Page 31 - 2015 Key Metrics-Assessing ECP Practice Performance

Frames Mark-Ups
Independent optometric practices mark-up lower cost frames more than high-end frames. The average mark-ups provide guidelines for
planning frames retail pricing strategy.

Frames Mark-Up by Retail Price

Mark-up

5x
Average Mark-up*
4x
3.09x
3x 2.84x 2.76x 2.64x 2.59x
2x
1x

$99 or less $100 - 199 $200 - $299 $300 - $399 $400 or more
Retail Price
*Selling price divided by cost-of goods

The average retail mark-up multiplier for frames sold by independent practice ODs was 2.6 times the wholesale frames cost during
2010, based on OD estimates of their retail sales mix by price point and average frames wholesale cost. This is the same median mark-
up multiple calculated for total eyewear sales by ODs, based on their estimates of eyewear sales and cost-of-goods. A 2.6x mark-up
yields a 61% gross profit margin percentage.

Average Frames Mark-Up

Low Median High

1.5x 2.0x 2.2x 2.4x 2.5x 2.6x 2.7x 2.9x 3.0x 3.2x 3.8x

5th 15th 25th 35th 45th 50th 55th 65th 75th 85th 95th
percentile ranking

Frames Average Wholesale Cost per Pair
The median independent practice OD estimated in 2010 that the average wholesale cost of the frames they held in inventory was $65.
The median wholesale frames cost has increased about 2% annually in recent years. Practices with an average frames wholesale cost
of $50 or below are likely to have an opportunity to improve sales of higher end frames and increase the average eyewear sale.

Key Metrics: Assessing Optometric Practice Performance 2015 29