When it comes to luxury jewelry, you can’t ignore Van Cleef & Arpels. For many people buying luxury jewelry, their first necklace is often the iconic red clover necklace. The brand’s marketing strategy of increasing prices is spot-on. In 2021, the price was 21,000 RMB, but this year it’s already 23,200 RMB. Doesn’t it feel like you’ve instantly made 2,000 RMB if you bought it two years ago? This yearly price hike by luxury brands creates the illusion that luxury goods hold or even increase in value. But this illusion is deliberately crafted by the brand. Why do they do this? Even during economic downturns, luxury brands still raise prices to subtly change consumer psychology: “I’m buying something that will hold or increase in value.”
But is that really the case? Let’s use this popular Van Cleef & Arpels clover necklace as an example to see what happens if you want to sell it after buying it.
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Selling to a precious metal buyer. This is the worst option in terms of value, with the lowest offer. This is likely what the question refers to. We often handle authentic pieces, so we’re well aware of the material costs. The necklace contains about 5.2 grams of 18k gold and a red agate stone worth around 200 RMB. Including labor, the total material cost is just over 2,000 RMB. However, if you sell it to a precious metal buyer, they’ll only be interested in the 5 grams of gold. Based on the current gold price, the most you’ll get is 1,500 RMB. To put it bluntly, for a 23,000 RMB necklace, around 20,000 RMB is purely brand markup.
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Selling to a luxury resale shop. For a brand-new necklace, most resale shops will offer around 60-70% of the original price. Due to exchange rates, the price abroad is about 85% of the domestic retail price, and the 15% difference is the resale shop’s profit margin. If the necklace is used, the resale price will drop even further. A second-hand necklace with some wear typically sells for about 50-55% of its original price. This is for popular, in-demand designs. For more niche or less popular designs, the resale price will be even lower. So, do you really think luxury goods hold or increase in value with these kinds of resale prices?
Entry-level luxury jewelry has always been a consumable item, just like clothes in a store. The longer you wear it, the less it’s worth. Unless you're a celebrity who frequently appears on TV, it will always be just a consumable item. A necklace that costs 20,000 RMB new may only be worth 10,000 RMB after a year of wear. This depreciation is what defines luxury goods.
True luxury consumers (who are the brand’s real target audience) always buy luxury items as consumables. They don’t worry about depreciation. So, for those who can afford luxury goods but feel a bit of a pinch when spending, don’t be fooled by the myth of luxury items holding value. Custom-made jewelry may be a better option, as there’s no brand markup—just the cost of materials and craftsmanship.
