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Thread: How to price product separate from service

  1. #1
    Rising Star Michael I. Davis's Avatar
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    How to price product separate from service

    There has been discussion on how to separate pricing of product from service. Does anyone have any specific idea how to do this? All prices theoretical.

    For example; Frame X my cost $xxx. SV CR39 scratch coat blanks $x.00/pr $xxxfor this job.

    Now shipping, time to add to inventory; should go to price of the product

    Service; helping pt pick the frame and discuss lifestyle and advise on the product, lets say 1/2 hour; optician makes $XX/hr so 1/2 $xx.

    Initial adjustment and appropriate measurements; $xy? (does not take as long as picking out the glasses but an obvious separate service perhaps a greater charge).

    Time to order lenses, edge to frame, check final product (1/2 hr) $XX perhaps more, how much more? Depend on complexity of the job?

    Now the hard part, overhead for the practice that includes everyone's salaries, rent heat phones all that jazz.

    Dispensing fee ??

    Do we break this down individually or one large dispensing fee? This is where I start to get a headache.
    Last edited by Steve Machol; 01-25-2019 at 08:41 PM. Reason: Removed wholesale prices as per forum rules.

  2. #2
    Master OptiBoarder optical24/7's Avatar
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    My 1st question would be, what are you trying to accomplish? Compete with the 10's of dozens of low ball eye glass providers out there? If that's the case, good luck. You can certainly do what Costco does: buy close-outs at lower pricing and only offer a very small array of budget lenses. Or go the America's Best (worst) route and carry really low quality, cheap Chinese frames w/CR39 lenses.

    But realize; Costco has other drivers to their location, they sell a plethora of other products that drives foot traffic. AB rely on heavy advertising of their cheap pricing. So, you would need a lot of foot traffic and/or advertising.

    On the advertising thought; you could certainly advertise "wholesale" type pricing. I think though that it would be tough to do without appearing to be baiting and switching. " Yes Ma'am, your glasses are only 59 bucks, but the dispensing fee is 70." ( If you want to appear low, just advertise by the single lens price, not a pair price. LC did that back in the 80's for an extremely short period of time, short because of the fall out over the appearance of baiting and switching.) Advertising, consistently and heavily (which is what you'd have to do) can be extremely costly. That added cost would have to be accounted for in you pricing, driving it up.

    You could try to find a location with heavy foot traffic, those are fairly expensive, driving up your costs further. If you lowered your profit by say 25%, you'd need 25% more sales and put in 25% more work just to stay where you are. If you are going to compete on price you are going to go up against some big money players out there that can out compete you at pricing due to economies of scale.

    In closing; Why would you want to be the 1st kid on the block to try this scheme? Do you think the public is ready to embrace a dispensing fee that very well could be higher than the cost of the cheap glasses? (Good luck trying to get even 25 bucks out of someone that got their Zenni's for 10 bucks). My experience is that people don't like "add ons" like, " Your lens costs this, your material is this, the coatings cost this the drill holes costs this, ect". That's why we here bundle everything for one price other than Transition. All our lenses include digital/aspheric/atoric, AR, thinner material, ect. We get virtually zero push back on pricing. It's a lot easier to sell down than up. When you take the time to explain the benefits of each aspect of the lenses you will be designing for them, patients tend to understand the value they are getting. It's pretty tough to spend time educating them when you need to "turn and burn".

    IMHO, offering products/services, bundling and knowledge that your competition doesn't have is a better policy for success. We've grown to 3 locations in the last 10 years by word of mouth, taking no insurance using this philosophy with tons of competition around us .

  3. #3
    OptiWizard
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    This is a great plan if you want to go out of business. Or if you want every person who walks in the door tell you not to help them pick out frames because they don't want to pay your fee. Or continually bring in broken frames because they were adjusting the frames themselves to avoid your fees, or took it somewhere that did it for free and now it is mangled. etc, etc. It is just a bad plan all around.

    Sell your self not the product, bundle as much together as possible.

  4. #4
    Rising Star Michael I. Davis's Avatar
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    In closing; Why would you want to be the 1st kid on the block to try this scheme?


    Because if this is a workable idea and no one goes first, it never happens. So far we are 2 for 2 thinking it is not a good idea. Anyone else?

  5. #5
    Manuf. Lens Surface Treatments
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    Redhot Jumper .......................................here is some food for thought.

    Quote Originally Posted by Michael I. Davis View Post



    Because if this is a workable idea and no one goes first, it never happens. So far we are 2 for 2 thinking it is not a good idea. Anyone else?



    If you are convinced that the standard run of the mill dispensing optician will still be around in another 10 years, do not go for it.

    If not, only if you are top of the line in everything you do, at higher than usual prices you will easily survive.

    Self refracting for the Rx is going to be here in a month or so, and will increase with a good speed over the next few months and years, and there will be others jumping into the field anytime in the near future.

    The older generations are opting out of this world, and their role is being taken over by the cell phone kids, who have a totally different way of thinking and acting.

    The major corporations in our field are heavily banking on the internet sales of their products the next few years, on a world wide basis.
    ..........and what they are going to do for servicing those products is still an open question. However they already own over 10,000 optical retail stores they could use and activate for starters.

    .......................................here is some food for thought.
    Last edited by Chris Ryser; 01-29-2019 at 02:33 PM.
    Chris Ryser
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    DLO. NA.IC.I.T.PO

    http://optochemicals.com............................. http://arcoatings.com

  6. #6
    Manuf. Lens Surface Treatments
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    Redhot Jumper the only route to go for optical eyeglass frames these days..........................

    Quote Originally Posted by optical24/7 View Post

    My 1st question would be, what are you trying to accomplish? Compete with the 10's of dozens of low ball eye glass providers out there? If that's the case, good luck. You can certainly do what Costco does: buy close-outs at lower pricing and only offer a very small array of budget lenses. Or go the America's Best (worst) route and carry really low quality, cheap Chinese frames w/CR39 lenses.

    .........................the worst route, is just about the only route to go for optical eyeglass frames these days.

    Tons of manufacturers that will make frames for you, and brand them anyway you want for a surcharge and might give you an exclusivity, if the quantity ordered justifies it.

    and "CR39" lenses are still the closest plastic optical quality to glass lenses, while the optical retail sells Polycarbonate lenses lenses which are produced by injection molding at 8 lenses in a shot of a few seconds, as a prime quality.
    Chris Ryser
    ________________________________________
    DLO. NA.IC.I.T.PO

    http://optochemicals.com............................. http://arcoatings.com

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