We all know how expensive eyewear can
be. There are so many brands selling sunglasses it logically means that there
is a lot of competition in the sunglasses market. There is Chanel, Prada,
Giorgio Armani, Burberry, Versace, Miu Miu, Dolce and Gabbana, Persol, Oakley,
Ralph Lauren and the ubiquitous Ray-Ban.
All of these are competing for the
customers, which means they are at their best prices with minimum profits.
A Single company called Luxottica owns Ray-Ban, Persol, and Oakley.
Luxottica also makes sunglasses for all of the brands mentioned above and many
more and thus controlling over 80% of the world’s major eyewear brands.
These sunglasses are usually marked 10 to 20 times what it costs to make them,
after all making them is not rocket science. In fact, the monopoly of
Luxottica over the sunglasses market is so strong people even shell out big
money for hideous sunglasses and the price can vary from 500$ to absurd amounts
such as 15000$.
Since Luxottica also owns about 7000
retail outlets, prices of eyewear are artificially kept high. Luxottica owns
and operates LensCrafters, Sears Optical, Target Optical, Pearle Vision,
Sunglass Hut, Ilori, OPSM, Bright Eyes and other chains in the United States,
along with yet more chains throughout Asia, Europe, Africa, India, the
Antipodes and the Middle East.
Oakley, before Luxottica acquired it tried selling their sunglasses cheaper.
This angered Luxottica; they kicked Oakley out of their retail outlets and
within a day Oakley shares crashed. Luxottica then acquired Oakley and
maintained the artificial prices.
But, hey insurance companies cannot be fools enough to give you money to buy
these sun glasses, surely they must know about this scam?
Yes, of course, they do and they too are a part of it! Luxottica also
owns EyeMed Vision Care, a managed
vision care organization in the United States. As of 2014, it is the second
largest vision benefits company in the United States. Since Luxottica does not
own Swedish Insurance companies naturally, we do not get to buy the expensive
prescription glasses via our insurance cover. EyeMed is “not so much
insurance as a marketing ploy to get people to buy from their stores at a
discount and to force the remaining independent stores to buy Luxottica
controlled frames. But, again, most people are unaware of this.
We generally assume that if we are paying a high price for something we are
getting a better product/service. (Similar to private schools).
You might want to be a little careful the next time you buy those expensive sunglasses.
Moral of the story: “The correct price of a product is what a customer
is willing to shell out.”
Choose parts, mix, and match.