> This led me to a Reddit community of replica enthusiasts, who traded details about “trusted sellers” capable of delivering a Chanel 2.55 or Loewe Puzzle or Hermès Birkin that promised to be indistinguishable from the original, and priced at a mere 5 percent or so of the M.S.R.P.
> ...
> What was once a sly novelty has bloomed into a gigantic market. In 2016, a Virginia woman was sentenced for buying $400,000 worth of designer purses from department stores, returning high-quality knockoffs and reselling the real bags for profit; the stores went years without catching on.
> This led me to a Reddit community of replica enthusiasts, who traded details about “trusted sellers” capable of delivering a Chanel 2.55 or Loewe Puzzle or Hermès Birkin that promised to be indistinguishable from the original, and priced at a mere 5 percent or so of the M.S.R.P.
There are amazing counterfeit watched to be had. For better or worse, suits don't work like this. Instead, you find a Tailor in Vietnam or Colombia, who will make you something great for $2-300. But the best materials/fabrics aren't accessible without paying thousands. That said, these days, I rarely have the opportunity to wear suits.
I am not the above poster, but I have a semi-reliable tailor in Southeast Asia. They took my measurements a few years ago when I visited their country, and I send them size updates when needed. They have excellent fabrics in a variety of colors and weights.
I have seen that there are pros and cons (with this particular tailor, others shops can be more professional, but they are also more expensive, sometimes much more).
Pros: hard-to-beat price ($35 for a classic or sporty cotton shirt, $60 for wool/cashmere/denim/cotton pants, $150 for a wool or cotton sport coat, $200-250 for a suit) for something that is somewhere between bespoke and made-to-measure, opportunity for low-cost explorations (let's say I have a few unique garments), playing with details and fabrics.
Cons: communication is often challenging (most speak broken English, which demands a good deal of patience and intuition), they are not very detail-oriented (some of the uniqueness of the garments were not sought by me, e.g., e.g., bizarre button placement or pocket shape, etc.), quality of garments can vary unpredictably, and they are always asking for more business, which can be tiring.
The other option is to buy on eBay, as I have been doing for some time. Although most pieces are priced correctly, some are much cheaper than they should be. I have bought fantastic, semi-current suits (say, suits that are 10 years old, but with classic features, meaning they are relatively "timeless") that have been used sporadically (the color of the ink on the label is a tell, some have been used once or twice) for $150 when new they would have cost 10 or 15 times that.
But I get much more satisfaction when I order clothes from my tailor. Those are pieces "designed by me", for me.
I did something like this for a while. I was in Hong Kong in the late 80s and on the recommendation of a much more seasoned colleague I went to 'his' tailor who measured me in great detail and for what I'd pay for one off-the-rack suit in the US I got 2 really excellent well fitted suits and a week worth of dress shirts. For the next decade or so I would order things a couple of times a year (by sending a letter + money order; no web site then) and it would show up 6-8 of weeks later just as I needed. Even when I included "I gained 10 lbs since my last order", they adjusted perfectly.
Then I spent a good while where suits weren't the 'style', didn't order and lost those contacts. Not that I need one now, but it'd be nice to have 1 suit that really fit and looked good for less than US$1k.
You did what I did, but 30 years ago, hats off. I've had a few suits made by my tailor and some were well crafted, others, well, let's leave it at that. I would say, outside of SE Asia, $1k is the middle ground between too expensive for a made-to-measure suit and too cheap for a bespoke suit.
As I see it, it is more fun to have distinctive garments made. I had a shirt made inspired by a shirt I saw Fonda wear in a Western movie, a denim jacket seen in a Paul Newman interview. It was a lot of fun, but dealing with the tailor took some tenacity and a certain unusual desire to wear those clothes.
On a trip to Korea, one of the team had an entire suite of outfits made inspired by the movie "Electric Cowboy". Outstanding quality. These apparently made him wildly popular is several SFO clubs, esp in the Castro.
If you live near Seattle, you can have a company called Ruby Threads manage the process - they make twice-yearly trips to Vietnam, returning with made-to-measure custom suits:
Quality isn't the same everywhere. I'd heard often from my colleagues about inexpensive tailored clothes they got in Asia. So when I was working in Dubai, I went to a tailor to get some shirts made. They measured my arms and neck then told me the shirts would be ready in 3 days. When I got the shirts, the collar and sleeve length were perfect, but the rest of the fit was comically bad. I only wore the shirts with a jacket on to hide the sloppiness of the fit.
