Are Luxury Handbags Actually Good Investments?

Posted on June 22, 2022

WHAT IS A GOOD INVESTMENT?

No matter what kind of investment you make, an investment is fundamentally just the process of buying anything that will increase in value over time and will give you a return. What this means is that you spend money to generate more money, the goal is to earn more than your initial investment to make a profit and not just break even. 

A good investment is one that not only gives you a profit, but also tolerates the risks and aligns with your personal goals. You have to assess the risks and know if your investment is sustainable, if there are too many risks then maybe the investment needs reconsideration.What makes a good investment is rather subjective but the main aim of any investment is to make a return. The goal is to get your money's worth.

LUXURY BAGS AS INVESTMENTS

When it comes to designer handbags, they have been a hot commodity for decades which has driven consistent supply and demand. From the Dior Saddle, Balenciaga City bag, Classic Chanel flap to the Hermes classic Birkin, the designer handbag is more than just a fashion statement, it's become an investment. Much like art, watches and antiques, the designer handbag has become what feels like an exclusive collectible asset, but does this make them a good investment? Well, let’s assess the pro’s and con’s and we’ll let you make a decision. 

1. POTENTIAL FOR PROFIT THROUGH RESALE

When buying a designer bag, depending on the rarity, the designer and market value, there is potential to resell the bag for much more than you bought it for. The resale market only favours particular designers, like Hermes, Chanel and Louis Vuitton. Popular resale websites like Ebay, Vestiaire and Grailed are great platforms to use. Handbags there sometimes sell for 40% over the retail price based on how rare they are and how good the condition is. Auctions are also great places to resell, research shows that over 3,500 designer handbags were sold at auction in 2019 alone, raking in a huge £26.4 million ($32.9 million)

2. PURCHASING A PIECE OF HISTORY

Depending on the rarity of the handbag, you can become one of the few owners of rare pieces of fashion history. If you’re someone that adores fashion and fashion history, purchasing handbags that are vintage or one off exclusives means you become one of the few owners in the world. Hermes for example, only made a handful of Himalayan Birkins which very few people own, one of which is even exhibited at Sothebys.

3. LONGEVITY

Depending on the materials of these bags, they have a lot of potential to last almost a lifetime, which is why so many people purchase luxury handbags. Chanel, for example, uses leather for their classic flap bags which is very durable and can withstand a lot without much damage to its hardware. With the right preservation and care, these bags can last for years and can be passed down to your children or friends like an heirloom. You can even purchase leather cleaning supplies and go to bag specialists to repair your luxury handbags and help preserve their condition.

Original Post: Are Luxury Handbags Actually Good Investments?