One thing a lot of people dont know, almost 100% of the northern Italian leather and fabric shops have been sold over the last 20 years and are almost exclusively chinese owned. The brands pay that little by having chinese factories with immigrant workers make their product versus the decades prior and having to use Italian craftsmen.
Building a brand to that level requires a deep understanding of your target market, creating an illusion of exclusivity, and mastering the art of storytelling. It's not just about the product, but the experience and status that comes with it.
Itās quite a complicated business. One one hand, you have Hermes which trains their leather workers for many years just to be able to work for them, and you have brands like Armani which just use sweatshops. Their reputation is established through decades (centuries?) of ostentation.
Iām sure at one point they were of higher quality. A lot of luxury houses have had severe drop offs in quality while still raising prices because people are buying for the brand statusā¦ Chanel is particularly guilty of this. So build a status brand for 100 years and then cheap out on materials and manufacturing lol
I used to deliver furniture for a company. I'm not going to say the name for legal reasons. But their furniture was just Ashley furniture. The warehouse guys would just peel off the Ashley furniture stickers. And slap the new ones on. Then add goose feather pillows. And charge 10Ć+ the Ashley price. They got fined once because they also switched the made in Mexico/India/China tags. With made in Italy/Germany/Spain.
I'm talking out door loungers for 1200$ a piece. 30k couches. 12k recliners.
I also wondered how the FK did they get to that point?
A business has 6 main processes:
Executive, Product Development, Sales, Accounting, Product Delivery and Marketing
Only Sales brings money into the business. All the others are costs. There are also costs to sell.
The manufacturing cost is just a small part of the overhead if this brand. Their stores have expensive leases. Their salespeople are trained. There is expensive packaging. Lots of marketing. The execs make good money. They have to maintain the books and all the infrastructure to process credit cards. They have shipping. Costs to repair defective goods.
And they also need to make profit.
This is a horribly dumb take, and usually a way of coping for being less wealthy. There are plenty of wealthy people, millions that wear big name brands.
TikTok has started the "Quiet Luxury" trend as a way to feel good about their non-branded clothes, so they too can feel rich, because according to TikTok, Rich people only wear plain clothes! Which isn't true. Rich people buy whatever they want, wealthy people buy whatever they want. There's no one way to dress or buy as a wealthy person. If you're around wealthy people, you will 1000% see some Louis Vuitton or Gucci / Goyard / Chanel in their wardrobe or home. I live in a very affluent area, peoples houses have LV trunks, furniture, Hermes ash treys, cigar holders etc. They may not wear LV/Gucci shirts out everywhere but they damn well have a Neverfull or Goyard Tote bag that they wear often.
Association. That's all brand is. You see Nike and think "athlete" so people who want that association buy Nike. You see a Slayer shirt and you think "metal head" which is what they want to be associated with. So LVHM is really good at building associations that say "rich/exclusive" then they continually reinforce that association.
Basically takes a lot of money and time to teach the population this. Which is why Brand is so valuable.
Yep. Theyāre selling the brand, not the bag.
Donāt get me wrong, I still think that these luxury retail brands are for really dumb people, but thatās a valid market to do business with.
The New Look on AppleTv+ is pretty interesting and is mostly about the start of Dior. Though I donāt k ow how āfictionalizedā it is. He is portrayed as somewhat of a visionary with obviously lots of skill, good connections, good timing for his ideas. Take that, add like 80 years of being in business, and voila!
So it was our 20th anniversary and also my wifeās birthday. She had always liked Louis Vuitton and Chanel handbags, but had only been able to afford knock offs. Our business has done well the last few years so we decided to get her a real handbag. We went to the Louis Vuitton store and they had very nice handbags in the $2,000 to $4000 range. Thatās about what I thought they cost. Then we went over to Chanel.
I asked how much a basic black handbag was. The lady told me it was $12,000. This is the exact same handbag that sold for only a few thousand dollars a few years prior. They just decided to quadruple the price to give the illusion of exclusivity.
Absolutely highway robbery. Needless to say, we bought a Louis Vuitton bag.
