March 30, 2020
Why Glasses Are So Expensive

Why Glasses Are So Expensive

For the 50 percent of Americans who
wear glasses, getting a new pair can be pricey. For the cost of a single pair, they
could pay a month’s rent in any of these one-bedroom apartments, buy a
month’s worth of food for two people, or buy a roundtrip flight
from New York to Reykjavík, and still have money to spare. And that’s without lenses. Add the cheapest lenses available and
the price jumps by another 200 dollars. Granted, this is the most
expensive pair we could find on the LensCrafters website and we
didn’t input insurance information. Still, the average price of
glasses in the U.S. is in the hundreds. $238 for frames, $113 for
lenses, and $201 for an exam. Insurance can help bring down the cost,
but it’s still a lot for a few pieces of plastic. And they don’t have
to cost this much. Recently, two former industry executives
revealed to a Los Angeles Times columnist that quality frames could
cost as little as $4 to make, and designer
frames a mere $15. So why the huge markups? A possible explanation could be
the consolidated nature of the industry. According to a 2019 IBISWorld report,
the top four companies operating in the U.S. account for over 60 percent of
industry revenue following a decade of mergers and acquisitions. The biggest of them,
Luxottica, has 40 percent. The Italian company is the largest
maker of eyewear in the world. In the U.S., it captures huge shares of
both the prescription eyeglasses and sunglasses retail market, owns several
major retailers, has exclusive manufacturing and licensing deals with
tons of designer labels, and owns EyeMed, one of the
largest vision insurance providers. A Luxottica spokesperson told CNBC that
the glasses industry is very diverse, including several discount
retailers like Walmart and Costco. This is true. The same IBISWorld report noted that
the vast majority of consumers prefer value eyewear
from such stores. Still, with such large market shares
and diverse holdings, it’s worth examining this one company’s power. And in 2017, Luxottica announced it
would get even bigger by merging with Essilor, a
French lenses manufacturer. The 49 billion dollar deal
further consolidated the eyewear industry, leading some to ask: Will this help consumers or hurt them? Leonardo Del Vecchio founded Luxottica
in Italy in 1961. The name is a combination of the
Italian words for light and optics, and the company manufactured components
and accessories for the optical industry. But Del Vecchio soon transformed
the company from supplier to manufacturer. In 1971, Luxottica debuted
its first house-made glasses line. This turned out to
be a prescient move. Starting in the 1980s, glasses
slowly transformed from a necessary medical device to a fashion
statement for the face. Luxottica both drove and capitalized
off this trend by partnering with designer brands to make
lines of glasses and sunglasses. Under these licenses, the fashion
houses send inspiration to Luxottica which designs and
manufactures the frames. The company first partnered with
Giorgio Armani in 1988. Thirty years later, its roster of
partnerships sounds like a fashion week unto itself. Prada. Chanel. Burberry. Michael Kors. Ralph Lauren. Tiffany. Versace. Bulgari. And on and on. Luxottica also purchased several brands
outright, like Vogue eyewear, Ray-Ban, and Oakley, and they
moved into retailing, buying LensCrafters, Sunglass Hut, and Cole
National, which is the parent company of Target Optical, Sears
Optical, and Pearle Vision. In total, Luxottica has
about 9000 stores worldwide. And that’s not all. Their vision insurance company, EyeMed, has
a network of 28,000 eye health professionals and covers
39 million people. And that’s still not all. We’re focusing on the U.S., but Luxottica has a major presence
in the UK, New Zealand, Australia, Latin America, and, of course, its
native Italy, as well as manufacturing facilities in
the U.S., Italy, China, Brazil, and two small
plants in Japan and India. In 2018, Luxottica had net sales
of just under nine billion euros. That’s about 10 billion U.S. dollars and an increase of
22 percent since 2013. To put it simply: if a brand wants
to sell glasses, they want to be in Luxottica’s huge
network of stores. And if a store wants to sell
popular brands, they’ll want to offer Luxottica products. You know Ray-Ban, Chanel,
Bulgari and the like. Some argue that Luxottica’s disproportionate
size and power stifles competition, causing the whole
industry to stagnate. The profits in this
industry are relatively obscene. There hasn’t been any serious
innovation in the industry. I mean, Google Glass might be
the best example, but they’re pretty far from getting into it. And so this this industry just sort of
sits there and it makes a lot of money and it is stagnant and
extracts the cost of billions of dollars from American and
actually just global consumers. Some competitors have
managed to succeed. Zenni Optical, an online-only glasses
retailer, began in 2003 and sells glasses for as
little as $6.95, lenses included. Another company, Warby Parker, began
selling glasses starting at $95 in 2010. We each had that frustrating experience of
losing a pair of glasses or breaking a pair of glasses and
then not understanding why they cost several hundred dollars. Dave left a 700 dollar pair of
glasses in the seat pocket of an airplane. We thought that was just way
too much money to spend on a pair of glasses, technology that’s
been around about 800 years. And we looked into the market
and saw this massive industry that really had been overcharging
consumers for for decades. Warby became so popular that it
opened its first physical store in 2013, and they’ve since
opened about 90 more. Companies like Zenni and Warby prove that
glasses don’t have to be so expensive. They also
