Buying Bags For Investment

[SparklehorsetteMadeleine]

I've been watching luxury youtube and cruising the PurseForum for quite some time... and I've come across this piece of advice. 'Buy Chanel / Hermes' for investment. At first, I was weirded out. I don't mind people who buy 'investment' bags themselves. What I take issue is people recommending that others do so despite the level of risk.

I wouldn't buy bags for investment for several reasons:
-There's too much competition on the preloved market- and chances are, someone is offering the same bag in better quality and a better price
-Once you sell it, you can't gain extra income from it.
-Fashionphile, Vestaire, etc take a cut from your sale. Not attacking them, I understand why- but it does lower your profits
-Chanel's owners are ageing. It's very likely that the value of Chanel bags will dip after new ownership occurs.
-I wouldn't know the right time to sell it. No one knows. But there's strong seller's remorse if you find the same bag, years later on another resellers site asking for greater money.
-It's currently a bad time to sell or buy Chanel due to the lawsuit by the RealReal. Buyers are being more cautious, and sellers are getting lower quotes. Why would I want to invest in such an unstable environment? Whose to say that in three years time, Chanel won't be involved in another lawsuit?

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I don't understand why people encourage others to 'invest in bags'. For me, I like D&G and Dior bags. But people tell me that they are bad investments, and I should be buying Chanel instead (insert joke about free advertising for Chanel). So instead of giving money to brands I trust & love and whose quality I can vouch for, I end up giving money to Chanel which increases their profits and I deny a sale to their competitors. It's really clever marketing.

I can't excuse people saying I should buy Chanel bags OVER D&G and Dior because 'investment'. I know resell value may not be as good, but I buy my bags to use them and I buy them carefully.

Either way, Chanel as a business wins. They get tonnes of customers every year, who then try to sell their bags on pre-loved markets. Chanel, being clever- decries the preloved market, saying only they can authenticate the bags. Potential buyers go into the boutiques instead, and make more profits.

So my question is: How do you feel about people advising others to purchase bags for investment?

 

[BittyMonkey]

Bags are not an investment. At least in the US we are seeing Millennials moving away from collecting things and more to travel and experiences. Bags are going to go the way of ‘investing’ in good china and silver, IMHO.

 

[lv.uni.girl]

I hate the idea of bags being seen as investment, I just don't see the logic behind it and it makes me feel uneasy when people are convinced into believing that the simplest, most utilitarian object I can think of is a smart financial move. An object to convey style/trends while it serves a practical purpose, yes. An investment to add to your portfolio? No.

 

[cncm]

Yes agree. Vast majority of bags, including many Chanels, will not hold their value in resale market once you taken into account commission and other cost of selling. You should invest your money in stocks, real estate, bonds, etc...NOT handbags. Buy Chanel if you love the bag, don’t do it purely hoping to make money one day from it.

 

[remainsilly]

I don't understand why people encourage others to 'invest in bags'.

Because they have lots of "mistakes" to resell.

So my question is: How do you feel about people advising others to purchase bags for investment?

I predict their stuff isn't moving on ebay/etc.
So time to fish for more customers.

Call me a cynic.

 

[leechiyong]

I think it's incomplete advice. Handbags aren't stable investments. They are only valuable as long as the economy is good. If it turns, the market becomes saturated. Sure, the market may return, but it's only something to consider trying if one has proper savings and portfolio outside of it.

 

[Tuned83]

Don't think many of us here believe in buying for investment. Most who resell do so to get some money back to buy something else after they r done with said bag. There have been many a discussion as to whether how much can be recouped in the future features in the decision to buy in the first place. The general concensus is love for the bag comes first but getting some money back after use is always a bonus. So despite Hermes not doing too badly on the resale market I'm not a fan so I won't be buying and that's just fine.

