(Photo: Reuters)

How Hermès created the most valuable fashion accessory

High-end luxury fashion brands are all about being exclusive, all rings true especially when it comes to the French luxury brand, Hermès. One item, in particular, is so exclusive that it can hold value better than gold, the Birkin handbag.

In 2019, a Birkin with white crocodile skin with diamond-encrusted hardware sold for $500,000 that was sold to a sports betting consultant, Dave Oancea. People said he was crazy about spending $500k on a handbag but he says that other people are offering to buy the bag with a $180k markup for an offer of $680,000 within 6 months after buying.

If you think that buying on a bag for thousands of dollars is crazy, then you’re jaw will drop once you meet the most exclusive handbag club. The Birkin is famous for its cult of collectors with many having collections of Birkins worth millions.

Celebrities who have a Birkin collection include Lady Gaga, Jeffree Star, Katy Perry, Jennifer Lopez, and even boxing icon, Floyd Mayweather. Former Spice Girls member and fashion icon, Victoria Beckham, has a collection of over 100 Birkins reportedly worth over $2 million.

The Birkin ranges in price starting at $10,000 and can reach up to a six-figure price depending on the materials and rarity. Hermès released their first Birkin in 1984 costing $2,000 and was inspired by the actress named Jane Birkin.

The Birkin wasn’t an initial hit so Hermès used clever marketing and tightly controlled production by the late 90s to increase demand along with focusing more on quality rather than quantity. The Birkin truly became popular in 2001 making it’s TV debut on the HBO hit series, “Sex and the City” that details the exclusive process on buying the hard-to-get handbag and gave it the reputation as a vital piece of pop culture.

The Birkin was priced around $4,000 in 2001 and the same bag today would cost $10,000. Buying a Birkin bag isn’t as easy as walking in a store and paying for it, as they have a long waitlist that is currently one year long.

Hermès limits the supply and can deem who is worthy of purchasing a Birkin, often limiting them for celebrities to enforce the exclusivity and status of the handbag it is known for.

A corporate attorney, Tara, details buying her first Birkin and the exclusive experience Hermès offers. Tara says that she was offered to buy a Birkin within 12-18 months and she spent around $10,000 at Hermès before being offered a Birkin.

A Birkin collector, Monika Arora, founded the luxury fashion website, Pursebop.com, explaining the popularity of the Birkin. Arora says she was able to explore the option of buying a Birkin after two years of building a relationship with an Hermès sales associate and build up a purchase history.

Both women say that part of the excitement of buying a Birkin is in the chase and that Hermès breaks all the rule of commerce with this buying process. The CEO of Hermès, Axel Dumas, said it best, “Our business is about creating desire.”

View this post on Instagram

I’m hungry for some chocolate 🍫

A post shared by Jeffree Star (@jeffreestar) on

The quality is truly next level with each handbag made by a single craftsman in France and experts testify their work is impeccable. The secret behind their marketing is attaching an emotional experience provided in buying a product.

The first Birkin is a simple model but as time goes on collectors desire more exclusive and rare designs. The Birkins with rare designs and materials often sell more on the resale market than the Hermès store, only offering the most exclusive ones to their longtime collectors.

Most of the rare Birkins are harder to find on the primary market people turn to secondary markets such as auction houses leading to more people seeking the bag and driving the price increase. More collectors are buying more rare bags looking at them as an investment with the value of a Birkin holding better in value compared to gold from 1984 to 2016.