Frame lines and percentage numbers
So I'm looking for some input and numbers if anyone can help. What is the actual percentage spent on your frames for an optical line and how many lines do you normally have? How many brands per line? Doing some research to compare. Thank you all for your help.
Last edited by cdhood65; 12-27-2023 at 02:59 PM.
We carry all independent frame lines, so I'm not sure if it will be a good sample but here goes: 16 companies, 19 frame brands.
Most independents only have one frame brand, occasionally they will distribute an different independent frame brand as well as their own. There are some frame distributors out there who distribute multiple independent frame brands too. We tend to carry 30-40 pieces per brand with a few exceptions.
Many factors involved, but there is some information available, for example: https://www.visionassociatesinc.com/...yecare-Biz.pdf
A general search should help. A general 3-4 turns per year is expected.
15 vendors, 22 brands. That's a lot more brands than I need, but many are grouped into one vendor/rep so there's little distinction in costs or buying time whether one line or two. And many of those vendors/brands are niche stuff that doesn't account for much volume, but is good to have when I need it (Stepper titanium, Wiley X, Nano, Champion sun).
One big vendor that I get 5 meat-and-potato lines from, which accounts for most of my middle 50% of sales.
One vendor that I buy all my lower-end from (20% of sales)
5 vendors for all my high-end (20%)
All the rest of my vendors are the bits and pieces that make up the last 10%. I really *should* pare those down, but they serve their role that my bigger sell-through lines don't, so I have a hard time parting with them.
My frame costs are 15% of my total optical revenue.
Side question: as wmcdonald said 3-4 turns per year is expected. That's been the long-held conventional wisdom. Do you all achieve that? I sell 1200 frames a year. With that turn expectation I should only have 300-400 frames. That seems restrictive to me. Once upon a time I had a ridiculously huge 1000 pieces (yeah, I know). I've pared down to 600, but it would be difficult to drop to 400. It would be more efficient, but I would sacrifice choices, options, and flexibility. I don't think 1200 frames a year is *meager*, so there must be plenty of you out there with similar unit sales. Are you operating to your satisfaction with 300-400 inventory?
It seems that you SHOULD be able to sell a frame in 3 months or it's bad. But even double that: if no interest in 6 mo, it's a bad fit for your optical.
So a frame HAS to turn twice a year, minimum.
An AVERAGE frame. Or, an AVERAGE frame line. Or, your entire inventory.
Ergo, you shouldn't have more than double what you sell per year. In my case, that's pretty small: 800-1000. So I should have 400-500 frames. I'm in that vicinity.
It makes you buy as sharp as possible, and return as much as reasonable. (If you go the full service, full cost approach.)(There are smarter, more profitable ways to do it, of course, but not by an optometry practice.)
Edit: I have bloat. 573 frames. 21 lines. Only 7 vendors, though. I have to go on a diet.
Last edited by drk; 12-28-2023 at 01:30 PM.
Another point:
1. You really don't get to set reimbursements much, any more, on design and supply of ophthalmic lenses. Sure, some of the additional niceties that need to be presented/promoted (like photochromic, AR, individualized designs) have an upside.
2. Frame retailing (which is at least half of what goes on in the optical, if not 80%) rewards you for your investment. You should understand that it is the single biggest cash generator in optical (because it has all the risks of retail)
There is no way that frames are your biggest cash generator! Please explain how that could be.Originally Posted by drk
When you take insurances, your profit margins are greatly reduced. Frames, especially those with retail prices significantly over insurance allowances, can give your best profit margin over exams, lenses, accessories, etc.
Here is the thing that many patients don't understand: In order to make a profit/earn a living, insurances practices have to artifically inflate prices of everything, and sell every feature a la carte.
By the time the pt gets the designer frame and category N progressives with all the bells and whistles and adding in the premiums for the vision plan, they have paid more than they would have in a practice that sets fair prices and doesn't take insurance.
But that is for a different thread....
I'm a fair price, no insurance, independent optician. I assure you that lenses are my highest revenue producer and also highest profit margins. I do my own edging.
