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Comment by cletus | Hacker News Reader

I find these systems fascinating. Hermes does make high-quality bags but really where they shine is in marketing.

You see a similar thing play out in the mechanical watch world. Rolex is the master of marketing. They make a good product, make no mistake, but they don't over-produce models, still have scarcity despite selling millions of watches a year and have a limited inventory so Rolexes have the strongest secondary market.

Compare this to Omega who simply produce too many watches and too many watch variants such that you just don't have the strong secondary market that Rolex has. This is despite Omega producing in some cases a better product in utility purposes (eg Planet Ocean vs Deepsea Sea-Dweller).

But there's a dirty little secret with all these brands, including Hermes. As much as they say it's about spend ratios and the like, ultimately it comes down to whether or not they like you. If, as a woman, you're attractive, stylish and likely to be seen with their products (eg red carpet events) you will have WAY more offered to you than your spend ratio might otherwise warrant.

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Same goes ie for Ferrari. For those that don't know - you can buy 'cheap' V8 ie Californias, 458, 488, F8 etc, pretty much just like anything - you pay and get into queue, and once its your time, you get what you've selected with sales rep.

Not so much the better V12 / hypercars which they do in carefully limited amounts. You have to be previous owner of series of lesser ones. You have to be their customer for quite some time, with flawless trail as a stellar customer. You have to have very good relationship with their company (so like Justin Bieber got his car painted on some color that they didn't approve and Ferrari banned him for life). Unique extremely limited series are all this but 10x or 100x, since all know this is darn good investment right out of gate, if you don't screw up maintenance (and at those price levels nobody sane does that). Those are basically not driven, each km would be ridiculously costly in total costs and depreciation.

You can skip most of this if you buy second hand, for adequate inflated prices. This won't work for Bieber style of situation of course.

Fascinating, thank you. What staggers me is how the very well-off people who can afford the Ferraris put up with this nonsense. In my book the whole point of being rich is the increased freedom which surely includes not complying to idiotic requirements (and I don't mean the social and legal norms here).

I guess an urge for status signalling is very hard to resist.

It's probably because of this "nonsense" that people see these cars as exclusive and therefore worthy of putting up with the nonsense...

Having dipped my toes in the Ferrari world, there are three very different groups of Ferrari buyers- Status people, car people, and super rich people. The status people play the silly game with the dealers. The car people buy used from the status people after the new model isn't flashy any longer. The super rich people buy original era cars (before Fiat bought out the company in the 1970's) and use them as investments.

Well, the main reason that you'd buy a Ferrari in the first place is status signalling, so if it's extra-difficult to get, that makes it _better_ at status signalling. Kind of a variant of a Veblen good; the presence of whatever the special model is in their driveway indicates that the person has completed the rich-person equivalent of throwing a ring into Mount Doom, so is impressive to people who are impressed by that sort of thing.

Well, I've driven one basic (458) on a track circuit and let me tell you... If TCO would be below 1% of my net worth, I would buy it in an instant. It literally puts a smile on your face. And its a marvel in engineering compared to cars for regular Joes.

But completely useless in regular traffic, in fact much much worse than normal cars. And all kinds of idiots want to semi-constantly race you. So sort of great deal on the paper, actual reality not so much.

Same, I drove a factory-fresh F140 v12 GTC4Lusso straight off the line in Maranello while they were still being produced, and having background in German-built cars, it’s light years of difference. If I could have bought that same day I 100% would have. They’re that good.

They are amazing cars, but damned if they don't look like a hatchback Corvette

I see it as the Corvette looking like (copying) the Ferrari. I've got a friend who drives one of those 'high-end' wishes-it-was-a-Ferrari Corvettes. Every time she drives up I say "shoulda bought a real car", and I get a dirty look.

Not a ferrari, but I had a Mercedes AMG for a few years and it was exactly like that too - put a stupid grin on my face on the track or on the autobahn(5am drive at solid 160mph for like 30 minutes near berlin will always remain my favourite driving experience), but day to day it was awful - loud, uncomfortable, ruinous on fuel, and people wanted to race you constantly, every now and then people wanted to take pictures as well etc - which I imagine with a Ferrari it's even worse. Nowadays I settled for a completely inconspicious family car that no one would even look at twice, but which still has enough power to go fast if I want to. But owning "flashy" cars is definitely not for me anymore.

I confess to having a soft spot for sleeper cars. Dont know what the equivalent term would be in Germany. But anything that looks convincingly like a family car but can do 0-100kph in a flash would qualify.

Example: Volvo V60 Polestar wagon, or the legendary Ford Taurus SHO

Im sorry to say that in my corner of the US, an AMG Benz screams man-child rather than car enthusiast, because they tend to be driven by idiots. Ditto any BMW M.

