Most of us have experienced sticker shock and the disparity in costs when shopping for sunglasses or for frames for corrective lenses. The truth behind designer brands and knockoffs will surprise you. It all starts with a large yet little-known company called Luxottica. Luxottica is an Italian eyeglass manufacturer. 60 Minutes reported on Luxottica and detailed how it is probably the most well-known brand that nobody has ever heard of.
Most everyone has heard of these designer brands: Gucci, Prada, Ray-Ban, Oakley, Polo, Versace, and Vogue; the list goes on and on. Just about everyone also knows about retail stores such as LensCrafters, Pearl Vision, Sears, Sunglass Hut, and many others. What do these brands and stores have in common? It would be correct to say that those brands are sold in those stores; it would also be correct to say that those stores are all in competition with one another, yet the prices of the brand eyeglasses never vary. The commonality is that all these brands are either owned by or manufactured by Luxottica.
From initial design to storefront sale, Luxottica is in control. If a brand isn’t being handled by Luxottica in some manner, most stores will not sell it, essentially leaving a competitor with no other avenue for sales. Eventually, Luxottica could potentially buy them out one by one, as was the case with Ray-Ban and Oakley. Competitors are unable to compete in a market so tightly controlled by one major player, a situation that could technically be considered a monopoly. In the 60 Minutes piece, Luxottica CEO Andrea Guerra mentioned that about half a billion people around the world are wearing his sunglasses. Luxottica owns roughly 7000 retail locations where they sell those brands, set the prices, and even pay for some or all of the cost through their business, EyeMed, the second-largest vision insurer.
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Do Designer Brands Mean a Better Product?
Dr. Jay Duker, chair of ophthalmology at Tufts University, stated, “For about $40, you can get a pair that offers 100% protection against ultra-violet rays. If you spend maybe $70, you should be able to get a pair with decent quality polarizing lenses that cut out glare. Beyond that, the medical benefits tail off pretty fast.” The main reason for wearing sunglasses is to block out white light, while the purpose of wearing prescription glasses is to improve vision. Cheaper glasses can work well in both cases. Between damage to the frames or lenses, possible loss, and keeping up with trends, designer shades will cost more in both the short term and long term. Warranty replacements typically result in a deductible being paid of roughly 50% to 80% of the cost of the frames. Warranties for lenses are generally less forgiving with regard to time, with length of warranty averaging only 6 months to possibly 1 year.
Are There Alternatives?
Companies know to price their products in accordance with how much consumers are willing to spend. Given that there is a true lack of competition in the sector, Luxottica can price its items at any cost they deem fit. It’s not unusual to see frames fetch anywhere from $100 to $1000. Luxottica has stated that the gross profit on a pair of sunglasses is roughly 62%, an astounding profit margin. We as consumers usually assume that the price we see is the price that we should pay, but it shouldn’t be that way.
There are alternatives, such as knockoff brands and competitor brands. The quality of a frame is not judged by the brand logo it wields, but by the lenses it holds. Sunglasses are worn to protect your eyes from UV-A and UV-B rays, and prescription lenses exist to improve vision, but the frames really contribute nothing. Some of the best designer brands can be of relatively poor quality, and while the same could be true of knockoffs, their cost is far less. As with generic drugs and grocery store brands, there are always options when it comes to sunglasses and prescription glasses.
Given the nature of knockoffs, it takes diligence to find a good deal in terms of quality. However, an online search can quickly provide a wealth of information on the quality of the merchandise through customer reviews. Even though many believe that knockoffs may be defective goods or are all manufactured by the same company, most often they are not. Competitor brands, on the other hand, tend to be of much higher quality, come in a variety of similar designs as their name-brand counterparts, and can be priced substantially lower. In addition, significant savings may be attained when ordering online. Coupled with insurance, and given such advantages as HSA and FSA accounts, a pair of prescription corrective glasses or sunglasses can be bought on the cheap.
Reference
- Herbert W. Faking it: why wearing designer knockoffs may have hidden psychological costs. Scientific American website. August 19, 2010. http://www.scientificamerican.com/article/faking-it/.
- High-end sunglasses and “knock off” shades may have no difference in quality. GWOB website. April 16, 2014. http://www.gwob.com/high-end-sunglasses-knock-shades-may-difference-quality/.
- Miller EG. Why eyeglasses are so expensive & how you can pay less. 20somethingfinance website. Updated October 18, 2012. http://20somethingfinance.com/why-eyeglasses-are-so-expensive-how-you-can-pay-less/.
- Morran C. 6 reasons why designer sunglasses are a rip-off. Consumerist website. July 15, 2010. http://consumerist.com/2010/07/15/6-reasons-why-designer-sunglasses-are-a-rip-off/.
- Stahl L. Sticker shock: why are glasses so expensive? CBS News website. October 7, 2012. http://www.cbsnews.com/videos/sticker-shock-why-are-glasses-so-expensive-50132676/.
- Touryalai H. Ray-Ban, Oakley, Chanel or Prada sunglasses? They’re all made by this obscure $9B company. Forbes website. July 2, 2013. http://www.forbes.com/sites/halahtouryalai/2013/07/02/ray-ban-oakley-chanel-or-prada-sunglasses-theyre-all-made-by-this-obscure-9b-company/.