Your return rate must be extremely high if you expect to sell every frame you have in 6 months. I think that is very unrealistic. I'd say that turnover rate is in dollars not in frame units. I don't return many frames, I buy them to sell them, sales reps love that and your perks with them are much better.
I think you're doing business right.
But accounting wrong. You are also, therefore, an optical lab, so you can't allocate the profit on the lenses. You'd have to consider what "your lab" would charge "your optical" to fabricate the job. Assuming it's what a "normal" wholesale lab would charge, your optical is not doing much better than mine.
But being an optical lab has it's benefits! You're in a "third" business: frame retailing, dispensing opticianry, and lens "manufacturing".
Lots of ways to do it.
My return rate is probably higher than some, but lower than most. The reps aren't complaining.
But there's no way inventory that sits for six months is EVER going to sell robustly. Mark it way down and take a hit and EVENTUALLY it may go. I just prefer to exchange for fresh product so that my entire optical is ("new product") less than a year old, or older product still selling well ("best seller").
Definitely more revenue and profit from lenses than frames, unless you’re heavily into insurance. ( Or an extremely high end shop). (And who sells a frame with every lens order? Yearly, I did tons of POF’s.)
As far as frame turns, it depends. Sometimes it’s good to have unique or one of a kind products. I had a display of one of a kind facets/jeweled eyewear. Some only turned one time, ( these were with lenses in the 2-3k out the door range.) But they brought up many comments by patients impressed with our customization abilities. So, well worth the slow turn.
We're in the same boat but we don't have the volume to justify doing that. Our margins are slightly better for frames than lenses. We don't do a ton of POF, under 20%.
Out of curiosity I've just calculated exactly how many frames my branch has.
1268 across the board
264 of those are our own corporate brand
132 are kids frames
204 are sunglasses
The rest are designer makes.
Yes I'm sad enough (and bored in the post-Christmas lull) to sit here and count frame display panels.
Last edited by Loki; 12-29-2023 at 10:05 AM. Reason: clarity
Polaris?
Your single payer health care (as screwed up as NHS is!) is showing. This week has been traditionally, here across the pond, our busiest week. Over here, where most get health care insurance from their employer, they often have vision benefits and tax incentivized dollars set aside that must be used by years end and flock in before they lose often thousands of dollars they and their employer paid in to and must use it or lose it.
I'm not very busy right now because our doc at the last minute had to cancel today's schedule.
I'll tease the regulars here to stay tuned next week as I announce...
Your single payer health care (as screwed up as NHS is!) is showing. This week has been traditionally, here across the pond, our busiest week. Over here, where most get health care insurance from their employer, they often have vision benefits and tax incentivized dollars set aside that must be used by years end and flock in before they lose often thousands of dollars they and their employer paid in to and must use it or lose it.
I'm not very busy right now because our doc at the last minute had to cancel today's schedule.
I'll tease the regulars here to stay tuned next week as I announce...
It's always quiet this time of year for us. The Friday before Christmas we had a double clinic and a grand total of seven appointments, one of which was a recheck. The year I first started, I spent the entire Christmas season in the upstairs office removing files from patients who hadn't been to us in ten years, lol. We have about 50 filing drawers, so it took some doing.
HA!
Is hell freezing over???I'll tease the regulars here to stay tuned next week as I announce...
I was bored enough to do this at one point in the year too! I went through all receipts and anything with PHI for the past 15 years and had everything that was past 7 years for receipts and invoices or longer if patient files. Then I organized all the remaining stuff by when we could shred them and packed them away in boxes. I even organized everything in the boxes alphabetized by company and then by date (I know OCD much?). Wanted to make the files functional if anyone had to get back into them for whatever reason.
But here in the states that is not a job for December LOL. Many years of working corporate optical, some of my stores would do like 2 months of revenue in the last 2 weeks alone. It was always a good year when we had made our sales goal by the middle of December because I knew whatever else we did would improve my bonus.
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