I've been reading Deluxe and while the author appears to be a Hermes fan, due to its hand-made quality, she doesn't discuss the markeup. With LV she says its 13x for the handbags! Does anyone know what the markup on a Birkin is? Or something like the Medor clutch or CDC bracelet? Scarves? Just curious. I have a little Hermes but no bag. Lately though I'm a little turned off by the steep price increases in everything.
Markup on Hermes items?
- Thread starter LeeMiller
- Start date
I have no idea what the mark up is, but the items are handmade in a country with very high wages and good benefits for workers. I certainly think the craftsmen/women deserve to paid well. I have often wondered what a master craftsman at Hermes is paid, probably not enough. I hope manufacture stays in France.
I cannot imagine sitting down and hemming one of the scarves and doing the perfect job we admire.
That said, the price of bags has gone throught the roof.
I cannot imagine sitting down and hemming one of the scarves and doing the perfect job we admire.
That said, the price of bags has gone throught the roof.
That woman is a moron. LV does not have a x13 markup. In the LV forum we even had a thread on how the conglomerate as a whole spends money, and LV is the biggest contributor to the conglomerate LVMH. The mark up even from raw materials was not x13. I'm not really trying to defend LV, but that article was basically an Hermes ad, putting all other high quality brands down for some reason.
As a general rule, LV has a slghtly higher profit margin than other luxury brands. I believe it was around 40%. Hermes has about 30%, at least that's te last statistics I've read. I have no idea how they mark up each item, but I believe the more coveted the item is they more profit they will take.
If you read the Hermes magazines and attend display of craftmen in action you'll realize why it's much more expensive than many other brands. They use methods that are totally dated in the manufacturing business. Doing everything by hand takes a lot more time. Also they have to pay more for the raw materials they use because they refuse a lot of it because it doesen't meet their quality requirement (however most luxury brands do this, also LV I know for sure). Finally they have a, to me it seems, more rigid quality control of the final product. If something seems off or a product is even the slightest damaged during transport it is destroyed. This adds to the final price.
Because of the education level and age of some SAs I do also believe they use a different wage system than most luxury houses.
As a general rule, LV has a slghtly higher profit margin than other luxury brands. I believe it was around 40%. Hermes has about 30%, at least that's te last statistics I've read. I have no idea how they mark up each item, but I believe the more coveted the item is they more profit they will take.
If you read the Hermes magazines and attend display of craftmen in action you'll realize why it's much more expensive than many other brands. They use methods that are totally dated in the manufacturing business. Doing everything by hand takes a lot more time. Also they have to pay more for the raw materials they use because they refuse a lot of it because it doesen't meet their quality requirement (however most luxury brands do this, also LV I know for sure). Finally they have a, to me it seems, more rigid quality control of the final product. If something seems off or a product is even the slightest damaged during transport it is destroyed. This adds to the final price.
Because of the education level and age of some SAs I do also believe they use a different wage system than most luxury houses.
Lee, it's not that steep when you think of the process involved. It depends on how you feel about paying for time and workmanship.
For instance, they farm the animals (Hermes owns a lot of the farms that they get their hides from, or has exclusivity with other ones), have people employed to check and reject hides/skins (up to 90% are rejected, I'm told) - these people are worth their weight in gold - imagine stitching an entire bag together only to find a flaw? Then the treat (press or roll) and dye the hides (this is expensive, time-consuming, and requires the skins to go through many "hands", skins go to an expert cutter, on to a craftsperson, hours of stitching by hand...onto the pearler for the hardware.....QC checks the entire way...polished...packed in a box that is upholstered in paper pillows that soemone is specially employed to make...
I mean....there is so much work and care and love involved, and just looking at an Hermes piece, you can understand why (I speak for myself!), whereas I stare at other Houses pieces throught the windows, and can't justify it.
Lee, if you love the bags, you can justify the price, because you can appreciate everything that has gone into it, and all that has gone before! I bet you'll be justifying in no time!!
For instance, they farm the animals (Hermes owns a lot of the farms that they get their hides from, or has exclusivity with other ones), have people employed to check and reject hides/skins (up to 90% are rejected, I'm told) - these people are worth their weight in gold - imagine stitching an entire bag together only to find a flaw? Then the treat (press or roll) and dye the hides (this is expensive, time-consuming, and requires the skins to go through many "hands", skins go to an expert cutter, on to a craftsperson, hours of stitching by hand...onto the pearler for the hardware.....QC checks the entire way...polished...packed in a box that is upholstered in paper pillows that soemone is specially employed to make...
