Pam at HMS Blog doesn't think a handbag ought to cost $52,000. Of course, this only reveals the naivete of someone who doesn't understand the complexities of the handbag industry. Like so many others she seems to think that the price of the handbag ought only to reflect the incremental cost of rolling one specimen off the production line, or perhaps the value of the components (in this case scraps of recycled Louis Vuitton bags) plus production labor. But what about all the other costs that the average consumer does not stop to consider?
For example, there's advertising. It was expensive enough back when the handbag companies were only allowed to advertise meaningfully to wardrobe consultants and other professionals. Sure, the ads in the industry journals weren't cheap, and all those ball point pens, key chains, and sticky-note pads emblazoned with the LV logos and handed out at the big fashion conventions, those could really add up. But now that advertising directly to the consumer is possible, every handbag designer has to put a full-page ad in every publication from Ladies Home Journal to Fine Homebuilding to American Quilter even to think of competing. And that's not even counting the cost of advertising at major sporting events. If Gianni Q. Public isn't thinking about buying a new Coach wallet when he's pulling out a tenner for a beer at the NASCAR race, the marketers have already failed. And that means they have failed the American people.
And then, of course, one must pay the lawyers. When some poor elderly woman on a fixed income gets lead poisoning from licking the grommets on that "handbag" she bought off the street while she was taking that bus trip to Canada, the handbag companies have to shell out a lot of dough to defend themselves, protect their brand, and keep the public believing in the integrity of their products.
But the real cost of handbag design, of course, is already spent long before the first model slings the first sample of a new product over her bony shoulder and slouches out into the glare of the runway lights. I'm talking, of course, about research and development. The R and D investment in a new handbag design can far outweigh the cost of actually producing and selling the handbag, and the price structure really has to reflect this. Imagine the field researchers carefully isolating new materials from samples of ecologically-harvested rainforest species, hoping against hope that one of them will turn out to produce a previously impossible style. Think of the pearly-eggshell-coated textile scientists, toiling away with their fabric swatches and test tubes, combining toiles with leathers to see which ones produce a reaction. Think of the elite-educated grommet engineers, slowly going deaf from the low-frequency whine of the servohydraulic fatigue analysis system as they clamp yet another buckle design into the impact tester. Think of the human factors engineers with their computerized test dummies, measuring clavicular stress day in and day out. Consider the focus groups.
I bet you have never considered the focus groups.
It's especially enlightening to consider how revenue from those handbags that actually have a sizable market are used in effect to subsidize the production of handbags that coordinate only with the rarest of outfits. The sufferers from VRWMs (very rare wardrobe malfunctions) are, thank the Lord, few in number and concentrated in only a tiny fraction of the world's population centers, but by gum, even if the market for those products will never be large enough on its own to economically justify their production, those people deserve handbags that relieve their conditions as much as you and I do.
This is a great post. Nicely done.
Posted by: John | 09 September 2007 at 07:21 AM
Hilarious! (I'm an engineer)
Posted by: Greg | 20 September 2007 at 11:02 AM