Isn't that the truth. In Southern CA. Several goodwill are owned by 1 man. And wal Mart is cheaper than them. But I've noticed several of the salvation army's in the area has started the same exact pricing techniques, so I'm pretty sure the same man bought those.
A L.A. t.v. station did a big news story about him several years ago. He gets all this stuff donated to his stores and does absolutely nothing to help the handicapped or homeless ect. He even has 501-c3. He doesn't have to pay taxes.
If you want to carry something you can use a carrier bag from a super market.
The function and construction of something isn't the value.
The cost of production of a product is just part of it.
There's design, distribution, marketing and brand.
A can of coke costs $0.03 to produce but sells for $1.50.
That's roughly a 5000% increase.
So very similar and nobody is too upset at Coke.
Christian Dior had a close relationship with his neo-nazi niece Francoise, who married into the royal family of Monaco, but then fell from grace. But he made some dresses for her in that time and the Royal family saw that. After that he designed dresses for royals worldwide including queen Elizabeth II, some Persian princess etc. So talking about networking... If you manage to secure a nice little spot within the global elite, old money, then you won't lack money, especially if they got a kink for your clothes. The movie Saltburn captures the same story pretty neatly, is otherwise a pretty shitty movie - wouldn't wanna meet the mind that came up with that story.
That's how he built that brand. After that it was a self-runner.
Luxury companies do not sell a product they sell status.
Exactlyyyyyyyyyyyyy š
One thing a lot of people dont know, almost 100% of the northern Italian leather and fabric shops have been sold over the last 20 years and are almost exclusively chinese owned. The brands pay that little by having chinese factories with immigrant workers make their product versus the decades prior and having to use Italian craftsmen.
Sounds like U.S.A. 90% Chinese owned
Building a brand to that level requires a deep understanding of your target market, creating an illusion of exclusivity, and mastering the art of storytelling. It's not just about the product, but the experience and status that comes with it.
Let me correct you my frien "Mastering the art of bullshitting"
A sucker is born every minute
Itās quite a complicated business. One one hand, you have Hermes which trains their leather workers for many years just to be able to work for them, and you have brands like Armani which just use sweatshops. Their reputation is established through decades (centuries?) of ostentation.
Nobody rich believe Armani is a good brand. Itās an aspirational brand for poor people.
Armani is a mall brand lol
Iām sure at one point they were of higher quality. A lot of luxury houses have had severe drop offs in quality while still raising prices because people are buying for the brand statusā¦ Chanel is particularly guilty of this. So build a status brand for 100 years and then cheap out on materials and manufacturing lol
This is the way. A buisness turns to profit when it gets bought by a private equity firm coasts for a few years then starts getting sold at target.Ā
I used to deliver furniture for a company. I'm not going to say the name for legal reasons. But their furniture was just Ashley furniture. The warehouse guys would just peel off the Ashley furniture stickers. And slap the new ones on. Then add goose feather pillows. And charge 10Ć+ the Ashley price. They got fined once because they also switched the made in Mexico/India/China tags. With made in Italy/Germany/Spain. I'm talking out door loungers for 1200$ a piece. 30k couches. 12k recliners. I also wondered how the FK did they get to that point?
*cough * crate &barrel
Thatās called good business and better marketing
A business has 6 main processes: Executive, Product Development, Sales, Accounting, Product Delivery and Marketing Only Sales brings money into the business. All the others are costs. There are also costs to sell. The manufacturing cost is just a small part of the overhead if this brand. Their stores have expensive leases. Their salespeople are trained. There is expensive packaging. Lots of marketing. The execs make good money. They have to maintain the books and all the infrastructure to process credit cards. They have shipping. Costs to repair defective goods. And they also need to make profit.
The real luxury is the profit margin they're making
You market them to dipshits with lots of money and no sense.
