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Why Eyeglasses Are So Expensive

(Photo by Syed Hussaini on Unsplash)


Anyone with bad eyes can regale the pains of shopping for eyeglasses, or even worse, the steep price tag that often comes with them. Most employers don’t provide vision insurance; most people end up paying out-of-pocket for eyeglasses and eyeglass accessories. Furthermore, companies that do often only provide discount plans or wellness benefit plans that offer discounts and excellent benefits for an annual premium. With this distinct lack of coverage in mind, it’s easy to see why most people end up paying the full price. But why are glasses so expensive to begin with?


The average pair of specs run for around $230 at Lenscrafters, and yet they only cost around $10 to make. How do people end up paying for the nose then? Well, a company named Luxottica has a tight grip on the eyeglasses industry. This Italian eyewear company touts an impressive list of clients, namely Prada, Versace, Ralph Lauren, Burberry, Chanel, and Dolce & Gabbana, Rayban, Coach, Sunglasses Hut, Lenscrafters, Oakley, Pearle Vision, Sears Optical, Target Optical, and DKNY. Whew! Half a billion people are estimated to wear Luxottica’s eyeglasses worldwide, with all four of their eyes overseeing the biggest names in eyewear. Luxottica controls 80% of the eyeglasses industry, but their monopolistic grip and lack of competition lead to an outrageous uptick in profits.


Furthermore, a merger with another eyewear behemoth, Essilor, in the fall of 2018 meant Luxottica would now have even more access to the market. Having access to the vast majority of the market means that Luxottica became something known as a ‘price maker.’ Price makers have the rare luxury of setting their products’ prices to the max limit that consumers are willing to pay because they have almost no competition. Since Luxottica controls so many brands, they can carefully set the prices and pay more for specific brands.


Monopolies can indeed benefit specific industries, but in low-tech industries like eyewear, they give consumers an illusion of choice with a high price tag. This facade is a nearly seamless plan for bilking consumers who need these to function in everyday life.


One glasses maker, Charles Dahan, established his own eyewear company, Custom Optical, in 1977. He invented the machine that could manufacture thinner glasses lenses and wanted to put it to use. He was also designing metal and plastic lenses, and pitched his lens-manufacturing machine to Lenscrafters in 1985, back when it was still an independent company. Lenscrafters bought Dahan’s lens machine in addition to some models of his frames. Dahan’s frames were so popular with Lenscrafters that he ended up supplying up to 20% of their frames at one time.


The founder of Lenscrafters, E. Dean Butler, took a shine to him, too, calling him Lenscrafters’ “crown jewel” and a “real go-getter.” However, Butler agreed that the eyewear industry has evolved into something much more sinister since his heyday a few decades ago. In the 80s and 90s, the average pair of glasses cost Dahan between $10 and $16 to make. Lenses usually cost $5 to manufacture but could jump up to $15 depending on the coatings. However, a pair of glasses that cost $30 to make would only run for $100 at Lenscrafters back then, whereas now it would go for triple or quadruple the price.


Unfortunately, Dahan had to close Custom Optical in 2001. After Luxottica purchased Lenscrafters’ parent company, U.S. Shoe Corp, for $1.4 billion in 1995, they gained control of Lenscrafters stores and subsequently began pushing their lenses over those of independent providers. It was only a matter of time before mom and pop eyewear stores like Custom Optical started to closing their doors forever.


Luxottica hasn’t played so nicely with its subsidiaries, either. Take Oakley, for example: after they went public in 1995, their biggest customer became Sunglasses Hut. However, Luxottica purchased Sunglasses Hut in 2001 and told Oakley that if they didn’t give them lower wholesale prices, they would cut their orders and start selling their brands instead. Oakley, who understandably felt backed into a corner, had no choice but to comply. However, Oakley was not lost on the unfairness of the deal, stating at the time of the deal that, “We have made every reasonable effort to establish a mutually beneficial business partnership with Luxottica, but it is clear from this week’s surprising actions that our efforts have been ignored.” Not long after, Oakley’s stock lost a third of its value, a signal of what was to come.


A few years later, Luxottica bought Oakley. Dahan confirmed that Luxottica’s MO was to either coerce eyewear companies to do what they want or to cut them off. This system has worked quite well, seeing how Luxottica controls 80% of the eyewear industry. However, their claim to care about consumer health is very incongruent with their sky-high prices.


The online eyewear industry has the potential to compete with the monolith that is Luxottica, but it still has a ways to go. The sheer scale of Luxottica and its reach makes it almost impossible for any competition to pose a threat. Because of Luxottica’s monopolistic grip on the industry, both Dahan and Butler agree that there should be some federal oversight that prevents a single company from taking near-complete control of the market, especially in the case of healthcare-related industries.


Now that you’ve got the scoop on why glasses are so expensive these days, you might be wondering if there are any corners you can cut when purchasing a new pair of specs. Fortunately, an informed consumer is a consumer that’s likely to save money, so check out this consumer guide before buying your next pair. Unfortunately, if you’re looking to “fight the man” and buy a pair of sunglasses that comes from a non-Luxottica-owned eyewear company, you might be looking for awhile. However, as mentioned earlier, many online eyewear providers offer an array of affordable options that are worth checking out.


Happy shopping, and best of luck on your new specs hunt!

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