But, given the traditional understanding of markets, one wonders how the cartel (really, this appears to be more of a monopoly) is able to sustain itself. There does not appear to be very high barriers to entry, and with obvious online sales channels available... This seems like a great industry to disrupt.
There may be obvious online sales channels, but optical prescriptions are only available in person, and Luxottica has done an excellent job at making sure the most convenient optometrist is also an affiliate stocking their eyewear.
They don't only own the Lens Crafters peddling Chanel and Prada frames, but also Sears and Target Optical selling "discount" versions with only slightly reduced margins.
There's also a law requiring a prescription less than one year old to purchase eyeglasses or contact lenses, to send consumers back to the sales floor as often as possible.
See above for people discussing how difficult it can be to even get a copy of your prescription to order online with, despite it being federally mandated.
I don't know, you can buy glasses affordably, say at costco or online and maybe other places(not sure i'm out of the u.s.), and they'll look pretty good.
If people "need" to have branded goods, let them pay.
Reading that just pissed me off to no end. Eyeglasses are not a luxury for me - they're an absolute necessity. I kind of feel like I'm being preyed upon here by a bunch of Italian ripoff artists.
Mmmh, you can get a brand new tiny pile of high-end electronics, including a touch screen, for $50-100. Stamping out some metal and putting some glass into it seems like something that should be around the $10 price point.
Second this. I bought a 30-40 USD prescription lenses that has gotten me more compliments than my 200 pairs ever did. Plus there is no gaudy brand name / logo on them - it is exactly the style that fits me.
I've been buying my glasses from Zenni for a couple years now. I'm rather nearsighted (-7), with astigmatism, so I was pleasantly surprised that the optical quality is pretty good. The frames are somewhat less consistent though, I imagine they have multiple suppliers.
The part I like best about Zenni is the oleophobic hard AR coating option. It doesn't cost an arm and a leg, and actually lasts a fairly long time without scratching. (If you wear glasses you know that no matter how carefully you clean your glasses, they scratch. And the expensive coatings flake off.) Now I clean my glasses with soap and warm water in the morning, and the water just shakes off at the end. The anti-reflective aspect is somewhat lacking, but the ease of cleaning is what makes it for me.
It's basically the same thing as the watch market you can get cheap (<10$) watches but 'nice' quickly becomes hundreds of dollars. IMO, this has little to do with manufacturing costs it's all about the design, sale, and marketing costs.
When Americans do it, it's called a monopoly and gets the attention of the FTC. Did you read the article?
> But other competitors told us Luxottica has them in a chokehold: if you make glasses, you want to be in their stores; and if you have stores, you want to sell Ray-Bans! So Luxottica can set the prices as high as it wants.
You could make the same argument about clothes: Clothes are not a luxury for me, they're an absolute necessity. With the prices Gucci charge, it's like I'm being preyed upon... ;)
But, in the UK I could choose to buy luxury glasses, but places like specsavers will always offer affordable GBP 20 frames with free lenses as well. And of course the eye test is also free in Scotland.
Neither of these is true in the US; there are no chains with retail locations selling affordable frames, nor are there free vision prescriptions. Furthermore, Luxottica owns or is affiliated with the majority of locations writing vision prescriptions, and an up-to-date prescription is required to purchase a pair of glasses.
It's like if Gucci not only was the most common retailer of clothing—and by an enormous margin—but also owned the tailors conveniently located next door.
Functional eyeglasses are not expensive. There are several businesses that sell basic frames in a variety of shapes and sizes, with prescription lenses ground, coated, fitted to the frame, and shipped to the customer.
It should not come as a surprise that they mostly come from China--apparently the natural enemy of the trademarked luxury brand.
This is why if you have a "vision plan" through your employer, you can't get new glasses the same day, from anywhere. They show inflated US prices on the invoices, but behind the curtain, you're probably getting the same inexpensive goods from China as if you had just ordered them yourself.
You can go a lot of places and just get a simple optometrics prescription for $10. Then you can take that to the web, and order 2 regular sets and one tinted set for less than the price tag on the cheapest, ugliest frame in your optometrist's office. All those frames are different brands of Luxottica.
You are being preyed upon, in the same way that a lot of other people in the US who require durable medical equipment to maintain quality of life are being preyed upon.
If you doubt this, search the web for prices on "underarm aluminum crutch". There is not a lot of variation in design for these. They are essentially a fixed length of a standard size of aluminum tube, cut, bent, and drilled by machines, and bolted together along with some rubber and foamed plastic parts. There are no patent encumbrances. Yet the price varies from less than $20 to over $120 for exactly the same thing. This is, in large part, due to health insurance rules.
And this is why Wal-Mart and Costco and Warby Parker will eventually eat Luxottica's lunch. Because in a competitive market, you have to set your price based on the per-unit cost. Only a monopolist or oligopolist can charge based on what people will pay.
This is the money quote: "Andrea Guerra: Everything is worth what people are ready to pay."
And that is only true when the producers have pricing power, which only occurs in a non-commodity market. You don't have to be Isaac Newton to grind your own lenses. You can make a lens/mirror grinding machine out of washing machine parts and a controller like an Arduino.
It should be impossible for a product that can be created in a nerd garage to be anything other than a competitive commodity market, shouldn't it? Will "open source eyeglasses" ever become a bona fide project?
