Why does Hermès cost so much? And is it actually worth buying?

Why does Hermès cost so much?

If you've ever wished for a Birkin bag but were shocked by its price, you might wonder, "Why is Hermès so expensive?" Let's find out why Hermès is one of the most expensive luxury brands out there.

Hermes, renowned for its exquisite leather bags, stands out as a premier luxury brand acclaimed for its unparalleled craftsmanship and exclusivity.

Being consistently ranked as the world's most esteemed luxury label, Hermes commands premium prices due to several factors, foremost among them being its meticulously handcrafted approach to manufacturing. Each item is painstakingly created by skilled artisans, ensuring the highest standards of quality and attention to detail.

Moreover, Hermes products are crafted from top-tier materials such as luxurious leathers, exotic skins, and sumptuous suede, further enhancing their allure and durability.

Hermès bags like Kelly and Birkin aren't rushed. It takes artisans 15 to 20 hours for a Kelly bag and 48 hours for a Birkin. They meticulously inspect the leather, hand-stitch the bags, and weld the metal parts for quality. With only about 12,000 bags made a year, Hermès ensures each piece is top-notch, resulting in bags that stand the test of time.

Notably, investing in Hermes is considered a savvy financial decision, as evidenced by a 2017 study revealing that Birkin Hermes bags have seen a staggering 500% increase in value over the past 35 years, averaging a remarkable annual growth rate of 14%.

Why is Hermès so pricey in the resale market?

Surprisingly, certain Hermès items, notably the Birkin bag, prove to be more lucrative investments than stocks or gold. The average annual return on a Birkin bag stands at 14.2%, surpassing the S&P's 8.7% and gold's -1.5%.

How does Hermès maintain its exclusivity?

Through strategic limitations on availability. For instance, there are approximately only 200,000 Birkin bags in circulation, a tactic that enhances the brand's allure and justifies its premium pricing.

In addition to their superior craftsmanship and material quality, Hermes maintains its exclusivity by imposing strict limits on the number of Birkin bags a client can purchase annually. This scarcity strategy serves to preserve the brand's prestige and desirability among discerning clientele.

So, simply strolling into a Hermès boutique won't guarantee you a bag. Building rapport with a store associate is crucial, as they may assist you in securing a bag when available. However, there's a limit; you can only purchase two quota bags annually. To explore non-quota options, refer to our guide on Hermes Starter Handbags.

Furthermore, Hermès maintains exclusivity by setting high prices and periodically increasing them. This strategy ensures the brand's desirability and scarcity, prompting other luxury brands like Chanel, Bottega, and YSL to follow suit by raising prices.

In essence, the allure of Hermes lies in its unparalleled dedication to craftsmanship, use of premium materials, and status as a coveted investment piece, making it a symbol of luxury and sophistication revered by connoisseurs worldwide.

The primary factors contributing to the high price of Hermès products are their exceptional quality and limited availability.