Let’s be real for a second. There are two different types of sunglasses. No, we’re not talking polarized and non-polarized. We’re talking expensive – and cheap. Why are there just two tiers of sunglasses? What’s the difference between a $200.00 pair and a $20.00 pair of sunglasses? And what makes most sunglasses so expensive?
We can’t talk about this without being honest – almost brutally so. The truth is not very flattering to either side of the price line. But as a sunglasses manufacturer that works with multiple factories in a cutthroat market, we can peel back the curtain a little bit to let you see the hidden side of the eyewear industry – and the broader fashion industry as well.
Let’s break it down.
In a 60 Minutes segment found on Youtube, Lesley Stahl spends almost 13 minutes describing the near monopoly that Luxottica™ has over branded sunglasses – thereby controlling the market price. This is not an unfair practice in terms of the actual production of sunglasses. Gucci™, Dolce & Gabbana™, Ray-Ban™, Oakley™ and more have a few extra costs over the cheaper alternatives. The licensing fee to a high-fashion brand or acquisition cost of purchasing the brand to add as a Luxottica subsidiary raises the price. There are research and development fees going into new styles and new materials. There’s the cost of designers – some well-known third parties and some who work directly for the brands – who determine next year’s fashion statements and must be paid for their patents and designs. Although the materials may be nearly the same as a generic version or a rip-off version, the labor of many brands relies on hand-construction and crafting in locations where factory workers are paid a living wage, like Italy.
To sum it up, Luxottica sunglasses the following additional costs for some of their brands:
- Licensing fees
- Acquisition costs
- R & D costs
- Design patent fees
- Designer expenditure
- Hand-construction
- Fairly paid workers
- Marketing costs like fashion shows and sponsorships
- Possible addition of luxury materials like gold
This may not be true of every Luxottica brand, but it’s certainly true for most of them. Even with these additional costs, however, there is a pretty steep mark-up between the cost of creating a pair of sunglasses and the actual shelf price. That mark-up is due to a couple of factors.
- Monopolization (Luxottica is the only manufacturer that has deals with these exclusive brands, and they’ve been buying up and assimilating the competition like Ray-Bans and Oakley.)
- Guaranteed Distribution (Luxottica owns Sunglasses Hut™, Pearle Vision™, and LensCrafters™ among other retailers so they don’t need to bargain their prices down.)
- Exclusivity (Customers are really just paying for the perception of the brand at this point – and everybody is aware of this. No Canal Street knockoffs for these fashion mavens.)
Not to say that all Luxottica sunglasses are in the $100-$200 range. They do feature cheaper styles within many of the brands – for a given value of cheap at $50 bucks a pop. This may be due to these sunglasses being made in a different location or being a classic style with a long-existing patent, or even sunglasses from prior years being marked down in various outlets. Although Luxottica will continue to produce and defend the higher price point, never getting pulled down into the low-price weeds of their scrappy competitors.
What makes cheaper sunglasses different? Our brands at Piranha™ and Maxx™ rarely reach up beyond a $30.00 price point, so how – and why – do we keep our prices low?
While we can’t reveal all our secrets (it’s a competitive business here at the bottom price rung, lol), we can knock off a few of those costs that the Luxottica company has right away.
- We don’t have to pay licensing fees because we don’t do business with high fashion brands.
- We don’t have to keep the price high to maintain an appearance of exclusivity either.
- Yes, we do acquire companies – but they’re not huge names. They tend to be established, but smaller than the big brands. So, the costs of acquisition are less.
- Marketing? What’s that?
- Gold? Diamonds? Absolutely not. Gold-colored plating and plastic or glass rhinestones are just as sparkly.
This next part is the not-very-flattering bit for the eyewear industry, and the fashion industry in general. We don’t condone this behavior, but it’s widely spread and is one of the bad parts of consumer culture, and we play in this field, even if we have a better vision for our brands.
- Low-cost brands arrive slower on the shelves. For mass-market brands, costs are cheaper because they take inspiration from trends that started months, even years ago. That means we take advantage (at a slower speed, of course) of the trends revealed by the high fashion brands.