I've been buying my glasses at a certain website that is very cheap and has great promo codes. All you have to know is your prescription. They are sort of cheap feeling, but they work and have stylish shapes. Also can buy 4 pairs for less than half of what I'd pay at LenseCrafters.
What was your experience like getting your prescription details from LensCrafters? I've heard they don't like give up the details to allow customers to easily work with a competitor.
I just got an eye exam at a LensCrafters a week and a half ago.
I received my prescription from the optometrist without asking.
The only thing missing is the pupillary distance measurement. There is not even a place for it on the prescription form I received. I didn't know it was something I'd need until reading this thread and checking out zennioptical.com.
I'm not sure what he or she used, but I've been using Zenni Optical for at least half a decade now, and have always been satisfied.
Some optometrists are a little hesitant to give you your prescription data, but it's yours. When in doubt, ask them up front whether they're willing to give it to you after the exam; if not, walk away.
Consumers do not get a break. At LensCrafters, the average cost for a pair of frames and lenses is about $300. You may think -- well, there's choice in the mall for other glasses. But Luxottica doesn't only own the top eyewear chain in the country, it owns another large chain: Pearle Vision, and Oliver Peoples, and several boutique chains. And it runs Target Optical and Sears Optical. And we're not done, Luxottica also owns Sunglass Hut - the largest sunglass chain in the world.
The cost of frames is not based on the cost of traditional manufacturing. Luxottica controls the market, like De Beers and the diamond market.
There were an interesting report about manufacturing lenses using 3D printer - for original shapes, which then are additionally processed. The article described covering 'layered' lens shape with a film which makes the surface smooth and then using that for making a form for final casting of the transparent plastic. It wasn't a complete replacement for lenses - but still an interesting step towards automating the process.
Hobbyist-grade volume printing does not have the resolution necessary to create an eyeglass lens.
But some old washing machine parts and an Arduino can grind out any lens shape you might need from a printed blank. Building a garage lens grinder using a volume printer wouldn't be any more complicated than replicating a RepRap.
You really could make a pair of glasses from one type of plastic. If you need the temple pieces to fold (if it even has temple pieces), the same hinge design used by whittlers to make pliers from a single piece of wood would suffice, and could probably be cut with a laser of the correct wavelength.
Volume printing is best suited for applications that cannot be mass-produced.
Eyeglass frames can be described adequately by overall width and length of the temple pieces. One machine can produce several similar styles of frame in all the most common sizes before you can blink. If they don't have a brand name on them, frames are dirt cheap.
The lenses are the unique element. If you're not including either the lenses or the unique shape of someone's face in the printing process, there's just no point in doing that instead of going to Costco or Walmart for a frame.
Or you could create a style so alien to current styles that it could not be produced with current mass production machinery. Perhaps it secures the lenses with nose and eyebrow piercings, or a hatband-like ring around the entire head, or a pince-nez style that puts silicone hooks over your nostrils.
So we're talking baout knockoff frames.But many(or even most people who care about brands) don't like to buy knockoffs and prefer the real brand.So this will probably carry over to frames.
What would be interesting to me is an in-depth look at how this company is able to sustain its near monopoly on the business. They do not appear to be leaning on government intervention, and the product can be delivered via e-commerce (zappos, etc.) so they can't control the sales channel that much. The product is not that complicated to manufacture, has huge and recurring volume and, as of right now, preposterous margins.
Are they that good at taking advantage of positional goods and marketing? Are they litigious? Do they use kickbacks effectively? Are they buying out competition, and, if so, how are they doing it and why is new competition not emerging?
A situation like this appears to be a complete affront to nearly any economic model I can think of, and demands attention.
Additionally, we in the startup community should all be sitting around and thinking: "Wait, high margins, simple product and I can sell it online... Wait, what?"
I use 39dollar, but I think Warby Parker has done the best job at stealing marketshare away from the monopoly. The startups are out there, and they are working. It just takes time to tear away from status quo.
Offhand, it seems like this stuff isn't that difficult to make. After all, it's just frames made out of plastic, right? But it is at this point we get a glimpse into what it takes to manufacture products.
The basic design of glasses - like any accessory - is a skill in itself! We look at the shape, the materials, used, the colors, the hinges, the nose-pads, and the aesthetic of frames. Many of us can look at a pair of glasses and "know" that they are styled for men or women, and different frame shapes and colors are better suited for different face shapes and skin tones.
This is all to say that, even before we start manufacturing, one has to find talent who understands all of these aspects of accessory design in order to produce a great product. Parallels to software engineering suggest themselves.
When it comes to manufacturing, most all of it is done outside the US in China. Physical manufacturing is difficult. There is a years-long iterative process of choosing materials, manufacturing samples, working with the vendors, and ensuring quality. Maybe you are importing acetate from another country. Oh, and it is February - you planned for Chinese New Year, right? Import these frames into the US and let them sit in customs for a month. Etc. Physical manufacturing is hard.
What if you're making eyewear for another brand? Now you have to design things which are consistent with that brand's aesthetic.
Then you have to find an optical lab to fulfill prescriptions. A lab which is reliable, does not ship products with scratches on lenses, and has strong inventory controls. Optical labs, incidentally, are really expensive operations to run because the machinery is so specialized.
And then there is the shipping, logistics, and customer service pipeline.