You got exactly what you were measured for… which might as well have been off the rack since every department store sells shirts by neck size and sleeve length
When I used to sometimes get suits etc. made, I went into a tailor on trips to Asia. Presumably, assuming your measurements didn't change much, you could reorder things and get them pretty close though I never did that.
Just sending your measurements will essentially give you something semi-custom. When a tailor takes your measurements, you usually go back and they do a little bit of nipping and tucking of a suit before you take it away. Other articles of clothing like coats require less precision.
I love replicas/knockoffs of high quality. I live in China and I can get say Salomon, Nike ACG and North Face Purple Label for maybe 1/8-1/6th of the retail price of the real deal. And the product is indistinguishable, in some cases may be produced in the same factory.
Being both a craftsman and having worked luxury handbag retail, I can tell you right now that I could spot the difference in construction quality and after a couple months of wear, the disatrous difference. I also highly doubt that the 800$ price tag reflects the overhead , advertising, packaging, retail store markup required to run the store and the salary + commission it takes a dedicated salesperson to go through the special order process it takes to sell one of these bags.
Yes, however this article is sporting the idea that the only difference between the designer product and the downmarket product is the unjustified inflated pricing.
The very next sentences explain why this is about conspicuous consumption:
> The authors of “Signalling status with luxury goods: the role of brand prominence”, which appeared in the Journal of Marketing in 2010, do so by dividing the rich into two groups: “parvenus”, who want to associate themselves with other rich people and distinguish themselves from have-nots, and “patricians”, who want to signal to each other but not to the masses. They theorise that more expensive luxury goods, aimed at patricians, will have less obvious branding than cheaper ones. Sure enough, they found that Gucci and Louis Vuitton charge more for quieter handbags and Mercedes slaps bigger emblems on its cheaper cars. People who cannot afford luxury but want to look as if they can (“poseurs”) go for big logos: counterfeiters usually copy louder goods.
I think this point is made in Succession where Tom (who is, of course, the most social climbing member of the clan having married into the Roy family and is the only person in the show who actually makes a point that being rich is awesome) comments on the "ludicrously capacious" bag of the friend of his sidekick.
What is deeply amusing is that the whole "ludicrously capacious" meme has taken off to the point where you can buy large bags with "ludicrously capacious" on them.
> I bet some large majority can identify an Hermes bag as an expensive bag, logo or no.
Not to the extent you'd think, I bet. The designs of the Hermes bags are designs that have been widely copied by far less expensive manufacturers.
I went on the Hermes site and looked at some bags (they don't show prices on their website), then looked up the prices of the bags. They were all an order of magnitude more than I would expect for the item I was looking at.
So, sure, most people could look at a bag and think "That bag cost hundreds of dollars". But I don't think that most people could look at the bag as think "that bag costs thousands of dollars". Spending several thousand dollars on a handbag is so far outside the realm of normal for people that it wouldn't occur to them that it would be that expensive.
I hope one day people are free from the grip of Veblen goods. Its probably impossible due to genetic causes, like a demand for status.
However we may be able to educate people that 'you cannot buy class'.
Its interesting how many lower income people have iphones, Jordans, Teslas/Mustangs/Corvettes but as soon as you hit the upper-middle class, these disappear in favor of the more practical/functional items of similar prices. Not to say that some in the upper-middle class don't waste money on a Ferrari/Lambo, but I imagine its the same thing, 0.1ers don't buy those products.
I don't disagree with your overall point, but some of your examples are hardly Veblen anymore. Or perhaps we have very different definitions of upper-middle class. I live in what I consider an upper-middle class area, where median household income is about 3-5x the state's as a whole. Everybody has an iPhone and you can't throw a rock without hitting a Tesla/Mustang/Corvette. Jordans I won't comment on since I know nothing about sneakers, but I would argue the other brands are all no longer Veblen. My MIL used to buy only mid-range Samsung phones that would become slow or lose significant battery within a couple of years, necessitating a replacement. My wife finally talked her into getting an iPhone, and she's been using the same one for 4+ years and has no desire to replace it, because it's still working fine. And similarly for all the other people in my family and their iPhones. I personally still rock a Xs. So for us and millions of other people, iPhones are actually a better value than most alternatives. Similarly, the Mustang and Corvette are usually considered to be excellent values within their class. Sure they're toys, but they deliver a lot more performance per dollar than most fancier sporty cars. Tesla has been and arguably still is the best electric car brand. Add in the recent price reductions and the reintroduction of tax credits, some Tesla models now have final costs below the average new car price. Hardly a status indicator when you buy a car that costs less than many Hondas and Toyotas.
