We all try to enjoy the finer luxuries in life when we can. A beautifully aged bottle of brandy, a fancy handbag, or a designer piece of clothing are all very enjoyable to have. But, their major shortcoming to the average consumer is their price. Luxuries aren’t cheap and it is fair to say that most people steer clear of this industry as a whole.
However, the luxury products industry is more vast and active than ever before. The global luxury items industry is estimated to be around $316 billion in size and it’s not hard to see why. There are tons of people out there who have the financial means to enjoy these expensive commodities.
With this, the industry of luxury items is underestimated and relatively unknown by the average trader. Here is a quick overview of the luxury items industry along with the potential future of the industry and some ways to get involved:
An Overview of the Luxury Industry
Items that can be considered part of the “luxury industry” are all around us and it’s pretty easy to spot them once you know what you’re looking for. To put it simply, an item can be considered a luxury good when it is bought at a certain price (usually a high one) and increases in value over time. Some examples of items that commonly do this are designer clothes, handbags, and accessories like watches.
Traditionally, this market has been prominently dominated by a few select items throughout history. For one, fine art pieces have seen major growth over many decades and are extremely common to see traded around in this industry. Take Pablo Picasso as an example; his paintings have dramatically increased in price over the years as it becomes more and more difficult to find an original Picasso piece.
The major player in the luxuries industry is supply and demand. With the goods being so low in amount, their demand goes through the roof over time. This was also seen with certain shoe brands in the last few decades. Brands like Jordans see massive profits when sold a few years later once the market has so little supply.
The Future of the Luxury Industry
In the past, luxury items and their sellers were traditionally connected to buyers with auctions. While this is still the case for many, there exists another, more efficient option. Nowadays, the widespread adoption of the internet and certain sites have made it easier than ever to sell and buy luxury items.
To say that all luxury items were sold through auctions is not entirely the truth, though. With high-end products, there is always a company that manufactures them. Gucci and Versace are two great examples of this. Their locations that sell these high-end products through physical stores are the first way that consumers get their hands on luxury goods. After this comes the resale market which is mainly dominated by sellers on the internet.
There are many dedicated sites for selling luxury items (which can be found below) but the entire industry of E-Commerce is growing as a whole along with it. Sites like Amazon and eBay continue to see consistent, monumental growth with each passing year. But, dedicated sites like Amazon and eBay that are specifically for the sale of luxury items are also seeing a rapid upward trend over the last couple of years.
With this, the market for luxury goods is predicted to see market growth of around $356 billion by the year 2027. So, many new investors are flocking to the luxury goods industry to get in before it’s too late. It’s not very difficult to get started and the average can get started today with some simple items.
How to get started reselling luxury items today
Luxury items can be a great investment but have a big prerequisite before getting started. The main hurdle to jump when trying to buy luxury items is up-front capital. These items are called luxury for a reason and tend to be pretty expensive from the average person’s perspective. With this, just realize that a good amount of capital is needed to get started and maybe consider buying smaller, less expensive items at first.
This might be well and good to know but many might ask themselves “how do I sell my handbag or other luxury items?”. To sell your goods, there are a few different routes to take. Traditional auctions are an option, but they tend to be more inconvenient and reap less reward due to the cut they take from a sale.
The more popular option is to use one of the many websites that specialize in the resale of luxury items. There are a wide variety of sites out there for resellers in the luxury market at the moment, so just do a bit of research into which one fits your needs best.
Some items to look into that have seen some consistent and sizable profits over the years have been fine art, high-end watches, designer handbags, vintage wines, classic automobiles, and high-end jewelry to name a few. Some of these are more costly to purchase than others, but they all are expected to appreciate.
All this being said, it is recommended that you sit down with a financial advisor before diving into the luxury goods market. This way, you can craft a plan and find the investment strategy that best suits your needs.