drive innovation. Warby Parker even uses technology that
allows consumers to do their own eye exam using a
computer and a phone app. The company says these prescriptions are
reviewed by an eye doctor within a day, removing an actual eye
checkup as a barrier to getting glasses. But some optometrists worry
that this method oversimplifies prescriptions and puts consumers at risk
of getting a faulty product. The problem with ordering glasses online
always comes down to two things and that is patient
health and patient safety. And obviously if you can sit down
in front of your computer and with a few keystrokes have a pair of
glasses ordered, that is going to save you time. But at what expense? Dr. Pierce told CNBC that some
glasses ordered online may not conform to U.S. safety standards. Imagine lenses so thin that
they shatter under the slightest pressure. And one study by
the American Optometric Association found that 29 percent of 154 glasses
ordered from online retailers had at least one lens with an incorrect
prescription, a problem that can lead to headaches, eye
strain, dizziness, and more. The study did not specify from
which online retailers the defective glasses were purchased. But worse, Dr. Pierce worries that consumers will
take an online prescription as license to not
get regular checkups. During the course of an eye exam, a
lot of things can be revealed that would otherwise never be detected. For example, the diagnosis
of glaucoma, cataracts, macular degeneration, even things like
dry eye and allergies. And in very very rare cases,
brain tumors have been diagnosed during the course of an eye exam. So that’s deceiving to consumers to
to have the impression that they’ve received an eye exam when
all they’ve had is a rudimentary refraction online to determine refractive
error, and even then not very accurately. Warby Parker doesn’t claim its
digital prescription check is a substitute for an eye health exam. They even say so in this
video that explains the process. Prescription check is not a comprehensive
eye exam and it isn’t meant to replace visits to
your eye doctor. But we do think that telemedicine increases
access and can be a great complement. Often, incumbents in an industry can
be resistant to change or are scared of it. At the end of the
day, technology is changing. You can either bury your head in the
sand and ignore it or embrace it and create ways to increase
access to health care. And that’s what our hope is. Dr. Pierce’s concerns aren’t yet too
widespread given that a tiny percent of glasses overall
are purchased online. The vast majority of consumers buy
glasses from large discount chains like Luxottica’s Target or Sears;
other walk-in chains like Luxottica’s LensCrafters or Sunglass Hut;
or doctor’s offices like one of the 8,000 in
Luxottica’s EyeMed insurance network. And since 89 percent of the
products sold in Luxottica stores are manufactured by Luxottica, the odds are
even better that you’ll buy frames made by Luxottica — even
if they’re branded with Chanel, Tiffany, or Prada. And Luxottica is about
to get even bigger. The United States Federal Trade
Commission approved the merger in March 2018, but some antitrust experts
question if the review was enough. And I see these prices and I
still think something’s wrong in this market. That competition is not
working in the market. And the idea that you could have
a merger that brings together the largest manufacturer of lenses and the
retailer that makes some of the most best-selling frames, it seems
to me that that merger would be entrenching power. Professor Fox and her colleague, Scott
Hemphill, told CNBC that the FTC tends to be more sympathetic
to vertical mergers — that is, mergers between two companies at different
areas of the supply chain. In this case, Luxottica makes and
sells frames whereas Essilor makes and sells lenses. Vertical mergers are a tricky area
because, on the one hand, combining a customer and a supplier
can be pro competitive. It can bring important efficiencies
that benefit consumers and society more generally. At the same time, vertical mergers
under certain circumstances can be anti-competitive. And so the trick
is to figure out which transactions are anti-competitive and
which ones are pro-competitive. The FTC uses economic models to guess
whether a merger will help or harm consumers — basically, whether prices
of the product will go up or down. Maybe that analysis is impeccable,
but it’s very narrow. And they should at least have
considered that the merger might have prevented the firms
from lowering prices. It might have entrenched the
structure that kept competition from breaking out. As part of their “A Better
Deal” policy proposals, Senate Democrats condemned the Essilor-Luxottica merger as
an example of corporate consolidation gone too far. It’s worth noting that the eyewear industry
in the US was riddled with accusations of excessive markups
and monopolistic behavior long before Luxottica. Luxottica has not faced
the same scrutiny. In fact, its merger with Essilor
has been approved by trade commissions around the world. Its size and markups are not an
anomaly, but a modern iteration of what’s long been
an industry standard. Luxottica did not respond to a request
for an interview in time, but a spokesperson did speak with CNBC
about the company’s methods and pricing. The approximately 74 million baby boomers
are reaching the years at which the vast majority of
individuals need vision correction. And Medicare doesn’t cover routine
eye exams, glasses, or contact lenses. Maybe their children or
grandchildren will cajole them into trying Zenni Optical
or Warby Parker. If not, Essilor-Luxottica stands to gain
quite a bit in the coming decades. Everybody doesn’t have to
buy luxury glasses. You don’t need Ray-Bans. But there’s a lot of room in
between where there ought to be competition and you’re
not seeing it.

