Has anyone ever seen some of the intricate seed bead embroidered bags Chanel puts out (or the Swarovski beaded bags with each crystal held on by a seed bead crystal with the knots individually done on the back, not glued with E6000)? Some of the boys that have weeks of embroidery work on them (and yes, this is a case where that embroidery is done by hand; I know because I've done this type of work, and no machine can do it). Can you imagine paying a highly paid worker to do weeks worth of work on one part of a bag, and how much that might cost? Say, 8 hours a day for 10 days (some may take more). Let's say for instance they get paid $50/hour (reasonable for this kind of work), that's $4,000 just for the embroidery part. Now finish the rest of the bag. Knowing that these things are sold with a markup of 100% by a store (i.e. a bag that costs $10,000 your local NM paid $5,000 for) and that sellers markup their goods by a lot more than they get from the reseller (so let's say that bag NM paid $5,000 for cost Chanel $500 to make--which is an off number as usually they charge quite a bit more than just this magnitude), imagine the cost for the bag.... With costs running to $5,000 to manufacture (only considering labor and materials, no PR and no advertising, etc.), then it would be sold to NM for $50,000 and to the customer at $100,000. I'm sorry, but that bag was not priced anywhere near this cost, nor was it near the "cost" sold to NM.
So how did Chanel manage to make a profit on this bag??? The only thing they can change is how much the worker is paid, and by a lot. Do you think French and Italian artisans will work for a huge reduction in their usual and customary local pay rate just to do Chanel a favor, or do you think it's just possible that they are paying someone other than a generations artisan whose family has been born and raised in France or Italy for generations? Chanel doesn't give these bags away just because they are pricey to produce; whatever the cost, they are going to make their same level of profit on the bag.
So how did Chanel manage to make a profit on this bag??? The only thing they can change is how much the worker is paid, and by a lot. Do you think French and Italian artisans will work for a huge reduction in their usual and customary local pay rate just to do Chanel a favor, or do you think it's just possible that they are paying someone other than a generations artisan whose family has been born and raised in France or Italy for generations? Chanel doesn't give these bags away just because they are pricey to produce; whatever the cost, they are going to make their same level of profit on the bag.
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