What if you had to spend alot of money just to be offered the chance buy a luxury item?

See Trying to Dethrone the Birkin? Make Fewer Bags: Chanel has taken a less effective approach to competing with the Hermès bag than American luxury brand The Row by Carol Ryan of The WSJ. Excerpts: 

"The wish to mimic the Birkin is understandable, as the bag is a gold mine for Hermès. The brand limits how many it produces, so demand far outstrips supply. Hermès could easily jack up the price but has found a smarter way to profit from the Birkin’s popularity that is less likely to alienate loyal clients.

To get a Birkin, shoppers must build a relationship with one of the brand’s sales assistants and wait to be offered a purse. This creates a perception that the biggest spenders get access to Birkins and encourages customers to splurge on other goods to build the equivalent of an “Uber rating” at the Hermès store. 

Although the brand says shoppers aren’t obliged to buy other goods to be considered for a Birkin, collectors of the bags call this the “pre-spend.” To get their hands on a Birkin 25 in basic Togo leather, shoppers might have to shell out $10,000 or more on other goods they don’t necessarily want."

"Because the supply of Birkins is restricted at the Hermès store, people are willing to pay up extravagantly for used bags. A Birkin 25 in Togo leather that cost $11,400 to buy new in 2024 sells for more than double that amount on resale platform Fashionphile."

Related posts:

Has Luxury Lost Its Shine? Customers are complaining that they are getting less bang for their buck at the luxury store (a case of Veblen goods) (2024) 

Is Starbucks coffee no longer a Veblen good? (2024)

China's Government Cracks Down On Displays Of Wealth On Social Media (2022)  

(See In China, Bragging About Your Wealth Can Get You Censored: Online posts by users showing off their receipts, over-ordering food or scattering money have been deemed vulgar. Regulators say such content leads young people astray by Vivian Wang and Joy Dong of The New York Times.)

Payless sold its discount shoes for $600 a pair at mock luxury influencer event (2018)

Federal Reserve Economists May Have Discovered Another Cause Of Bankruptcy (if a neighbor wins the lottery people start spending more on consumption to keep up) (2016)

Conspicuous Consumption, Conspicuous Virtue, Thorstein Veblen (and Adam Smith, too!) (2007)