I think we're getting away from the definition of Veblen goods in that it implies people wouldn't want a Tesla, Mustang, or iPhone as much if you cut the price in half. And that seems manifestly silly.
On the other hand, I can absolutely imagine that a lot of the people who buy supercars would be less likely to buy a Lambo, given it's downsides, if it were something any upper middle-class household could afford if they wanted to.
If almost everyone has an iPhone/Telsa, but a few people don't, some people may begin to read it as a signal. In a sense, when veblen goods are popular in a community, they have become table stakes instead of status symbols.
They're still veblen goods though even if they're table stakes. Because they became table stakes due to their price.
There's some fascinating class-based spending behavior I was taught in school decades ago. I have no idea how valid it still is, but I presume nothing much has changed.
What I remember finding the most curious on first glance is that people in the lower-upper income group are the most likely to be bankrupt within five years of hitting that income band. Bu the explanation made sense to me: at that income level, you begin to compare your lifestyle to those who are much wealthier than you are, so you feel poor by comparison. Therefore you're more likely to start spending at rates that the income level can't actually sustain, in an attempt to live like the wealthier people you have begun to compare yourself to.
I think what you're describing is very similar to the Diderot effect [1], which has been discussed in here several times (I'm too lazy to search for those threads, but that's how myself have learned about it):
> The Diderot Effect is a phenomenon that occurs when acquiring a new possession leads to a spiral of consumption that results in the acquisition of even more possessions. In other words, it means that buying something new can cause a chain reaction of buying more and more things because the new item makes one feel like one needs other things to go with it or to keep up with it. This can lead to overspending and accumulating more possessions than one actually needs or uses.
This is very true in my case. And I have justified this in multiple forms. First, I really need it, then its been proven over years I didn't use much. Later I purchased more stuff, reasoning being This is my last hurrah, buy it even if I don't need it, in few years I will have no desire left to buy anyway.
This didn't have disastrous effect as most purchases were smaller kitchen tools (<100 dollars) and most expensive was computer ( < 2500 dollars). After that I've been little more conscious.
As an ex-Android user who held out as long as I could: these aren't a Veblen good.
1. iphones aren't meaningfully more expensive than android alternatives, except at the very bottom of the market, and even then the difference isn't huge, even for lower income earners, when you finance.
2. There are actual product differentiators between Apple and Android. There are very real issues like privacy and app availability/quality; even when an Android version of an app exists, it's not always as functional.
3. But far more importantly, the newest range of Pixel phones are absolute garbage and barely work. After two top of the line androids in less than a year, I got sick of missing text messages and dropping phone calls because of shitty software. I was forced to switch to a (cheaper!) iphone.
> ...as soon as you hit the upper-middle class, these disappear in favor of the more practical/functional items of similar prices.
I doubt there is truth to the common trope that "REAL rich people don't buy X/Y/Z". Its a No True Scotsman argument. In actuality, Kelly / Birkin are appreciated by a wide spectrum of people, even folks who are "0.1%ers". Just like "0.1%ers" buy luxury cars. Hell, Bill Gates (a "0.1%er" squarely) basically lobbied for a law just so he can import a Porsche 959. Jerry Seinfeld has a huge car collection. If you want to argue "old money", Prince Harry has a Jaguar E-type and a F-Type. Luxury goods are enjoyed by the leisure class, period, because they have disposable income and like nice things.
> Not to say that some in the upper-middle class don't waste money on a Ferrari
It is not actually possible to directly buy the fancy Ferraris. No matter how much money you have. It's a whole thing. You don't call them, they call you.
same with high end luxury watches. i think that these companies just add another layer on top of the standard veblen goods definition making it even more exclusive/desirable, and therefore even harder to get one.