My current car is actually an XC60 T8 :-) It's a bit of a barge, but the 400bhp is "enough" to go fast should you want to.

>>Im sorry to say that in my corner of the US, an AMG Benz screams man-child rather than car enthusiast

That's fine, everywhere is different.

The EX30 does 0-100kmph in 3.5 seconds.

I guess an urge for status signalling is very hard to resist.

Buyers who just want an exotic don't have to jump through Ferrari's hoops. There's the used market. Or, it's relatively easy to buy a new McLaren, Lotus, etc.

> In my book the whole point of being rich is the increased freedom which surely includes not complying to idiotic requirements...

That's precisely why there are people flipping Porsche and Hermes Birkin bags for a living.

There are certain rich people who have absolutely zero patience and won't deal with that car configuration/salespeople/six months of wait bullshit.

So what do they do? They buy the car now, the day they see it brand new but second hand, at a price above MSRP.

I think the parent's point is why would a rich person care about these items at all. If I were rich, I would hire my own artisan to make me a bag. Kind of like a bespoke suit.

Yeah I'm not rich but most of my clothes are made by a third generation tailor. Sometimes if I see a style I like at a retail shop I buy it and bring it to them to duplicate. You get to completely customize everything and having control of the fabric and literally everything is so nice. It kinda makes me wonder why there's so many retail stores selling clothes when above a certain income it's just better to get almost everything bespoke.

Ferrari broke their model this cycle. Their high end customers have put up with this for decades since the hypercars always gain value. Most people let them gather dust for a while, then sell them for a tidy profit once the Ferrari quiet embargo on aftermarket sales goes away.

This time they got really greedy and tried to insert a limited production mid-engine model into the middle, under the La Ferrari hypercar but above the 'base' mid engine car they have been making forever. The problem is that SF90 isn't special enough. It's the same basic technology as the much cheaper 296 (which is plenty fast and special) and no SF90 has re-sold for above or even that close to MSRP. All the special customers have taken a bath on SF90 and I hear are pretty annoyed with Ferrari.

They also tried to toss in the SP line of cars, further diluting the special, limited nature of the hypercars.

The SF90 resale values seem to also be impacted by issues with the battery and charging system. I remember reading quite a few stories about electrical gremlins on FerrariChat. Even if the issues are worked out by later updates (which they may or may not be), that kind of bad reputation can have a big impact on depreciation.

>"but really where they shine is in marketing."

I guess they do since they can sell their stuff. But not to people like me. When I see product priced just for being status symbol my first reaction is - fuck off, go find yourself some suckers.

I am not saying you shouldn't tell them to fuck off, but have you entertained the idea that the person who is the sucker is actually you?

These watches are part of a status and this status allows these people to dictate to the rest of us how they'd like their omelette.

Well I work as an independent company, I find clients, develop products for them on my own premises and get paid, sometimes it is licensing fees. I am not rich but do well enough and can retire. So no, except the government nobody tells me what to do and as long as I pay taxes the government not really interested in people like myself.

> But not to people like me

I love the Enlightened Hacker News Commenter who can’t wait to share how they are different from other people when it comes to marketing.

Who’s the sucker, the person buying the Birkin or the person commenting hundreds of times on a website that’s a marketing campaign for a VC firm?

¿Por que no los dos?

Neither of them are suckers.

It’s fun to post online and it’s fun to buy things that make you happy.

>"Who’s the sucker, the person buying the Birkin or the person commenting hundreds of times on a website that’s a marketing campaign for a VC firm?"

Does that really matter? I just expressed my opinion. And I am not that different. I bet there are more people like myself than the ones who would pay $10000 for a purse.

I bet there are more people like myself than the ones who would pay $10000 for a purse.

Obviously. But are there more people 'like you', than people willing to pay 'too much' for something they know is irrational, just because it brings them joy. I might not want to buy that specific hand bag, but I'm not going to sit here and judge since I too have made plenty of irrational purchases in my life, many of which have brought me great fun and joy.

I do make plenty of irrational choices too. Same people who do not mind paying thousands for a gun laugh at me when I pay $5000 for an EUC. Hard to explain but I think it is a bit different than paying for "status symbol"

> Hard to explain but I think it is a bit different than paying for "status symbol"

That is very fortunate for you because after all you’d never buy a status symbol!

True. I can afford some but the thought to buy one just because I can had never crossed my mind.

Unironically saying that you have no interest in status symbols and then going on to talk about a purchase of a $5,000 electric unicycle is really something.

That $5,000 electric unicycle is a status symbol. You’re welcome to believe that I’m a fool and don’t know what I’m talking about.

Don’t you think that’s what every Rolex wearer and Birkin carrier thinks, too? “Oh they’re just really nice ________ with features I like and can afford.”

The only reason I've got EUC is because they're an incredible fun to ride. I've become a bit of an addict as for me it is pure mental and physical joy.

