how do luxury brands make money

People also ask

  • Why do people buy luxury brands?

  • So they purchase expensive and conspicuous goods, to make sure their resources are visible to outsiders. As an example of this behavior, researchers recently examined Google search trends across the U.S. and found that people in states with relatively high income inequality were more likely to search for luxury brands than those in other states.

  • How much do people spend on luxury products?

  • Spending on luxury apparel, leather goods, watches, jewelry and cosmetics reached $390 billion last year, according to Boston Consulting Group. But growth is starting to slow from its postrecession pace.

  • Do luxury brands have higher profit margins?

  • Luxury brands certainly have higher margins. One of the reasons the industry is so attractive is that margins of 18%-25% are both achievable and sustainable (the latter being by far the most important, as many new launches have discovered in recent years).

  • Why are luxury car prices so high?

  • I鈥檓 told that the biggest reason for the increase in prices is that more brands are targeting the luxury market (given those higher margins, and the way it has performed through global recession).

    Leave a Comment