Upper-middle class people can't afford Ferraris or Lamborghinis. If you can afford either of those cars, which start in the six-figures, you are not middle class, you are very definitely upper class. You can't even get on the list to buy one of these cars without a bank account balance in the 7 figures.
Also...every major wireless company offers iPhones free or heavily discounted. iPhones aren't the luxury goods anymore, they're the cheap alternative.
Samsung Galaxy A14 5G - £15 per month + £9 upfront
£563 in total (3yrs no inflation)
Apple iPhone 11 - £32 per month + £19 upfront
£1191 in total (3yrs no inflation)
The iPhone 11 is being sold for £480 on Amazon - I'm struggling to see where the heavy discount is.
That link is blocked for me, unfortunately. Assuming that it is indeed cheaper than the equivalent models from competitors, why do the carriers do it? Do Apple subsidise the offer to maintain market share so that they can sell add-on products?
Your comment about iPhone build quality is as anecdotal as they come. Here's my counterpoint anecdotal take: I've had pretty much every iPhone model since the iPhone 3G, and the tiny number of issues I've had have been straightforward (a free screen replacement as a result of a publicly acknowledged issue, for example). I also work in the repair sector (not for Apple), and have seen absolutely no evidence to support your claim that iPhones are dying left and right.
When Apple do entire device replacements, this is simply because for weird issues it's a quicker and easier on-the-spot resolution for both the end user and the Genius Bar than spending days depriving the owners of pretty vital devices trying to reproduce odd issues. Articles abound detailing how exacting Apple are with suppliers, e.g:
In case you're not quoting from it anyway, I'd recommend the book "Class" by Paul Fussell. It's a bit outdated, and often not really serious, but it takes this kind of observation quite far.
I've found it remarkably useful, despite often being a bit tongue-in-cheek.
The insight on mirrored surfaces was especially interesting. I remember seeing a staged photo of some Trump kid & spouse with their own kid playing in a living room with a spotless mirrored table and was like "oh, hey!" Lots of fun bits like that.
... Actually, the entire Trump thing was fascinating with Fussell's instruction guiding one's experience of it. "Prole" fit on expensive suits. Middle-as-fuck taste in home decor ("if you're rich it means everything's huge and covered in gold, right?"). Still haven't figured out how much of it's genuine and how much of it's an affectation for marketing/personal-branding reasons.
He got his hope-for-the-future "Class X" all wrong—just an upper-middle youth fashion wave, mostly—but otherwise it's still a surprisingly-useful tool for analysis, considering how old and half-jokey it was.
Looks shitty if it's even slightly dirty, gets dirty if you so much as look at it, requires very thorough cleaning to make it look good (no smudges or streaks).
Means you don't do your own cleaning—like, at all. Once-a-week housekeepers can't keep a mirrored coffee table looking tidy. Probably also helps if you have whole rooms you barely use, but even dust'll have it looking shabby faster than, say, wood. If you buy such a piece and do your own cleaning—and especially if you actually use it—you'll probably regret it in a matter of days.
It's the kind of thing someone without that can only own (without it looking way worse than almost any alternative material) if they're so dedicated to it that it'll be the thing people remember about them. "Aunt Gertrude and that damn table. You remember that? Wouldn't let anyone touch it, and damned if every time you came to visit, she wasn't cleaning it. She had a whole process. Drawer of different towels, three or four cleaning bottles she had to put on in order. One time my kid touched it with a cookie-greased hand and she saw me getting the Windex, nearly bit my head off."
Jordans are not Veblen goods. They are entry level sneakers. Enough to set you apart from the sketchers wearing squares, but they are not margielas or visvims.
I once had the delivery list of the subscribers in my city, because the postman accidentally handed the list to me, and it was the wealthiest families of the city, a university and the embassies.
A long time since I read it, but Michael Tonello's memoir "Bringing Home the Birkin" was a fun and easy read. Long and short, he figured out how to skip the waiting lists, buy the bags and flip them for profit.
The part about the margins always annoys me. They are comparing final cost to cost of goods + labor to manufacture, but there are other components than that. There is the cost of stores, of store staff to sell you the bag. The executives salaries who do not make the bags themselves.
