Asked LEGO about price increases, Response Inside

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Asked LEGO about price increases, Response Inside

Post by legitimatealex » Thu Feb 16, 2012 4:18 pm

Thanks for contacting us about set pricing.

We're really sorry to hear that you're disappointed with the pricing of new LEGO® sets.

We think it's important that LEGO toys are imaginative, creative, fun and last for ages! So we work really hard to make sure we use the very best materials so that one day you can pass on your sets to your grandchildren.

In fact we have a 28 point check list to make sure the quality and color of all our bricks are exactly right, and there are only 5 factories in the whole world which are good enough to make LEGO sets! We have a team of experts in Denmark whose job it is to invent and test new LEGO sets, themes and toys. They tell me it takes years to check everything. They need to test all the new ideas, talk to the factory about how to make them, work out what sort of box it needs to go in and then deliver the new sets to all the shops in 130 countries!

As you can see, a lot of thought goes into your toys so I hope you understand we invent and make LEGO sets to last a lifetime, or even longer! This along with the cost of manufacturing and shipping influences how we price out sets and I am sorry that you are unhappy with it.

I do not know what will happen in the future, but I have passed your comments along to the appropriate departments to take into consideration. We do appreciate you taking the time to voice your opinions and concerns, it is something that we take very seriously.
My concern that I sent in was that the prices on the sets were rising more quickly than they should be and that there seem to be fewer pieces included in sets as compared to just only 2 or 3 years ago, as well as a concern about the number of licensed sets driving up prices across the board. I think I mentioned the new summer sets this year being very expensive and mentioned the Captain America motorcycle price.

Thoughts, Comments?

I think the response I got does a good job telling me what exactly can influence the costs, as well as their concern with quality but at the same time I don't feel entirely assured that the prices wont just continue to climb. I'm also a bit skeptical about quality, especially with the Chinese plastic that is being introduced in more and more sets.
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Re: Asked LEGO about price increases, Response Inside

Post by brickity » Thu Feb 16, 2012 4:30 pm

I think you should be happy you live in the US and not the rest of the world where we get gouged. What I find really funny is that Canadians get a 25-30% "gouging", which forces us to buy from other countries. I don't want to complain too loudly, because I know we don't get gouged as badly as some other countries (Australia anyone?), but what makes it so painful is that we live right beside the US and the product is the exact same.

Anyhow, just saying you should consider yourself lucky... and on top of that, the US seems to have the BEST clearance sales allowing you to purchase sets for a fraction of what the rest of the world pays.

:)

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Re: Asked LEGO about price increases, Response Inside

Post by sidersdd » Thu Feb 16, 2012 4:35 pm

I think what you got was more or less a canned response for why LEGO sets are more expensive than MegaBlocks sets, but not why LEGO prices are rising faster than inflation. Anyone dared to look at the MegaBlocks price trends for comparison?

Also, one simple answer to your question is that people are paying it so why not charge more? At some point it breaks down sales growth but I don't think we're there yet.
Last edited by sidersdd on Thu Feb 16, 2012 5:56 pm, edited 1 time in total.

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Re: Asked LEGO about price increases, Response Inside

Post by striderhiryu » Thu Feb 16, 2012 5:53 pm

I take it their 28 point checklist doesn't include cracking parts. In my less than 1 year old collection I'm fairly certain that there are more cracked parts than I have in my big box of 15+ year old lego.

Unfortunately I'm not a fruit fly or else I could validate their time and money spent into making lego last a 'lifetime, or even longer!"

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Re: Asked LEGO about price increases, Response Inside

Post by koromo » Thu Feb 16, 2012 7:48 pm

5 Factories?

I know one must be in Poland. Where are the others? (and why isnt Poland listed on the country of origin listing of the packaging?)
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Re: Asked LEGO about price increases, Response Inside

Post by ncbarrett » Fri Feb 17, 2012 6:42 am

While I don't like the price increase, I am ok with it. Everything is going up. Except my pay. ;-)

re: captain America motorcycle, it has been mentioned it is not a complete set due to not wanting to spoil movie.
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Re: Asked LEGO about price increases, Response Inside

Post by sadowsk1 » Fri Feb 17, 2012 8:28 am

ncbarrett wrote:While I don't like the price increase, I am ok with it. Everything is going up. Except my pay. ;-)

re: captain America motorcycle, it has been mentioned it is not a complete set due to not wanting to spoil movie.
I hear that.