At a unit level, it is true that glasses are pretty cheap to make. In that sense, because it is easy to get into the market - which is relatively unregulated compared to, say, payment processing - you deal with a lot of unscrupulous businesses and middlemen trying to peddle bad-quality goods.
Eyewear may have recurring customers, but perhaps not so much brand loyalty. Many customers want to physically try on frames before buying, which increases customer acquisition costs (either via home-try-on programs or physical showrooms.)
Companies like Luxottica, I have heard, sell their eyewear to mom-and-pop optometrists and use sales data to figure out the size of the market. Then they plop down with a Lens Crafters.
This is all to say... it is a difficult business, there are many competitors, it is hard to wade through the crap, it is hard to find good talent, and things like aesthetics and brand recognition are important - and take time to develop. Not as easy as it seems!
Sure, everything in life is harder than it seems on first glance. But compare with, say, consumer electronics. Or knife-making. And so on. They have all these same problems and more, and no one company dominates in this same fashion.
I think there are many sectors where just one or two companies really dominate the industry.
PayPal seems like one, especially for international payments. iPhones and Androids. Windows. Cargill for food.
Granted, I am having trouble coming up with companies where "just one" company dominates the market, but overall this seems more common than one would like to think.
You are correct in that "it is difficult" would not be sufficient to explain why there are so few competitors. But I think I feel similarly about these other industries as well.
This comparison with Luxotica breaks down for two reasons. First is when you consider that Paypal has network effects and iOS and Android are platforms. Pushing glasses frames has neither of these impediments for upstarts. The second is the ridiculous markup. If Paypal increased their transaction fee from 3% to 30%, a competitor would kill them. Cargill didn't bump food prices 10-fold even though bio-engineering is at least an order of magnitude more complex and costly than molded plastic in a pretty shape.
Making a cellphone that talks to antennas and satellites is a billion times more complicated and yet many companies do it. You're not addressing the core question here.
jbert said above: "people want to try on several pairs of glasses and see which ones they look best in." That seems like a very good reason that is different from any other industry.
As far as I can tell, Luxottica is like a book publisher who also has a significant retail presence. They buy licensing deals with all the major eyewear brands, likely at prices competitors can't afford because only they can sell through their retail channels (7,000+ stores in the US alone, and keep in mind the U.S. is by far the largest market for luxury consumer goods). Eyewear designers want to get their glasses in front of as many consumers as possible, so the alternative of not signing a licensing agreement would mean forgoing all those retail channels (and a big chunk of the U.S. market).
So it's basically vertical integration (exclusive manufacturing rights and retail presense) + economies of scale. They made themselves a very powerful intermediary and signed some very lucrative exclusive contracts to compound that advantage.
There are people taking advantage of this. Namely, Warby Parker.[1] They opened retail stores to combat Luxottica's market share in that arena, manufactured their own eyeglasses, and raised $41mm in funding to do so. They're growing rapidly, but still a relatively small part of the overall market. They originally were going to price their glasses at $50, but found that consumers branded their products as cheap so they artificially raised the price to $100! Still enough to undercut the competition, but shows you how the current market has skewed consumer perceptions of price/quality.
I would characterize Warby Parker's relationship to Luxottica a bit differently.
You have correctly identified Luxottica's value proposition: "You don't know how to get into eyewear, but we are experts on it. Partner with us!"
However, to even move the needle for Luxottica, that brand partnership has to be worth many millions of dollars.
Warby Parker is not competing against Luxottica. They are not trying to do white-label eyewear for other fashion brands. Warby is simply another fashion brand. They are competing with the other brands that Luxottica is making glasses for.
There is another company (which I used to work for, called Eponym, Inc.) who is a closer competitor to Luxottica in terms of trying to capture the market of fashion who want to get into eyewear. Though the success of selling glasses to individual customers is important, Luxottica is more of a B2B partnership whereas Warby is B2C.
I agree Warby Parker is not competing directly with Luxottica. But they're still taking advantage of the fact that those brands are charging very high prices and current retail channels are controlled by a single entity who restricts competition from third parties. And they are certainly competing with retail channels owned by Luxottica.
I think the core of luxxotica isn't manufacturing.
It's being a 2 sided market,same like ebay - a meeting place between most brands and most consumers.And we know that those types of businesses are very tough to attack, and probably even more so offline.
In a way, similar to walmart, but luxury brands don't fight through lower prices, so it might enabled luxxotica to ask them not to sell lower at any other place. In a sense this luxxotica monopoly is great for luxury brands, so i could even imagine a scenario where luxxotica tells to each brand "we're building a monopoly on glasses in the u.s., and we want this place to be the ideal place to sell luxury goods ... , please help us" - why won't they help ?
I literally just used them and bought 2 pairs of normal prescription glasses and 2 pairs of prescription sun-glasses for less than I paid for my last pair of prescription glasses.
I'm SUPER satisfied with them and have been telling everyone I know to use them.
Buying glasses online is a definitively sub-par experience.
It's very difficult to find ones that are fitted exactly right and look the way you want. If you re-order exactly the same frame style and size as you've had previously, then you can do alright, but it's hard to get the same experience as with a physical store.
Also, people often put off getting new glasses until they have to, and it's convenient to get it all done in one shot.
Additionally, the business is still sitting on some convenient anti-competitive regulations that exist at the state level in most places.
Another big factor is insurance. Health insurance often covers enough of the cost of eye exams and glasses, people end up not caring how much it actually costs.
