Pricing dilemma

[Spexvet]

The price I charge for free form lenses has always been higher than for latest generation traditional lenses. Recently, I've gotten some very favorable pricing on free form lenses- lower than Adaptar and Image prices, in some materials. My gut feeling is that free form lenses, being much better quality than older lens models, justify a higher price point. On the other hand, that would mean charging more than I charge for a Physio (for example), for a lens that costs me much less than a Physio, which I'm not totally comfortable with.

What are you folks doing, or what would you do?

[Uncle Fester]

Charge what the market will bear.

[braheem24]

Charge based on performance, your patients expect the same.

[drk]

Spex, you need some schoolin'.

Retail price = Aquisition cost + professional services rendered.

Do you render more professional services with individualized lenses?

Watch out, Firmoo and Ira the Snake probably are lurking.

[Uilleann]

DRK hits the nail square - personalized lenses require a greater expertise to fit properly, therefore it will cost you more to fit from a labor and training aspect yes? So why charge less for your services, knowledge and expertise?

[kcount]

The price I charge for free form lenses has always been higher than for latest generation traditional lenses. Recently, I've gotten some very favorable pricing on free form lenses- lower than Adaptar and Image prices, in some materials. My gut feeling is that free form lenses, being much better quality than older lens models, justify a higher price point. On the other hand, that would mean charging more than I charge for a Physio (for example), for a lens that costs me much less than a Physio, which I'm not totally comfortable with.

What are you folks doing, or what would you do?

Price all of your product based on whats its percieved value is not its wholesale cost. There is no shame in making a good profit and being a smart buyer.

[Chris Ryser]

Spex, you need some schoolin'.

Retail price = Aquisition cost + professional services rendered.

Do you render more professional services with individualized lenses?

Watch out, Firmoo and Ira the Snake probably are lurking.

drk..................You just hit another nail right on its head on the coffin of the traditional retail opticians profession.

...........take what the market can bear..................

If you have not read the thread on the statistics: here are a few lines:

• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.

• 24 percent of American workers say that they have postponed their planned retirement age in the past year.

• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

Opticians should be interested to know how much business is already going to :

Zenni Optical........Essilor owned FramesDirect.........Eyebuydirect..........Firmoo, and Coastal Contacts .

Between these largest onliners the sales are not a few hundred per day, they are in the several 5 figures.

These are all sales you are not making, because you still want to make as much as you can get away with. The time to adapt is here now or you are going to cater to the rich 1% only.

[Spexvet]

Spex, you need some schoolin'.

And you ain't foolin'.

Retail price = Aquisition cost + professional services rendered.

I'm thinkin' that in terms of good/better/best/freeform, I'll price these guys between better and best, positioned as "affordable free form". As soon as they pop up in a chain, though....

[HarryChiling]

drk..................You just hit another nail right on its head on the coffin of the traditional retail opticians profession.

...........take what the market can bear..................

If you have not read the thread on the statistics: here are a few lines:


[/B]

Opticians should be interested to know how much business is already going to :

Zenni Optical........Essilor owned FramesDirect.........Eyebuydirect..........Firmoo, and Coastal Contacts .

Between these largest onliners the sales are not a few hundred per day, they are in the several 5 figures.

These are all sales you are not making, because you still want to make as much as you can get away with. The time to adapt is here now or you are going to cater to the rich 1% only.

I was under the impression that this is what every business did. I thought this was a capitalistic country, I encourage everyone to make a profit and price what the market can bear. The reasons why Chris statistics add up is because not enough of the American public realizes that without profit any business will be a gone business.

I love to use the show Pawn Stars as an example if anyones seen it on the History channel. The people running the shop will often times call in experts to appraise the things people bring in and the majority of the time when the appraisor says its worth $500, the pawn shop clerk will ask the person "so how much do you want for it?" the response is 90%+ times $500.00. Then clerks there spend more time explaining that they are running a business and if they can't make any money off of it they can't buy it. The best part of the show is after they explain that to someone and the person counters with $495.

Bottom line everyone wants to be paid for what they do, if you spend more time with the patient then charge more for the product and don't let the onliners or Chris tell you different.

If you feel your products are priced exhorbitantly high then:

1. Check around in your area to see what the competition is pricing the product at and price accordingly.
2. Time every aspect of the fit and dispense and calculate your hourly rate + acquisition cost + service fees + shipping + Overhead + etc. until you have your price.
3. Take your break even cost and add a marginal profit to it +20%.

However you price it you need to make sure that the office can remains open, you provide the best customer service you feel your patients deserve, and you can live with yourself.

Oh and Chris I would dare you to post the actual cost of your chemicals also your the one who's always pushing doing your own SCR and UV coatings to make exhorbitant profits, even your AR stripping model has profits that are well above 400%+ so look who's calling the kettle black. And you predicting that the B and M takes a hit from the onliners is common knowledge not some sort of magical prophecy.

[Jacqui]

I agree with Fester :D

[Judy Canty]

Wouldn't it be much wiser to take this conversation over to the Pro's forum?

[Robert Martellaro]

My gut feeling is that free form lenses, being much better quality than older lens models, justify a higher price point.

Switching the manufacturing platform to free-form does not guarantee increased lens performance. I suspect that the lens you're buying is no more optimized than a generic semi-finshed PAL, and may or may not perform as well as a traditionally surfaced lens in the same price class.