It makes you appreciate networks of people looking to find and share the best deals around. I'm still pretty pumped about scoring the latest falcon at TRU for 82 bucks by just using coupon codes and timing this past fall.

It makes me wonder how many AFOL make up the overall market of Lego buyers. I always thought that we are a minority in the Lego market and that Lego will keep raising prices and the vast majority will keep buying them up. New Lego fans and for my own genre, new Lego Star Wars fans are being born everyday.

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Re: Asked LEGO about price increases, Response Inside

Post by Legobrandon » Fri Feb 17, 2012 11:11 am

I remember reading somewhere that the AFOL market is just over 5%. I'm sure it is higher than that.
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Re: Asked LEGO about price increases, Response Inside

Post by silvashado » Thu Feb 23, 2012 7:05 am

I've also heard that some reasons why prices are going up is the rising cost of gas and shipping costs. The cost to make plastic has gone up so they have to raise their prices because their base costs have risen. Also, if it's a license, it's hard to say what the license cost and that definitely will affect cost.

But honestly, I don't think the prices have gone up that badly, not considering everything that's going on in the world to affect the economy and the price of goods. But it's also why I almost always buy LEGO on sale or at least with the assistance of the VIP program to earn $5 off.

It may be easier for me than some because I belong to a local LEGO club and we have a partnership with the local LEGO store to put our displays into the showcase window. When we do that, each person involved in the display gets to buy 5 sets at 30% off. So that really helps to buy the larger sets. My club is small enough that I get to do this at least twice a year.

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Re: Asked LEGO about price increases, Response Inside

Post by Orangechef » Fri Feb 24, 2012 7:24 am

I have mixed feelings on this. While the cost of ABS plastic has gone up we're not talking about the price doubling or tripling. On the scale that LEGO is buying at this should increase the price per hundred pieces by a dollar or more like we've been seeing. Also, while the cost of gas has gone up, the biggest transport for LEGO would be by container ship, and there's currently still an oversupply of container ships so the price shouldn't be going up much there either.

Personally my hope is that the increases aren't so much LEGO driven (increase profits / cover costs of products like LEGO Universe) as they are retailer driven. I've been a little wary of the current company head though after I saw that he recently weighed in on Europe's economics issues - not his place as the head of a toy company.

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Re: Asked LEGO about price increases, Response Inside

Post by mah4546 » Tue Feb 28, 2012 2:19 am

brickity wrote:I think you should be happy you live in the US and not the rest of the world where we get gouged. What I find really funny is that Canadians get a 25-30% "gouging", which forces us to buy from other countries. I don't want to complain too loudly, because I know we don't get gouged as badly as some other countries (Australia anyone?), but what makes it so painful is that we live right beside the US and the product is the exact same.

Anyhow, just saying you should consider yourself lucky... and on top of that, the US seems to have the BEST clearance sales allowing you to purchase sets for a fraction of what the rest of the world pays.

:)
How is that LEGO's fault? It's not.

It is not LEGO's fault that America is a low tax country with virtually nil import tariffs on consumer goods (in fact, just about the only consumer good with an import tariff is pickup trucks, go figure).

It is not LEGO's fault that the United States has relatively cheap energy costs to the rest of the world that drastically lower transportation and logistics cost.

It is not LEGO's fault that the United States has an insanely low sales tax rate, as low as 0% in some areas.

It is not LEGO's fault that the United States is dominated by large retailers that buy in huge bulk, which contributes to awesome economics of scale that allows prices to be lower.

It is not LEGO's fault that the United States has a population of over 300M, which allows it to spread fixed costs over a significantly higher population base than any other major LEGO market.

Canadians get no gouging. They have a smaller population base, much higher taxes and higher transportation cost. What is LEGO supposed to do? Sell product at a loss to be "fair?"

And LEGO is ridiculously expensive in Oceania because of transportation costs and the country's insane tariffs. Again, not LEGO's fault.