100 thoughts on “Why Glasses Are So Expensive

  1. I live in France, it costs me 33 euros to have me eyes checked, of which I don't pay a penny. My last glasses and lenses cost 250 euros total (Police frame, so not cheap), of which I payed, wait for it, 0 euros and 0 cents. All that thanks to my 15 euros per month health insurance.

  2. a months worth of food for 2 people, lol! yea rite! more like 2 weeks worth for 1! Food is expensive here in the uk! Glasses are also £40 ish

  3. In Pakistan you can get glasses with frames, lenses and eye test for under ~$25

    And I would assume it's the same if not cheaper in rest of the subcontinent, including India and Bangladesh.

  4. I using almost everyday my Rayban wayfarer made in Italy since 2013 and they still perfect and cool 🙂
    so.. better spend more getting quality' that last

  5. Is seriously? Are you doing apology? I find it hard to believe that they simplify the work of the optometrist and the optical costs

  6. I’ve purchased glasses from a professional optometrist only to discover 6 months later that one of the lenses had the incorrect prescription.

  7. When I went to get my glasses from a optometrist who was part of the network I found the whole business strange. I had to keep demanding the sale floor person after my eye exam I just wanted my prescription but I was pushed to use the insurance.I told them I wanted only the glasses which were 100% covered by my insurance. Sadly not everyone else in the office was aware they had to say that. A woman was going to be charged $1500 on glasses (with insurance) and when she heard that she walked out of that office. I found out that I can buy a cheaper price pair of frames online and my insurance would be covered after I show evidence of purchase. I always tell my optometrist I will have laser eye surgery when I’m 21 so I don’t have to deal with this and they have a look of fear over loser a customer. 🤷🏽‍♀️

  8. What I hate more than the frames is the extra you have to pay for add-ons like polycarbonate lenses and anti-reflective coatings.

