Why are prescription eyeglasses so expensive?
январь 23, 2021
It has been a long time since the prescription eyeglasses industry has been listed as a profiteering industry. Production cost is far less than the market price. Why is it?
1. Commodity cost
From the perspective of the production cost of a pair of eyeglasses, yes, there is indeed a big gap. However, it is unfair that people only count production price into the overall cost of a pair of eyeglasses. A pair of prescription eyeglasses might only cost $6-$10 for production, however, the middle agent might quote $30-$50 when it is delivered to local suppliers. Only after the overall revenue of an optical shop is distributed to manufacture and middle agent, a optical store can actually calculated their own operating cost.
2. Operating Costfor an Brick and Mortar Store:
Rent Cost: $1000 / month for business area of 60 square meters
Equipment Cost: The initial investment of the refractor, the edger, the photometer, the focal meter, the interpupillary distance meter, the projector, the inspection disc, etc. totals $20000. And if all the equipment is of high quality, complete equipment cost will be at least $100000.
Staff Salary: The income of technical staff and sales staff in the glasses industry is generally low. Average monthly salary is about $1000 - $2000. Hiring 4 employees in an optical shop, the salary is $4000 - $8000
Operating Cost: Mainly water and electricity. Electricity bill of an optical shop is relative high, calculated at $150 - $200 per month for a 60 square meter store, in addition, water and electricity costs, and other equipment maintenance costs total 150 yuan/month.
Taxes payable: Land tax and national tax together account for 5%~7% of sales revenue
Decoration cost: The decoration cost of a professional optical shop needs at least $10000 and the luxury ones need more than $60000. The same is calculated based on 5-year depreciation cost, the monthly depreciation is about $1000
If monthly sales of an optical store reaches $10000 - $15000, the average price of a pair of prescription eyeglasses is $400 - $600. The monthly sales volume is about 38sets.
An optical shop with a total cost of $7000-$10000, with a sales $10000-$15000. The profit is about $3000-$5000. With the huge impact of the covid-19 and the economic depression, many people choose to change their glasses only when it got broken. It’s hard for a prescription eyeglasses store to keep their profit and sales. Many small glasses store will find themselves struggle and at a lost.
