The Real Cost of a Handbag

Designer_Handbags[1]Buy a designer handbag, and we all know you’re paying a heavy price for the name of the designer. But, just how much of your money is going straight into the pockets of the handbag companies’ shareholders?

The handbag

The price of designer handbags can vary from a few hundred pounds up to tens of thousands of pounds. One of the most famous designer handbags is the Hermes Birkin, if you want to buy one you’ll have to join a waiting list and be prepared to pay at least £6,000.

Materials

The uber-expensive handbags are made out of animal skins such as ostrich or crocodile. Getting hold of good-quality skins from these animals is getting increasingly difficult so in recent years both Hermes and LVMH – owner of brands including Marc Jacobs, Louis Vuitton and Givenchy – have invested in farms in order to cut their costs, and have better control over supply.

Enough python or crocodile skin for one medium-sized handbag costs up to £1,700, according to luxury leather goods manufacturers contacted by Yahoo Finance. But, most designer handbags are made from first grade calf leather costing around £60 per bag.

Competition from luxury fashion houses and car companies has driven the price  of leather up in recent years.

The lining of the bag and the hardware (buckles etc.) will cost a further £20.

Labour

One of the big differences between designer handbags and the ones you’ll find in a high street store is that they are handmade. This adds to the price with manufacturers putting labour costs at £70 – £100 per bag.

In fact, some firms put the cost at even more than that. Mulberry, the British handbag firm, makes it’s ladies bags at a factory in Somerset. With one of it’s Bayswater bags taking a team of 30 three hours to make, it has a manufacturing cost of £185 per bag.

Profit

So, a luxury handbag costs £160 to make, or around £265 for a Mulberry Bayswater bag.

With a starting price of £1,100 for a Bayswater handbag, that’s a profit of £840 per bag.

 

Source:  Tafarah Griffiths