What Are You Really Paying For? The True Cost of a Licensed BrandPosted: December 9, 2015
“Why do your products cost as much as brands like Versace?” People have asked.
My short and sweet answer: “Because we have higher quality products.”
Upon seeing the puzzled look on their face, I’d explain further.
Most consumers don’t realize the difference between “licensed brands” and “independent brands”.
In terms of eyewear, a pair of “licensed brand” frames will bear the logo of a big and recognizable brand, such as Versace, Gucci, Christian Dior, Michael Kors, Giorgio Armani, Prada, Ferragamo, Valentino…etc.
These fashion power houses give optical companies the rights to develop, manufacture, distribute and sell products bearing their logos. This kind of agreement, depending on how powerful/recognizable the brand is, could potentially cost the eyewear company millions of dollars on the rights alone. They receive permission to use the name for a number of years (typically, five) plus, an additional amount of time per each unit sold.
Meanwhile, the luxury house (such as LVMH) that owns these big fashion brands will sit back and collect the license fee and royalties without ever needing to know anything about the ins and outs of optical design or manufacturing.
Eyewear companies such as Luxottica (which owns Lenscrafters/Sunglass Hut/Sears Optical/Peale Vision and holds the licenses to Chanel, Tiffani, Bvlgari, Oakley, Coach, Prada, Armani, Prada, Ray Ban, etc.), and Safilo Group, (which holds the licenses to Fendi, Boss, Marc Jacobs, Dior and owns nine thousand retail stores worldwide) handle the process of creating and producing the branded eyewear lines.
Taking the licensing fees and the cost of the royalties into consideration, the in-house eyewear designers have a very rigid budget when creating the style. Often times, this means the quality has to be sacrificed. In order to turn a profit, the styles must be easily mass produced. Their business strategy hinges on the idea that people will buy the products for the recognized logos regardless of quality.
However, an independent eyewear brand, such as TC CHARTON, has none of those embedded costs.
In my case, because there is no one above me to dictate the budgets and no board members to answer to, I have total freedom in the creative process. I get to pick the best quality components and materials and can just focus on creating the most beautiful products possible. Instead of spending the money on paying royalties and licensing fees, I get to spend it on quality and craftsmanship.
I am not alone. Behind every independent eyewear company, there is someone who is passionate about the art of designing and producing a distinctive collection that reflects their artistic sensibilities. Unfortunately, when dealing with licensed brands, they will have to compromise creativity for the sake of profit.
I am fortunate because I have no such constraints. This is all I know, and I cannot imagine doing it differently.
So before you shop for your next pair of frames, please remember: if the brand sounds familiar and bears a big logo that appears on clothing or other consumer goods, it is a licensed brand. A discerning consumer will always seek out lesser known and beautifully crafted pieces, as these are the styles that truly embody the artistry and vision of a true designer.
For more information, I suggest reading Deluxe – How Luxury Lost its Luster, by Dana Thomas. It is a wonderful book that goes into intricate detail surrounding the issues plaguing licensed brands.