Another Wholesaler Going Retail.

[Speed]

Following big Es example. http://salemopticaloutlet.com/salem-optical/

[Chris Ryser]

Last year we decided that it would only be fitting to celebrate our 50th Anniversary by opening our doors to the public and offering our products and services direct to the consumer at wholesale prices.

They must be losing some professional customers, while gaining some retail customers. Not the best advertising.

[wmcdonald]

Times have really changed. Sorry to see this.

[optimensch]

What does this say about how their wholesale business was going? If they do retail with the same approach that they ran their wholesale, I doubt things will go a whole bunch better. You cannot simply say that now you are a retailer and because you have wholesale infrastructure and "cost of goods" of a wholesaler that you will be anything like a successful retailer. Any retailers still buying from them will not be impressed, I suppose.

[Don Gilman]

What does this say about how their wholesale business was going? If they do retail with the same approach that they ran their wholesale, I doubt things will go a whole bunch better. You cannot simply say that now you are a retailer and because you have wholesale infrastructure and "cost of goods" of a wholesaler that you will be anything like a successful retailer. Any retailers still buying from them will not be impressed, I suppose.

How about Essilux? Wholesale, retail, on line etc. etc. Any of you "retailers" still buying from them?

[Chris Ryser]

You cannot simply say that now you are a retailer and because you have wholesale infrastructure and "cost of goods" of a wholesaler that you will be anything like a successful retailer.

The cost of goods is the same all over and set by the manufacturer or importer, with some extra quantity discounts that might be applied.

There will be drastic changes in the way we have been doing business in the optical retail for the last 150 years, and you better start adapting as they come flying at you very soon.

The Essilux team has already 5,000 stores with the LensCrafters and many more others under their hat.

They also own the biggest block of operating optical labs in North America and own the largest single part of online opticals.

Every move they will be taking has been studied from every angle and they are only taking very calculated chances that have been studied in depth.

The company in question has made its own first move by going into retail, if they have done the right thing, only time will tell.

[optimensch]

How about Essilux? Wholesale, retail, on line etc. etc. Any of you "retailers" still buying from them?

I buy from different suppliers, and try to stay on top of things as best I can - what is best for me and best for my clients. As far as Essilux, well, if you want to sell a rayban or a varilux or a crizal....gotta bite the bullet. Keep in mind Essilux adverstises a lot to the public, and promotes these brands. This drives clients in to request them (some of the time). I doubt people are asking for Salem Optical Outlet brand lenses - ie the competition is NOT driving traffic to you. You could argue that ESSILUX drives some traffic via their very strong brands.

My point is that being a wholesaler and deciding to move into retail because you surface lenses and have a lab, and look at what appear to be "juicier" margins, I don't think is enough to "cut it". Retail is a whole entire other business. Good luck to these folks.

[optimensch]

The cost of goods is the same all over and set by the manufacturer or importer, with some extra quantity discounts that might be applied

As you know, Chris, a lab that surfaces their own lenses, especially progressives, has a far lower COGS than a typical retailer who buys finished progressives. This is not that complicated to understand. But I agree that this advantage is not really that great because even retailers can source progressives and other lenses directly in China and elsewhere to save some $. Yes, optical is changing like every other retail industry and some will adapt and others won't. Like the great book, "who moved my cheese?"

[Don Gilman]

I buy from different suppliers, and try to stay on top of things as best I can - what is best for me and best for my clients. As far as Essilux, well, if you want to sell a rayban or a varilux or a crizal....gotta bite the bullet. Keep in mind Essilux adverstises a lot to the public, and promotes these brands. This drives clients in to request them (some of the time). I doubt people are asking for Salem Optical Outlet brand lenses - ie the competition is NOT driving traffic to you. You could argue that ESSILUX drives some traffic via their very strong brands.

My point is that being a wholesaler and deciding to move into retail because you surface lenses and have a lab, and look at what appear to be "juicier" margins, I don't think is enough to "cut it". Retail is a whole entire other business. Good luck to these folks.

Rayban agree. Varilux I want them lenses with no line..........Crizal I want them lenses with no glare Vast majority of the time!

[EyeManDan]

vertical integration

[Chris Ryser]

correction...........................

The Essilux team has already 5,000 stores with the LensCrafters and many more others under their hat.

So far I have to change the figure to over 10,000 retail outlets, and we will see as time progresses

[Lab Insight]

They must be losing some professional customers, while gaining some retail customers. Not the best advertising.

You will likely see more of this in the near future. Wholesalers turning retailer is becoming common - it's not by choice, it's about survival.

I don't see an issue with it to be honest. The ECP's don't have a problem with Essilux doing it.

[fjpod]

I have an issue with it (not that it matters...LOL). Frame manufacturers that buy lens manufacturers, that buy insurance companies that have the vision plans, that buy labs which you are forced to use, and directly solicit the patients of your practice for product sales and services. It's called monopoly...cleverly worded as vertical integration.

So... just adapt and take it? fight back? Pick your poison.

[mervinek]

I have an issue with it (not that it matters...LOL). Frame manufacturers that buy lens manufacturers, that buy insurance companies that have the vision plans, that buy labs which you are forced to use, and directly solicit the patients of your practice for product sales and services. It's called monopoly...cleverly worded as vertical integration.

Vertical Integration! So wrong.

[Chris Ryser]

Lets see some years down the road ....................................

You will likely see more of this in the near future. Wholesalers turning retailer is becoming common - it's not by choice, it's about survival.

I don't see an issue with it to be honest. The ECP's don't have a problem with Essilux doing it.

I did the opposite, started out as a well qualified optician, then started a frame wholesale company I operated for nearly 20 years along with a top notch optical lab and my last venture was into manufacturing lens treatments for another 20 years.

Essilux with their expansion into the online optical business without service, and ownership of over 10,000 retail stores worldwide, can easily adapt these businesses to function also as service centers to their online sold glasses, for, or without charges to the customers.

This would boost their online ventures tremendously.

In 20 years, I could see opticians and optometrists doing exactly what their doing today, but for a individual fee and not make a living from sales.