Some things are more expensive than others, everybody knows that. But what makes an object be valuable? Why do we pay huge amounts of money on material things? Well, there are some factors that determine the value of an item and the whole investment business is related to these things. Studying these factors will give you an understanding of value and help you make better investments.
These apply to everything from cars to clothing:
Supply and Demand. The more an object is desired the more expensive it gets. If many people want it the price will inevitably rise but if there is no demand, the market can’t function so the prices will be very low. The supply is also important because if the supply is low that makes the item limited and even more valuable and expensive.Rarity. Not everything rare is valuable but if you combine rarity with high demand of the product, the value will increase considerably. For example a feather from the extinct huia bird was sold at an auction for £3,800, the rarity of this feather made the price incredibly high.
Age. This can vary to an extreme and the other. If something is very old like historical artifacts or vintage cars, they usually are expensive. Also the nostalgia involved, like old toys and old bikes that we had when we were kids can potentially increase the value. This can also apply if something is very new like the latest technology, latest phone, new modern building etc. The iPhone 6 is more expensive than the iPhone 5 for example. The age combine with the other factors is what gives value to an item.Trends. When something is trending the demand always rises. Many things can influence the trend: fashion shows, designers, movies, pop culture or current events.
Materials. The materials from which something is made is an important thing to take into consideration. A white gold ring will be much more valuable than a sterling silver one. Also high quality materials are more durable and therefore more expensive.
The brand. Many times there are items made from the same materials but a famous brand’s name will increase the value. A Dolce & Gabbana cotton dress will not be the same as as one bought from a random store. Designer bags, watches, jewelry, clothing, cars and furniture are all much more expensive that a not so known brand.