Most people I know of who buy luxury watches or handbags say they’re a good store of value and can fetch a high resale price in the future. If the market mostly consists of people who buy them for the sole purpose of reselling, wouldn’t that make it a purely speculatively priced item, akin to crypto? How has the luxury market not collapsed?
In: Economics
It is speculative to some degree but not like crypto because there’s an intrinsic value. I’m only familiar with watches so using watches as an example, let’s say a particular watch model sells for 25K at retail, due to the limited supply of maybe 1000 units, it’s sold out and u can only buy from other sellers, thus causing a price increase in the aftermarket. Now let’s say the watch market tanks and everyone is trying to offload that watch model, it will still have a baseline price and likely won’t be far from the retail price it originally sold out. However, this only applies to specific watches, typically made of material other than steel and from specific brands. Most of the watch Grey market, the value is about half of their retail price. You can easily find an example but comparing prices of specific Rolex models 2-3 years ago compared to today.
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