Fact: if you read a quarterly report for
Gucci (which is a public company) it is clearly stated that all products are marked up 90%. That means that our $1000 bags cost about $100 to make, (probably less because of the volume of accessories produced.)
Um, don't you mean a 900% mark-up?
A 90% mark-up on a $100 bag would be $90, resulting in a $190 retail price; not $900, resulting in a $1,000 retail price, wouldn't it?!!
90% x $100 = $90
900% x $100 = $900
Also, remember that, as well as selling through their own boutiques, designers sell through retailers and they can't charge less than their retailers; so the mark-up, when they sell directly, will be
much higher than the mark-up when they sell through their retailers.
Incidentally, I find it
very hard to believe that the average Gucci bag would only cost $100 to have made in Italy; as we have fine suede jewellery cases, hand made in France, for our company, by the same artisans that make them for all the biggest French designer names (and I mean
all!) - so I know what highest quality leather goods cost to produce (and that they
are, genuinely, very high quality [we don't have Kool-Aid in the UK!]).
Even allowing for the fact that production in Italy costs slightly less and that the quality may not be quite as high, it still seems a little low to me...
You are right about one thing - that there are discounts offered on large orders.
As others have mentioned, most designers advertise heavily and have to run extremely expensive premises, in the most expensive cities in the world. This, obviously, pushes up their costs, considerably.
I would guess that the mark up, through Gucci's own stores, is nearer 500 - 600%; very high, but not 900% high.
But I don't know for sure, as I haven't read their reports!
Speaking of high mark-ups, I recently heard about shoes being sold for £35 in the UK, that only cost £2 to produce in China; that's a 1,750% mark-up!
Finally, as someone has already mentioned; quality does not necessarily equal durability.
If you just want durabilty - may I suggest you buy workwear, or sportswear?