 

[Dooneysta]

It’s like art. Most people who aren’t in the business of selling art (or profiting somehow from those people) will tell you that buying art as an investment, gambling that this artist will be big someday and you’ll see big returns, etc, is not a good idea. Buy because there is something about it that appeals to you besides monetary profit.
Same with bags. They are not a sound investment strategy. If you’ve got your ‘real’ portfolio squared away and you just want to dabble for fun, that’s one thing. But it’s not the best idea to be counting on selling your bag closet to ensure you’re not eating cat food in a fleabag by-the-month motel when you’re old. Fund your retirement in other ways primarily!!!

We’ve all heard people say ‘these are investments’ but do you think they seriously mean ‘investment’ in that sense..? I hope not.

 

[papertiger]

Auction houses and resellers are promoting the resale market.

Everyone on Youtube are not experts, they're just chasing advertising. Talk of luxury goods is click-bait, it doesn't really matter what anyone says. The whole of the so-called 'Beauty Community' is going belly-up with exposure of undisclosed sponsorships and fake collabs, they've gotta keep up their subscribers numbers somehow.

Mostly it's just people looking for an excuse to buy another bag following the advice of stupid people who've been collecting bags for 5 mins. If someone has no personal taste and buys only to impress others they are more easily swayed, if people buy bags to actually use it's not an issue.

Good bags can be an investment if you can discern quality and understand what suits you, an investment in personal style.

 

[SparklehorsetteMadeleine]

Thank you everyone for your replies.

I've seen posts on this forum that says 'Chanel bags are better investments than stocks' and on Fashionphile's Hermes page, you can see mentions of Birkins outperforming gold (?). In the past week, I've been discussing bags I'm thinking about purchasing and twice people have mentioned 'investment' value on this forum.

Again, I wouldn't mind but it's awful advice. It concerns me that the audience of these youtube videos are quite inexperienced with buying luxury goods, and once they reach a certain income level they'll buy from Chanel believing its an 'investment'.

Right now, the 'big' luxury youtubers are all about selling a rich lifestyle. You see their fancy cars, lavish shopping hauls and it subconsciously makes you listen to their advice more as you are under the belief that if you follow it, you too will live their perfect life. This is probably obvious information to all of you, but as someone who looked up to them quite a bit until I thought about their advice critically- I'm a bit stung. And I see smaller youtubers, who aren't interested in selling a lifestyle but have a genuine passion for what they talk about. So I'll stick to them- but I will forever be thinking critically for myself.

 

[Liberté]

Flipping highly sought after consumer goods can be a business for some, but buying bags or any consumer good is a very, very bad / highly risky "investment strategy" for mostly everyone, especially in the long term. For one, even if there's quite a bit notoriety on resale prices of consumer goods these days because of the internet, it's difficult to know what you can get for your bags in the market at any given time. Compared to mainstream investments, it's illiquid, prone to degradation/ loss of value even with little use (climate, moths, leather getting dry, color loss...), doesn't pay dividends, potentially expensive to maintain, may become completely worthless if trends change... So many financial instruments these days can be bought and sold at little to no cost within the blink of an eye, and are sold and bought on a transparent and open marketplace that allows you to follow closely the value you might get back if you chose to sell. Even compared to putting money in a bank account that doesn't give you any real returns once you account for inflation, a handbag is an awful and very risky "investment". If you have money for a new Chanel bag it's a better investment to buy a $ 5 dollar bag and invest the rest in conventional assets rather than to get that bag.

It can be an investment in personal style for sure and a few select bags allow you to get a lot of your money back if you want to sell them (mostly a few categories of hermes bags and certain limited editions if you sell them fairly quickly), but even then, the value more than likely won't keep up with inflation and you're stuck with resellers or auction fees or the inconvenience of being a reseller yourself. It's not a real investment.