  9. Ah, you could buy ticket to Poland, get yourself dental made, medical procedure done, buy glasses, spend vacation, fly back, and still save money if you worked and spend money while receiving all these things in the US

  10. A visit to Optometrist 200US$ wow! I pay only 69$AUD more like 55$US for eye exam without any insurance or anything here in Australia.

  11. In India you can get glasses in $7(Cheap) and good Anti-Glare glasses or BlueCut glasses in under $15 with offers it can go as low as $4 !!!!

  12. I don’t get why people are hating on Luxotica,they are very smart it’s not their fault consumer are idiots who agree to spend thousands of dollars on some glasses

  13. "Lens shatter under slightest pressure"? Can't you just buy the frame online and take it to the store to confirm your prescription and make the right lens for you. At least you can save money on the frame.
    You can do this is Malaysia, and eye exam are literally free here.

  14. I understand going to optometrists for the full examine to detect different things, but you can still get jacked up glasses from Walmart. I have noticed even if a correct prescription is given the adjustment is only as good as the people doing it and consumer beware if their mood is bad.

  15. I use its the cheapest ive found starting at like 7 dollars. The quality is great and while it is online you can download pics to get a feel for what they'll look like on you. Ive bought probably a dozen pairs from there myself and my family have as well. The freedom to compare such large quantities at once is great. And you can design your sunglasses to have colored mirror tints, color tint, gradients, and much more to make your glasses all the more for you. Within the last few years, they introduced an unnoticeable yellow tint to block blue light from computer screens and phones and reduce headaches, i love it and wont go back, i never notice the tint and the benefits are fantastic. I bought a total of 9 pairs for my family and it was about the price of one pair at LensCrafters. The pair i have now are almost 2 years old, super durable with a plastic/metal frame, and the only bad thing is that the oleophobic coating has worn down some but i have an oily face and ive worn them for 16 hours a day for 2 years so i dont mind. The only pair i ever broke was a frameless pair but again, i dont blame them bc it took a dodgeball straight to the face before they cracked. Dont waste your money, I buy designs that ive never seen in a store but online they can stock more floral prints, pride designs, and other kooky and cute designs while stores are limited by their floorspace.

  16. "Most consumers can't spend several thousand dollars on a Parda handbag, but for $300, they can own a pair of Parda sunglasses" that's the most rediculus thing I've heard. Well maybe people don't want to have to pay to own fancy glasses so make affordable options for them.

  17. They don’t even let retailers compete. Ray-ban’s wayfarers are retailed at $153
    Amazon, Macy’s, Dillard’s, and target sells them for the exact same price.

  18. Adam ruins glasses is only slightly more entertaining that this piece. SLIGHTLY.

  19. Warby Parker does have pretty cheaply made frames when compared to the same priced Ray Bans alternatives and there lens technology is very basic with little to no options.

  20. The optometrist monopoly has also added $50-250 tax to eyeglass costs. CNBC should do a story on this unnecessary and overpriced cost and step for getting glasses. Maybe we should have optometrists also administer an AIDS test during their "examinations" to make them more useful to society. Optometrists are useless, fee-gougers in the google-your-symptom-age.

  21. Cost of my glasses and eye test reading/ watching TV
    Zero Nothing NaDa social Welfare System in the Republic of Ireland.
    You can buy Designer eyewear of course.
    One company operating in Ireland

  22. I'd rather not live in Iowa, Wisconsin, or Nebraska, though. (Spoiler alert: Rent is cheap in those places for a reason.)

  23. When more competition such as Warby Parker grows, then Luxottica as a whole will be forced to bring down its prices. Its just a matter of time, monopoly or not.

  24. Wooooow.. i bought my glasses worth 2800 PHO, that's about 55 USD. And that includes frame, eye check up, lens and i upgraded it with transition lens. 😱
    Next time you visit the philippines, grab your self a pair of glasses if you need it, you'll save a lot. Haha

    Edit: 2800 PHP and that's the "high end" package. Prices here starts 795PHP in the leading optical stores here.