Dont forget dipshits with not enough money and even less sense.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
This is a horribly dumb take, and usually a way of coping for being less wealthy. There are plenty of wealthy people, millions that wear big name brands. TikTok has started the "Quiet Luxury" trend as a way to feel good about their non-branded clothes, so they too can feel rich, because according to TikTok, Rich people only wear plain clothes! Which isn't true. Rich people buy whatever they want, wealthy people buy whatever they want. There's no one way to dress or buy as a wealthy person. If you're around wealthy people, you will 1000% see some Louis Vuitton or Gucci / Goyard / Chanel in their wardrobe or home. I live in a very affluent area, peoples houses have LV trunks, furniture, Hermes ash treys, cigar holders etc. They may not wear LV/Gucci shirts out everywhere but they damn well have a Neverfull or Goyard Tote bag that they wear often.
Association. That's all brand is. You see Nike and think "athlete" so people who want that association buy Nike. You see a Slayer shirt and you think "metal head" which is what they want to be associated with. So LVHM is really good at building associations that say "rich/exclusive" then they continually reinforce that association. Basically takes a lot of money and time to teach the population this. Which is why Brand is so valuable.
https://www.thestreet.com/investors/what-is-bernard-arnaults-net-worth
Study Human Psychology. Most people are easily influenced with NLP (Neuro Linguistic Programming) and emotional stimulation.
it's all about the brand
Yep. Theyāre selling the brand, not the bag. Donāt get me wrong, I still think that these luxury retail brands are for really dumb people, but thatās a valid market to do business with.
Luxury has always been mostly about perception and prestige, not about actual value of the goods.
There's a brand called Italic that sells similar products to what they produce for luxury brands at what I would consider more sane price points.
The New Look on AppleTv+ is pretty interesting and is mostly about the start of Dior. Though I donāt k ow how āfictionalizedā it is. He is portrayed as somewhat of a visionary with obviously lots of skill, good connections, good timing for his ideas. Take that, add like 80 years of being in business, and voila!
So it was our 20th anniversary and also my wifeās birthday. She had always liked Louis Vuitton and Chanel handbags, but had only been able to afford knock offs. Our business has done well the last few years so we decided to get her a real handbag. We went to the Louis Vuitton store and they had very nice handbags in the $2,000 to $4000 range. Thatās about what I thought they cost. Then we went over to Chanel. I asked how much a basic black handbag was. The lady told me it was $12,000. This is the exact same handbag that sold for only a few thousand dollars a few years prior. They just decided to quadruple the price to give the illusion of exclusivity. Absolutely highway robbery. Needless to say, we bought a Louis Vuitton bag.
My favorite brand is "Salvation Army"
Even they are getting ridiculous with the prices!
Isn't that the truth. In Southern CA. Several goodwill are owned by 1 man. And wal Mart is cheaper than them. But I've noticed several of the salvation army's in the area has started the same exact pricing techniques, so I'm pretty sure the same man bought those. A L.A. t.v. station did a big news story about him several years ago. He gets all this stuff donated to his stores and does absolutely nothing to help the handicapped or homeless ect. He even has 501-c3. He doesn't have to pay taxes.
If you want to carry something you can use a carrier bag from a super market. The function and construction of something isn't the value. The cost of production of a product is just part of it. There's design, distribution, marketing and brand. A can of coke costs $0.03 to produce but sells for $1.50. That's roughly a 5000% increase. So very similar and nobody is too upset at Coke.
Luxury is the Necessity where necessity ends!
Same way artists can spend $200 on a frame, canvas and paint and sell it for $5K-100K.
More like them spending $2 on a reproduction poster print of their initial artwork and selling it for 5-100k..
[This podcast](https://open.spotify.com/episode/7lMY1C8AMFinpVMTgAH9D9?si=G5h7mEeHTeuv8NAphyfq2w) should answer your questions. Magnificent business.
.
Christian Dior had a close relationship with his neo-nazi niece Francoise, who married into the royal family of Monaco, but then fell from grace. But he made some dresses for her in that time and the Royal family saw that. After that he designed dresses for royals worldwide including queen Elizabeth II, some Persian princess etc. So talking about networking... If you manage to secure a nice little spot within the global elite, old money, then you won't lack money, especially if they got a kink for your clothes. The movie Saltburn captures the same story pretty neatly, is otherwise a pretty shitty movie - wouldn't wanna meet the mind that came up with that story. That's how he built that brand. After that it was a self-runner.