Pricing Case Study: Why Does a Hermes Birkin Handbag Cost $40,000?

The conjunction of iconic status, managed rarity, managed desire, consistent economic appreciation, and the robust market for Birkins as financial assets drive the price.

KEY POINTS

• The Hermes Birkin bag is a unique ultra-luxury product whose astronomical price cannot be explained only with functional and emotional value factors like most other products.

• Its iconic luxury status is derived from a carefully managed and sustained rarity and desire stoked by clever marketing honed over decades.

• The Birkin is widely regarded as…