In a recent post we looked at a young brand producing luxury products that launched an impressively successful Kickstarter campaign. In the information accompanying the campaign the label's team broke down the production cycle behind a brand's manufacturing process into stages showing the difference in price points between their retail price and the traditional retail price of a similar product by more famous fashion companies, highlighting the dramatic discrepancy between the real cost of a design and the actual price that consumers pay for it.
As consumers know, when they buy a design product they are indeed paying for materials, fittings, craftsmanship, duties, transport, and exclusive design. On top of that they are also paying for the prestige attached to that brand, but that final price gets even higher once other additional costs get calculated (never understimate the CEO pay packages and shareholders' interests...).
What may be the real price of a luxury piece then? Maybe a little investigation into made in China copies may help us unveiling it. So let's start from the original, taking as example the leather bags with integrated LED lights from Chanel's S/S 17 "Data Center" collection.
One of the bags from this collection, Chanel's LED Boy Bag, will acually be included in Christie's Sacs & Accessoires sale (taking place on 12th December in Paris). The bag integrates a LED panel with lights that can be programmed to create colourful patterns or Chanel's logo.
The LED bags from that collection were incredibly exclusive and two models of bags (LED Boy Chanel 2.0 Clutch Bag and the Embroidered Satin/LED/Lambskin design) were only given on request, while Chanel's LED Old Medium Boy 2.0 Flap Bag was priced $9,000.00 (USD) and the LED Small Boy 2.0 Flap Bag was slightly cheaper, coming at $6,900.00 (USD).
Now, if you're assuming that this price includes the technology behind the bag, you will be very surprised to know that the technology integrated in these designs is actually relatively cheap or anyway cheaper than what you may think.
Buying in bulk a LED circuit board from Chinese company Shenzhen Ohays Technology Co., Ltd. costs indeed $49,00 per piece (for an oder between 1,000 and 1,999 boards), or $45,00 for a larger order.
The LED board in question can obviously create a LED changeable pattern or a company's logo and it is controlled by an internal button and can be powered via a USB cable attached to a power bank (just like the board in Chanel's designs).
The Chinese company doesn't only sell LED boards to integrate in a product, but also finished products incorporating LED lights, from clutches to crossbody bags in different versions (replicating Chanel's original bag, or with an obviously fake Off-White strap).
The offer is wide and includes five types of LED bags going from $36 to $89 per bag, according to the quantity and the type of bag.
Now, design heads will obviously say these are cheaper copies, fake versions of original and more famous bags, assembled with low quality materials. While they may be right for what regards this aspect, it is hard to say where the LED boards for the Chanel bags came from.
Most electronic components are indeed manufactured in China and even the ones for Chanel's bags may be coming from this factory or from a similar one.
While it is impossible to defend the copy and condemn the original, it is legitimate to wonder what may be the real price behind the original bags. Once you add to the cost of the board the price for the raw materials, the manufacturing and transport, you will probably get to $900-$1,200 maximum, a sum that seems a fraction of the price the original products are sold at.
It will be interesting to see the final price this bag will reach at Christie's auction (for the time being it is estimated between $6,100 and $9,500) and see if this product will get even wealthy collectors to wonder which one is the real con, the overpriced original or the low quality copy integrating the same technology as the original.