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Have you even wondered why is Hermes so expensive? Well, we have the answers.
Why Is Hermès So Expensive?
If you’ve ever drooled over a Birkin bag, only to cry when you saw the price tag, then you’ve probably asked yourself “why is Hermes so expensive?” Keep reading to discover what makes Hermès one of the priciest luxury brands on the market.
History of Hermès
Hermès traces its origins back to Paris in 1837. At that time, harness maker Thierry Hermès opened a workshop and began producing durable, award-winning harnesses adapted to the challenges of city living.
Throughout the late 1800s and early 1900s, Hermès gained a reputation throughout Europe for creating high-quality, made-to-measure harnesses and saddles.
Starting in 1925, the house expanded to other product lines including men’s ready-to-wear, scarves, and ties.
The iconic Kelly bag came onto the scene in 1935, while Hermès’ Birkin bag arrived in 1984.
Throughout the early 2000s, the brand opened several international stores in Europe, the United States, and Asia.
Nowadays, the company continues to open brick-and-mortar stores, while at the same time expanding its e-commerce presence. All of these efforts appear to be working, as Hermès reported revenue of €8.98 billion in 2021.
Hermès Quality – The top reason why is so pricey?
Ever since Thierry Hermès started creating harnesses in his Parisian workshop, the brand has been synonymous with high-quality craftsmanship and top-of-the-line materials. After all, when you’re charging five (or even six) figures for a bag, the quality has to be flawless.
Let’s see some of the ways Hermès keeps its quality standards up.
Quality products start with quality materials and Hermès has no shortage of either. Indeed, Hermès sources materials from all over the world in order to offer customers the absolute finest leather and animal skins available.
Not only are these products top-of-the-line, but each one has a unique character that creates a distinctive look.
Some of the materials Hermès uses in its products include Clemence leather, Chèvre de Coromandel leather, lizard, alligator, and ostrich.
Highly Skilled Artisans
While exclusive materials are the building blocks of Hermès’ products, they’d be lost without the skilled hands of master leatherworkers.
To keep its quality standards up, Hermès employs more than 7,500 artisans. To become an artisan, candidates must be recruited from vocational schools and vetted by Hermès’ master trainers (a position that requires 8 years of experience).
From there, new recruits are put through an 18-month program that involves technical training and practical application under the guidance of a designated tutor.
Alternatively, students can enter the École Hermès des savoir-faire (the Hermès School of know-how) and earn a national diploma in leatherwork. Throughout the program, students are tested and evaluated by in-house experts.
During this time, artisans inspect the leather or skin for imperfections, select the best swath, and invest hours stitching to make sure the bag holds up over time.
But it’s not just the leather that gets special treatment. The metal on each bag is hand-welded to ensure top quality and is plated with gold or palladium for durability.
Given the amount of time that goes into producing each and every piece, Hermès is only able to produce about 12,000 bags per year. All of this attention to detail means that Hermès bags keep looking amazing year after year.
Resale Value of Hermès Items – Why is Hermes so expensive on the preloved market?
As strange as it sounds, some Hermès products, particularly the Birkin bag, are more profitable investments than either stocks or gold. In fact, the average annual return on a Birkin bag is measured at 14.2%, while the S&P averaged 8.7% and gold averaged -1.5%
That’s certainly impressive, but it’s important to keep in mind that a bag’s resale value is determined by several factors including:
- Hardware type
- Year of manufacture
Therefore, it’s a good idea to do your research before purchasing a bag. Especially if you hope to make money on it one day.
Is Hermès Popular?
With a host of celebrity devotees that includes Victoria Beckham, Kim Kardashian, Cardi B, and Lady Gaga, it’s safe to say that Hermès has plenty of fans.
Aside from celebrities, the brand has over 12 million followers on Instagram. When it comes to search volume, the brand reported 12 million searches in 2020, an increase of 3.6 million compared to the previous year. The brands' popularity increased tremendously through social media. Once you see enough Birkin unboxings on YouTube and Instagram, one might start coveting one. The fashion house's popularity is definitely one answer to the question "why is Hermes so expensive".
How Does Hermès Create Exclusivity?
Like any luxury brand, Hermès has to create exclusivity in order to sell its products for such high prices. The main way the brand does this is by limiting availability. As an example, it’s estimated that there are only around 200,000 Birkin bags currently in circulation.
That means you can’t just walk into a Hermès store and expect to walk out with a bag. Rather, you’ll have to build up a relationship with a store associate and hope that they’ll help you secure a bag when one becomes available.
Even if you do manage to develop a strong relationship with a store associate and can purchase a bag, you can only buy two quota bags per year. If you want to buy a non-quota handbag, check out our guide for Hermes Starter Handbags.
Another way that Hermès creates exclusivity is through high prices. It might sound counter active, but having high prices and rising them periodically ensures that the brand is still sought after and exclusive. This strategy is working so well that other brands like: Chanel, Bottega and YSL are now also regularly increasing their prices.
Hermès Warranty and Bag Care
With the exception of Hermès Apple Watches (which have a 2-year warranty), other products are not covered by a warranty program.
Rather, you can send your products to the company whenever you want for maintenance and repair. The price for these services varies, but you can expect to pay anywhere from several hundred to several thousand dollars to get your bag back in good shape.
Where Are Hermès Bags Manufactured?
Hermès bags are manufactured primarily in France, where production is carried out across 52 sites. This network is supplemented with 12 other manufacturers in Switzerland, Italy, the UK, the USA, Vietnam, and Australia. This is another reason why Hermes handbags are really expensive. To manufacture in France (like most of their quota bags) is much more expensive than to manufacture in Asia for example.
Top Reasons Hermès Is So Expensive
The two main reasons why Hermès is so expensive are the quality of its products and their exclusivity.
In addition to sourcing the finest quality materials, Hermès employs only the best craftspeople to create its merchandise. On top of that, the brand’s artisans spend countless hours cutting, stitching, and sewing products so they look amazing and last forever.
While Hermès’ quality is unmatched, the drawback is that the company can only produce a limited number of products each year. This exclusivity means bags can easily go for tens of thousands of dollars each.