Ever wonder why sunglasses are as expensive as they are? You will be surprised to find the majority of the price comes from a near monopoly the company has on the sunglasses industry. From my analysis of the public financial statements, the majority of what you are paying for is spent on licensing fees and a majority on the inefficiencies of running the company. .
How’s it going everybody this is beat the bush today we’re going to talk about sunglasses because they’re so expensive and every single time i buy a name-brand pair just like these these are versace and they cost me about $200 and they’re pearl polarized so they’re a little bit more expensive but every time when i buy them i feel a bit ripped off because you know
When you take these pair off it’s so light is it may not a gold or anything there’s no gold on here or anything it’s all plastic with a little bit of metal how can this be $200 the thing is a lot of the top name brand sunglasses they’re actually made by the same company called luxottica today we’re going to look into these sunglasses and find out exactly what your
Money is paying for long time ago i had a pair of oak leaves and then later on got a pair raping and thinking that yeah maybe they’re different companies different design right it turns out they’re actually a house brand made by luxottica the same company when they own it that means they don’t have to pay any royalties to anybody like these designer labels over here
What i understand is that these designer labels have a specification of what they kind of want – sunglasses to look like and then actually luxottica designs it for them and they approve it it’s not like the designer labels actually design it and then license it to luxottica that means when you’re buying one pair or another it could have been from the same exactly
The same cad designer that was you know just designing it a little differently for each brand something to think about the take away from all these is that when you walk into a store and it has all these brands and stuff it gives the impression that you have a lot of selection yeah it is a lot of selection but it’s actually all made by the same company and a lot of
People don’t realize this they have a lot of different stores the name differently but it’s really the same store so lens crafter pearl vision sears optical target optical are all stores by luxottica i’m i’m not naming the ones i didn’t know there’s a lot of different ones and a lot of different brands too but these kind of give you an idea of how vast this salty
Branded conglomerate really is maybe next time i’m going to buy some generic ones from either costco or walmart hopefully they’ll fit fine because when you buy a pair like this it has the name brand you’re paying a lot for the name mean brand also for the style and selection because you can just walk in the store and then put it on and you go does they look good
On me does it you know feel okay i mean kind of do the same thing with the stores as well but they have a smaller selection so i went ahead and looked at luxottica ‘s financial statements because it’s just what i like to do and kind of look at their business in 2007 they had a revenue of four point nine billion dollars and that’s a lot of sunglasses but in 2015
Only eight years later they almost doubled it in 8.8 billion dollars of revenue worldwide and the cost to make these is 2.8 billion dollars the cost would be you know like they’d have to design it they have to actually manufacture it somewhere it says this one here made in italy so they probably have to stamp out these metal things extrude these plastic and high
Polarized lenses and things like that usually you can take a look at the item itself and just kind of see how much effort they put into actually making this thing and you know you can just take one glass and see that the actual cost to make this it doesn’t cost that much it’s plastic okay so it says here in the financial statements they have thirty two percent of
Costs pay for the plastic pay for the factory and things but really it shouldn’t be that high because on a pair of two hundred dollars and glasses sixty-four dollars is cost give me a break most of the cost it’s going to be in licensing fees and they’re going to be paid out to all the designer labels you know like for this one for sake did moat i don’t know how
Much is going to go to them but i believe a really big portion of this see four dollars i’m just going to guesstimate that this thing probably takes less than $10 to make a ballpark so the rest of this goes for sachi okay that’s that’s fine and all because you look at this it’s $200 and glasses the designer label should get some money right but where does all the
Rest of the money go to you’re still 136 dollars to account for in their financial statements you can see that the profit is about 10% of these glasses $200 sunglasses $20 is going to be their profit 20 dollars it’s going to go in to their bank account after they pay for everything you know such as operation we pay for their office space paying for the rent or
Whatever for all these stores that they have open they need to have advertising fees and they also need to pay the people to to do the work right such as salaries and bonuses but to me when i look at this this is a lot of money spent on overhead here most the money that you’re paying is really going towards running the company itself from what i can tell looking
At other financial statements this is kind of like a bloated company where they’re just burning a lot of the money and not keeping a lot of the profits so when i look at the $200 here and what it divides up into i see that most of it is in licensing fees and a lot of it could be buried inside inefficiency in the company so are there any alternatives if you want a
Pair of designer sunglasses well one thing is if you’re stuck on designer sunglasses you really want designer sunglasses or something you can do because you have to buy it from them but there are alternatives if you don’t care too much about the brand once you know that these sunglasses are designed by the same company and that they’re not really from the designer
Label themselves you kind of go well you know is it really worth it to because this is just a pseudo label it’s just they’re just putting a brand on it and you’re paying a bunch of licensing fees when you think of it that way it may not make us much to buy decent glasses if you’re interested in finding more about this company and what all this sunglasses business
Is all about i’ll leave a link right here about luxottica it’s a 16 minute spot about them don’t forget to give me a leg over here and let me know in the comments section if you’re still going to buy designer label sunglasses even though they’re $200 and don’t forget to subscribe over here thanks for watching
Transcribed from video
$200 Sunglasses: What are you Paying For | BeatTheBush By BeatTheBush
