What Goes Into A Price?


This would probably offend some people in the industry, but the truth is: Glasses, rudimentarily, are not expensive to make.


So what goes into the price of a pair of glasses?

The cost of raw materials (the frame and the lenses), and many other things you may have never thought about. Sometimes these "many other things" exceed the cost of the raw materials.


Are the margins high?

Yes. It's just like many other things in retail. It can be 1.5X the cost. Or it can be 15X the cost. It depends on the item being sold and many other factors, for example the estimated rate of warranty claims. And it's even higher if you're a large chain store that can purchase with volume, or if you vertically integrate everything from manufacturing to retailing, as some large companies and chains have done.


I'm writing this to explore the reasons behind the "high" price of glasses, partly because there are a few people who are very interested in this topic and will actually read my super long essays, and partly because I secretly hope we can be a better society. To put it directly, bad customers and bad people (amongst many other things) can cause things to be more expensive, and this applies to society in general.

Some of the things I've listed and written down here tend to fall on the worse end of the scale; thankfully there are generally quite a fair bit of good people and good policies we have in place. But for the sake of pointing out why glasses are more expensive in Singapore than elsewhere (and this can also be applied in the case of why we are cheaper than in some other countries), as well as to show what goes into the price of a pair of glasses, I'm putting across the points.

Many of the points are inter-linked but I've seperated them into parts, hopefully making it easier to understand.


PEOPLE.

This is going to be a huge section, bear with me. 

The sheer amount of time it takes to make a sale.

This includes serving people who come in repeatedly but do not buy, or try the entire store to buy a earhook. Yes, someone's going to pay for the three hours it took to make a 30 cent profit, and it isn't that customer. It's the same elsewhere - not every prospective tenant who views a room through an agent eventually choses to rent it - hence the final renter is actually also paying for the agent to serve the ten others who did not rent. Property agents need to eat, and so do we. Fact of life, eh.


Society's expectations.

They are sometimes excessive for the amount of money paid (or not paid). And a handful of these people are not even shy about it. Like paying for a single vision lens and screaming that it isn't a progressive and doesn't change colour and is not made of glass and doesn't come with warranty when one loses it. Or expecting eye checks to be free. Or upon knowing that we adjust glasses for free, bringing in several pairs of glasses and expecting to be served ahead of everyone else. Or children who start destroying both the frames and the furniture and fittings in the store.

I could go on and on. Of course most people aren't like that. But then it just takes a handful of these a week, and the easy way out is simply to raise prices or hire more staff to handle the situations.

Businesses are a reflection of what society wants - see how Grab / Uber has transformed the industry. Do we as a society want to pay for others to do all of the above and more? I mean, we are not the Government, we are a business. We don't collect taxes and give out GST vouchers. We simply react to the environment around us.


The ridiculous stuff.

Like someone who robbed our store with a penknife and drunk people who come in to harass our customers. Or a family who allows their elderly parent to spit at our store and throw things at our glass panels, and government agencies who cannot solve the problem even after 2 years (and counting, btw, photographs attached below). One of the more memorable ones at a previous store I worked at was when someone started smearing some cream/gel on the products. Oh and people who are hungry and expect a buffet to be set out for them. Or more recently, wanting free glasses because we owe everything to the pioneer generation.

Walau I am not the government okay. You ask HDB give me free rent lah.

And the group of people that think theft is alright, expect us to sell glasses to them at 90% off the retail price, and who are somehow very free, behave terribly, and only add negativity to the community around them. Do they wake up every day pondering whether they have done enough evil for the week?


The tricksters.

Buy 1 box of contact lenses for $20, or 2 for $30. And someone would scream and shout to return the $20 box and keep the $10 box. Nice try. Thankfully I don't sell contact lenses (but that's for another article on why I don't). And those that put a 10% deposit and never come to collect their glasses; or make a ruckus during the collection in an attempt to get a better price, even before putting them on properly, "ayio cannot ah cannot ah", and when you ask them what's the issue, "cannot, not good, cannot ah cannot ah, can you give me a discount, else I don't want to collect and I'll tell everyone you very lousy". Yup, happens to every new store. And those are just part of the whole list of tricks I've seen - since I've always been doing new branches for my previous employers.