You think Americans save a lot on LEGO? You don't want to know how cheap a Porsche Cayenne is here.

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Re: Asked LEGO about price increases, Response Inside

Post by countryboy » Tue Feb 28, 2012 9:29 am

mah4546 wrote:
brickity wrote:I think you should be happy you live in the US and not the rest of the world where we get gouged. What I find really funny is that Canadians get a 25-30% "gouging", which forces us to buy from other countries. I don't want to complain too loudly, because I know we don't get gouged as badly as some other countries (Australia anyone?), but what makes it so painful is that we live right beside the US and the product is the exact same.

Anyhow, just saying you should consider yourself lucky... and on top of that, the US seems to have the BEST clearance sales allowing you to purchase sets for a fraction of what the rest of the world pays.

:)
How is that LEGO's fault? It's not.

It is not LEGO's fault that America is a low tax country with virtually nil import tariffs on consumer goods (in fact, just about the only consumer good with an import tariff is pickup trucks, go figure).

It is not LEGO's fault that the United States has relatively cheap energy costs to the rest of the world that drastically lower transportation and logistics cost.

It is not LEGO's fault that the United States has an insanely low sales tax rate, as low as 0% in some areas.

It is not LEGO's fault that the United States is dominated by large retailers that buy in huge bulk, which contributes to awesome economics of scale that allows prices to be lower.

It is not LEGO's fault that the United States has a population of over 300M, which allows it to spread fixed costs over a significantly higher population base than any other major LEGO market.

Canadians get no gouging. They have a smaller population base, much higher taxes and higher transportation cost. What is LEGO supposed to do? Sell product at a loss to be "fair?"

And LEGO is ridiculously expensive in Oceania because of transportation costs and the country's insane tariffs. Again, not LEGO's fault.

You think Americans save a lot on LEGO? You don't want to know how cheap a Porsche Cayenne is here.

Re-Read the Brickity's post. At no times does he state that it's LEGO's fault.... He's just stating a fact when doing comparision against the OP's pricing VS (Presumably) his own pricing.

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Re: Asked LEGO about price increases, Response Inside

Post by coreyc592989 » Tue Feb 28, 2012 12:37 pm

lol he doesn't really say WHO is doing the "gouging" lol I think it could be Canada's currency is worth MORE than ours, or something with taxes and tariffs, lol idk what that means (im not that educated in crazy words lol) (had to spell check my tyoing cause it's not with all the right punctuation lol) but like in Australia, someone on youtube said that legos cost a LOT more than here, like 2x as much....and my brother said it was because of the value of the currency.

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Re: Asked LEGO about price increases, Response Inside

Post by brickity » Tue Feb 28, 2012 2:58 pm

mah4546 wrote: How is that LEGO's fault? It's not.
They set the MSRP and subsequently their wholesale price to Canadian retailers. I'm not sure who else would be at fault?
mah4546 wrote: It is not LEGO's fault that America is a low tax country with virtually nil import tariffs on consumer goods (in fact, just about the only consumer good with an import tariff is pickup trucks, go figure).
Are you suggesting that the 30% difference in MSRP is due to Canadian import taxes and that CDN retailers are actually purchasing at the same wholesale price as US retailers?
mah4546 wrote: It is not LEGO's fault that the United States has relatively cheap energy costs to the rest of the world that drastically lower transportation and logistics cost.
I might be able to buy this, but why is the cost of Lego more expensive in countries that are closer to the original source of the product (i.e. Europe and Asia)? By the way, does Alaska get special pricing due to their transportation and logistics costs? What about Hawaii?
mah4546 wrote: It is not LEGO's fault that the United States has an insanely low sales tax rate, as low as 0% in some areas.
MSRP is before sales tax, so this argument is irrelevant.
mah4546 wrote: It is not LEGO's fault that the United States is dominated by large retailers that buy in huge bulk, which contributes to awesome economics of scale that allows prices to be lower.
Interesting argument. So small independent retailers in the US have more purchasing power than Walmart Canada? It's funny you should mention this, because Walmart Canada took a stance against Lego's pricing policy and boycotted Lego on their shelves for a year or two. Lego stood firm and didn't change their pricing. They wanted to keep their profits.
mah4546 wrote: It is not LEGO's fault that the United States has a population of over 300M, which allows it to spread fixed costs over a significantly higher population base than any other major LEGO market.
Actually, this is Lego's fault (not the population, but the fixed pricing). Would it make sense to you if each state in the US had different pricing dependent on the number of people? What about each city?
mah4546 wrote: Canadians get no gouging. They have a smaller population base, much higher taxes and higher transportation cost. What is LEGO supposed to do? Sell product at a loss to be "fair?"
They do get gouged. The population size is irrelevant, since Lego doesn't have to produce a unique product for our population. It's the exact same (box, pieces, instructions, everything is the same as the US product). And let's be honest now, when the Canadian dollar was at 70 cents per 1 USD, the price difference made sense. Lego wasn't selling at a loss during that time and CDN pricing was equivalent to US pricing due to currency rates. Now that the currency has been fluctuating at par for several years, you're going to try and sell me on the theory that Canadian logistics, taxes, and population size are what's causing the problem? I mean I completely understand The Lego Group making a silly PR statement like that and pretending it's ok, but let's be real, Canadians get gouged.

