By Fira Rosete
The Hermes company was founded in Paris by Thierry Hermès, a man who specialized in making harnesses. His skilled craftsmanship left a lasting impression on generations in his family to come and led the company to become what it is today. Hermes is a luxury brand praised around the world for its accessories which include scarves, belts, purses and more.
However, there is one accessory sold by Hermes that everyone knows, and that is the Birkin bag.
The Birkin is a purse that was named after the actress Jane Birkin and is considered the personification of elegance. Everyone who is interested in purchasing luxury bags knows about the elusive Birkin, and everyone with the means to buy one is on that waiting list. What makes the Birkin bag so desirable is that the supply is very low and customers are limited in the amount of Hermes bags they can buy a year. This low supply of a desirable bag has caused a remarkably high demand for them.
Another economic principle that can be applied to this purse is investment. In 2020 it was revealed that the value of this bag increased by 38% that year alone, and it doesn’t stop there. These bags have only gone up in value as time goes by and will continue to do so. This makes it a great investment piece. If you know when to sell, the resale value can be very high for a Birkin bag.
The Birkin bags exclusivity makes it a normal good due to its positive elasticity of demand. Its high prices influence the amount of people demanding it. A Birkin bag is priced anywhere from $10,000 to $250,000 and people are willing to buy them. The target consumer for an Hermes bag is someone with a lot of free income. These are the only people who can afford this bag without having to eat ramen for a few months. This means that Hermes has a very specific clientele, also known as a client base.
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