The fact that there are many places to buy glasses online but they still have a very limited marketshare is perhaps the best evidence that it's not really a comparable experience.
I remember watching the 60 minute video of the Luxottica interview. That guy was so gangster in his responses. "The perception of choice", just outright said it.
I've been buying my glasses online for the last 2 years now. 39dollar and Coastal. Quality control for the frames aren't as good, but they work. On average I pay ~40 vs 200+.
Both the eye exam and the glasses can be optimized to save a lot of money.
For eye exams, I used to pay the optometrist $153 ($117 refraction + $36 dilation). I later found out that Costco often has an optometrist on site in a tiny office and will charge just $50 (and add +$20 for dilation). That's less than half the cost of most other optometrists. A bonus is that the tiny Costco office has no frames so there's no sales pressure to guide you towards his limited selection of frames. Therefore, he always just prints out your Rx and gives it to you without any dirty looks. Costco (the warehouse) has frames but you have to walk next door into the main retail floor to try them. The optometrist has no idea whether you buy glasses from them. You don't need to be a Costco member to use the optometrist at Costco.
For lenses, I used to always pay ~$400 for 2 pairs of glasses. For Eyemasters, Lenscrafters, Visionworks, etc, it didn't matter if they had "2-for-1 sale on lenses" or "2nd pair frames free". The total (when including desirable features such as AR coatings, etc) always came to ~$200 for each pair. I've come to believe the sales promotions at eyewear chains are as meaningless as the "sales" at mattress stores.
Now, I buy from zennioptical.com. Each pair is always less than $35. That's even cheaper than Costco and Walmart.
I think my recommendation won't work for people who are very sensitive to fashion and want to try all the stylish frames at their fingertips. (Ralph Lauren, Calvin Klein, etc.) At my age, eyeglasses are just functional things and I'm fine with picking out a no-name classic style from zenni.
I tried zenni and I didn't like the way the glasses affected my vision. Since it's mail order, I felt stuck. As a new glasses-wearer, I don't know if zenni gave me bad glasses, I told them the wrong interpupillary distance, or I got a bad prescription from my doctor, or I just have confoundingly weird eyes.
Try adjusting the angle of the lenses with respect to each other, more -- instead of /\. A few that I got had a strong angle but were much better after I flattened them out. Of course it could be other things like getting astigmatism wrong but it's a quick thing to try out.
There are a lot of people that don't feel comfortable wearing cheap polycarbonate lenses, which is the default kind a lot of places will sell to you. If you felt like the world looked distorted, and you didn't adjust after a day or two of full-time wear, then you might be one of them. The solution is usually to upgrade to a high index lens (they're made from different, higher density plastics) for a bit more money. I've never been able to tolerate poly lenses; I got them once at LensCrafters (which calls them "Featherwates") and had to return them.
As someone who only just (6 months back) started wearing prescription eyeglasses ... this information is eye-opening (sorry, I know this pun was done to death in the original article).
I'm in Australia, so the options are not quite so wide. 'Name brand' frames, as well as grinding the glass, suffers the same, seemingly artificial, premium that everything else does on this side of the pond.
My first eye test was free, but the frame + lenses were upwards of A$300. Yes, it seemed horrendously expensive at the time. (Trying to find an online retailer of the same model glasses that I bought - with a view to buying a slightly different style or colour - is next to impossible. i-spax (brand), colin (model) ... I can find it on the company web site, but evidently no one sells these things online, which in 2015 just seems perverse.)
Zenni will give you glasses that are functional, I suppose, but they do cut corners. I've tried a handful of the online glasses shops and have never been terribly happy. The frames are cheaply constructed and not terribly durable and the lenses seem to be of poorer quality. If I needed a spare pair to take on a canoeing trip I'd get them from Zenni or some other cheap place so I wouldn't have to worry about losing an expensive pair.
In terms of comfort and vision I'll pick the expensive glasses every time.
I got 2 pairs of glasses from zenni for a total of $40, including shipping. First pair lasted 2 years, still using the second pair 3 years after I bought them. Better quality then any other pairs I've had, including a $400 pair from the optometrist.
I've purchased Zenni glasses for my last 2 prescriptions. The first pair I got I found much more comfortable after replacing the nose pads with a kit from Walmart. Otherwise the glasses are pretty good - lightweight, double hinged and everything.
I reordered the same frames this past year and they seem to be fine, so I don't know if they changed up the nose pads in any way or if I managed to adjust the frames properly this go around.
For sunglasses I go with with Luxottica because of the premium polarized lenses. I wear sunglasses 11 months out of the year so I definitely agree on getting a quality pair.
>> The total (when including desirable features such as AR coatings, etc) always came to ~$200 for each pair.
I'm guessing you have a strong prescription. I was always jealous of people who had a comparatively 'weak' prescription being able to get glasses from PearlVision or what not for $99.
I have bought glasses from Zenni and they were fine, although they really really don't like to make bigger lenses (the last time I asked for frames with 40mm lenses I got exactly 3 choices). I expect that this has something to do with the lens making equipment they use.
I'm looking forward to the flat optics future when a holographic lens gives you the same correction but without the weight, depth, or chromatic abberation of a "normal" lens.
Zenni Optical, frames start at 6.95 including prescription lenses. They handle all their manufacturing and supply chain internally which is how their get their price point low.
