here's what your money is paying for. (The 1st number is LVMH, the 2nd number is the luxury industry average) http://stocks.us.reuters.com/stocks/ratios.asp?symbol=LVMH.PA&WTmodLOC=L2-LeftNav-16-Ratios For an LV item that sells for $1000: Labor + material cost: LVMH - $350; Industry Average - $680 Cash operating cost (marketing / advertisement, store personnel's salary, transportation, etc.): LVMH - $420, Ind. Avg - $153 Non-cash operating cost (e.g. depreciation of manufacturing equipment): LVMH - $30, Ind. Avg. - $17 Income Tax: LVMH - $60, Ind. Avg. - $30 Net profit after all it's said & done: LV - $140, Ind. Avg - $120 I guess compared to other luxury brands, you do pay more for advertisement / marketing on a LV bag. Edited to add: The cost break down is based on LVMH margin. But since LV is by far the largest division of LVMH, the profit margin of LV should be about the same as LVMH, possibly even a little higher.