I do not give a flying fuck about its status value. It is most likely big fat zero since most people have no clue about the price.

Even though it was not a factor at all when buying it turns out to be very practical as it lets me run errands very fast and efficient. Nothing else beats the convenience. When I visit my current or prospective clients on a bicycle I have to leave it outside and risk it being stolen (nice bike and Toronto are very bad combo). Car - only if I want to ruin my day driving downtown. EUC comes with me into the office and 90% of the time it makes client very curious / amazed which is a good thing for conversation.

> I do not give a flying fuck about its status value.

It doesn’t matter whether you care about its status value. If I bought a Birkin and said, “I don’t care about the status value” you’d scoff and think I’m a sucker.

And yeah I guess I am surprised to learn that $5,000 is the cheapest available EUC.

Not the cheapest but one that has Smart BMS, IP rating, good suspension, big range and big power margin for safety. Otherwise yes, you can buy cheaper one starting I think with as low as $1000.

Oh wow, $4,000 more for the one you bought. Not everybody can afford to drop money on an item like that, especially when there are serviceable but cheaper alternatives.

It's almost like you have to have a certain something to buy it...

An Hermes Birkin bag isn't fungible with other bags of equivalent design or quality. That it is that bag by that brand is essential. Most of the price and scarcity isn't for its qualitative or quantitative attributes but rather to maintain the appearance of exclusivity.

I doubt paulcole feels that way about their unicycle.

Yes, fundamentally, the possession of things of value is a signal of means, but that's mundane. Everything you own or do signals means to some degree, but that's different from signaling being an essential property of those things or activities.

> Hard to explain but I think it is a bit different than paying for "status symbol"

I mean, yes, this is what all buyers of status symbols think. No-one is going out buying a Birkin bag or a Ferrari or a Rolex or a monkey NFT or whatever saying "better go buy a status symbol today". Or, at least, very few people.

EUC as in an Electric UniCycle?

Just wondering; didn't know this one.

Excellent Used Condition

But an Excellent Used Condition what?

Yes, Electric Unicycle

> And I am not that different

Your entire comment was saying how you aren’t like those people and calling them suckers.

Well you can interpret it like this and there is a logic. But truthfully my reply was to express my attitude towards the sellers of "status symbol" when the equivalent in everything but brand name is easily available for a fraction of the price

The comment absolutely should not be downvoted it’s highly perceptive.

I don't know anything about the secondary market for Hermes bags but it seems like it's pretty healthy.

But watches from certain brands (and certain models) can be sold immediately for a profit. For example, a Rolex steel Daytona retails for $14k from an MSRP. You'll sell it in a heartbeat on the secondary market for $30k. The Rainbow Daytona a handful of years ago was $100-150k IIRC. It's now closer to $500-600k.

The market is off its peak of 2021-2022 quite a bit but I've bought several luxury watches that could be sold for a healthy profit if I was so inclined.

What makes some of these products go crazy heights, while (I guess that) some other just lose value or never gain value ? Are those products better than others or is it just some pure coincidental mix of factors ?

It's really difficult to predict and has to be managed well by the company. But a big one is when a model gets discontinued because at that point no more will be made so supply is fixed.

So the current generation of professional (ie steel) Daytonas have a ceramic bezel. This is to avoid scratches but means they can shatter with enough force. The ceramic itself is baked in a plasma furnace. The tech behind these things can actually be really cool.

So Daytonas have historically sold above MSRP on the secondary market but not by this much. About 10 years ago the new ceramic Daytonas were released and what happened was a lot of people sold their previous DAytonas to "upgrade". This meant that what was 6 months earlier a $13k MSRP watch was selling for $10-11k and that seemed crazy to me given it was now discontinued so I bought one. At the peak of the market, that watch would sell for $30-35k. Now it's probably under $25k but that's still a good investment.

But steel Rolexes never really appreciate that much because the volumes ard really high. You're not going to get rich buying a steel Submariner. There's simply too many of them out there.

But one exception is the really vintage Daytonas, particularly what are called Paul Newman Daytonas [1]. These were watches that back in the 1980s sat in a display case for years (at $500 or less) because no one bought them but an association with Paul Newman skyrocketed them in the public consciousness to the point that a 1960s era Paul Newman Daytona in mint condition can easily be worth $500k-$1m+.

The market dynamics are really fascinating but it's now become essentially impossible buy an in-demand watch from an AD unless you're a big spender on other products there (they're all typically jewelers as well). The history of Rolex was in utility not luxury (eg the GMT was invented for Pan Am pilots who suddenly were flying cross-country, the Submariner is a dive watch, the Daytona was originally for racing drivers, etc).

