LuxuryFashion #BrandMarkup #DiorSuppliers
Have you heard about the recent Italian police raid on some of LVMH’s Dior suppliers in Milan? 🚔 According to prosecutors, Dior pays only $57 to produce handbags that retail for a whopping $2,780! 😱 How is it possible for a brand to achieve such high markups?
Check out this article for more details: https://economictimes.indiatimes.com/news/international/us/do-you-know-how-much-luxury-bags-of-dior-and-armani-cost-startling-revelations-made-after-italian-police-raid-milan-units/articleshow/111492605.cms
Here are some possible solutions for building a brand to achieve such remarkable markups:
- Invest in Quality: Focus on creating high-quality products that can justify premium pricing.
- Brand Reputation: Build a strong brand reputation that adds value to your products.
- Limited Editions: Create exclusive and limited edition items to increase desirability.
What are your thoughts on this? How do you think brands like Dior manage to have such high markups on their products? Let’s discuss! 💬 #LuxuryFashionMarketing #SupplyChainTransparency
You market them to dipshits with lots of money and no sense.
Same way artists can spend $200 on a frame, canvas and paint and sell it for $5K-100K.
It’s quite a complicated business. One one hand, you have Hermes which trains their leather workers for many years just to be able to work for them, and you have brands like Armani which just use sweatshops. Their reputation is established through decades (centuries?) of ostentation.
Luxury companies do not sell a product they sell status.
Building a brand to that level requires a deep understanding of your target market, creating an illusion of exclusivity, and mastering the art of storytelling. It’s not just about the product, but the experience and status that comes with it.
[This podcast](https://open.spotify.com/episode/7lMY1C8AMFinpVMTgAH9D9?si=G5h7mEeHTeuv8NAphyfq2w) should answer your questions. Magnificent business.
I’m sure at one point they were of higher quality. A lot of luxury houses have had severe drop offs in quality while still raising prices because people are buying for the brand status… Chanel is particularly guilty of this. So build a status brand for 100 years and then cheap out on materials and manufacturing lol
One thing a lot of people dont know, almost 100% of the northern Italian leather and fabric shops have been sold over the last 20 years and are almost exclusively chinese owned. The brands pay that little by having chinese factories with immigrant workers make their product versus the decades prior and having to use Italian craftsmen.
A business has 6 main processes:
Executive, Product Development, Sales, Accounting, Product Delivery and Marketing
Only Sales brings money into the business. All the others are costs. There are also costs to sell.
The manufacturing cost is just a small part of the overhead if this brand. Their stores have expensive leases. Their salespeople are trained. There is expensive packaging. Lots of marketing. The execs make good money. They have to maintain the books and all the infrastructure to process credit cards. They have shipping. Costs to repair defective goods.
And they also need to make profit.
it’s all about the brand
The real luxury is the profit margin they’re making
Christian Dior had a close relationship with his neo-nazi niece Francoise, who married into the royal family of Monaco, but then fell from grace. But he made some dresses for her in that time and the Royal family saw that. So talking about networking… If you manage to secure a nice little spot within the global elite, old money, then you won’t lack money, especially if they got a kink for your clothes. The movie Saltburn captures the same story pretty neatly, is otherwise a pretty shitty movie – wouldn’t wanna meet the mind that came up with that story.
I used to deliver furniture for a company. I’m not going to say the name for legal reasons. But their furniture was just Ashley furniture. The warehouse guys would just peel off the Ashley furniture stickers. And slap the new ones on. Then add goose feather pillows. And charge 10×+ the Ashley price. They got fined once because they also switched the made in Mexico/India/China tags. With made in Italy/Germany/Spain.
I’m talking out door loungers for 1200$ a piece. 30k couches. 12k recliners.
I also wondered how the FK did they get to that point?