« The FDA regulation of tobacco | Main | The economics of ticket scalping »
Vertical integration, luxury handbag crocodile version
What would Oliver Williamson say?:
The economy may be hurting world wide, but those that love Hermes are still buying. In fact, Hermes has resorted to breeding its own crocodiles on farms in Australia to meet the demand for its exotic bags. It is reported that Hermes makes around 3,000 crocodile bags every year and demand continues to grow while the crocodiles are not readily available to fill orders. It can take three to four crocodiles to make one Hermes bag, so the move to use their own farms makes sense.
The pointer is from Bamber.
Posted by Tyler Cowen on June 12, 2009 at 09:34 PM in Economics | Permalink
Comments
Perhaps a crocodile is rolling him over in a watery grave.
Can't wait to use this on my next Organizations final
Posted by: david at Jun 12, 2009 9:56:33 PM
Designer bags are a crock.
Posted by: Walt at Jun 12, 2009 10:38:11 PM
Technically it's a crocodile ranch, not a farm.
Posted by: Ninja Zombie at Jun 12, 2009 10:51:13 PM
"It can take three to four crocodiles to make one Hermes bag"
Those are some big bags or some small crocodiles.
Posted by: anonymous at Jun 12, 2009 10:51:56 PM
This is great news for corcs. As is well known animals that bred for humans see their numbers increase. This should assure the species is not endangered.
Posted by: JLS at Jun 13, 2009 12:55:52 AM
"This is great news for corcs"
Not for the ones who end up as bags !
Posted by: SN at Jun 13, 2009 1:43:47 AM
JLS,
If numbers are all we concern ourselves with then yes, demand will insure their survival. But generally, their role in an ecosystem is what's of consequence, not their existence on a ranch.
To be clear, the ecosystem value I refer to is taken with respect to human and select non-human sapient animals (certain primate species for instance). It's a support and sustenance service we cannot yet do without.
Posted by: SUR at Jun 13, 2009 2:20:29 AM
Unless David has new recent information, Ollie Williamson is some ways from the grave. Or at least I hope to see him at ISNIE next week.
Posted by: jn at Jun 13, 2009 7:05:46 AM
I credit Nevil Shute in his novel "A Town Like Alice" (1950)for the whole inspiration.
A British woman, Jean Paget is engaged to Joe Harman a station manager living out "beyond the black stump" (or in back of beyond, as we would call it.) She gets the idea to start making shoes and handbags out of the numerous crocodiles with the goal of turning podunk Willstown into a modern "Town like Alice" (Springs.
Wonderful, wonderful book and, if possible an even better 1983 miniseries with Helen Morse and Brian Brown.
Go to www.nevilshute.org for more info on Shute and reviews of his books.
John Henry
www.changeover.com
Posted by: John Henry at Jun 13, 2009 7:35:27 AM
I credit Nevil Shute in his novel "A Town Like Alice" (1950)for the whole inspiration.
A British woman, Jean Paget is engaged to Joe Harman a station manager living out "beyond the black stump" (or in back of beyond, as we would call it.) She gets the idea to start making shoes and handbags out of the numerous crocodiles with the goal of turning podunk Willstown into a modern "Town like Alice" (Springs.
Wonderful, wonderful book and, if possible an even better 1983 miniseries with Helen Morse and Brian Brown.
Go to www.nevilshute.org for more info on Shute and reviews of his books.
John Henry
www.changeover.com
Posted by: John Henry at Jun 13, 2009 7:35:52 AM
John H, if you like Neville Shute try his "Slide Rule", an autobiogrphy of his years as an aeronautical engineer. It teaches lots about economics on the side.
Posted by: dearieme at Jun 13, 2009 9:15:28 AM
I was talking to an old classmate at my college reunion the other week. He's now in the diamond sales business, and I was curious how the economy was affecting him. He said the people who buy $3000 rings are still buying $3000 rings, and the people who buy $150K pieces are still buying $150K pieces -- it's everyone in between he has to adjust for.
I'm guessing the people who buy Hermes crocodile handbags are the people who are buying high-end diamonds. (And I'll go an extra step and guess that Hermes is moving to its own farms not so much to be able to produce enough handbags to meet demand, but so as to produce them more cheaply while carefully maintaining some artificial scarcity -- the It bag is only the It bag so long as not everybody can get it!)
Along these lines, I'm guessing that the economics of Hermes crocodile bags (or Birkins, or high-end Chanels, or what-have-you) are really quite boring (potential for founding one's own crocodile ranch notwithstanding), and the interesting handbag economics are found in, say, whatever bluefly.com is selling -- bags that are expensive, but within reach of young professional women who don't mind a bit of credit card debt.
Posted by: Andromeda at Jun 13, 2009 10:32:35 AM
SN and SUR yet oddly animals that make people happy or a profit tend to still exist in the wild, ie dogs, cats, horses. I am not sure if there are cattle or camels in the wild.
A Croc gene pool on farms would allow their reintroduction into the wild if people thought that beneficial. Crocs on a farm may well under cut the costs of crocs caught in the wild making poaching disappear. So I will stand by my comment so far.
Posted by: JLS at Jun 15, 2009 12:35:51 AM
...which makes one wonder what kind of contractual hazards from the part of the crocs Hermes is trying to mitigate with this move.
Posted by: ogmb at Jun 15, 2009 7:24:54 AM
Crocodil skin is very class but kill them is bad...
But it's too class ! :D
Posted by: radio at Jul 6, 2009 5:07:28 PM
regarder extrait gratuit story of laly video
Posted by: Laly streaming at Jul 13, 2009 3:08:14 PM
Congratulation your post is excellent !
Posted by: Bonus chilipoker en ligne at Jul 17, 2009 9:31:45 PM