Having worn thick glasses since I was a young kid, I spent a ton of time at the eye doctor.
Getting your glasses from an independent doctors office was insanely expensive. It always seemed like a scam. Cheaper at the places in the mall, but still could be hundreds of dollars.
I've seen the ads for $9 glasses online but good luck with the fit (they have directions to follow to measure yourself) but you're going to still want to see a doctor to have them checked and all. Best case, poor fitting glasses are going to give you a wicked headache. I'm not sure what the long-term damage to your eyes could be.
I bought my "every day" glasses from a "legitimate store." In my case it was an eye doctor in my local Costco. Then I used all the measurements and information from my prescription to order some $15 prescription sunglasses from a cheapo online vendor. The fit was pretty good, but the tint was really lame and "cheap" looking. Fine for my purposes since I rare need sunglasses and I'm not particularly fashion sensitive, but I wouldn't have wanted to wear them all the time. You may infer here that I would've been fairly pleased with my cheapo lenses if I hadn't gotten them tinted. They'd have been an amazing deal for $15.
I got my last two pairs of glasses at JINS in Japan. (Station mall at Nagareyama-Ootakanomori.)
8000 yen, ready in 30 minutes. (Bells and whistles will cost extra: like thinner lenses, etc. and some things have to be special ordered.) Stylish, durable, perfect.
I can get a free cleaning and new nose pads at any JINS outlet. Did that twice already with the current pair.
The bigger question is why are contact lenses so expensive? The molds are undoubtedly costly but once made they can pump out millions of lenses and it's not significantly more complicated than plastic eyeglass lenses that require more material and have to be cut to the final shape of the frames.
Of course the answer is that employer subsidized insurance has created in industry that can engage in predatory pricing when the bulk of the customers aren't directly paying out of their wallet.
Some glasses are expensive because it's what people are willing to pay.
I get high quality glasses with contemporary styled frames at WalMart for next to nothing. Not only that but the WalMart optometrist is more competent and does a better job getting my prescription right than the private optometrist I used to see.
It's not as if WalMart is some exclusive club only available to the elite.
Anyone who wishes to do so may shop there and purchase their glasses.
They also have a very nice warranty. One pair got run over by a lawnmower, which was entirely my fault. Free replacement.
It is a choice to pay $400 or more for the same glasses you can get for $60. And as long as people are willing to pay $400, why not charge them that. Good for the price gougers. They only exist because people prefer to go to price gougers, since there is definitely not a quality improvement. Customers are simply paying more because that's what they want to do.
WalMart seems to be often cited as the biggest competitor in this market, but I don't find it very compelling as an alternative. I know many people who do not shop at WalMart for numerous reasons, e.g. their labor practices[1]. The fact that giant, monopolistic corporations like Luxottica and WalMart seem to be the most viable option for something essential to many people is not particularly comforting.
People are willing to pay half a million for tiger bones in order to cure "diseases". You can't go around selling tiger bones for $2, they would obliviously not work.
Same thing for glasses. Same thing for walking canes.
Point taken, though the effectiveness of glasses is (I would hope) a little less likely to be the product of placebo effect. The high prices of glasses feels more like a matter of branding and style, in the same way a t-shirt with a swoosh on it costs $30, and one without costs $10 (USD).
Not all decisions (yes, including "rational" economic decisions) are solely about price. A rational consumer (and much more so a not-quite-totally-rational everyday person) frequently makes choices that don't optimize for price at the expense of all other considerations.
I endorse zennioptical.com I got my glasses for $28 including shipping. Better than what I get at a chain optometrist (probably where they go to order them). They've got 10's of thousands of frames; all the lens options; bifocals or trifocals and so on.
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[ 4.8 ms ] story [ 175 ms ] threadThere may be obvious online sales channels, but optical prescriptions are only available in person, and Luxottica has done an excellent job at making sure the most convenient optometrist is also an affiliate stocking their eyewear.
They don't only own the Lens Crafters peddling Chanel and Prada frames, but also Sears and Target Optical selling "discount" versions with only slightly reduced margins.
There's also a law requiring a prescription less than one year old to purchase eyeglasses or contact lenses, to send consumers back to the sales floor as often as possible.
See above for people discussing how difficult it can be to even get a copy of your prescription to order online with, despite it being federally mandated.
If people "need" to have branded goods, let them pay.
glasses are cheap at the drugstore.
The part I like best about Zenni is the oleophobic hard AR coating option. It doesn't cost an arm and a leg, and actually lasts a fairly long time without scratching. (If you wear glasses you know that no matter how carefully you clean your glasses, they scratch. And the expensive coatings flake off.) Now I clean my glasses with soap and warm water in the morning, and the water just shakes off at the end. The anti-reflective aspect is somewhat lacking, but the ease of cleaning is what makes it for me.
You can also get cheap sunglasses ex:
http://www.amazon.com/Matte-Reflective-Color-Rimmed-Sunglass...
It's basically the same thing as the watch market you can get cheap (<10$) watches but 'nice' quickly becomes hundreds of dollars. IMO, this has little to do with manufacturing costs it's all about the design, sale, and marketing costs.
> But other competitors told us Luxottica has them in a chokehold: if you make glasses, you want to be in their stores; and if you have stores, you want to sell Ray-Bans! So Luxottica can set the prices as high as it wants.