  25. Something is very wrong – what good is optical insurance that is owned by eyeglass frame and lens manufacturers?

  26. Talking about money, capitalism isn't supposed to help people, it's supposed to make the rich richer and the poor poorer.

  27. In Vietnam:
    Eye exam: free even without insurance
    Frame: $0.5 – $70
    Lenses: $7 – $45
    I think the average total cost is about $15 and this is a very decent quality pair of glass that could last you for ~5 years

  28. $200 dollars for an eye exam ? They cost 50-100 INR at any good hospital in New Delhi. That's $1 – $2. You guys should definitely see Lenskart. I got 2 really good frames with blue ray protection, anti-glare, scratch proof layer glassed for $25. That's 2 glasses for $25 with a free eye checkup and a free visit at home to show me the frames. This is bogus, y'all!

  29. And this is why i always get my glasses from Korea whenever im over there.. my prescription is so bad that it always costs me a fortune here in the states to get the lenses to a reasonably thin size that won’t weigh down on my nose. It cost me $150 for total for my frames and lenses that were thinned 12x. Oh, and they were done in 3 hours in the same day. Lovely.

  30. Knew this. I paid 15 dollars for my home glasses from zenni. But i wanted a versace sunglasses and cartier glasses, so i had to pay that fee.

  31. 200 US funny money for an eye exam?
    I paid ten pound sterling for my last eye exam. I paid 200 pound sterling for my glasses.

  32. I was hoping they would mentioned goggles4u. They have helped me out and several others in a jam when we managed to get $30 pairs while my eye doctor was charging me $400 after insurance. After I lost my insurance, I can only rely on them now.

  33. Leonardo Del Vecchio( Luxottica) have been raised in orphanage he Started The business from nothing, I always had Great admiration for him.

  34. This isn’t only a North American thing, I’m in Central America and had to get another pair of glasses for $330+ when I even haven’t fully paid my previous pair of glasses in less that’s a year. It was kinda my fault that they damaged but the price to pay is too much. Yes, you can practically get a pair of glasses (basic ones) for much less than that, but they won’t work as well, too high of a price for a need but that’s they way it is 😪

  35. Wow!! In India I got my eyes examined and got lenses. I admit frames were not super branded. Still, everything was under about $30. I guess that's why India is popular in medical tourism.

  36. Shut up really. You can get a test done in the UK for £20. And you can get two pairs of glasses for £69.

  37. I use Zenni Optical, cheaper and pretty good frames, but some can break a lot easier than RayBands or other brands…

  38. For the most recent few years, I had worked at an online eye glasses store in logistic, customer services and business decision team. The company is owned by couple of American eye doctors from FL, they contract out their lab work to a few licensed Chinese factories. Their glasses were all imported to the US with drop ball test cert and cost usually around $3-15. Then the glasses are sold either online or in their physical stores, depends on the design of the frame. When sold in the store, each pair priced $100 and up, if online, their price range $15-100. So you know sometimes when you order a pair of a glass from the eye doctor why it takes around 2 weeks. Your prediction was sent to China (which take a couple of days )and air ship back(take a week). The cheapest way to order prescription glasses nowadays is to get eye exam from your eye doctor and then order the glasses online. Coz anyhow you are most likely going to received the glasses from Chinese made glasses anyway.

  39. I am sick of health professional using "Patient health and patient safety" as code for "challenging our monopoly"

  40. You should have taken into account the overhead cost of glasses. The very nature of glasses determines that a lot of them sit on shelves for very long time before being sold.

  41. I've lived in India for 18 years and bought eyewear in best designed for nearly A$20 and now I'm in Australia everything same cost me from A$150-200
    which is crazy even though some of the eyewear I see here says made in India and still costs A$150

  42. I interviewed with this company once…was very unprofessional and the manager wanted to sleep with me. 😅.

  43. Dear Americans I'm not sure if you noticed but wherever a product is sold with with any relations to your health you are charged 4-5X more than Europe. And it so happens all your loving and caring doctors and the health institutions which exist to protect have perfect relationships with the companies that charge you 4-5X times the prices of Europe. I wonder why…

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