Why buying luxury bags is not a good investment
Sometimes, when I casually browse videos on YouTube, I encounter some luxury channels discussing how buying luxury bags has been an excellent investment for them. However, that was only potentially true for a few Chanel, Hermes Birkin and Kelly bags. Most of the time, buying a luxury bag is like buying a new car or most of the stuff in life we acquire. The face value instantly drops once it gets past that 30 days return period. Some people may have made a profit by selling their luxury bags, but that's limited to trends and timing. For most of us who saw a bag we loved and bought without much consideration, it is not likely to retain value other than bringing us joy while using it.
Some people were indeed able to turn a profit selling the Chanel or Hermes bags they bought, but things are usually more complex than they seem. For example, it was easier to sell anything during or right after the Pandemic because people had more wealth to shop due to being stuck at home and the lack of expenses. People could make money by selling tropical plants, so yes, highly sought-after luxury bags could definitely fetch a high price tag. Unfortunately, that ship had sailed. After things settled down, we returned to our regular schedule and started to spend money elsewhere other than shopping. We may not have gotten a raise by returning to the office, but inflation has undoubtedly hit our wallet.
Due to the increase in expenses, people have been buying less. If you have frequently been shopping online, you would notice people no longer shell out their money for every It bag. Merchandise is not moving at the pace like what you saw during the Pandemic. The tiredness of the luxury bag market is most prominent with mid-range luxury brands. Brands that rarely had sales are now doing "private" sales faster than the season's transition.
When things are slow, brands must create newer products to excite customers, hoping to develop the next It bag miracle. However, with limited resources, it is more challenging for customers to pay attention to new products. With an oversaturated market, luxury bags can't hold their value. It is easy to notice that by checking out reseller websites like TheRealReal or Fashionphile. If you consider the prices you see there are low, imagine how low the compensation is for people who send in their luxury goods.
The luxury handbag craze has officially hit the plateau. Even brands like Louis Vuitton have reported a drop in sales. Brands that rode the trend upwards naturally will hit downward after the tipping point. It is an unavoidable natural cycle unless they do something unexpected to shift the fall. Luxury brands could keep raising prices to astronomical levels because we had more funds to shop when the only things we bought were masks and hand sanitizers. Now that we are dealing with inflation and economic struggles, we are less likely to open our wallets without thinking about it thrice.
Besides the financial reasons, super fakes have become a significant issue for the luxury community. Because bags like Hermes Birkin and Kelly are so popular, replica manufacturers have really honed their craftsmanship and perfected their imitation. Let aside replica bags; even dupes are everywhere. With people flaunting their fakes or dupes on social media, it creates a psychological effect, making the trending luxury handbags less desirable. For example, you can easily find videos that show LV and Chanel replicas that look identical to the real thing. You will only be able to tell if you are an experienced authenticator. After seeing so many fakes, I wondered if they were real every time I saw some specific luxury bag on the street. Maybe it is just me; I am not keen to pay $10k for a bag that looks like dupes everywhere that cost less than a fraction of the price.
Unfortunately, the dream of owning an investment luxury bag often bursts when you are trying to sell. People who can easily pay $10k to $20k are not buying from resellers. They are people who are sipping tea and champagne while people are wrapping up their purchases. Selling your bags on reseller websites is another level of complication. The fees they charge keep increasing, making you question your intelligence. Ultimately, you may feel stuck with a bag you no longer want if you don't cut losses. Selling it on your own isn't a pleasant journey, either. Have you tried selling anything on the Facebook Marketplace? Scammers playing tricks with honest people like they were from a circus. The fear of losing everything may make you find a space on your shelf instead.
Keeping your luxury bags in the closet thinking one day you will catch another round of price hikes would not be wise. It differs from buying a property, believing the house will make you a profit after 10-20 years. Generally, luxury bags are made with either leather or coated canvas. If you are unfamiliar, coated canvas means the canvas material was covered primarily with plastic. Owning bags in general, requires you to do maintenance work if you want them to last. Furthermore, it is even more challenging if you want your bags to look new after a few years. Luxury isn't always equal to quality. Brands have been caught skimping on material when producing the handbags you love. Bags don't last as long as they used to. To upkeep your luxury handbags, you must ensure they stay in optimum condition because you can't afford damage and have a renovation like you do with your house. That includes controlling the humidity, the temperature, and the airflow. You may need to condition leather bags periodically so they don't crack.
Like everything in life, don't simply accept everything I said because the situation I mentioned may not apply to you. Please do your research and re access it based on your decision. If you are still buying as usual, hanging out with luxury store SA's having an afternoon tea, you are likely to be in the fortunate group of people who don't have to worry about selling bags. On the other hand, if you Googled and found this article, it is not likely buying a luxury handbag can be an excellent investment for you based on the many unforeseen factors I mentioned. Ultimately, it is more important to enjoy things you own and not constantly wonder about the future of things or what if.
