How Does Warby Parker Make Money?

Warby Parker’s Business Model in A Nutshell

Warby Parker is a prescription and sunglasses retailer that focuses on vertical integration to enhance the customer experience by owning the optical labs where the lenses are developed and by owning physical and online stores for customers to choose from. among a variety of products. Warby Parker leverages programs like the Home-Try-On program and “Buy a Pair, give a Pair” to reduce long-term customer acquisition costs, and encourage repeat purchases and existing customer referrals.

Origin story

Warby Parker is an American online prescription eyewear and sunglasses retailer. The company was founded in 2010 by Jeffrey Raider, Andrew Hunt, Neil Blumenthal, and David Gilboa.

The idea for Warby Parker came about after one of the founders lost his glasses on a backpacking trip. The cost of replacing the glasses was so high that the person in question went through a grueling first semester of graduate school without them.

While studying for their MBA in 2008, the four friends began to wonder why the glasses weren’t being sold online.

Blumenthal, who had previously run a nonprofit organization to sell eyeglasses in the developing world, emailed the other three in the middle of the night and suggested they start their own company.

This, he argued, would provide much-needed competition in the industry, hitherto dominated by a single company that kept prices artificially high.

Warby Parker was launched on February 15, 2010, after the founders received an initial investment of $2,500 from a new company management. the scholarship program at the Wharton School of the University of Pennsylvania. The company was subsequently inundated with orders after GQ called it ” the Netflix of glasses”, resulting in Warby Parker meeting its first-year sales target in less than three weeks.

The first physical store opened in 2013 in New York City, with a subsequent store opening in a vintage school bus. In 2016, Warby Parker announced plans to open its own optical lab and manufacturing facility to cut out the middleman.

Ultimately, the company brought about a momentous change in the eyewear industry. By designing eyewear in-house and engaging directly with consumers, the company offers high-quality, fashionable eyewear at a fraction of today’s price. Does Warby Parker Take Insurance?

As explained in its financial brochure:

The opportunity for prescription glasses

The corrective lens market has several underlying advantages, as it presents itself as more robust to economic cycles and a market is driven by a medical condition that requires ongoing support.

As Warby Parker points out in his financial prospectus he presents:

• Consistent replenishment cycle – where contact lenses are replaced daily, weekly, and monthly, thus creating the opportunity for a recurring business administration. that can be sustained with repeat purchases.
• Increase the use of screen time – With the use of more and more screens in our daily lives, new prescription products such as blue light filters and light-sensitive glasses have become a key element driving the management of companies.
• E-commerce penetration is still nascent – ​​The eyewear industry has been one of the slowest to adopt e-commerce, so this created a great opportunity for Warber Paker, which, along with retail stores, is focused on online retail.

Warby Parker’s Mission, Vision, and Core Values

Warby Parker’s mission is “to inspire and impact the world with vision, purpose, and style (without charging a premium for it)”.

While his vision is “To provide a vision for all.”

And its core values ​​revolve around fun, speed, originality, and a focus on the customer experience (through programs like Home-Try It and its exclusive retail stores).premium).

Warby Parker model “Buy a pair, give a pair”

As highlighted in its financial brochure:

We started Warby Parker 11 years ago to solve our own problems as frustrated consumers and make a positive impact. We aspire to demonstrate thata business administration. you could scale, be profitable, and do good in the world, without charging a premium for it. Since our founding in 2010, we have pioneered ideas, designed products, and developed technologies that help people see. We offer everything our customers need for happier eyes at a price that puts money in their pocket, from quality designer eyeglasses (starting at $95, including prescription lenses) and contact lenses, to eye exams. sight andvisiontests, and they can meet with us online, in our retail stores, or even at home. Wherever and whenever they need it, we’re there to make exceptional Vision Care simple and accessible. Charming, too.

Similar to the TOMS One-for-One model, Warby Parker uses a “Buy one pair, give one pair free” model, which is intended to help the company scale its vision.

As further highlighted in its financial brochure:

We also believe that everyone has the right to see. Glasses allow people to learn, work and navigate the world with more safety and dignity, but the 2.5 million people around the world who need them don’t have access. To help address this issue, we partner with nonprofit organizations like VisionSpring to ensure that for every pair of glasses sold, a pair is distributed to someone in need. VisionSpring estimates that, on average, one pair of glasses improves personal productivity by 35% and increases monthly revenue up to 20%. Through our Buy a Pair, Give a Pair program, we’ve helped distribute more than eight million pairs of eyeglasses to people in need since the start, increasing the earning potential for low-income people.household incomein excess of an estimated $1 billion.

Scaling Up: Warby Parker Supply Chain Integration

One thing the Luxottica Case teaches us is just how powerful a vertically integrated part is. (where you control most of the steps from manufacturing to manufacturing ), thus controlling the quality of the product (from sourcing to manufacturing) and the process, therefore the customer experience.