Economics in Action: Hermes and Supply and Demand

Bloomberg explores why $10,000 Birkin bags are still such a hot commodity:

“’The limit to what Hermes sells is how much it can produce’ … revenue ‘is what they decide it’s going to be.'”

(Evil geniuses.)

“Rather than expanding leather-goods production aggressively, Hermes has limited supply to protect its image. Being too accessible can lead to ‘banalization’ and the company’s backlog of bag orders has probably helped insulate [Hermes] from the weakening world economy … ”

(Limit the SUPPLY, expand the DEMAND, etc.)

“That, along with being famously impossible to obtain immediately if your name isn’t Gaga or Kardashian, has held their place in the upper echelon of timeless fashion.”

(“Gaga or Kardashian.”)


4 Comments / Post A Comment

megsy (#1,565)

I read a book about this called “Bringing Home the Birkin” and apparently there are ways to get the bag immediately if you know how to work the system. A fascinating read!

Also, I really want a Birkin. I feel that when you can easily drop $10,000 on a handbag, you’re doing ok.

megsy (#1,565)

@megsy ALSO Rory Gilmore got a Birkin which is why Logan > Jess > Dean.

amirite (#2,677)

@megsy ha ha, I remember that episode was the first time I’d heard of a Birkin bag. I love how Rory’s grandparents flipped out and she was like, “it’s nice, I guess?”

Renleigh (#2,110)

@megsy I’m glad you guys are here, because Gilmore Girls is also the only way I know about Birkin bags. Though I do take issue with your ordering of Rory’s boyfriends, because OBVIOUSLY Jess is the best. He would never buy her a bag she’d be afraid to put pens in, and that’s a point in his favor.

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