LEGISLATION
The rules and laws. Because we are a country based on law. Maybe except the harassment we've been getting.

The Physical Store.

Everything has to be approved, even the air-conditioning. As with alterations, drawings have to submitted, and if you operate in a mall, even the renovation and decor need to be approved. Moneh moneh moneh.


Licenses.

Yes, some trades like ours are regulated. And then there is continuing education (that nurses, doctors, and other healthcare professionals have to go through as well).


Goods

Some goods have to be approved (contact lenses have to be tested, approved, and be traceable by lot numbers).

Ultimately the laws are put in place with respect to what the public wants. Although we cannot pursue a referendum like what Taiwan did in order to decide on important matters, we vote for candidates who then have a say in parliament, and that's how laws are made, although we usually bother about sheltered walkways and lightbulbs more. What if we actually bothered more about these stuff?

I have to say though, that these laws are not necessarily bad. In fact they are good in helping to maintain a consistent standard. You wouldn't want contact lenses tainted with bacteria, do you? So yes, you pay for it. Unless you pioneer generation, then maybe give you discount and free coffee at hawker centre.



THE MARKET AND INDUSTRY
How things work.

Rent prices

Many people think that in central locations, glasses are more expensive simple because of the rental. This is not true. In most "good" locations, there is more crowd, hence more customers unless the customer type is incorrect (e.g. outside a primary school VS outside an LRT station). Hence, the larger crowd automatically pay for the higher rent. In fact, if one looks overseas, stores in rural areas often charge higher prices. However for central areas, having more foot traffic means more staff are needed, and with rising salaries comes rising prices of glasses.


Into the bin

Just like the clothing industry, not all the goods we bring in are eventually sold. Fads die off, colours get limited, and so on. I guesstimate that on average, 50% to 70% are sold before they are taken off the shelves (or become so obsolete that it shouldn't be on display). Many consumers like to have a choice and to feel that they have made the right choice - like how you'd choose your wall colour or floor tiles - and so stores have a variety of products available, even though it's already clear that some products (or colours) will never sell and end up in the bin instead. Yes, we have things there for you not to choose it!

And you wouldn't be happy if a store is unable to help you when, say, you sit on your glasses and need a replacement, right? And so there is also a percentage of frames kept there just in case. Yes, eventually they end up in the bin.


Bidding for rental space

Many different kinds of businesses vie for rental space; this includes very profitable and less-profitable trades. Try out-bidding a cash-rich spa for a shop space. While for instance HDB tries to control the market by reserving certain shop spaces for certain trades - you'll realise every new cluster of BTO has a doctor, a minimart, an eatery, and a bakery - optical stores often have to bid with everyone else. But hey, it's not like HDB or any landlord can control everything - imagine if you had to pay more for your HDB apartment if you have more kids, or if you had more furniture, or if you tend to walk outside more often hence wearing out the tiles more? You probably wouldn't be happy. And so tenancies cannot be that strictly regulated either.


Comparison with other countries

In some developed countries, people go to get their eyes checked, pay for it, and do their glasses elsewhere using the prescription. This spreads out the cost and hence the glasses itself can appear cheaper - sans the eyecheck. Locally, the cost of your eye check is actually spread out into the price of the glasses themselves, and so are the other costs mentioned above, hence it can appear to be more expensive. And then some places are cheaper overall, like in Vietnam or Thailand, which needs no explanation why.



I'M A SUSHI CHEF
Why are you so much more expensive than online? Why your margins so high?

Ultimately optical stores are like contractors - we bring together and curate the different suppliers and brands, hence bringing convenience to a customer (and often assurance too), or like a restaurant - bringing together different ingredients for you to enjoy a good meal with your loved one.

