Investments
The key stakeholders for the luxury market include customers, suppliers, financial institutions, and employees of the sales and manufacturing organizations. It is but obvious that the increase in luxury good sales mean good days for everyone involved. However, it may not always uniformly translate to economic and other forms of prosperity to all the stakeholders.
Employees in the sales organizations of luxury goods come under pressure when the market turns bearish and bottom lines begin to take a heat. On the other hand, in a bullish market, there would be a constant increase of customers and sales. This could also translate to increased sales commissions and overall bonhomie in the sales organization. On the manufacturing side, it would mean immense pressure to meet the increasing demand which could have a ripple effect all along the supply chain.
A few of the inputs that go into the making of luxury goods may be scarce and a scale-up to meet the volume demands may not always be possible. It could also mean enhanced pressure in the manufacturing itself, especially when the manufacturer process is highly labor-intensive and artisan oriented. It may not even be possible to scale-up manufacturing to meet the demand in certain in certain extreme cases like in the case of handmade goods segment like Monte Blanc pens.
Customers obviously enjoy perks in a market that is down turn because the companies would like to expend their stocks. While in the bullish market, the customers would find it difficult to acquire the goods of their choice on demand. Financial institutions that support acquisition of luxury goods need to be cautious about various external market conditions and financial health of their clients in all market situations when they are financing procurement of luxury goods.
