I hope everyone had a great weekend, hopefully for most of you it was as sunny where you are as it was here. This weekend, when thinking about what I should write about for today, I couldn’t stop thinking about those Away suitcases that I wrote about last week. You know, these stupid things.
Which naturally led me down a rabbit hole of understanding what someone would need to make to buy those high-end/luxury items I mentioned last week.
Now, I feel like everyone can afford the occasional coach bag (idek if that’s right or luxurious) or Away suitcase, but I was more curious about what level of income afforded you the luxury of buying primarily luxury brands.
To simplify it, how much money do you have to make start dressing like this:
Here’s where you stand
That guy, Kyle Kuzma, is making $13 million a year (so as much as we laugh about his clothes, the joke’s really on us), but more generally here is the income level breakdown:
I could write forever on what I think of this, how the wealth gap will only grow with current compounding rates, blah, blah blah, but I think it’s summed up pretty well here.
What’s the point in bringing all of this up?
Well, these luxury brands have found product market fit among the ultra-rich, and it’s all a game of percentages and volume.
For example, if me and Lebron James both committed 1% of our income to buying a suit I’d walk out with your typical suit, and he would walk out with something designer. Indochino would make a few hundred bucks and Dolce and Gabbana would make a few thousand.
But not everybody is Lebron, so in this way it’s also a game of volume.
Indochino could (and will) sell more suits, but they would have to sell dozens to catch up with Dolce and Gabana who made thousands off one high-end customer.
So, the take way here is that brands/companies that are exclusively targeting the wealthy end up doing as well, if not better than other competing companies, yet nobody seems to specifically target this demographic when starting.
Perhaps the best example of this is real estate.
If you like scrolling on Zillow, you’ll love this real estate site; not a single house priced under $24 million.
Better yet if you look at their team, not a single one looks a day older than 45.
Serhant gets the picture. 6% of $200k is $12k, but 6% of $100 million is $6 million. “Why sell 500,000 houses, when I could sell just one and get the same commission?” Sure, it will be a harder listing to get, but they understand the percentages and building a brand.
By targeting this super rich niche and establishing a name for themselves, they have been able to realize much, much higher profits with a leaner team, and overall, less work.
If you haven’t figured it out by now, we’re talking about business ideas for the Top 1%. And just like they can splurge on more expensive items, they will also splurge when it comes to services.
As I mentioned last week, it’s difficult to launch a luxury product, but it’s much easier to start a luxury service.
“I’ll be your server today”
Here is your list of services that those of means often use, that us simpletons don’t:
- Concierge services: Think of it like a personal assistant. Someone who books your travel, schedules meetings, securing event tickets, reservations, etc. The job itself isn’t hard but finding the right fit maybe. I think poaching top secretaries at Fortune 500 companies and placing them with well-to-do individuals would be interesting.
- Private healthcare: Personalized on demand healthcare. Everyone pays for convenience, and I think this idea holds some water.
- High-end real estate: We already talked about this one.
- Interior designer: Big house, lots of space, don’t know what to do with it. Have someone who specializes in it do it for you.
- Personal shopper: I hate shopping
The hard part? It’s probably very difficult to find an “in” to these exclusive groups.
The easy part? Most of these services sound super easy to manage, if not just a one man show.
Tansky Sawmill Toyota
Like I said, I just bought a new car! And there’s no better place to go than Tansky Toyota. Car dealers can be slimy sometimes, but not Tansky, they gave a detailed run down of the car and it’s features, as well as a full tank of gas when I left. Go check them out, ask for Malik Patel, and tell them Matt sent ya. #ad
“Who do you know here?”
Everyone’s heard the phrase “your network is your net worth”, and I think that rings the truest for some of these scenarios.
Like I said, none of those service businesses seem difficult to learn, hard to manage, or require a college degree, but weaseling your way into those groups would be very difficult I imagine.
That being said, I can’t imagine you’d be starving for business if you got one opportunity with someone, crushed it, and then had the word spread.
Just ask Jeff Probst, Rich Paul, or Tom Brady.