Fair enough, I admit I didn’t do any deep research on luxury brands. My assumption that they make a lot of profit is based on the fact that many successful brands that also spend money on “R&D, marketing, office employee salaries, shipping, storage, dealing with returns and damages, and more” nevertheless manage to sell their products for very decent prices. So I really do not see what could justify another brand with presumably similar production costs selling almost identical products for 5 times the price. Based on the little I understand about human psychology and economics, it’s about the exclusivity, the luxury, the idea of having something “limited edition”. People think it’s worth a lot because other people think it’s worth a lot. But maybe I’m wrong and Louis Vuitton doesn’t make a lot more profits than, say, Zara. I’m checking now and the net worth of Bernard Arnault (the CEO of Louis Vuitton and richest person in Europe) is more than twice that of Amancio Ortega (chairman of Zara), but I’m not sure this is the metric I should be looking at. In any case my main point is that the fact that we spend so much money as a society on something so “useless” is a moral scandal.
And as far as risk is concerned, I will use Printful and Etsy for the MVP, and they only charge fees when products are purchased, so the financial risk is literally zero. The only thing I may lose is time.
So I really do not see what could justify another brand with presumably similar production costs selling almost identical products for 5 times the price.
The production costs are not similar and the products are not identical. Compare a Louis Vuitton bag to a cheap knockoff up close, and you’ll see that the authentic bag has a much nicer-feeling fabric, clean and consistent stitching stitching, metal rather than plastic fasteners, more aesthetic placement of the “LV” logo, a lack of “slouch”, an overall nice shape, and sturdy, symmetrical handles. You may not care about these features, and I don’t, but luxury consumers do. The authentic bag will typically last longer, and to achieve this level of quality, it needs to be made in a many-step process in the US, France, or Spain, where labor costs are high. If you’re not sinking that kind of money into craftsmanship, you’re competing with Walmart’s LV lookalikes, not LV itself.
And as far as risk is concerned, I will use Printful and Etsy for the MVP, and they only charge fees when products are purchased, so the financial risk is literally zero. The only thing I may lose is time.
This sounds like a good low-risk idea to me. My main reservation would be that e-commerce return rates are high—supposedly around 30% overall, but probably much higher for apparel (since you can get the wrong size). This is a special difficulty for made-to-order and/or low-volume businesses that can’t easily resell returned items.
I have worked in e-commerce pricing BTW; happy to answer any questions about the industry.
As the lead moderator of the Forum, I read a lot of comments. And I want to call out that this, and your prior comment in the thread, made me very happy.
It’s cool and unexpected to see someone show up on a thread like this who has your level of experience in a very relevant field from well outside of EA. I don’t have anything else to add here—just dropping in to say thanks.
Fair enough, I admit I didn’t do any deep research on luxury brands. My assumption that they make a lot of profit is based on the fact that many successful brands that also spend money on “R&D, marketing, office employee salaries, shipping, storage, dealing with returns and damages, and more” nevertheless manage to sell their products for very decent prices. So I really do not see what could justify another brand with presumably similar production costs selling almost identical products for 5 times the price. Based on the little I understand about human psychology and economics, it’s about the exclusivity, the luxury, the idea of having something “limited edition”. People think it’s worth a lot because other people think it’s worth a lot. But maybe I’m wrong and Louis Vuitton doesn’t make a lot more profits than, say, Zara. I’m checking now and the net worth of Bernard Arnault (the CEO of Louis Vuitton and richest person in Europe) is more than twice that of Amancio Ortega (chairman of Zara), but I’m not sure this is the metric I should be looking at. In any case my main point is that the fact that we spend so much money as a society on something so “useless” is a moral scandal.
And as far as risk is concerned, I will use Printful and Etsy for the MVP, and they only charge fees when products are purchased, so the financial risk is literally zero. The only thing I may lose is time.
The production costs are not similar and the products are not identical. Compare a Louis Vuitton bag to a cheap knockoff up close, and you’ll see that the authentic bag has a much nicer-feeling fabric, clean and consistent stitching stitching, metal rather than plastic fasteners, more aesthetic placement of the “LV” logo, a lack of “slouch”, an overall nice shape, and sturdy, symmetrical handles. You may not care about these features, and I don’t, but luxury consumers do. The authentic bag will typically last longer, and to achieve this level of quality, it needs to be made in a many-step process in the US, France, or Spain, where labor costs are high. If you’re not sinking that kind of money into craftsmanship, you’re competing with Walmart’s LV lookalikes, not LV itself.
This sounds like a good low-risk idea to me. My main reservation would be that e-commerce return rates are high—supposedly around 30% overall, but probably much higher for apparel (since you can get the wrong size). This is a special difficulty for made-to-order and/or low-volume businesses that can’t easily resell returned items.
I have worked in e-commerce pricing BTW; happy to answer any questions about the industry.
As the lead moderator of the Forum, I read a lot of comments. And I want to call out that this, and your prior comment in the thread, made me very happy.
It’s cool and unexpected to see someone show up on a thread like this who has your level of experience in a very relevant field from well outside of EA. I don’t have anything else to add here—just dropping in to say thanks.