The Annals of Luxury: A Peek Inside Vuitton

Exactly what is the difference between a $1,500 Louis Vuitton bag and and a Santee Alley knockoff?

If you thought we were going to say that you can't tell them apart, dream on!

Of course there's a big difference. Highly skilled craftsmanship and quality materials are just the start.

Take a look inside Vuitton's spotless 150-year-old workshops in Asnieres-sur-Seine, France, to see some of what else you're paying for. This is where Vuitton makes its custom orders. You don't see factories like this in China, do you?

(The video, from the French business newspaper Les Echos, is in French, but the head of Vuitton isn't saying anything you don't already know about his historic firm. The pictures are what's important.)

All of this comes at a price.

Still, is that $6,000 Birkin really worth it, given that Vuitton is charging you 12 or 13 times the cost of making it? Or to put it another way, the $995 Papillion that you covet was made for about $80.

(If General Motors had margins like that, they would be bailing us out. But this is another story.)

Vuitton isn't alone in claiming these giant markups. The same goes for other Rodeo Dr. brands.

The value of any luxury item lies in the eyes of the consumer. It has to do with the difference between wants vs. needs, as we have learned from years of sales training on two continents. And then there's the notion of "perceived value." If you think it's worth $6,000, it is.

Does the bag represent good value for the money? Of course, not! But then if you can afford it, you might not care. So go for it!

Just make sure to pay your bills and take care of all the little people in your life first, before blowing all of your cash on something you merely "want."