Respectfully disagreed. The sales people for veblen goods work extremely hard because competition is intense even within that space. The Bugatti salesman is competing with Ferrari, McLaren, Lamborghini, etc.

The margins per-sale are great, but because of your low volumes you experience a lot more volatility. Minor fluctuations in sales have disproportionate impact on your bottom line.

I once worked for a luxury real estate brokerage and had opportunity to talk to real estate brokers who dealt in ultra-high-end real estate (the kind of properties that people make YouTube videos about). One conversation stood out to me that's relevant here:

I asked him about a listing for a Manhattan penthouse that had been making the news (mid-8-figure buy-in), and his response was that it was an incredibly risky property to represent, because the list of potential buyers is perhaps a dozen people long. If none of them move on the deal then you're holding an absolutely immense albatross.

Ultra-high-end goods are generally susceptible to this. Your market is small enough that it doesn't take a lot to existentially threaten you, and there is no shortage of people who want to eat your lunch (just like with any other market).

Do you happen to have more sharable anecdotes / thoughts around this? I realize its off topic, however I think it still has value to warrant that.

I'd be interested in anything you can share about it. I'm curious how the 'day to day' folks see things vs how its sold and told to the rest of us via news magazines or books.

- At the high end, everyone's got a gimmick. You can't just be personable and charming, you have to be so memorable as to feel like some fictional character. Your clientele are expecting more than mere representation, but something/someone who makes their life actively more interesting.

- Part of this may have been the market (NYC), but I got the distinct feeling that a lot of this was that buyers wanted a NYC fairy tale. If you're wealthy enough, it's not enough to have an agent, your agent has to spring forth and become a side character in the adventure story of their life.

- There's a lot of spilled ink about the mega-wealthy buyers (Middle Eastern oil barons, Russian oligarchs, Chinese billionaires, etc.) but they are a vanishingly small portion of the population of very wealthy people. In general I think most people have a poor appreciation of how little of the ultra-high-end consists of foreigners and high-profile business people that they've heard of.

- Related, there are way more wealthy Americans than most people appreciate, and the sources of their wealth are way more mundane than most people suspect. There are more 8-figure luxury condos being sold to families that own car dealerships and trucking companies than tech wunderkinds or petro-oligarchs. By multiple orders of magnitude.

Respectfully disagree. Which oil-rich Sheikh did you see who only has one supercar in their garage and not all of those you listed? These people aren't stock brokers or tech bros who need to work and save money for for years in order to be able to finally afford one dream car, but they own a multi generational empire that makes them enough money to afford all those cars.

>If none of them move on the deal then you're holding an absolutely immense albatross.

Comparing real estate to exotic cars is apples to buffalos. Most exotics are already sold before they leave the factory floor.

Except this isn't the main market for Ferrari, McLaren, Lambo, et al. There are maybe a few dozen people on this planet who fit into that kind of stratospheric wealth.

The bulk of their sales are to the "merely multi-millionaire" rich - your business executive, late-career law partner, guy who owns a chain of dental practices, etc. These are people who are not exactly scrimping and saving for their Ferrari, but certainly don't have the infinite money cheat code.

If you think Ferrari's sales ledger is consisted mainly of oil barons and other billionaires, I dunno what to tell you.

Neither is better, or more profitable over the long term than the other, but you really need to know which game you're playing.

Luxury brands spend millions on marketing and brand awareness. In some sense, all the "sales work" have already been done before a person sets foot into a Bugatti dealership. Reputation takes decades to build but just a few missteps to destroy. Brand is way more fragile than people think. As soon as Bugatti stops making great cars, they'll fall into a place where they can't compete in the luxury market, nor the mass market Japanese car brands like Honda or Toyota.

In that sense, luxury fashion seems to be a easier market than watches or cars. You don't need an innovative engineering team. Just spend millions on marketing to uphold the common narrative you are a luxury brand. And that shirts with your logo on it costing 10x more than a similar product at say H&M, is not only justifiable, but sensible.

When was the last time you saw an ad to buy a Bugatti Chiron?

Ads don't just have to be a photo on a billboard, though, or the entire thing of influencers wouldn't exist.

How many times has the Chiron been on Top Gear - I reckon at least three times (I can remember once in the Clarkson era and another time in the Harris/Le Blanc era; the magazine's had one at the Nürburgring at least once)? Sure Bugatti's letting them loose with a multi-million euro car out of the goodness of their hearts.

The simple fact that you (and me, and everyone else here) know about it show that people in marketing are doing their job.

I don't remember seeing an ad for a Bugatti Chiron, I am obviously not the target market, but I stumbled upon an ad for a private jet! Also other luxury cars and watches that make Rolex look like child toys. I was when I worked in a helicopter company and someone picked up a magazine from the showroom where customers get their helicopters delivered. The content was out of this world, I remember an article on the merits of private jets over travelling first class (I guess anything less is unthinkable), with purchase recommendations. So the ultra-rich get their ads too.

Does Rolex have other revenue streams aside from overpriced watches?

So that's like a $100-200/yr. annual subscription to wear an already expensive watch.

I've seen people wearing watches, but hell I have hard time identifying the brand of watch, let alone where the person wearing it works.

However, I agree with the first part of your comment in a way, but it's really not that hard to get a rough estimate of someone based on how they choose to present themselves. They didn't exactly get forced into that look.

Though I'm wondering what, exactly, defines the appearance of a specific lawyer who pushes for accident victims to sue, or businessmen that participate in wage theft. How do you tell them apart from... other lawyers or random people wearing suits?

Wage theft is rampant here, especially for lower wage workers. The government simply doesn't exist in a capacity to actually prevent these things, and people in general are too apathetic to other peoples well being, let alone engaging in appropriate political discourse, that the needle rarely moves forward for your average citizen.

The people who did the training and have the surgical ability to fix a Rolex deserve $1000.

An elaborate precision machine that is 35mm across and hand-built over a year (so they say), it makes sense that “cheap” Swiss watches are $9000. Rolex retails for 2-4x of that due to brand cachet and artificial scarcity, even though they are by far the highest volume manufacturer.

Rolexes also keep their value incredibly well. I bought a nice Tag many years ago (I knew nothing about watches) and it’s now worth about $1000 on the used market at best. Had I bought a similar priced Rolex instead, it would have kept its value, if not even appreciated.

Watch market above that starts getting weird. You have some special models, technically equivalent w/ cosmetic bling hitting $80-100k

TIL