[1]: https://www.bobswatches.com/paul-newman-rolex-daytona

Thanks for that small piece of history, that's indeed fascinating

A mix of quality, management of scarcity, x-factor (call it what you will, some kind of intrinsic appeal to the in group who buy this sort of thing or otherwise inherent desirability), and marketing

I would say: Careful marketing. Who gets access to buy this kind of watch? All you need to do is Google: Rolex Rainbow Daytona. Look at all the celebrities that appear wearing that specific model. It is not an accident.

Yup and it's not so easy to buy them, you need to get into a queue and wait. People with access shops/employee privileges (sometimes you can buy a watch out of the queue if someone doesn't show up to get theirs) are making a killing.

Well, this is a bit different. It is a way to safely park one's money. Not paying 10x price for a thing with the whole purpose being to show that I am fucking rich.

> When I see product priced just for being status symbol my first reaction is - fuck off, go find yourself some suckers.

This phenomenon is (or must be) so fundamental to existence that it has been produced over and over again by the process of biological evolution.

There clearly is a utility in a social setting to showing off the fact that you have sufficient resources to waste quite a few of them just visibly showing that you can.

> There clearly is a utility in a social setting to showing off the fact that you have sufficient resources to waste quite a few of them just visibly showing that you can.

That's the whole deal with engagement rings, and more generally with romance.

> There clearly is a utility in a social setting to showing off the fact that you have sufficient resources to waste quite a few of them just visibly showing that you can.

The modern world has much better ways to show this than relatively low cost jewelry/clothes/accessories.

Real estate, employer, board seats, private jet flights, yachts, and the simplest, vacationing often to destinations you have to fly to.

> Real estate, employer, board seats, private jet flights, yachts

Those are all way too expensive for regular folks.

> and the simplest, vacationing often to destinations you have to fly to.

That's too cheap to work as a status symbol for regular folks, plus provides all kinds of value (entertainment, relaxation, etc.) so it's not even a good way to burn money.

Regular folks show off by e.g. buying engagement rings that are multiple of the fiance's salary, or making other purchases whose defining characteristic is that others know it's expensive.

Jewelry, clothes and accessories are good for showing off because the more expensive ones aren't more useful or pretty at the margin. You're not buying utility for spending extra, other than that conferred by status games.

Yeah, but you can't carry those with you.

Why not waste your money on literally anything else? Build a museum, fund a public library, get your name plastered on a university by giving tuition to some poor kids!

The whole Debeers diamond ring scam has worked for decades until the last few years where synthetics are crashing the market.

And so they should be, there is absolutely no reason to pay more a mined diamond than lab-grown, it's synthetically produced but it's not a synthetic product if you see what I mean, it's not like say cotton vs polyester.

It only makes sense to mine diamonds if it's cheaper to do so than to manufacture one of equivalent quality.

There's a great documentary about this called Nothing Lasts Forever which I think I caught on Netflix.

The outfits with big skin in the natural/mined diamond sector have told a story about something that's been in the ground for eons and being pulled out and turned into something special as a symbol of love, and hoping that turns people away from synthetics. It's just story telling. You can see the romance in it, but the price differential is huge.

There are various attempts to keep the synthetics out, and/or identifiable, but even the main players are admitting that a significant percentage of synthetics are now in the naturals market, nobody knows how many, and that they're undetectable. That means the naturals market has to come back to actual costs plus some markup over what they've been for 100+ years: costs plus insane markups.

> something special as a symbol of love, and hoping that turns people away from synthetics. It's just story telling. You can see the romance in it, but the price differential is huge.

It's just BS, my wife's engagement ring stone is a size we picked, and then a quality (colour, lack of occlusions etc.) that I did some research on and picked to be a level for each that basically you needed to be trained & have equipment in order to determine the defects, i.e. I can't ever give her another one (natural or not) that looks better (it could be bigger but not more brilliant) to the naked eye. (And it's for her to wear, not an investment or whatever, so I figured really no reason to care beyond the naked eye.) If I'd added an additional requirement that it be formed over millennia in the earth, either it would have cost us a lot more, or more likely she'd have an objectively worse ring. Nothing romantic about that IMO!

It's such a weird market segment to me.

Sure, they are obviously very high-quality products, but they are clearly not worth the money you are paying for them. You're very obviously paying primarily for the opportunity to brag that you've got a "genuine Birkin". It's like those silly restaurants putting gold flakes on food: you can't taste or smell it, so you're paying solely for the opportunity to be ripped off.

If you've got money to burn, why not get a fully-custom product made exactly to your wishes by a local atelier and end up with a far superior product for the same price? What's the point if you can't even fully enjoy the fruits of your labor?

Yes, I know a guy who is of old Indian royal family stock (of course they have no special rights any more), and he will just show pictures of expensive bags and so on to his tailor and get them made for orders of magnitude less than retail.

It's entertainment.

It's just as right or wrong as buying tickets to watch a sporting contest.

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