Are Designer Sunglasses Worth the Price?
Maybe not, writes Brett Arends. For starters, most shades are made by the same company.
Most sunglasses are made by the same company. Do you prefer the "quality" of Ray-Ban to Oakley? They're all made by one company, Italian manufacturer Luxottica–one of the biggest consumer companies that consumers have never heard of. Luxottica also makes sunglasses branded Burberry, Chanel, Polo Ralph Lauren, Paul Smith, Stella McCartney, Tiffany, Versace, Vogue, Persol, Miu Miu, Tory Burch and Donna Karan.In many cases, the same company is also selling you the glasses. Luxottica also owns LensCrafters, Pearle Vision and Sunglass Hut. This is extreme vertical integration. The eye doctor telling you that you need a new pair of glasses, the sales people helping you choose them and the people who design and make the glasses all work for the same company.
Luxottica says it makes a gross profit of 64 cents on each dollar of sales. Even after deducting sales and advertising costs, overhead and brand licensing royalties it's still making 52 cents. That's some margin.
"A significant chunk of what you pay for isn't the quality of the lenses, it's the brand," adds Dr. Reza Dana, director of the cornea and refractive surgery service at Massachusetts Eye and Ear Infirmary. He notes that making lenses that offer protection against harmful ultra-violet rays "isn't very expensive technology."
This just goes to show how important brand names are to consumers. I think we are all guilty of buying things just because of the name. I can relate to this article because the only pair of designer sunglasses I have owned were Oakleys. Not only did they break within the first few months, but the lenses got scratched so easily. From that point on I would just purchase a cheap pair from a gas station or a pharmacy. They block the sun and last much longer than my Oakleys ever did.
ReplyDeleteDefinitely a successful way to dominate a particular market. And they implemented the strategy very well making the majority of the brands listed high-quality brand image. I was at one time reluctant to buy brand name sunglasses but ended up getting a pair over a year ago. I found myself keep much better care of them rather then breaking my pair once a month.
ReplyDeleteWow can you say monopoly. Now I know that this isn't a true monopoly but when you own ever link in the chain from design to manucacturing to production to wholsale and even retail that's incredible. 52 cents profit on the dollar is spectacular for any industry, except maybe the oil companies.
ReplyDeleteOne more thing, the last pair of sunglasses I bought were $90 from Sunglass Hut and the soft nosepiece gummy material melted in the car the next summer, now it hurts to wear them, thank you Luxottica.
ReplyDeletehaha awe I'm sorry to hear that Patrick. That sucks. But i've also noticed what Joe was saying. I can buy a cheap pair from a retail store and they seem to last just as long as my oakleys did. That's incredible how they can make so much money as a profit though. I had no idea they were so profitable or so close to being a monopoly.
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