Internet and wholesale companies.

[ELM OPTICAL]

I am doing some research on the subject of internet sales. What is the current status on the relationship between the bigger 3 companies (L,S,M) and the internet discount dealers?
What is the official reaction on this subject?

1 Sales people know that their account sells on internet but afraid to do something because they will loose comithions.
2 District manager is afraid of the same thing.
3 Private stores complain and complain that internet sells curent merchandise with a $40 mark up.
4 Private stores complain and complain that internet/storefront optical stores sell curent merchandise with a $40 mark up in regular retail enviroment
5 The big companies are afraid to loose 30-40% of their bussiness that goes to internet sales to each other.

Please help me understand this. And do not tell me that there is no one who discounts exclusive lines way below the MSRP and has current acounts.

Thanks in advance!

[HarryChiling]

I got to tell you if i didn't have a conscionce I coudl throw up an e-comm site in less than an hour and have it populated with frame in probablty another hour. It cheapens our profession and devalues the product. If the big boys knowingly do it then they are slitting their own throats.

[Fezz]

I don't think discussing pricing is appropriate in this forum. You should sign up and join in the Professionals only forum. Lots of price discussions over there.

[Crazy-bout-Optics]

I don't think discussing pricing is appropriate in this forum. You should sign up and join in the Professionals only forum. Lots of price discussions over there.

I don't think his question is price based, rather on the principle that The big Boys set rules for Private practice (MSRP, Not being able to sell online as this will Devalue the Designer name and Brand), yet allow Internet companies to play by different rules.


To answer this question, its because the big 3 WANT these companies selling their product. They are in the business to sell frames. Period. Most designers get paid royalties for each frame that leaves the Manufacturing plant. More frames = More $$$. At the end of the day, they can probably put aside fears that this will "cheapen" their line because the bottom line is bigger than if their frames were not allowed to be sold online.

The same goes for Designer clothing. Tommy Hilfiger for example. Sells in department stores, yet has Company Outlet stores. Lower price points at the outlet allows access to those who cannot afford, and won't pay the high department retail prices. This equals more sales and more $$$ for the designer.

IMO, the big 3 allow companies that have proven an ability to sell eye wear online to sell their product. If you check out Frames Direct you will see they use Luxotticas Visuals on their site. Those images are copy righted, and if it was unauthorized, you better believe Lux would sue the crap out of the company. So however a Representative of the company cuts it, i am convinced they allow and want these companies selling their product or else they would have sued for Copy Wright infringement.

A simple solution to this problem of having to "Compete" with online sales is to simply not carry the Designer lines. However it is prob. suicide as the general public unfortunately equates designer lines with high quality and being "Better (whatever that means) than unbranded lines. Thus the demand for designer goods.

I do wonder if the average Jane & Joe Smith stop and think about frame manufacturing. Many of the big 3 also produce unbranded lines, or lines sold under a "Non-Designer" name. Think about 2 indentical frames being made. Same plant, same material. Unbranded frames sells and retails for less, while one gets a logo slapped on it and INSTANTLY gets marked up and wholesales and retails for Much more. Simply for a logo.

* I APOLOGIZE for this lengthy reply, its almost 6 in the morning here in Tucson, and I haven't gone to bed yet, and I'm bored. :hammer:

Just my 2 cents ;-)

~Matt

[icare]

If the big 3 and others are permitting online sales to continue, they have only to look at the contact lens industry to see where they are headed. They may sell more in the short term, but the long term trend will be that they are forced to manufacture and sell more in order to make the same profit on dwindling margins. Maybe they all think that their own brands are strong enough to sustain severe internet competition long enough to create virtual monopolies.

The contact lens brands still strong on the internet are fewer today and I doubt that they are pleased with their margins. I would venture to say that frame manufacturing technology is less proprietary than contact lens technology, too. A patented contact lens design can remain marketable at a higher cost for a longer period of time. If the big 3 find their profits shrinking and raise their prices too much, there is a never ending supply new market entrants who will be willing to manufacture and distribute to the world at a discount.

Frame manufacturers willing to permit internet sales are thinking only in the short term. Frame manufacturers thinking in the short term have no more to offer than the fly-by-night reps that pass through our offices every day. Something is failing in their business models and professionals should be wary of them.

[ELM OPTICAL]

If the big boys knowingly do it then they are slitting their own throats.

IF?

Where do you think the product comes from? Knockoffs?
No!
They do sell and pretend not to sell!
So what is their policy?

[Johns]

IF?

Where do you think the product comes from? Knockoffs?
No!
They do sell and pretend not to sell!
So what is their policy?

People like you (labs & other wholesalers), and me (opticians, optometrists, and MDs) set up sites, and/or resell to internetters.

Hey, you don't care who buys your products, why should they?

[HarryChiling]

IF?

Where do you think the product comes from? Knockoffs?
No!
They do sell and pretend not to sell!
So what is their policy?

I hear you it's not a matter of IF, but why as it is established that they are doing it and getting away with it. Doesn't make it right and that sucks for me, the worst part is that alot of these sits are no longer just selling frames, but they are also selling lenses in them: SV, Bifocal, and Progressive. I saw a post on here for frames direct that purported to have a patented system created by dr. quack that allows them to take a seg height online. Amazing, how do I get a hold of that formula? Oh, wait I know better than that. :hammer:

[ELM OPTICAL]

People like you (labs & other wholesalers), and me (opticians, optometrists, and MDs) set up sites, and/or resell to internetters.

