In an article about Warby Parker, an image of glasses on top of a book
Warby Parker has made a big splash in the eye-care business. (Image by Dariusz Sankowski from Pixabay)

Warby Parker Is Helping Others See Through a Corrupt Eyewear Industry

The glasses company was founded as a response to the exorbitant prices of frames. However, recent business decisions have put the company’s future into question.

Thoughts x
In an article about Warby Parker, an image of glasses on top of a book

The glasses company was founded as a response to the exorbitant prices of frames. However, recent business decisions have put the company’s future into question.

Odds are that either you, or someone you know, has glasses. Glasses have been used to help individuals with their vision since the 13th century. Despite new innovations and their increased availability in the modern age, 2.5 billion people in the world who still need glasses do not have them. Why is that? Some of it has to do with the fact that a lot of people in need of vision care live in developing countries where they do not have access to eye care or glasses. But it is also because of how expensive glasses can be due to the corrupt nature of the eye-care industry.

However, a small company formed in 2010 has revolutionized the glasses industry: Warby Parker. It was started by four friends at the University of Pennsylvania Wharton School of Business. They were out backpacking, and one of them lost their glasses. When they went to get new ones, they were shocked to discover how expensive new frames would be. From then on, they had one goal: “to offer designer eyewear at a revolutionary price.”

The average cost of frames and lenses can be up to $400 at eye doctors and independent frame stores. Even at name-brand retail stores like Costco, the median cost of frames is $180. These huge prices are due to the fact that 80% of the glasses industry is owned by the Italian corporation Luxottica. The fact that one company owns the production and retail of most frames eliminates industry competition. With less supply and competition, companies can charge high prices for their products.

On top of that, glasses are a necessity for people with vision problems, and people are willing to pay more for what they need. These factors have contributed to Luxottica getting away with significantly overcharging for their glasses. In 2019, a LensCrafters executive revealed that most simple-frame glasses cost about $20 to make, yet businesses will charge hundreds of dollars for them. Firms are entitled to profits, but this level of overcharging seems like extortion.

For a long time, people had to just deal with the crazy prices until online companies hit the market. One of the first of these companies to take the stage was Zenni Optical in 2003. The business operated entirely online and sold glasses for under $30. Zenni Optical worked well, but many customers would still go with a Luxottica-owned store because they wanted to try the glasses on before they bought them.

Then came Warby Parker, whose ingenuity comes in lending frames to customers. Customers can choose five frames and have them shipped to their house, where they try them on, take pictures and post on social media. This allows the consumers to shop online while also getting the opportunity to try the frames out. This stellar business model helped Warby Parker get its foot in the door of the glasses industry, and it has grown ever since. Since its inception, Warby Parker has opened 71 retail locations in 28 states, including Washington D.C.

As a longtime customer, I can say that it is my favorite company to shop from. Most Warby Parker frames cost about $95. Obviously, that is a lot more than Zenni’s $30 glasses, but I still recommend Warby Parker for a few reasons. First, for every pair of glasses sold, a pair is donated to someone living in a developing country where glasses are not widely available. Because of this, it is necessary for customers to pay for the production of two pairs of glasses. Second, Warby Parker also has a great variety of options that you can try on at home or in a store. With most other online glasses retailers, you cannot try the glasses on to see if you like them. You are stuck with what you order.

Warby Parker also has excellent customer service in stores. If your lenses don’t fit completely right, or the arms start to loosen — which are both very common issues — you can take your glasses to one of Warby Parker’s retail locations and they will adjust them for you free of charge. This easy access to assistance means that Warby Parker frames last longer than Zenni Optical frames. You could adjust them yourself, but you may end up just making your glasses worse, which is what happened to me. While Warby Parker may overcharge a bit for their glasses, it is not nearly as bad as what corporations charge, and I think it is worth the extra cost for the great service.

On top of all these other positive traits, the company started and has remained privately owned. This is especially great because it means you will not be indirectly supporting a corporation by shopping from Warby Parker. With every pair of glasses bought from them, profit is taken away from the corrupt Luxottica. However, Warby Parker might be taking a turn for the worse. In June, the company confidentially filed for an initial public offering (IPO), meaning it has the chance to be publicly owned and traded on the New York Stock Exchange.

While this could be good for the company and its investors, as it will raise a lot of money that the company can use to improve, the IPO has the potential to seriously harm consumers. With Warby Parker being publicly owned, Luxottica has the opportunity to buy much of the issued stock and become a significant shareholder of the company. This would give Luxottica a lot of influence over how Warby Parker would operate.

Luxottica could compel Warby Parker to adopt their corrupt business model of charging hundreds of dollars over the production costs, forcing people who need glasses to pay the often-inflated prices. Now, this outcome is not a guarantee. Even if Luxottica buys out Warby Parker, it is not certain that prices would rise. Nevertheless, it will be an interesting next decade for Warby Parker. They may continue to be a gold standard for successful companies that also prioritize social change — or they may unravel into the corrupt glasses corporation that they were initially trying to compete against.

Writer Profile

Elliot Jackson-Ontkush

Skidmore College
Economics

Leave a Reply