How does the market for luxury items (watches, hand bags etc.) work?

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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

9 Answers

Anonymous 0 Comments

I don’t have any luxury items but know people who do. It’s just something they consume. They are not buying them to resell or make money. Some of them *may* consider that they are only “renting” these luxury items while they own them, expecting that they’ll get a good chunk of their money back when they resell.

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