The Big Secret

[Mr_Mitchell]

We're so big on secrecy--the biggest fear of both the board owner and board participants is that consumers will figure out our markup. Well, I can look up any car and see what it costs the dealer, and as far as I know people still buy cars at dealer prices. More and more articles are being written in rags like Consumer Reports, Money, etc., where they spell out what the average optical markup is anyway.
I don't care if we post it on the board--it's not like most eyeglass consumers stop by here, but I just think the whole hush-hush thing is funny, especially coming from the majority here who insist they're in the business only to serve the vision needs of their patients.
My question is, if the markup is fair, why is it vitally important that we hide it? I know the markup on shoes, jeans, cars, marijuana...and I buy some of those products. I, like most people, understand the mark up.
If our mark up is fair, why is it secret?

[For-Life]

Because many consumers believe that even selling the product at cost = ripping them off

[k12311997]

In my experience with people they most certinaly do not understand mark up. People in the largest part of the population are not concerned with how much it costs to maintain, and staff a retail space they are concerned with how much they pay and they don't care what your rent and staffing costs are they think you are making (ie pocketing) X dollars if your charging cost + X.

[Ory]

In Ontario I am required to charge a cost plus dispensing fee when I sell eyewear. As a result there is no markup, everything is spelled out for the patient. I routinely hear "your prices are great, but that dispensing fee is so high" even though I know the markup on the exact same glasses is higher elsewhere. People do not get the concept of profit.

Mr Mitchell, you are free to post your price and how much your markup is in your store...then see how your customers react.:D

[Judy Canty]

--it's not like most eyeglass consumers stop by here, ...

Really!? Not only did consumers stop by here, we had to make a special effort to keep them away. You might want to search on the topic of consumer postings on the board.

BTW, Bob per your comment to me about our friend, yes he is! ;)

[Jedi]

While a big part of our industry is in retail, we are still professionals. Where does a car salesman get his accreditation? Or the kid that sells you jeans? What many consumers do not realize (our fault really) is the amount of education and professional development many of us undertake. In order for us to best serve the public we need to be on top of developments in the industry, trends, and maintain our levels of service (if you have been to a retailer in Alberta in the past couple of years, there is no service). Professionalism is tough to put into numbers, but if we allow ourselves to be grouped in with other retailers or accept that we just pettle commodities, we are in trouble. Not just Opticians, OD's as well.

For those that don't know my background, I'm an Optician at a high-end dispensary in Calgary, Alberta, (not quite New York or LA). With that being said, I have clients across the globe who will not buy anywhere else. Why?, we take great pride in knowing our sh*t, finding new collections (our owner goes to Mido and Silmo every year and build relationships), and providing the best level of service we can achieve. Can't put a price on that, and forunately we don't have too, many of our vendors realize that and provide us with a MSRP which we go by to a tee. The frustrating thing is there are others who will track down the collections we carry (no research and investment on their part) and price according to "standard" mark-up which makes us look like gougers. So is business and we respond accordingly.

Overall it goes back to the attitude that eyeglasses are just a commodity, with no regard to the service or knowledge involved. No good will come from that.

[Johns]

I just think the whole hush-hush thing is funny, especially coming from the majority here who insist they're in the business only to serve the vision needs of their patients.

Well, you obviously are hell-bent on letting everyone know what you're mark-up is.

Charity starts at home. Your recent posts have stated that you were recently hired by an OD. Why don't you show him what a great optician you are by approaching him with what you said in your post, but take it a step further:


Mr Mitchell says:

"Hey, doc...thanks for hiring me. I straightened out your frame mess, and everythings back on track. Now, let's straighten out your sales problem.

Why don't you let me get some poster board, and instead of running a sale, we'll post our wholesale prices in the front window ! It'll be great! Something like... Come on in! We pay forty cents for our lenses, but charge you a lot more! But we're honest! And hey! This is just like buying a CAR! Yeah! We'll sell a ton, and everyone will thank us for being such honest business people.

We should also post how much our overhead is so they realize why we have to charge so much, don't you think ?"

Mr Mitchell's Boss:

"Mr Mitchell that brings up a great point -overhead! I've decided to cut my overhead by hiring the car salesman down the road. I really don't need an optician to sell a comodity. Have a nice life..."