I mean....there is so much work and care and love involved, and just looking at an Hermes piece, you can understand why (I speak for myself!), whereas I stare at other Houses pieces throught the windows, and can't justify it.
Lee, if you love the bags, you can justify the price, because you can appreciate everything that has gone into it, and all that has gone before! I bet you'll be justifying in no time!!
and don't forget the cost alone...to get the bags to ship in those heavy orange boxes...packaged perfectly....
You are absolutely right. Their SAs (at least at corporate stores) are paid handsomely, at least within the realm of retail sales positions.
Not only that, but Hermes doesn't exactly put their stores into low rent districts. Can you imagine what owning the building at 691 Madison Avenue costs? In addition there's other overhead like the infamous and gorgeously made orange boxes; the embossed ribbon; the freebies; etc.
I forgot to also mention the steep decline of the dollar against the Euro/GBP/other currencies over the past few years. This affects nearly all high end luxury brands. Frankly I feel that some brands have WAY overcompensated (hello Chanel I'm looking at you), but overall the companies really can't help what the world markets are doing.
As consumers we pay extra for all these little or not-so-little things that make shopping at Hermes or any other high end sotre the experience that it is...I for one really enjoy the vast majority of my shopping experiences there*, and that's the way it should be.
*with the exception of one franchise store near me, where they're so unnecessarily rude that I wouldn't care if they had 10,000 Birkins hanging from the rafters being sold at deep discount--I still wouldn't shop there happily.
Lee, I also don't think you can't determine on the mark up for items across the board, as such. What I mean is, the bags are all priced individually, due to the cost of the leather (so many different leathers), different colours (lighter colours in exotics are harder to do, thus are more expensive), some leathers are more scarce than others on a seasonal basis, and the stores do thier individual buying and this is calculated (where I live at least) with our currencies' value against others (USD, I believe). It's too difficult to determine a specific "mark-up" percentage.
the people doing the work on the Hermes products are CRAFTSPEOPLE...........not factory machine attendants..................they are not much different than say a bench jeweler ..................their skill level must be extraordinary. I am not saying its worth it or reasonable only that in this day and age of cheap goods with no attention to quality .........Hermes is one of a dying breed.
I think H prices have been pretty consistent, especially compared with Chanel (a bag nearly doubling in price in just a couple years is just outrageous!)
Hermesaholic, I totally agree. This makes a difference
to me. Hermes does things the old-fashioned way,
and you are paying for investment quality pieces. It might
take longer for some to acquire one of these bags,
but it will be worth it.
I like the fact that Hermes itemsare not mass produced and made in some third world
country. I would rather have one quality handbag
than a dozen out-of-style tomorrow 'IT' bags anyday.
For an entirely handcrafted bag made of premier materials and NOT mass produced in a third world country, I think the price is justified. These bags are made to last not one lifetime but many. I have bags dating from the early '50's and they look as good today as they did when they were first put on the shelf in the store. I think that, alone, speaks volumes.
apart from all the things said (and also take into account hermès does not advertise as heavily as others ,no freebies vor stars so less of "our" money spend )
but i kow for a fact that h has (together with a very few others) the lowest mark up for their leathergoods in the luxury department. the clothes well there is as reason why they encourage you to buy them let´s put it that way but still better then others.
but i tell you something have you ever considered the markup of a 10$ tee bought at H&M manufactured in third world countries? compared to that hermès, chanel , vuittton etc are considred to be cheap
but i kow for a fact that h has (together with a very few others) the lowest mark up for their leathergoods in the luxury department. the clothes well there is as reason why they encourage you to buy them let´s put it that way but still better then others.
but i tell you something have you ever considered the markup of a 10$ tee bought at H&M manufactured in third world countries? compared to that hermès, chanel , vuittton etc are considred to be cheap
^ I love that logic!
No more $10 tees...I'm RTW all the way, baby!!!!
You have a great point, though, L.
No more $10 tees...I'm RTW all the way, baby!!!!
You have a great point, though, L.