For status and craftsmanship, few handbags rival the Hermès Birkin. Kim Kardashian, Bethenny Frankel Lady Gaga, Victoria Beckham and Naomi Campbell are just a handful of the celebrities who have been spotted with them. And Cate Blanchett toted one throughout Woody Allen's latest movie, "Blue Jasmine," in the role of Jasmine Francis, who moved from wealthy Manhattan socialite to destitute mental wreck after her husband's Ponzi scheme was exposed.
That bag was supplied by the manufacturer – part of a stash of loaners it circulates to advertisers and movie makers. But in real life the Birkin is in such hot demand that Dallas-based Heritage Auctions is offering 78 of them, more than a third in pristine condition, at its Sept. 23 luxury accessories auction in Beverly Hills.
"Birkins are the most sought after bag in the world and have been for a long time," says Matthew Rubinger, director, luxury accessories at Heritage. (He's profiled in my post, "How One Millennial With A Liberal Arts Degree Landed A Six-Figure Job.") Therefore they hold their value as a collectible. One of the more valuable Birkins coming up in the latest auction is an electric blue 35cm crocodile with an indigo chevre (goat) interior and gold hardware in pristine condition. The starting bid is $30,000 and it is expected to fetch $60,000 to $70,000.
For a slideshow of Birkins from the recent Heritage auction, including final sale prices, click here. (And there are bags for cat lovers too.)
Most people who pay that much money for a handbag don't intend to use it and even those who think they will are reluctant to once they own it. But these bags are really made to "be worn and carried and loved," Rubinger says. While you're paying for the name, you're also getting superior quality and even if you make the Birkin a workhorse, it's still a good investment. A "carefully used" one typically fetches between 80% and 120% of what the previous owner paid for it. In contrast, a lesser brand handbag in the same condition can be resold for only about 10% of what the original owner spent. "So if you can afford it, you're making a better economic decision to buy a special piece that's going to hold its value."
If you buy a pristine Birkin at auction, you pay a premium over what you would pay at an Hermès shop, where a bag like the pristine electric blue croc must be special ordered, says Rubinger. Since high-quality ostrich skins have become hard to find, Hermès has stopped making bags of these skins, they are only available at auction and buyers pay a premium for those, too.
But if really want a Birkin you can use and don't mind the idea of one that has been pre-owned, buying at auction could be a bargain. For example, the starting bid for a 2006 bag in very good to excellent condition like the one that Cate Blanchett carried in "Blue Jasmine" is $3,500. To buy a 2013 version of that bag at Hermès would cost about $11,000. A spokesman for Hermès declined to comment.
On the secondary market, Birkins are available not only at auction, but also at some brick-and mortar consignment stores (see Wendy Goffe's post, "Consignment Shop Treasures: Where To Go And What To Buy”), and online through luxury purveyors like Portero and The RealReal, both of which guarantee authenticity. Starting with the Sept. 23 action, Heritage will issue a certificate of authenticity with every handbag sold. That paperwork can be used when insuring the bag, selling it in the future, or giving it as a present to someone who wants to know it's the real thing.
A seller's guarantee of authenticity gives you legal recourse if what you buy turns out to be a fake, but it's still wise to familiarize yourself with the brand's hallmarks. With Hermès bags they include hand stitching; fine leathers and a serial number on each bag. (See my post, "How To Spot A Fake Designer Handbag.")
Whether you're a first-time Birkin buyer or an auction neophyte, Rubinger offers the following tips for price-conscious shoppers.
Check condition. Assuming you really want to use the bag, buy the best possible condition you can afford that is not labeled "pristine" (meaning as new as if you bought it in an Hermès store). One labeled "excellent” in the auction catalogue looks new from a foot away, but isn't – for instance because the protective plastic isn't on the hardware anymore. "Very good" means it's been used casually; maybe the corners are slightly scuffed or the handles have darkened. "Good" means worn.
Don't rely only on the photos in the glossy auction catalogue – also go online. Though descriptions in printed catalogues tend to be cursory, when an item isn't in pristine condition you may be able to find a fuller explanation online for the auctioneer's rating. Plus, you can zoom in on an item closer than the naked eye can see.
Ponder color. For the first Birkin most people want something they can live in – that they can wear with jeans, with a suit, or carry on an airplane. So the most practical choice is a neutral, like black, gray, gold or brown. If you can afford a second bag, make it one of the vivid colors that Hermès does so well, like bright red, blue or "orange H" – a company signature color. Hardware, which is a matter of a personal preference, not a matter of value, comes in plated gold or plated palladium (in the platinum family).
Choose durable leather. Avoid Swift (called Gulliver in earlier versions), which scratches easily and doesn't hold its shape. The most popular leathers are Clemence and Togo, which are textured. (Of the two, Togo holds its shape better.) Ardennes, discontinued around 1999 and Fjord, still being used, are also very strong and durable. All four of these are scratch-resistant and water-resistant. Calfbox and Bernia, two heritage Hermès leathers, develop an attractive patina, but will scratch and darken over time.
Decide on a price. Figure out the maximum you can afford, factoring in the 25% buyer's premium that you will have to pay the auction house. No matter how much you want the bag, don't exceed that number.
Bid live. You don't necessarily have to be in the room – most people aren't. You can also bid live over the phone or online (which is increasingly how people participate in auctions).
Don't jump right in. Let everyone else make their bids. Wait for a pregnant pause in the bidding before you place yours. Even if someone outbids you, stick to your maximum.
Keep options open. The biggest mistake people without a lot of auction experience make is falling in love with the bag, Rubinger says. "When you have your heart set on one bag, you are going to bid too high." Having other options helps you keep to your maximum. If your first choice goes for more than you were willing to spend, you will have a backup.
Of course, things may not come up in the order in which they interest you. The way to handle this is to set maximums in proportion to how much items interest you. But blowing your budget on a second or third choice might leave you short of funds when your first choice comes up for bid. You have to decide which piece you want more and how high you're going to go.
Finally, remember this is not the last Birkin you will have a chance to buy. If you don't get your first choice in this sale, you can look forward to the next.
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Archive of Forbes Articles By Deborah Jacobs
Deborah L. Jacobs, a lawyer and journalist, is the author of Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide. You can follow her articles on Forbes by clicking the red plus sign or the blue Facebook “subscribe” button to the right of her picture above any post. She is also on Twitter and Google+