 

[Dooneysta]

Flipping highly sought after consumer goods can be a business for some, but buying bags or any consumer good is a very, very bad / highly risky "investment strategy" for mostly everyone, especially in the long term. For one, even if there's quite a bit notoriety on resale prices of consumer goods these days because of the internet, it's difficult to know what you can get for your bags in the market at any given time. Compared to mainstream investments, it's illiquid, prone to degradation/ loss of value even with little use (climate, moths, leather getting dry, color loss...), doesn't pay dividends, potentially expensive to maintain, may become completely worthless if trends change... So many financial instruments these days can be bought and sold at little to no cost within the blink of an eye, and are sold and bought on a transparent and open marketplace that allows you to follow closely the value you might get back if you chose to sell. Even compared to putting money in a bank account that doesn't give you any real returns once you account for inflation, a handbag is an awful and very risky "investment". If you have money for a new Chanel bag it's a better investment to buy a $ 5 dollar bag and invest the rest in conventional assets rather than to get that bag.

It can be an investment in personal style for sure and a few select bags allow you to get a lot of your money back if you want to sell them (mostly a few categories of hermes bags and certain limited editions if you sell them fairly quickly), but even then, the value more than likely won't keep up with inflation and you're stuck with resellers or auction fees or the inconvenience of being a reseller yourself. It's not a real investment.

That’s a really great point that folks should bear in mind, the part about preservation. Any hardcore bag collector has experienced the trials of keeping a favored bag in top-shelf shape. I’ve had bags I’ve never carried get damaged in their dust bag in climate-controlled storage. It happens!!! Unless one has provenance that your dry bag with crumbly lining and tatty corners belonged to, like, Marilyn or John Lennon’s mother or someone, keeping even a new bag you don’t plan to wear ‘perfect’ isn’t an automatic given.

Very good point, L!!

 

[ccbaggirl89]

Bags are not investments. But, they are a better 'investment' for some people than blowing a paycheck every week. If you need some fast funds you can generally sell a luxury bag off and recoup some money, but you can't go and sell off all the movies and coffees you might have bought with that paycheck instead. They hold some money in place for when you might need it, but not usually the full value. Most bags, even the lower lux ones, have some residual value, but investments are supposed to grow your money and bags don't do that.

 

[bklner2014]

I highly doubt anyone's going to rush to buy a Chanel or Hermes on the basis of a YouTuber's advice that it's an investment. Lol!

But I do think it's true that those who had purchased Chanel (can't speak for Hermes as I haven't tracked prices) before the huge price increases have actually benefited. I'm not referring to all Chanel bags but the classic flaps. People who had done so could have used the bag, then resold it years later without a loss, and for them their Chanel would have been a good investment.

Everything has to be taken in context. If you're buying a Chanel flap at today's prices, there is no guarantee that you can recoup what you had paid for should you decide to sell it down the road.

I only buy what I like, and keep to only a few purchases as I dislike having too many possessions and am also reluctant to resell due to the hassle involved.

Thank you everyone for your replies.

I've seen posts on this forum that says 'Chanel bags are better investments than stocks' and on Fashionphile's Hermes page, you can see mentions of Birkins outperforming gold (?). In the past week, I've been discussing bags I'm thinking about purchasing and twice people have mentioned 'investment' value on this forum.

Again, I wouldn't mind but it's awful advice. It concerns me that the audience of these youtube videos are quite inexperienced with buying luxury goods, and once they reach a certain income level they'll buy from Chanel believing its an 'investment'.

Right now, the 'big' luxury youtubers are all about selling a rich lifestyle. You see their fancy cars, lavish shopping hauls and it subconsciously makes you listen to their advice more as you are under the belief that if you follow it, you too will live their perfect life. This is probably obvious information to all of you, but as someone who looked up to them quite a bit until I thought about their advice critically- I'm a bit stung. And I see smaller youtubers, who aren't interested in selling a lifestyle but have a genuine passion for what they talk about. So I'll stick to them- but I will forever be thinking critically for myself.

 

[Coconuts40]

I have spoken to consignment shops in my city, and they admit the market is saturated. There is a saturation of Chanel and Hermes in the resale market. Years ago, the resale market was a lot stronger, but as people are using their bags for a couple of years, and then reselling them, saturation was inevitable. Personally I will never purchase a bag with the incentive to resell hoping I will turn a profit. I do sell many of my bags but I have never turned a profit. I sell to get rid of clutter and always at a loss.