But, in the UK I could choose to buy luxury glasses, but places like specsavers will always offer affordable GBP 20 frames with free lenses as well. And of course the eye test is also free in Scotland.
It's like if Gucci not only was the most common retailer of clothing—and by an enormous margin—but also owned the tailors conveniently located next door.
At most retail chains in the US, there's a small rack of BCGs and safety frames that cost around $30. I know, because I've purchased them as backups.
It should not come as a surprise that they mostly come from China--apparently the natural enemy of the trademarked luxury brand.
This is why if you have a "vision plan" through your employer, you can't get new glasses the same day, from anywhere. They show inflated US prices on the invoices, but behind the curtain, you're probably getting the same inexpensive goods from China as if you had just ordered them yourself.
You can go a lot of places and just get a simple optometrics prescription for $10. Then you can take that to the web, and order 2 regular sets and one tinted set for less than the price tag on the cheapest, ugliest frame in your optometrist's office. All those frames are different brands of Luxottica.
You are being preyed upon, in the same way that a lot of other people in the US who require durable medical equipment to maintain quality of life are being preyed upon.
If you doubt this, search the web for prices on "underarm aluminum crutch". There is not a lot of variation in design for these. They are essentially a fixed length of a standard size of aluminum tube, cut, bent, and drilled by machines, and bolted together along with some rubber and foamed plastic parts. There are no patent encumbrances. Yet the price varies from less than $20 to over $120 for exactly the same thing. This is, in large part, due to health insurance rules.
And this is why Wal-Mart and Costco and Warby Parker will eventually eat Luxottica's lunch. Because in a competitive market, you have to set your price based on the per-unit cost. Only a monopolist or oligopolist can charge based on what people will pay.
This is the money quote: "Andrea Guerra: Everything is worth what people are ready to pay."
And that is only true when the producers have pricing power, which only occurs in a non-commodity market. You don't have to be Isaac Newton to grind your own lenses. You can make a lens/mirror grinding machine out of washing machine parts and a controller like an Arduino.
It should be impossible for a product that can be created in a nerd garage to be anything other than a competitive commodity market, shouldn't it? Will "open source eyeglasses" ever become a bona fide project?
> Your eye care provider must give you a copy of your contact lens and eyeglass prescriptions — whether or not you ask for them.
http://www.consumer.ftc.gov/articles/0116-prescriptions-eye-...
I received my prescription from the optometrist without asking.
The only thing missing is the pupillary distance measurement. There is not even a place for it on the prescription form I received. I didn't know it was something I'd need until reading this thread and checking out zennioptical.com.
I will be calling them tomorrow to get that.
Some optometrists are a little hesitant to give you your prescription data, but it's yours. When in doubt, ask them up front whether they're willing to give it to you after the exam; if not, walk away.
This looks like a good place for 3D printing to start chipping away at traditional manufacturing.
[Edit] I am talking specifically about printing the overpriced frames sold by Luxottica. Not the lenses.
Consumers do not get a break. At LensCrafters, the average cost for a pair of frames and lenses is about $300. You may think -- well, there's choice in the mall for other glasses. But Luxottica doesn't only own the top eyewear chain in the country, it owns another large chain: Pearle Vision, and Oliver Peoples, and several boutique chains. And it runs Target Optical and Sears Optical. And we're not done, Luxottica also owns Sunglass Hut - the largest sunglass chain in the world.
The cost of frames is not based on the cost of traditional manufacturing. Luxottica controls the market, like De Beers and the diamond market.
But some old washing machine parts and an Arduino can grind out any lens shape you might need from a printed blank. Building a garage lens grinder using a volume printer wouldn't be any more complicated than replicating a RepRap.
You really could make a pair of glasses from one type of plastic. If you need the temple pieces to fold (if it even has temple pieces), the same hinge design used by whittlers to make pliers from a single piece of wood would suffice, and could probably be cut with a laser of the correct wavelength.
Eyeglass frames can be described adequately by overall width and length of the temple pieces. One machine can produce several similar styles of frame in all the most common sizes before you can blink. If they don't have a brand name on them, frames are dirt cheap.
The lenses are the unique element. If you're not including either the lenses or the unique shape of someone's face in the printing process, there's just no point in doing that instead of going to Costco or Walmart for a frame.
Or you could create a style so alien to current styles that it could not be produced with current mass production machinery. Perhaps it secures the lenses with nose and eyebrow piercings, or a hatband-like ring around the entire head, or a pince-nez style that puts silicone hooks over your nostrils.
The lenses are still the majority of the effort.
Actually, I'm not. I'm talking about printing frames as opposed to buying them from Luxottica.
Are they that good at taking advantage of positional goods and marketing? Are they litigious? Do they use kickbacks effectively? Are they buying out competition, and, if so, how are they doing it and why is new competition not emerging?
A situation like this appears to be a complete affront to nearly any economic model I can think of, and demands attention.
Additionally, we in the startup community should all be sitting around and thinking: "Wait, high margins, simple product and I can sell it online... Wait, what?"
So if you control the retail chain, you've got the monopoly.
They said their competition was walmart. And that they bought Oakley after refusing to stock their product.
Offhand, it seems like this stuff isn't that difficult to make. After all, it's just frames made out of plastic, right? But it is at this point we get a glimpse into what it takes to manufacture products.