This comes up in tech as well. The cost to manufacture, say, a CPU, is very low compared to how it is sold. But you are paying for a lot of R&D that guided the CPU design. How are these things factored in? I'm sure that there is a word for this factoring in of R&D, mgmt, and other costs, but I don't know what the term is to start learning more. Does anyone else know?
The word amortize -- "gradually write off the initial cost of (an asset) over a period" -- denotes exactly this concept in the English language. As in, "the market price of a CPU includes amortization of the initial R&D effort over the lifetime sales of the CPU".
The problem is that it means something more specific to accountants and lawyers in practice.
Outdoor-themed Veblen goods are the new hotness for certain segments of the upper middle class. Yesterday I saw a guy with a haulbag... themed?... backpack that had a laptop sleeve and couldn't help but giggle. Remote work is great but taking a conference call from Big Sandy seems a bit silly, lol.
(At least it's only $99 which actually isn't bad at all for a quality backpack, but still.)
Had a conversation with a friend the other day where these backpacks[1] were brought up. After reading your remark, I now see what these list prices are really aiming at.
for my 18th Birthday I got a Timex. when I turned 21 I got a new watch and put the Timex away. almost exactly two years later I was going clearing out my room and was absolutely shocked to find it was still going and correct to within a minute. unfortunately the strap that came with it wasn't quite so long-lasting
> But as Solca observes, there are good commercial reasons why rationing by queue rather than price can make sense.
> First, it gives Hermès a buffer: even if demand drops, sales will not.
> Second, it creates surplus demand for the bags, which overflows into demand for other Hermès products. Much of the firm’s business consists of selling consolation prizes: wallets, belts, beach towels and so on. As J.N. Kapferer of the Inseec Luxury Institute in Paris observes, the wait induces “impatient buyers to switch to other products of the brand, to calm their hunger until the much-awaited object of desire is achieved.”
> Third, although market-clearing prices might raise profitability in the short term, in the long run they would drive French women away, leaving nouveaux riches from the developing world as the bags’ main buyers. If elegant Parisiennes lose interest, so, eventually, will women who aspire to be like them.
'economics' would make more sense if offered as a humanities course
Veblen goods are a topic that is covered in the first semester of any serious econ program. Buying them is perfectly rational and can be modeled mathematically.
Veblen Goods sounded a lot like Giffen goods which were covered in the economics module of my CS degree. I had to check, they're related [1]:
"... both Veblen and Giffen goods have an upward-sloping demand curve. This means that demand for them increases when their price increases. Their main difference is in the type of good.
Veblen goods are luxury items that connote status in society, such as cars, yachts, fine wines, celebrity-endorsed perfumes, and designer jewelry.
Giffen goods are essential goods, such as rice, potatoes and wheat. Demand stays high when prices increase because there is no ready substitute for them."
> Giffen goods are essential goods, such as rice, potatoes and wheat. Demand stays high when prices increase because there is no ready substitute for them.
The way Giffen goods were explained to me is that not only is there no substitute for a Giffen good, it is the substitute. Imagine you eat meat and potatoes and the price of potatoes increases. If you can no longer afford your regular diet and need to cut costs, well, meat is probably still more expensive than potatoes, so you buy less meat and even more potatoes.
That’s not the best explanation of Giffen goods, since it only covers price inelasticity.
The key point of Giffen goods is that, as they become more expensive, you have less to spend on alternatives and thus have to buy more of the Giffen good. For example, you normally spend 10% of your income on pasta but then the price doubles. With less disposable income, you can afford less meat, so buy more pasta instead. That said, there’s very scant evidence such an effect exists in the real world.
At this point, an economist would tend to usher in the argument made by Thorstein Veblen... Yet in a couple of ways, Birkins do not look like classic Veblen goods.
> This led me to a Reddit community of replica enthusiasts, who traded details about “trusted sellers” capable of delivering a Chanel 2.55 or Loewe Puzzle or Hermès Birkin that promised to be indistinguishable from the original, and priced at a mere 5 percent or so of the M.S.R.P.
> ...
> What was once a sly novelty has bloomed into a gigantic market. In 2016, a Virginia woman was sentenced for buying $400,000 worth of designer purses from department stores, returning high-quality knockoffs and reselling the real bags for profit; the stores went years without catching on.