Why do luxury clothes and accessories cost as much as they do? Itās as much a philosophical question as it is an economic one. The luxury ābrand premiumā – the difference in price between a luxury branded item and itās generic twin – is jointly determined by several factors. Thereās the aesthetic factor- the way an item is designed. There’s also a material factor- the fact that it is fabricated with higher quality textiles and craftsmanship. Then, finally, there’s a more ephemeral factor relating to the brand itself: the fact that a handbag carries the name āLouis Vuittonā or āChanelā increases its value in and of itself- regardless of the craftsmanship, regardless of the design.
Each of these factors matter. However, determiningĀ how much each one matters relative to the others is usually impossible, given that all three coexist in the same object. What accounts for the $1400 price tag on a Louis Vuitton handbag?Ā Is it the craftsmanship, the design, or the mere fact that āLVā is inscribed on the leather?
With
Supreme accessories, such questions move from the realm of speculation to statistics. Here, we have a list of products – chopsticks, shovels, bricks – where brand association is quite literally the only differentiator. The only thing separating an $89
Supreme clay brick from a $0.33 clay brick
from LowesĀ – other than the price tag – is the presence of the brand name and logo. Itās like an economic thought experiment come to life- which, presumably, is part of the idea behind Supreme selling these oddball items in the first place.
So: how much, exactly, is this Supreme brand premium (or “SUPREMEium”) worth?
Last week, in
this space and on
StockX TV, we began to answer this question for one specific item: chopsticks. We found that customers were willing to pay a SUPREMEium of 28100% for a pair of
Supreme Chopsticks. (Since publishing that analysis, the price of a Supreme Chopsticks has fallen from $65 to $61, making the current SUPREMEium 26326%).
Here, we’ve broadened that analysis to the larger universe of Supreme accessories. Specifically, we’ve identified two groups of products – “Generics” and “Brand Collabs” – and then compared their StockX market value to that of their non-Supreme equivalents. The “Brand Collab” group include items where the Supreme name has been added to an existing brand name product. For example, a 1.2″ Quiet Carry Knife will run you $39.95 on theĀ
Quiet CarryĀ website. Add nothing more than a Supreme logo, and the price tagĀ
leaps to $62, for a SUPREMEium of 55%. A Metrocard with 2 fares will run you $6.50 from the MTA ($5.50 for the rides and $1 for the card); an otherwise-identical
Supreme Metrocard will run you $19, for aĀ SUPREMEium of 192%.
At the other extreme, Hanes Men’s Crew Socks retail for just $0.92 per pair (
$12 for a pack of 13). On a per-sock basis, the
Supreme version of this exact same product is 767% more: $32 for a 4-pack, or $8 per pair. If you buy in bulk, you can get Longevity Soup Sets (
bowl +
spoon) for just $3.54 a piece; add a
Supreme logo, and the price jumps 2272% to $84.
For the Brand Collabs group as a whole, we calculate an average SUPREMEium of 505%.We performed this same analysis for a second group of “Generic” products. Here, we found theĀ SUPREMEiums were even higher.
At the low end is the ceramic sake set. Prices vary, but a
generic 3-piece sake set will typically run you around $20;
the Supreme version, by contrast, is currently selling for $71 on the StockX marketplace- a 256% markup.
Most of the other generic products showed significantly larger premiums. For example, you can buy an 18″ steel crowbar
at Home Depot for $7.34. Or you can buy the Supreme version on StockX for $201- a 2638% difference. A generic pair of bamboo chopsticks will run you just $0.23 each at
Wal-Mart ($2.77 for a dozen); the Supreme version of these exact same chopsticks are a whopping 26,326% more.
For the Generic product group as a whole, we calculate an average SUPREMEium of 11,548%.As time goes on, and more accessories are added to our catalog, we’ll be updating this analysis to reflect the latest numbers; the more data points we have, the more accurate our understanding of Supreme’s brand value. For now, we hope you enjoyed this initial foray into the economics of Supreme.