The basic design of glasses - like any accessory - is a skill in itself! We look at the shape, the materials, used, the colors, the hinges, the nose-pads, and the aesthetic of frames. Many of us can look at a pair of glasses and "know" that they are styled for men or women, and different frame shapes and colors are better suited for different face shapes and skin tones.
This is all to say that, even before we start manufacturing, one has to find talent who understands all of these aspects of accessory design in order to produce a great product. Parallels to software engineering suggest themselves.
When it comes to manufacturing, most all of it is done outside the US in China. Physical manufacturing is difficult. There is a years-long iterative process of choosing materials, manufacturing samples, working with the vendors, and ensuring quality. Maybe you are importing acetate from another country. Oh, and it is February - you planned for Chinese New Year, right? Import these frames into the US and let them sit in customs for a month. Etc. Physical manufacturing is hard.
What if you're making eyewear for another brand? Now you have to design things which are consistent with that brand's aesthetic.
Then you have to find an optical lab to fulfill prescriptions. A lab which is reliable, does not ship products with scratches on lenses, and has strong inventory controls. Optical labs, incidentally, are really expensive operations to run because the machinery is so specialized.
And then there is the shipping, logistics, and customer service pipeline.
At a unit level, it is true that glasses are pretty cheap to make. In that sense, because it is easy to get into the market - which is relatively unregulated compared to, say, payment processing - you deal with a lot of unscrupulous businesses and middlemen trying to peddle bad-quality goods.
Eyewear may have recurring customers, but perhaps not so much brand loyalty. Many customers want to physically try on frames before buying, which increases customer acquisition costs (either via home-try-on programs or physical showrooms.)
Companies like Luxottica, I have heard, sell their eyewear to mom-and-pop optometrists and use sales data to figure out the size of the market. Then they plop down with a Lens Crafters.
This is all to say... it is a difficult business, there are many competitors, it is hard to wade through the crap, it is hard to find good talent, and things like aesthetics and brand recognition are important - and take time to develop. Not as easy as it seems!
So, why is that?
http://www.amazon.com/Cornered-Monopoly-Capitalism-Economics...
This seems like a particularly interesting case study, perhaps not fitting well into any particular ideological framework.
This problem is across every industry, but because of the way branding, shell corporations etc work people do not notice.
Ask yourself whether shoes is truly different? How many places around the globe produce a _lot_ of shoes?
How about hard drives? Refrigerators?
PayPal seems like one, especially for international payments. iPhones and Androids. Windows. Cargill for food.
Granted, I am having trouble coming up with companies where "just one" company dominates the market, but overall this seems more common than one would like to think.
You are correct in that "it is difficult" would not be sufficient to explain why there are so few competitors. But I think I feel similarly about these other industries as well.
jbert said above: "people want to try on several pairs of glasses and see which ones they look best in." That seems like a very good reason that is different from any other industry.
So it's basically vertical integration (exclusive manufacturing rights and retail presense) + economies of scale. They made themselves a very powerful intermediary and signed some very lucrative exclusive contracts to compound that advantage.
There are people taking advantage of this. Namely, Warby Parker.[1] They opened retail stores to combat Luxottica's market share in that arena, manufactured their own eyeglasses, and raised $41mm in funding to do so. They're growing rapidly, but still a relatively small part of the overall market. They originally were going to price their glasses at $50, but found that consumers branded their products as cheap so they artificially raised the price to $100! Still enough to undercut the competition, but shows you how the current market has skewed consumer perceptions of price/quality.
http://www.masoneyewear.com/buy-eyeglasses-online-purchase-g...
You have correctly identified Luxottica's value proposition: "You don't know how to get into eyewear, but we are experts on it. Partner with us!"
However, to even move the needle for Luxottica, that brand partnership has to be worth many millions of dollars.
Warby Parker is not competing against Luxottica. They are not trying to do white-label eyewear for other fashion brands. Warby is simply another fashion brand. They are competing with the other brands that Luxottica is making glasses for.
There is another company (which I used to work for, called Eponym, Inc.) who is a closer competitor to Luxottica in terms of trying to capture the market of fashion who want to get into eyewear. Though the success of selling glasses to individual customers is important, Luxottica is more of a B2B partnership whereas Warby is B2C.
It's being a 2 sided market,same like ebay - a meeting place between most brands and most consumers.And we know that those types of businesses are very tough to attack, and probably even more so offline.
In a way, similar to walmart, but luxury brands don't fight through lower prices, so it might enabled luxxotica to ask them not to sell lower at any other place. In a sense this luxxotica monopoly is great for luxury brands, so i could even imagine a scenario where luxxotica tells to each brand "we're building a monopoly on glasses in the u.s., and we want this place to be the ideal place to sell luxury goods ... , please help us" - why won't they help ?
I'm SUPER satisfied with them and have been telling everyone I know to use them.
"In 2013, French lens manufacturer Essilor purchased a majority stake in EyeBuyDirect": http://en.wikipedia.org/wiki/EyeBuyDirect
"France’s Essilor International and Italy’s Luxottica Group, the two largest optical companies in the world, have ended merger talks that took place in secret over the past 18 months." http://www.insightnews.com.au/_blog/NEWS_NOW!/post/essilor-a...
Okay, competition's alive for now. How long will that last?
It's very difficult to find ones that are fitted exactly right and look the way you want. If you re-order exactly the same frame style and size as you've had previously, then you can do alright, but it's hard to get the same experience as with a physical store.