:hammer:

[MarcE]

2%?
5%?
Almost always less than 10%, and car dealers are seen as sleazy for trying to get the 10%. Only large volume auto dealers can make it now. Your plan would ensure that only Costco and Wal-mart optical remain in business.

[cocoisland58]

Over the last thirty years I have worked for a number of independents and corporate offices. The mark-up on frames using list price is pretty standard and we should all know that. The mark-up on lenses varies but not all that much. Discounts from labs and vendors vary widely and those are no one's business.

[Chris Ryser]

We're so big on secrecy--the biggest fear of both the board owner and board participants is that consumers will figure out our markup. ........................................I know the markup on shoes, jeans, cars, marijuana...and I buy some of those products. I, like most people, understand the mark up.
If our mark up is fair, why is it secret?

I have asnwered your post in the new Forum.........trying tp prove why it should be kept in a smaller circle. :finger:

[Fezz]

BTW, Bob per your comment to me about our friend, yes he is! ;)

:D:cheers::D:cheers::D

[Snitgirl]

Better wash your hands after Fezzy!!

:D:cheers::D:cheers::D

[Mr_Mitchell]

Ah, I love getting a reaction. Actually I have no desire to discuss markup here, but I just wanted to see how violently you all would react to the idea.
The responses tell me a few things...
A) You feel markup involves our services...well, if our services were valued enough we could do as one poster has to do and charge for it...though I don't know why you couldn't both charge for services and markup the merchandise, no reason it's mutually exclusive.
B) You think our "secret" will remain secret forever. Sorry, with the internet and even mainstream media our markup is common knowledge to anyone who cares to research it.
C) You assume people wouldn't buy glasses if they knew the markup. Well, I go out to eat. I buy groceries. I don't attempt to make deals with wholesalers on these items, I understand the markup is fair and I'm paying for convenience.
D) You assume I would be afraid to tell my patients...Actually I do, I tell them what others charge for the exact same product and if any customer asked I'd be happy to tell them the exact markup. I only sold one pair of glasses today as we usually don't work saturdays and only had a couple of patients...524 dollars. I think I'm doing okay with my stupid policy of not marking up crap because I can sell the high-end stuff.
Look, we all pay two bucks for a coke when we go out to eat, even though we know it costs the restaurant five cents. Knowing that markup hasn't made us try to work out bulk-purchase deals from Coke distributors, has it?
I don't advertise our markup and I don't volunteer it, but it's hilarious to me that so many who care so deeply about the customer live in fear that they'll find out how high your markup is.
That's all I'm saying. If you're worth all that money, bill it as "PD measurement" and "seg height" and see how far you get. I've lowered the markup and increased bottom-line dollars.

[Johns]

Look, we all pay two bucks for a coke when we go out to eat, even though we know it costs the restaurant five cents. Knowing that markup hasn't made us try to work out bulk-purchase deals from Coke distributors, has it?

Mr. Mitchell,

I love you analogy! (I really do.)

The only difference is, I can go out and buy a coke, just like any other consumer. The average consumer, however, can't go out and buy a multifocal lens at wholesale, and edge it into their own frame.

I do see where you were going with this though..

[HarryChiling]

I do see where you were going with this though..

Mr_Mitchell's actually turning out to be a pretty smart cat, reminds me of myself. I usedto come on this board every now and again and try to rattle the cage (so to speak). It is funny how easy it is and how when done right it actually provokes well thought out responses.

[Andrew Weiss]

I once toyed with the idea of opening an optical shop where I charged wholesale for all the goods and service fees for everything else -- from frame selection and order intake to adjustments, screw and nosepad replacement, etc. I got very interesting responses from both my optician friends and my non-optical friends, who were all unanimous that the idea would never work. We've built those items into our markup for so long that most patients aren't really open to paying for the services separately.

I've posted more on this on the "supporters" forum.

[Mr_Mitchell]

Thanks so much Harry! I swear I'm not a total jerk, everyone!
Chris...As for the new board...I subscribed over a week ago, but my paypal email is different from the email addy I signed up here with...not sure why that would matter but it does. I'm sure Steve will get it straightened out...and then, Chris, I challenge you to an Optiboard auction! I'll donate more and then you'll look cheap! Just kidding...maybe...

