputation, top quality materials, and rarity. Once you decide to purchase your first or next luxury bag, just be mindful of keeping it in excellent condition so as to preserve its worth. And remember that as with all investments, doing thorough research and observing the market keenly are the keys to success.
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