Also, people often put off getting new glasses until they have to, and it's convenient to get it all done in one shot.
Additionally, the business is still sitting on some convenient anti-competitive regulations that exist at the state level in most places.
Another big factor is insurance. Health insurance often covers enough of the cost of eye exams and glasses, people end up not caring how much it actually costs.
The fact that there are many places to buy glasses online but they still have a very limited marketshare is perhaps the best evidence that it's not really a comparable experience.
I've been buying my glasses online for the last 2 years now. 39dollar and Coastal. Quality control for the frames aren't as good, but they work. On average I pay ~40 vs 200+.
For eye exams, I used to pay the optometrist $153 ($117 refraction + $36 dilation). I later found out that Costco often has an optometrist on site in a tiny office and will charge just $50 (and add +$20 for dilation). That's less than half the cost of most other optometrists. A bonus is that the tiny Costco office has no frames so there's no sales pressure to guide you towards his limited selection of frames. Therefore, he always just prints out your Rx and gives it to you without any dirty looks. Costco (the warehouse) has frames but you have to walk next door into the main retail floor to try them. The optometrist has no idea whether you buy glasses from them. You don't need to be a Costco member to use the optometrist at Costco.
For lenses, I used to always pay ~$400 for 2 pairs of glasses. For Eyemasters, Lenscrafters, Visionworks, etc, it didn't matter if they had "2-for-1 sale on lenses" or "2nd pair frames free". The total (when including desirable features such as AR coatings, etc) always came to ~$200 for each pair. I've come to believe the sales promotions at eyewear chains are as meaningless as the "sales" at mattress stores.
Now, I buy from zennioptical.com. Each pair is always less than $35. That's even cheaper than Costco and Walmart.
I think my recommendation won't work for people who are very sensitive to fashion and want to try all the stylish frames at their fingertips. (Ralph Lauren, Calvin Klein, etc.) At my age, eyeglasses are just functional things and I'm fine with picking out a no-name classic style from zenni.
I'm in Australia, so the options are not quite so wide. 'Name brand' frames, as well as grinding the glass, suffers the same, seemingly artificial, premium that everything else does on this side of the pond.
My first eye test was free, but the frame + lenses were upwards of A$300. Yes, it seemed horrendously expensive at the time. (Trying to find an online retailer of the same model glasses that I bought - with a view to buying a slightly different style or colour - is next to impossible. i-spax (brand), colin (model) ... I can find it on the company web site, but evidently no one sells these things online, which in 2015 just seems perverse.)
In terms of comfort and vision I'll pick the expensive glasses every time.
I reordered the same frames this past year and they seem to be fine, so I don't know if they changed up the nose pads in any way or if I managed to adjust the frames properly this go around.
For sunglasses I go with with Luxottica because of the premium polarized lenses. I wear sunglasses 11 months out of the year so I definitely agree on getting a quality pair.
I'm guessing you have a strong prescription. I was always jealous of people who had a comparatively 'weak' prescription being able to get glasses from PearlVision or what not for $99.
I'm looking forward to the flat optics future when a holographic lens gives you the same correction but without the weight, depth, or chromatic abberation of a "normal" lens.
Getting your glasses from an independent doctors office was insanely expensive. It always seemed like a scam. Cheaper at the places in the mall, but still could be hundreds of dollars.
I've seen the ads for $9 glasses online but good luck with the fit (they have directions to follow to measure yourself) but you're going to still want to see a doctor to have them checked and all. Best case, poor fitting glasses are going to give you a wicked headache. I'm not sure what the long-term damage to your eyes could be.
8000 yen, ready in 30 minutes. (Bells and whistles will cost extra: like thinner lenses, etc. and some things have to be special ordered.) Stylish, durable, perfect.
I can get a free cleaning and new nose pads at any JINS outlet. Did that twice already with the current pair.
Of course the answer is that employer subsidized insurance has created in industry that can engage in predatory pricing when the bulk of the customers aren't directly paying out of their wallet.
I get high quality glasses with contemporary styled frames at WalMart for next to nothing. Not only that but the WalMart optometrist is more competent and does a better job getting my prescription right than the private optometrist I used to see.
It's not as if WalMart is some exclusive club only available to the elite.
Anyone who wishes to do so may shop there and purchase their glasses.
They also have a very nice warranty. One pair got run over by a lawnmower, which was entirely my fault. Free replacement.
It is a choice to pay $400 or more for the same glasses you can get for $60. And as long as people are willing to pay $400, why not charge them that. Good for the price gougers. They only exist because people prefer to go to price gougers, since there is definitely not a quality improvement. Customers are simply paying more because that's what they want to do.
[1]http://www.forbes.com/sites/rickungar/2013/11/18/walmart-sto...
That's a truism. The question is why are people willing to pay that much? Why hasn't cheaper competition gained a bigger market share?
People are willing to pay half a million for tiger bones in order to cure "diseases". You can't go around selling tiger bones for $2, they would obliviously not work.
Same thing for glasses. Same thing for walking canes.
Look at Gunnar Glasses selling for very a expensive price while the tech is something you could buy relatively inexpensively for ages.
myopticalshop.com
You can get rimless glasses for $50 and high-index (1.71) lenses with frames for $200.
Costs more for fancier options.
That's what I do.