Many people buy luxury bags thinking they are a good investment. This is because they know that they will increase in value. However, this is not always the case.
Unlike other products that depreciate, bags usually have a high value at resale. Here are some reasons why you should invest in a designer bag:
1. They are a status symbol
Luxury bags are a symbol of status and can convey a sense of sophistication and wealth. They can boost confidence and leave a lasting impression in social and professional settings. However, it is important to remember that social status is not defined solely by material possessions and that acquiring these items should be done responsibly. It is also vital to distinguish between wants and needs and regularly assess your financial situation and priorities to ensure that you are making the right investment decisions.
In many cases, the price tag on a luxury bag is due to the high level of craftsmanship and attention to detail. The meticulous embroidery, intricate hardware, and hand-stitched seams all contribute to the elevated cost of a designer bag. In addition, brand prestige can also drive the price of a bag. Luxury fashion brands with centuries-old histories can command premium prices, especially if celebrities and influencers covet their products.
Despite their elevated price tags, luxury bags are still considered to be a good investment because they tend to retain value over time. This is in part because of their status as symbols of prestige, but it is also due to the fact that they are often made with quality materials that can withstand wear and tear. Additionally, many luxury bags are heirloom pieces that can be passed down from generation to generation.
As with any type of investment, it is important to do your research before buying a luxury bag. A number of factors can impact its value, including the condition it is in, the name and reputation of the brand, and the rarity of the style. It is also a good idea to buy from a reputable seller that offers a warranty and returns policy.
As with any type of investment, it is essential to consider your financial situation and goals before purchasing a luxury bag. If you are interested in investing in a luxury bag, create a savings plan and set milestones to achieve your goal. This will allow you to savor the anticipation and enjoy your new purchase without compromising your financial stability.
2. They have a higher value at resale
When it comes to investment, people often think of things like stocks and bonds, but some consider luxury bags a better option because they have a much higher resale value. This is because these bags are made from high-quality materials and are often more durable than regular handbags. Plus, they are usually limited edition and hard to find, so once they’re sold out, they can become collector’s items. Some even have a resale value of up to 300% after 10 years!
The resale value of luxury bags can vary, depending on the brand and style. For example, a Chanel flap bag can sell for three times its retail price on the resale market. Meanwhile, the Hermes Kelly bag has risen by 129% over the past decade. In addition, mini editions and collaborations have a higher resale value than standard models.
Moreover, the resale value of luxury bags also depends on their condition. To keep your bag in good condition, it’s important to store it in the original dust bag and avoid storing it with other items. You should also take care not to scratch or snag your bag, as this could damage it. And if you ever decide to sell your bag, make sure to keep all the original paperwork and packaging.
Buying a luxury bag is a big investment, so you should choose one that you’ll wear for years to come. However, if you’re not quite ready to commit to such an expense, plenty of other options can still get you a great return on your investment. For instance, you can buy a used designer bag from a consignment shop or online marketplace like The RealReal. In fact, according to The RealReal’s 2023 Luxury Consignment Report, the aspirational ’It’ bag is shifting down-market, and more shoppers are looking for fair condition “gateway” bags from designers like Bottega Veneta, Prada, Celine, and Miu Miu. This is a reflection of the current fashion climate, where Gen Z and millennials are increasingly shopping for pre-loved luxury goods on sites like The RealReal.
3. They are a collectible
In many ways, luxury handbags have become like collectibles. In this sense, they can be viewed as investments that can yield a profit in the future. However, there are several factors to consider when deciding whether or not to invest in a designer bag. These include the condition, the brand’s reputation, and the market value of the bag. In addition, the price of a luxury bag can also increase or decrease depending on how much demand it has.
As such, it’s important to choose a bag that you actually want to own. You should also be sure that you are investing in a genuine, high-quality piece. Many fakes are sold in the luxury marketplace, so be sure to look for signs of quality. For example, if a bag feels cheap and hollow, it is likely fake. Moreover, a quality designer bag will have a smooth leather surface that doesn’t scratch or mark easily.
Another thing to consider is how illiquid your investment bag is. This means how often it is bought and sold on a given day, month, or year. Luxury bags tend to be more illiquid than other types of assets, which can make them more of a long-term investment.
A good way to measure a bag’s liquidity is to compare its price with that of similar bags on resale sites. This will give you a better idea of how quickly it will increase or decrease in value. However, if you are considering buying a bag for its resale value, it’s best to stick to neutral colors and styles. Trendy designs can quickly go out of style, making it harder to resell the bag later on.
While the resale value of designer bags has increased, it’s not as profitable as traditional investments. For instance, a Birkin bag has returned 14.2% annually over the past 35 years, outperforming the S&P 500 and gold. Additionally, most resale stores charge between 15 and 40% of the total sales price, which can reduce your profits. Additionally, some bags are not worth reselling, such as vintage pieces and limited-edition bags.
4. They are a form of investment
Handbags are starting to take the place of rare art, vintage cars, and whisky as a form of investment. In fact, in 2020, resale values on popular bags like Chanel, Hermes, and Louis Vuitton outperformed rare artwork, antique coins, and first-edition books, according to research by Art Market Research.
While investing in a designer bag may seem counterintuitive, it’s becoming more common as women are looking for a fashionable and creative way to grow their wealth. According to a study by The RealReal, Gen Z and millennials now account for 41% of the site’s luxury resale market, with bags from Chloe, Hermes, Celine, Saint Laurent, Prada, and Telfar among their top choices.
The best way to invest in a designer bag is to choose one that you love and will use. The best designer bags will hold their value on the resale market and increase in value over time. A good place to start is by buying a classic silhouette that will never go out of style, such as a Chanel Gabrielle or a Hermes Birkin. But don’t limit yourself to classic styles — many designers are creating contemporary It bags that are gaining popularity, such as the Gucci Jackie or the Dior Saddle.
In order to make a profit, it’s important to buy your bags from reputable resellers and resale companies that charge low commission fees. If you’re planning on reselling your bags for a profit, it’s also important to consider how much demand there is for the particular bag you are selling. The more popular the bag, the higher the chance of making a profit.
One thing to keep in mind is that bags are not a traditional business investment, meaning you can’t develop strategies and techniques for increasing sales like you would with stocks and bonds. Another drawback to investing in a designer bag is that you won’t see immediate returns. If you’re looking for a quick return, this isn’t the right type of investment for you.
As a fashion and lifestyle blogger, I’m a big fan of resale, so I’ve always loved shopping for second-hand luxury bags on The RealReal. But what if you could get that same feeling of gratification without the price tag? I’m happy to say that you can. Thanks to online resale marketplaces like Rebag, you can now do just that.