Privé Porter is becoming a fashion industry sensation with its record Instagram sales of the highly coveted Hermes Birkin bags.
Maybe it’s the Kris Jenner effect. Maybe.
It’s hardly a secret that all things associated with the Jenner-Kardashian clan receive countless clicks and practically instant notoriety on social media.
And when Kris Jenner walked into Privé Porter’s Aspen pop-up shop in 2015 and purchased two Hermes Birkin bags (all of which she captured for posterity on Instagram), the trailblazing reseller of the highly coveted bags became an overnight media sensation.
Media outlets around the globe stood up and took notice of Privé Porter, running articles about the small husband and wife start-up that has quietly been disrupting the way things are done in the luxury handbag market.
Jenner’s post on Instagram, in which she stands beaming while holding her two $18,000 Birkin bags, garnered 189,000 likes and more than 2,600 comments.
Over the following two weeks, Privé Porter sold another 30 bags to new buyers who were either followers of Jenner’s on social media or who had read the stories about her purchase.
But the priceless Jenner-driven publicity was really just fortuitous happenstance for Privé Porter.
The Florida-based reseller of luxury bags, founded by Jeff and Michelle Berk in 2008, had already built up a near-cult following before the famous reality television personality came strolling along that day.
Privé Porter’s annual revenue is a staggering $18 million annually, or about $1.5 million a month, all of which comes from selling store fresh (industry lingo for previously owned but still like new) Hermes bags, 90% of which are Birkin bags.
What the Berks have accomplished is quite novel and remarkable, on many levels.
To begin with, they are a vivid example of how technology is profoundly changing the norms of the fashion and luxury industry.
About 90% of Privé Porter’s business is conducted on Instagram. They do not have a permanent brick and mortar store anywhere. They do have occasional pop-ups, but other then that, their business is conducted entirely online, and primarily through social media.
Just a few weeks ago, Prive Porter sold a Birkin to an unidentified buyer for the record sum of $298,000 (the bag originally retailed for around $160,000).
Talk about savvy use of Instagram.
In years past, such record earnings for reselling Birkin bags were the provenance of illustrious auction houses such as Christie’s, which sells the bags on consignment.
But it’s not just Privé Porter’s staggering sales that are so noteworthy; there’s also the elusiveness of Hermes Birkin bags that novices may not be aware of.
Getting your hands on a Hermes Birkin bag can be near impossible. They’re rarely available at actual Hermes stores for novices or the average buyer.
“There has always been what I call a ‘buy-to-buy’ system at Hermes as it relates to being offered the chance to buy a Birkin or Kelly at Hermes. Nevermore, nor has there been in recent past, a real list that actually garners an opportunity for the novice Hermes shopper to buy a Birkin,” explains Jeff Berk. “Almost unilaterally, Birkins are reserved for the most affluent customers who support the brand in other categories, like buying Hermes shoes, table top products, the $3,000 blankets…In my experience, and certainly the feedback from our customers, in many cases if you are willing to buy $5,000 to $10,000 in tertiary categories, you will get offered one or two different Birkin bags to buy.”
In other words, obtaining one, or getting a specific model, often requires celebrity status or connections, and not just any connections — the right connections.
Not to mention the fact that retailers like Hermes, and for that matter the entire fashion industry, frowns upon reselling bags.
Yet Privé Porter typically has between three to eight Birkin bags coming in and out of their office every single day. That’s unheard of. Not to mention the small mom and pop has about $1.5 million worth of inventory on hand at all times.
All of which begins to bring into focus just how much Privé Porter has accomplished.
“It was really just a hobby in the beginning,” says Berk, who worked in the luxury goods finance industry for more than 20 years. “We started dabbling with a couple of my wife’s girlfriends’ used bags…We were doing very well — selling jewelry and watches on eBay — and my wife, to help her girlfriends out, put a couple of Birkins up there.”
It didn’t take long to realize that the highest margins came from selling handbags and specifically Birkin bags. Add to that, a decision to establish a presence on Instagram, and Michelle’s understanding of hash-tagging, and the current version of Privé Porter officially began to take shape and take off.
That’s the quick, Cliffs Notes version of the company’s back story.
To this, Berk adds that a great deal of sweat equity, years of it, went into building a trusted network of people who buy and sell Birkin bags. There were also some pitfalls along the way.
“It was a lot of work and a lot of mistakes, a lot of people selling fake bags,” he continues. “People sell you one or two real bags to get you on the hook and then scam you. A lot of cost went into building this up. But once we developed a reputation of being buyers, as opposed to places like Christie’s, which do consignment, once word got out that we were serious buyers, then people started calling us.”
Those calling include the Kris Jenners of the world (who has since come back to Privé Porter to have the company sell a bag for her) as well as a variety of other B-list celebrities – think stars of reality shows like Beverly Hills Housewives, ex-wives of A-listers and under the radar wealthy collectors who don’t so much as blink at spending hundreds of thousands of dollars on a handbag, or buying two or three such bags at a time for that matter.
“The woman who is paying a premium to us is someone who is really a collector,” Berk says. “This woman does not want to be told by Hermes she can only buy one bag every six months.”
When Privé Porter posts an Instagram image of one of its Birkin bags, customers can then call the company to discuss pricing. Once a price is settled upon, the money is wired and the bag is shipped.
Privé Porter will sell a Hermes Birkin bag that might retail for $12,000, for anywhere between $17,000 and $22,000. The final price depends on how hot the color of a particular Birkin bag is, or on the limited nature of the bag’s color and hardware combination.
For those shaking their heads at such prices, or who perhaps fail to understand the craze surrounding owning such a bag, Berk provides a bit of history and perspective.
To begin with, he explains, the supply problem surrounding Birkin bags is real. It’s not contrived, like the diamond industry, which controls the amount of diamonds on the market to build demand and drive up prices.
Each Birkin bag takes more than 50 hours to make, Berk explains. The bag’s handle alone takes about six hours of work. Those who make the bags must intern for two years, watching the process, before they’re ever allowed to touch a bag.
And once a bag is made, if a single stitch is out of place, the entire bag is destroyed. There’s no alternate retail offering for imperfect Hermes bags on the shelves of discount stores like Marshalls or T.J. Maxx. They’re either flawless and sold at top dollar or they never see the light of day.
“They have a real commitment to quality over bottom line,” explains Berk.
All of which makes the satisfaction of getting your hands on one that much sweeter and explains the obsessive following Birkins has developed among wealthy fashionistas.
“It gives someone who loves craftsmanship an emotional satisfaction,” Berk adds. “There are also people who love expensive things, and owning a Birkin gives them an extra layer of, ‘Hey I’m competent, I can get six of these. I’m not the person who grovels at Hermes.'”
And really, what wealthy fashionista wants to grovel?
By Mia Taylor, The Street
July 9, 2016