Hey, you don't care who buys your products, why should they?

Excelent point!
The only difference is that we do NOT tell our customers to sell Image for $199 only and if they would not we will close their account! We do not control retal prices.

[ELM OPTICAL]

Amazing, how do I get a hold of that formula? Oh, wait I know better than that. :hammer:

For FT 5in and 5 down!:D:D:D:D

[optirep]

Many ON-Line sellers get product for Independent diverters. They often use more than one so they are hard to trace.

[HarryChiling]

Many ON-Line sellers get product for Independent diverters. They often use more than one so they are hard to trace.

And the copy righted images mentioned earlier?

For FT 5in and 5 down!:D:D:D:D

Interesting now all I need is th eprogressive fitting formula and I never have to pull a ruler of pupilometer out again. :bbg:

[ELM OPTICAL]

Many ON-Line sellers get product for Independent diverters. They often use more than one so they are hard to trace.

BS!

Small ones maybe. I am 99% shure that any Rep can predict how many Guccies or Pradas is possible to be sold at particular store. Do they want to do that? I dont think so. They would lose commitions. Does the company makes them do that is another story....

[Chris Ryser]

Unbranded frames sells and retails for less, while one gets a logo slapped on it and INSTANTLY gets marked up and wholesales and retails for Much more. Simply for a logo.
~Matt

Matti you hit the nail on the head.....................

This has been done forever. When I still had my frame company in the 60's and 60's one of the large manufacturers in France made a deal with Emanuel Ungare, which subsequently we sold in Canada.

At some point he could not deliver on 2 or 3 models and our customers were screaming. So the manufacturer offered us the same frames stocked in the USA without the Ungaro brand at 1/4 the cost.

So they sold the same frames in the USA under their own name and we sold them in Canada at 3x the price in Canada under the designer name.

I am sure that such things are still going on.

[DragonLensmanWV]

For FT 5in and 5 down!:D:D:D:D

I remember the old days when it was 3 in and 3 down.:drop:

[LENNY]

I remember the old days when it was 3 in and 3 down.:drop:

You must have bigger heads in WV!

[DragonLensmanWV]

You must have bigger heads in WV!

I mean the old days when everyone wore a 48-20 black Liberty Fortune.:D

[Uncle Fester]

The short term quarterly profit is more important to a CEO + CFO (who are beholden to the shareholder) than the long term viability of the company IMHO.

They're safe with golden parachutes when the day of reckoning comes. As for the employees-- Let them eat cake if there is no bread.;)

[LENNY]

Short long.....

[newframes]

I don't think discussing pricing is appropriate in this forum. You should sign up and join in the Professionals only forum. Lots of price discussions over there.

Could you give a link to that forum?

[Fezz]

Could you give a link to that forum?

Newframes,

Welcome to Optiboard. The forum is not shown. Sorta secret. You can subscribe very easily! Click on the User CP button on the top left of the screen. On the left side of the next page there is an option for paid subscriptions. Follow the directions and=BINGO-you will be privy to all sorts of discussions and expert advice that is not appropriate for an open forum. See you there. First rounds on me!

[gemstone]

I remember an old customer (Doctor). He never gave us at the lab a seg hight. He said just put all mine 3 below. In the 70s when frames started getting bigger he finally called and said to use judgement and if it wsa a deep frame we could go 4 below. Is this any better than you'd get on line? Let on line do what it will. If it turns out to be a good thing for consumers, so be it.

[Chris Ryser]

Let on line do what it will. If it turns out to be a good thing for consumers, so be it.

.............amd dont expect any action or support from the major corporations all they want is turnover products.

[HarryChiling]

I remember an old customer (Doctor). He never gave us at the lab a seg hight. He said just put all mine 3 below. In the 70s when frames started getting bigger he finally called and said to use judgement and if it wsa a deep frame we could go 4 below. Is this any better than you'd get on line? Let on line do what it will. If it turns out to be a good thing for consumers, so be it.

It's not a good thing for the consumers. They blow that money online trying to get a deal, and then when it blows up in their face they come into my shop with that many dollars less to spend on a decent product. Then it happens again next year, because everyone seems to think they have found this wonderful loop hole where you can get glasses for real cheap. In some states a PD is a part of the Rx, and ANSI is not manadtory so technically once you fork over your dollars to the internet retailer you could get anything and theirs no stopping them from doing that, they could just say it meets our quality standards. Also consider the amopunt of patients that walk into the brick and mortars for adjustmenst or nosepads from online glasses, is every one here adament about checking to see if they were purchased from the store before adjusting, probably not. So in those cases the consumer is asking me to service a pair they did not pay the service fees for. Look at what happened to the contact lens industry, even some of the online retailers of CL's are not turning a profit?

If the tredn is to go online, then what's stopping your lab or other vendors from going direct? Why even deal with our offices our return and breakage rates are higher than they would accept if they were operating their own sites. It's definately a slippery slope here.

[gemstone]

If the tredn is to go online, then what's stopping your lab or other vendors from going direct? Why even deal with our offices our return and breakage rates are higher than they would accept if they were operating their own sites. It's definately a slippery slope here.

I'm not in the lab anymore. But a labs can 10 times, even giving bargains on line, than they get from the despensers. Labs may be looking at the sqeeze they now find themselves in.