There's nothing wrong in comparing, but telling an optical store that it's more expensive than online or getting direct from a supplier is like telling a contractor that you can screed your concrete floor or tile your kitchen at half the price. Or a sushi chef that you can also make sushi.

So yes, I am earning your money. Or if you still insist,

"Well, then alright, go do it yourself."

;)



KEEPING PRICES LOW AND THE EQUILIBRIUM
Learning from the giants on how to keep prices low.

We could work efficiently. Look at Owndays. Efficiency in procuring goods, pricing, service, and everything else. Critics argue that they are just like a fast food chain, grab and go. But they've just proven that there's a big enough portion of people who don't give a damn about the bells and whistles that a typical traditional optical shop offers. And so it works!

When I was staying overseas, I'd walk into a supermarket, get my goods, pass through the self-checkout, and load my stuff into my car by myself. This seemed very normal to me, but talking to some of the locals made me realise that they preferred having someone to greet them, engage in some small talk, and bag their groceries, and even help them carry it out. What a difference!

Here, we still dig for coins when we visit the wet market. In China, people use their mobile phones. So yes, once again a stark contrast. Every society's expectations are different - it depends on what the average citizen or the government wants.

So, I believe there is a kind of equilibrium - if many people demand something, that something will appear to fulfill their requests. If fast retailing works for glasses, that's because people want it. If prices keep increasing, that's because people want it to. If a business does not fulfill people's needs, it will eventually die off and another business will replace it. That's just the cycle, the equilibrium of things.

There's a lot more that we do in feeble attempts to keep costs low, but that will lengthen this already long essay.

So to conclude, if Singapore thinks that it is okay for someone to tear stuff off from the front of our store, spit at our store, make arson threats, threats of violence, throw things at our glass panel, and so on, or if the relevant authorities are not able to solve these issues, then eventually society pays for it as well.

Or if you keep taking chicken rice uncle's fork and spoon, he has to buy new one, and he will sell his chicken rice more expensively.


The tear-er, who is the son of the following:

The spit-ter / arson threat-er / etc

(Note: there are other ridiculous people but I've chose not to put their pictures here because they have ceased to cause a nuisance, etc.)



A LITTLE END NOTE

All that being said, one might think that I'm some big boss earning big bucks and driving some big car since I earn a huge margin on every pair of glasses I sell. Well, yes to the margin but no to the big bucks.

The prices and revenue that one sees now - that's just enough to keep the store afloat, and hence there will be some contemplating to do for the year end, to see if all these is worth it at all.

In addition to trying to earn a living, I also aim to try and do good (although admittedly that's a big thing to say and I don't know if I have lived up to it). Which is why I started a store based on very clear and honest pricing, and having the integrity not to "chop carrot head". And it should be good, right? But soon the "everything else" overtook the "raw materials". Amusing.

It took me some time to post this, partly because it takes time to compile and pen my thoughts down, and the other part because I don't think there are many businesses that have openly and directly stood up against another party, considering that customers and the residents here are my bosses and pay my bills and help me afford my next plate of cai fan (with sardine fish okay, I am semi-high-SES).

In short, businesses are afraid of offending people. The customers. The authorities. Our neighbours. The industry. Which reasonable business wouldn't be? And so we suck it up. And this eventually becomes the norm.

We see lots of the usual "our staff deserve mutual respect" but that's about it, and I do wonder why we aren't more open-minded towards such issues. Or is it just plain apathy? Why aren't we standing up against plain absurd behaviour. Or is it just me? Maybe all of the above is such a norm in society. Or a norm in Kim Keat Ave. Yup, spit, shit, and pee anywhere you want? Steal something. Normal?

Hardly the Singapore I know.



So yes. For quite a bit of the stuff you buy today, you're actually paying more for everything else instead of the item you're getting. And customers don't seem to care. So businesses continue to do it. We are just a small drop in the big ocean. What can we do? Stand by our beliefs and hopes - for how long?