And for the record, I am saying that The Lego Group is doing the gouging. Their pricing scheme made sense 15 years ago when the currency reflected the price difference, but now it makes no sense at all. Why would Canadians wait and purchase at ToysRUs during their 25% off sale, when I can get the same price shipped to me from BN anytime of the year? If I use coupons, I can get it even cheaper and closer to 40% off. The only time a Canadian sale even gets my attention is when it's 40% or more (which is rare).

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Re: Asked LEGO about price increases, Response Inside

Post by brickity » Tue Feb 28, 2012 3:14 pm

Lastly, I don't think Canadians are entitled to Lego at US pricing. It is what it is and The Lego Group has every right to charge whatever they want for their product. Their pricing scheme is directly related to their profit margins and what they expect to make. I can accept that and I love this site, because it helps me find other opportunities to purchase from different countries.

The only thing I can't accept is the PR nonsense regarding different pricing. The simple answer is that Lego prices their product to get maximum profit, which means that Canadians (and other countries) get gouged when compared to the US. It's that simple and it sucks, but oh well... thank goodness we have toysnbricks to help maximize our dollars! :)

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Re: Asked LEGO about price increases, Response Inside

Post by striderhiryu » Tue Feb 28, 2012 3:39 pm

One thing I've noticed is that the Lego website sells the 3DS video games for $43.99CAD, whereas EVERY single other retailer I've seen in Canada sells the same video games for $39.99 or less MSRP which doesn't make much sense to me. IMO Lego is definitely doing something weird with regards to Canadian pricing. Almost feels like Lego shop automatically added their minimum 'Canadian price gouge' percentage to the price of the video games even though it doesn't reflect the market price.

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Re: Asked LEGO about price increases, Response Inside

Post by sadowsk1 » Wed Feb 29, 2012 7:14 pm

striderhiryu wrote:One thing I've noticed is that the Lego website sells the 3DS video games for $43.99CAD, whereas EVERY single other retailer I've seen in Canada sells the same video games for $39.99 or less MSRP which doesn't make much sense to me. IMO Lego is definitely doing something weird with regards to Canadian pricing. Almost feels like Lego shop automatically added their minimum 'Canadian price gouge' percentage to the price of the video games even though it doesn't reflect the market price.
Maybe it's because megablok comes from Canada...

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Re: Asked LEGO about price increases, Response Inside

Post by striderhiryu » Wed Feb 29, 2012 9:29 pm

sadowsk1 wrote:
striderhiryu wrote:One thing I've noticed is that the Lego website sells the 3DS video games for $43.99CAD, whereas EVERY single other retailer I've seen in Canada sells the same video games for $39.99 or less MSRP which doesn't make much sense to me. IMO Lego is definitely doing something weird with regards to Canadian pricing. Almost feels like Lego shop automatically added their minimum 'Canadian price gouge' percentage to the price of the video games even though it doesn't reflect the market price.
Maybe it's because megablok comes from Canada...
Kre-O comes from USA. I guess Americans should be bracing for Canadian prices very soon.

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