How is Warby Parker able to sell eyewear at such a low price?

It all started in business school. In the fall of 2008, Neil Blumenthal and David Gilboa, both 28, were in the first year of their MBA program at the University of Pennsylvania’s Wharton School. They were in a computer lab kicking around business ideas with classmates Andrew Hunt and Jeffrey Raider when the topic of eyeglasses came up. Gilboa had recently lost his glasses, and was shocked to learn that a replacement pair would cost $700. He recalled thinking that his iPhone cost $200. He thought how could an iPhone, that can do unimaginable things, cost $200 and a simple pair of glasses cost $700?

Blumenthal thought he had the answer. He had spent time working for VisionSpring, a nonprofit that distributes eyewear to low-income people in developing countries. While at VisionSpring, he learned that the global eyewear industry was dominated by a single company, Luxottica. Luxottica is the world’s largest eyewear company and controls over 80 percent of the world’s eyewear brands. It owns Oakley, Persol, Ray-Ban, Sunglass Hut, LensCrafters, and Pearle Vision. It also owns the eyewear stores located inside several major retail chains, including Sears Optical and Target Optical.