[Chris Ryser]

I was under the impression that this is what every business did. I thought this was a capitalistic country, I encourage everyone to make a profit and price what the market can bear. The reasons why Chris statistics add up is because not enough of the American public realizes that without profit any business will be a gone business.

I don't think you understood the point I made or I expressed it not well enough.

I was referring to the drk statement:

Retail price = Aquisition cost + professional services rendered.

..............which means the better professional you are the higher the fee, and that goes for any professional, some services cost less and some more. Figure out yourself what you are worth.
If you prefer to just be a shop stay with the usual markup.

Why the statistics add up is not as you say, it actually is that most industries have closed their facilities and are still doing it and moved them overseas or to Mexico, left their workers high and dry for cheaper labour and are making even more money now than before. That is a fact.

If you send a pair of AR lenses to your lab to be stripped the lab charges you $ XX.00 and if you do them yourself you are making up for your material, input and labour as well as the knowhow.

Furthermore all your supply companies from frames to consumables are feeling the pinch originating from online sales, as these companies have all the purchases and work done overseas.

So we would like to see the B&M to do well, but I think tha drk is right in his statement and you Harry has just blown up.
.

[WFruit]

So, in the end, you need to price the lens high enough that you can make a profit and stay in business, but low enough that your patients can still afford it (and thus keep you in business)....

[Spexvet]

Switching the manufacturing platform to free-form does not guarantee increased lens performance. I suspect that the lens you're buying is no more optimized than a generic semi-finshed PAL, and may or may not perform as well as a traditionally surfaced lens in the same price class.

The heck you say! But but but .... I'm speechless

[WFruit]

Switching the manufacturing platform to free-form does not guarantee increased lens performance. I suspect that the lens you're buying is no more optimized than a generic semi-finshed PAL, and may or may not perform as well as a traditionally surfaced lens in the same price class.

This is possible. However, there are "generic" Free Form designs available, as well as the ability of labs to "re-brand" existing Free Form designs. Seiko, Shamir, and Essilor all offer such products. These lenses, while not having all of the bells and whistles of their name brand counterparts (such as POW optimaztions) are still full backside progressive lenses with all the benefits thereof. They are priced lower by the labs because they have a lower cost to the lab in most cases, and they all most certainly DO perform better than traditionally surfaced lenses in ANY price class.

Note, in all of my posts, when I say Free Form, I mean only full backside progressive lenses. I DO NOT include "digitally optomized" lenses, such as the 360 or Enhanced line of lenses, nor do I include "digitally molded" progressives, such as the Creation.

[gmanlook]

DRK hits the nail square - personalized lenses require a greater expertise to fit properly, therefore it will cost you more to fit from a labor and training aspect yes? So why charge less for your services, knowledge and expertise?

Explain what is different about fitting free form. It's all we sell and it's much easier to dispense than most progressives out there. As far as I know there isn't any fancy training or labor involved. Let me know what is involved because I must have missed it. Gary

[drk]

Well, simply the knowlege that "better" lenses exist should be worth something at this stage. Otherwise, any POW compensation should require more measurement procedures.

[Craig]

Well, simply the knowlege that "better" lenses exist should be worth something at this stage. Otherwise, any POW compensation should require more measurement procedures.

I fit 100% free form and don't have any idea what could require more time? We have done free form in a big way for at least the past 9 years and it is actually much easier to fit as it provides better results for the patient. We make sure to use as much trivex as possible and ensure the optics are as good as they get.
The difference between a "POW" design vs. a non "POW" design is not noticable to the consumer as we have proved many times over the years!! We have also tried this on my staff and they also can't really tell the difference; they all work well and better than traditional lenses that most people get in poly.

We have approx. 65% of our clients order 2 or more pairs of lenses and we use different brands for all the pairs and no one has ever said they like one over the other. We use the least expensive Pech Pro or a Unique in one pair and the Shamir Attitude Autograph for the wrap pair; the client loves them all and no one has ever come back to tell us they like one over the other.

Craig

[scriptfiller]

We started offering FF PAL's as our premium PAL offering and were actually able to reduce our prices versus the prior PAL's we were offering. No more effort is made in the fitting process than was made when fitting conventional/digitally surfaced PAL's. We do use a lab that specializes in FF technology for our wrap suns business, we have to charge a premium, but the pat. knows they are purchasing an exotic premium product.

Dispensing is actually easier with FF PAL's.

[drk]

There was a production facility whose assembly line went down, and their engineers could not find the problem.

Exasperated, they called in one of their experienced, retired assembly line workers as a paid consultant, who took out a hammer and after a sharp "rap" the production line began whirring again, to the amazement of the engineers.

The consultant presented an invoice for $5000, and the engineers complained"$5K for one hit with a ball peen?"

The consultant said, "Actually, it's $1 for the rap with the hammer. It's $4,999 for knowing where to hit it."

[EdgeOptical]

Market pricing, just like every other product out there.

[sharpstick777]

I took my practice to using 100% Digital Progressives in 2005... I stopped offering anything else. We grew from a $220K yr. to a Million Dollar a year practice in only 3 years, in part because of Digital Lenses.

Why do you still offer grinders? Grinders will be extinct eventually; Its not a matter of IF you go all digital, but when. Why not now when you can market it and gain some advantage over your competitors.