The value loss of luxury bags is not the same for all. 

Bags can cost the same initially at first-time purchase, but later, at the time of resale, the prices can vary, and the value loss would be different for different brands. 

This difference is a result of a couple of factors, such as brands’ status in the brand hierarchy, the model choice, supply control, and buyer behavior. 

Sellers coming to Value Creation often showcase this attitude and mindset, that “luxury” translates to “good resale value”. 

But this is not often the case. Good resale is dependent on a number of factors. Realistically, only a number of brands and specific items of those respective brands do well in resale and give good value to their owners. 

This guide describes the reasons why certain luxury brands are more valuable, why sellers are mistaken, and why resale should be on the mind before expectations are created.

Brand Hierarchy Creates The Ceiling, Not The Outcome

To understand how resale works, you need to first understand this brand’s framework. 

This framework does not guarantee profit, but it determines the limit within which your bag can reach.

The simple rule here is: 

Brands establish demand

The condition and model establish the price for it. 

A Simplified Resale Hierarchy (Based on Market Behavior)

This framework stands true and is very much prominent in the Dubai resale market. Prices are compared quite aggressively in Dubai’s market due to the high number of existing stocks.

Why Hermès, Chanel, and Louis Vuitton Perform Better?

1. Limited Supply

Due to Hermes’s limited availability, there is structural scarcity in the market for its models. This low supply leads to a higher price, often crossing the retail price. 

Chanel and Louis Vuitton use a different strategy. 

They ensure a very well-regulated distribution network combined with a regular increase in price. 

This results in buyer expectations aligning with sellers’ mindsets, creating an underlying understanding regarding the pricing.

How Models Impact Resale Performance

Resale value is also very much dependent on the model of the respective brand. 

A strong brand does not automatically warrant good money. 

The market dynamics of the resale market are such:

Launches that are a result of an ongoing trend or are seasonal are more prone to lose value (40-60%). 

Time-to-Sell Is as Important as Price

Value also starts going down if a product takes too long to sell. 

Therefore, liquidity also plays an important role.

Clever and experienced sellers know how time is a crucial factor in resale; therefore, they often accept a lesser quote for their top-tier handbags. 

Condition of Bags

Just like any other product, bags also go through wear and tear and deteriorate in their condition over time. However, a buyer does not treat all brands’ bags the same way.

Some brands, which fall in the top-tier, get more buyer acceptance and therefore even the deteriorated condition is ignored. 

For example, an issue on a Birkin would only result in a loss of 10-15%, while the same flaw on a Gucci or Prada bag would mean a loss of 25-40%.

Authenticity and Trust of Brands

Top-tier brands are also more trustworthy brands in the eyes of the buyers. 

Imitation of brands like Hermes, Louis Vuitton, and even Chanel is quite common; the authenticity of such brands is often questioned. 

If you're unsure what's examined, authentication standards matter significantly for Louis Vuitton, Chanel, and Hermès bags. 

Dubai has a very standardized and regulated resale market with reliable verification processes. It is because of this that strong brands are spared from scrutiny on the buyers’ end.

On-Ground Market Reality of Dubai

These factors are very much prominent and highlighted in the Dubai market due to:

• Lots of tourists in Dubai.

• Globalized price culture.

• Strong demand for authenticity.

• Constant review of prices and market conditions.

Icons like Hermès and Chanel remain liquid. Trend-heavy Gucci and Prada pieces correct faster here than in many Western markets.

Hence, the conclusion one can draw from this analysis would be that opting for the right market and platform can also help one in sealing a good deal.

Resale Strength Does Not Mean Guaranteed Profit

Risk exists everywhere; even the strongest of brands are not risk-averse. 

Moreover, sellers should be well aware of the market dynamics before stepping into it.

• Fees do reduce your eventual outcome.

• The condition of the bag and the increase in deterioration can similarly decrease the gain. 

• Timings, as aforementioned, can really change the outcome. Sometimes, even classic top-tier bags are not able to compete with trending bags. If there is an ongoing trend, a bag is listed right after or during that ongoing trend, this particular bag is sure to have more demand than classics. 

Minimize your risks by understanding and following the brand hierarchy, but even that cannot always guarantee a positive outcome. 

What This Means for Sellers

Strong brands are only doing well because of their authentic products and the loyal customers. Moreover, restricted supply and high-quality production also lead to consistent demand for their products in the market. 

Satisfaction can be achieved if the sellers understand the factors affecting resale activity. These factors are: condition of the product, brand and model of the product, and the timing at which this resale is taking place. 

If you're selling outside bags, category-specific routes matter. Explore options for luxury watches and designer jewelry.

Knowing where your item sits in the hierarchy is the first step to protecting value and avoiding surprises later.