- Original designs? Sure, but it’s not inside out for most of the line, it’s outside in. That means, designers come to the different factories and offer the designs for sale for a flat fee. Then manufacturers come along, choose one of those many designs, and say “We’ll run with this one, in this color, in this material.” This saves the cost of brand designers and opening a new mold at the factory level. Of course, we do have a designer or two in house to make some of our latest sunglasses – especially our sustainable eyewear – but most of the designs in our product line are sourced outside.
- Labor costs. All sunglasses are hand-constructed at some point. There is a difference in labor cost at a factory level between the Western and Eastern hemisphere. And this needs to get better. Even ethically sourced sunglasses that ensure the factory is obeying safety rules and workers’ rights (like ours) still use labor that is too inexpensive. A living wage may vary from country to country, hemisphere to hemisphere, but as sunglasses are accumulative (millions of pairs are sold, and people buy multiple pairs) and consumable (they break or get lost all the time, no matter what the brand), a pay-per-piece system would probably be better for workers than a pay-per-hour system most factories have.
- Low-cost sunglasses brands may share factories. It’s a little incestuous – our styles are chosen by us, so they’ll be different, but they might be produced by the same factories that produce our competitor’s styles.
Whew. Confession time over.
There are other things low-cost brands have to contend with that the Luxottica lines do not.
- Competition: We’re scrapping it out for the big-name retailers, and that means we’re dickering each other’s prices down. Among smaller store chains, we’re playing a mean game of Risk™ where we grow, piece by piece, in close-fought battles across the United States. The more competition you have, the more it can become a price game. With guaranteed distribution in the stores they own, Luxottica can keep their prices as high as they want.
- The balance between cost and quality: We’re trying our best to make sure our sunglasses are of a comparable quality to any luxury brand, but the care that a $20.00 pair of sunglasses gets is not the same level of care that a $200.00 pair of sunglasses gets – for obvious reasons. The lenses might be the same materials, the frame might be a similar tensile construction, the base components like nickel-plated screws might be the same – but low-cost brands work on volume, and that means a few ringers are going to make it through the line.
- Trademarked additions or not trademarked additions, that is the question: Some technologies are trademarked. REVO™ is trademarked for types of lens treatments, for example. When proprietary materials are created, each low-cost manufacturer has to determine if they will patent or trademark those materials – and it will affect their bottom line more. They determine if those patented materials or technology are worth it in terms of flexibility or durability of the sunglasses they sell.
Why are some low-cost brands better than others? Honestly, it’s what the retailers hold us to. It’s also some of the same features we share with more expensive brands.
- Product testing: Any pair of sunglasses in a major retailer like Walmart® must pass several tests to ensure they are safe and perform as they should. That includes tests that make sure you can see red lights and green lights through the lenses. Tests to guarantee the safety of shatter-resistant lenses and frames. Tests to ensure the consistent quality of the product line. That’s the benefit of shopping styles that are in major retailers, like we are.
- Guaranteed product materials: Polycarbonate is a material that’s shatter-resistant and also has the added benefit of being 100% UVA/UVB protective. Even completely clear polycarbonate lenses will protect against UV rays. Pretty cool, right? That’s the same for both luxury and non-luxury brands. But some cut-rate brands will skimp on the materials that make up their lenses and frames, which may lead to more dangerous situations for your eyes. They are not in retail chains that call them out for unsafe construction.
- Actual customer service: This may not seem like much. A lot of brands pop up, sell unsafe sunglasses, then vanish into the distance. However, low-price brands in major retailers are guaranteed to be there to answer your customer service issues. We’re making too many sales to just drop the product on the market, then walk away from the consumer. We care about our customers because we may be the only good, safe pair of sunglasses that consumer can afford. Not everyone can drop $200 bucks on something they’ll lose or damage multiple times a year.
Now, that’s a lot of stuff to digest about how sunglasses are made. Basically, sunglasses are expensive because there’s a monopoly at the high end of the market, and sacrifices to speed, originality, and construction are made on the low end of the market. On the very, very low end, even sacrifices to safety and usage occur.
As a consumer, collectively you have a lot of power to influence the market, and individually you have a lot of power to communicate with your favorite brands. Don’t hesitate to reach out or speak up, because most sunglasses manufactures do want to give you the very best we can, and we should all call out the bad players in the market.
By Sarah Wright – Ecommerce manager at Piranha Eyewear, a Navajo Incorporated brand
