Send us a text

👜 Workin' Burkin - How kelly hands kompetition. 

In this week's Baking it Down Podcast - Episode 192 - Workin' Birkin,  we're following a pretty funny story taking over TikTok. 

You see - 👜 Hermes is a line of really high-end luxury items like purses and belts. And if you have a Birkin bag, you're looking at tens of thousands of dollars alone. But the king of the Birkin bags? The Kelly Bag - a bag that you have to be invited to be able to buy... 💰 for almost a hundred thousand dollars. 

But last week, ⏰ a TikTokker discovered that Walmart has launched its own Birkin of sorts... a knockoff the internet how now dubbed the "Workin' Birkin" from "Walmes." 

Hilarious doesn't begin to describe it, but what's even more interesting is the marketing lessons we can pull from 🤑 Walmart's mass-produced copycat Kelly. 

Is Hermes going to shift its marketing strategy to compete with the behemoth of Walmart? Is Walmart testing its entry into the luxury designer bag market? No and no - here's why.

👛 1. Different Market Segments

Hermes sells to really rich people. Walmart has built a brand on the savvy money-saving shopper. Their market segments never overlap. The person who wants an authentic Kelly bag won't even glance at a Walmart's sliding doors. The price-conscious Walmart shopper ain't gonna be clickin' to Hermes website. Their market segments aren't even in the same parking lots.

And you shouldn't worry when a new baker starts posting in your community groups - they're not sharing your market segment. You're years into this - your skills are honed, your prices are set by your defined costs. You know exactly what it costs to stay in business, and you charge a profit accordingly. The new baker? They can charge a lower rate because they do produce a different product that does attract a different buyer. Don't you worry about them - the market takes care of everything.

👛 2. Supply and Demand

Hermes could ramp up production to compete with Wally World's massive production empire. Scrap the hand-made and sub it out for the mass-produced, right? WRONG. The more supply available of authentic Birkins, the less valuable each Birkin becomes. That's the law of supply and demand. The more supply, the less demand for it. The more demand, the less supply around to fulfill it. It's the invisible hand of the market at work.

👛 3. Costs Covered

You can't work for less than it costs to make, right? You'd be losing per order. So let your costs dictate your pricing. Same with the newbie. They can charge less because their labor rate is lower, they have lower indirect costs, and they don't have as much overhead. You - you can't. You have that Eddie to pay for, that Universal Bosch to keep powered on, and that Heavenly 70 Amerigels to use. You gotta cover your costs + profit - no if, ands, or Birkins.

👛 4. Exclusivity means Money

The higher your prices the more exclusive you're able to make your order inquiries. Hermes hand-makes each bag - taking up to 20 hours to produce. They can charge more for their lack of availability. That translates as "exclusivity" to your marketing. If Birkin can slap a $100k price tag on something that a grocery bag can functionally replace - why are you so worried about pricing lower than your competition? Price HIGH. Get EXCLUSIVE high-paying customers. We aren't selling food - we're selling a luxury edible product. 

️👛 5. Perceived Value in Luxury Pricing

Finally - the perception of value creates money. Oreos are cookies. Your custom-decorated dozen is cookies. Why can you charge 20x the price of Oreos?