[optirep]

. I've lowered the markup and increased bottom-line dollars.

??????????????????????????????

that is not possible! I guess you are saying you are getting a larger volume because of price.

I would think most people would want to raise mark- up and capture rate. Which would require skills and sales.

I have many customers that mark up much more than people right across the street and the do a higher volume by far. In most cases it is the optician or the OD that drives the sales.

[chip anderson]

I think the answer goes back farther than that. For the most part optician used to fill the Rx's of opthalmologists only. The thought that we were actually performing a medical service or at least an extention of one. A pecullarity of the law is: "You must have a medical license to provide a medical service." However, if one provides a medical service as in a friend bandageing a cut, or removing a splinter, one must charge for the service for it to be a medical service. It's against the law to remove a splinter or bandage a cut if you charge for it, you are practicing medcine and must have a medical license. However if you provide this service and do not charge for services, it does not constitute practiceing medcine.
Hense, the independent optician traditionaly has charged only for goods and services (such as soldering frames) that could not be constrewed as requiren a medical license.
Now that we have evolved however unwillingly into medical employees this prohibition tradition seems to have lost it's relivance.

Chip (Old enough to remember or at least old enough to read history)

[HarryChiling]

Chip (Old enough to remember or at least old enough to read history)

How about just OLD. :bbg:

[Bill West]

Every once in a while someone post a stupid idea. This one is tops.
That resturant that sells the drink for $2 probably has a little overhead.
Rent5/6k a month
Electric 800/1000 month
Advertising 1500 month
2 or 3 really good cooks 5600 month
Manager 5000k month
Asst. managers 2@ 6000k month.
And on and on.
Idiot post!:hammer:

[Chris Ryser]

Chris...As for the new board...I subscribed over a week ago, but my paypal email is different from the email addy I signed up here with...not sure why that would matter but it does. I'm sure Steve will get it straightened out...and then, Chris, I challenge you to an Optiboard auction! I'll donate more and then you'll look cheap! Just kidding...maybe...

Mitchell, .................Actually same thing happened, must have opened an account right at the beginning of paypal and the would not take my money because I did not go over that account of which I dont even remember anything. So I gave them another e-mail address and was ok.

As for the auction challenge..................I am not a gambler so I might look cheap. :bbg:

[Mr_Mitchell]

Nah, it was a joke Chris--I certainly hope you make about ten times more than me!
Optirep--how is it impossible to lower markup yet increase dollars? Here's an example:
You were buying generic soda for 5 cents a can, selling it at 50. You make 45 cents per can, 900% markup.
I come in and sell Le Coke by Chanel...buy it for 50 cents, sell it for a dollar. Way less markup but I'm making five cents more per can.
I would not have to increase volume to make more money.
I know some people are discounters and very good at it. It's not my demographic and not my style. My whole point in the original post is that consumers aren't stupid--they realize we have to have a markup, and while we don't want to advertise it we should be able to admit to our markup without shame.
And hey, my tactic worked. Lots of posts now about markup and lots of different views.

[CME4SPECS]

Nah, it was a joke Chris--I certainly hope you make about ten times more than me!
Optirep--how is it impossible to lower markup yet increase dollars? Here's an example:
You were buying generic soda for 5 cents a can, selling it at 50. You make 45 cents per can, 900% markup.
I come in and sell Le Coke by Chanel...buy it for 50 cents, sell it for a dollar. Way less markup but I'm making five cents more per can.
I would not have to increase volume to make more money.
I know some people are discounters and very good at it. It's not my demographic and not my style. My whole point in the original post is that consumers aren't stupid--they realize we have to have a markup, and while we don't want to advertise it we should be able to admit to our markup without shame.
And hey, my tactic worked. Lots of posts now about markup and lots of different views.

Customer opens can of Le Coke, it is flat. You give him another. You are out 2 Le cokes and have 1 dollar. You will go to the poor house very soon!
Actually the profit is 900%, the mark up is 1000%.

[CME4SPECS]

Mr generic is much smarter as he can carry 10 times your inventory and sell his product at half your price. I'd spend a nickel to make 45 cents any day, rather than spend 50 cents to make a buck. Do you put your money in the bank that has the lowest interest rate?