The different prices on LEGO in the US vs. Europe

[Stash2Sixx]

Thanks for posting this. It needed to be done. I'm glad someone came out and made an official statement. Many people have asked me at work why LEGO seems to be more expensive, and now I have a little more information to give them. Good job Mr. Ambassador!

[Tenorikuma]

I'd be curious to know the reason for Lego prices in Japan, which are fairly high (probably the same as in Europe). I suppose shipping might cost more, and Lego is definitely more of a premium toy. That said, the price is pretty reasonable when there are sales on, and sales tax is low and always included on the price tag. Amazon Japan also just introduced free shipping to local convenience stores.

I love Europe, but I don't think I could ever handle living their due to the insane taxes. In Japan, Lego and some other things might be expensive, but other things are really cheap, so it balances out.

[Kogyik]

Ok here's my input without trying to be too political.

Companies have to pay a huge amount in Taxes over there. Let's face it if the people would take care of their own health care services the companies wouldn't have to pass these deductions on to the consumer. Not only that but what is the standard work week/hours over there. Here in the U.S. the standard is 5 days or 40 hrs, but I haven't worked that in years. It is more like 6 days or 60- 70 hours a week. We here in America don't take our free time lightly and therefore if something is overpriced we aren't going to buy it.

So let's face it you are paying more for your social benefit.

I truly hope this doesn't offend anybody.

Lego maybe feels like we helped in WWII and therefore cuts us a break on the price.

[victor2000]

just sharing...

I lived in Indonesia, very close to Singapore ( only 1 hour flight ). the difference is Lego in Singapore is under direct control of TLC and lego in Indonesia is under control of a private company. BUT...look at the price ....for example:

1. the castle battle pack, which is US$12,9 in USA is only S$12.9 in Singapore or about only about US$11. this sets never enter Indonesia market.

2. 5378 Hogwart Castle, which was US$89.99 in USA, is only S$99 in Singapore or about only US$80. this sets never enter Indonesia market

3. now the last one, 7676 Republic gunship is S$199.9 in singapore or about US$140. quite expensive isn't it? but look at our price in Indonesia $210 !!!!!!!!!!!!!!!!! what the $@#% !!!!

price in other country near Singapore is as the same as Indonesia. Malaysia, Thailand, Vietnam and Philippines price is as expensive as Indonesia.

but why Singapore's price always cheaper? because Singapore is under TLC !!! it's not fair. completely not fair. not counting that Singapore always got the new item 1 month earlier than its neighbor.

what about the market? Indonesia's population is 210 million, comparing with Singapore's 5 million. even Indonesia capital, Jakarta, the population is 12 million. so if TLC said that US price is cheaper than Europe because of the market size, I just don't believe them.

[Tenorikuma]

what about the market? Indonesia's population is 210 million, comparing with Singapore's 5 million. even Indonesia capital, Jakarta, the population is 12 million. so if TLC said that US price is cheaper than Europe because of the market size, I just don't believe them.

"Economies of scale" has to do with a lot more than just population. It involves how highly developed and streamlined manufacturing, distribution, and retail networks of a locale are, as well the purchasing power of an average individual and the reliability of the local infrastructure. It may well be that Lego has run the numbers, and they can make more money selling to Singapore's 5 million people than Indonesia's 210. If Lego is wrong about this, perhaps someone should set up a competing wholesale business to sell cheaper Lego in Indonesia.

[Kogyik]

"Economies of scale" has to do with a lot more than just population. It involves how highly developed and streamlined manufacturing, distribution, and retail networks of a locale are, as well the purchasing power of an average individual and the reliability of the local infrastructure. It may well be that Lego has run the numbers, and they can make more money selling to Singapore's 5 million people than Indonesia's 210. If Lego is wrong about this, perhaps someone should set up a competing wholesale business to sell cheaper Lego in Indonesia.

Well Done Tenorikuma. This is a simple, but brilliant explanation of capitalism and Economics of Scale. If everyone wants to buy with chickens then TLC goes where they pay with currency.

[Tacitus]

I think my only follow up question I would have CopMike ask TLC would be concerning the cost of petroleum, and the long term effect on the LEGO product. Shipping and manufacturing costs aside, the bricks are petroleum based products. So, what effect will the rising costs of oil have on production? Will LEGO maintain brick quality, but increase the price, or will they sacrifice quality to keep the price relatively stable? I think that the issue of resource availability for LEGO production, and the long term effect of this on consumer pricing, is something more pressing than whether or not the clone battle pack is cheaper in SE Asia.

[frogstudio]

Hi!!!

Just to make all of you guys feel happy and fortunate... Prices for LEGO here in Argentina simply triple those of the US, not to mention that it's IMPOSSIBLE to get ANY of the big sets (Cafe Croner, Green Grocer, Town Plan Death Star, etc). Not to mention that Shop@home doesn't ship here... Only solution to get the cool sets? Buy them at Shop@home, have them shipped to a friend in Miami, have him ship the set to Argentina, paying customs import taxes (100%+ another 21% over that)... so what do you end with????? A beautifull Green Grocer for arround U$D 500.- (set price + american taxes + american shipping + shipping to argentina + import taxes) How I wished I lived in Europe!!!!! Smile guys... you are still lucky!!!

PS: just a little detail I had forgotten.. an average good income here in argentina is of about U$S 700.-

Edited August 1, 2008 by frogstudio

[Cardinal Brick]

I feel that it is misleading to compare u.s. prices with u.k. prices - in the u.k. we have 17.5% tax added to the retail prices for our goods whilst the u.s. tend to exclude the tax in the quoted price as it varies from state to state.

I assume that this is also the case for the european monetary member countries but please correct me, fellow U.S. / Euro AFOLs if I'm wrong

Cheers

Gary

As far as I know VAT has to be included in the price everywhere in the EU, but even so it leaves a huge discrepancy

Example AT-ST 7657

UK 19.99 – the VAT at 17.5% = £16.49 and from there put it into dollars (at 1.98 which I use as that was the exchange rate I got on my last trip) = 32.65 but yet an AT-ST before tax will only set you back 19.99 in the US, so the difference is still huge.

I’ll make the point again that with most things I don’t mind to much the difference isn’t that huge once sales tax is included but on Star Wars sets it’s just to far in my opinion.

Kogyik I would point out the UK has the longest working hours in Europe and a lot of us do just as many hours as people in the US

[Dovchenko]

Thanks Mads Nipper ( ),

I'm probably one of the least affected here so I won't go on and complain without reason (while Europians have all reason to). However, I still don't understand why American Prices and Canadian Prices are different. It's not by much but it's still seriously annoying... just because we have 10 times less the number of people in America. Sure, prices are cheaper when you live in a cash cow. Makes sense for Canada, having <100 Million, but if Europe's suffering with 100 million more people than America... that's a problem that just doesn't make sense. In America, it's 19.99. In Canada, 29.99. Not for any other product! We're at PAR guys. Nearly exactly on par. If Lego's suffering with money it's news to me that they can't keep it real. 10 bucks more for what? I want an answer, even if I'm not mad, just annoyed to see a 120 dollar set become a 160 dollar set when I could be getting more.

[Nikola Bathory]

Well, LEGO has never been among the cheap products on the market, right?

Still, it's simply not fair that in the EU a LEGO set costs more than it does in the US.

Actually, the weak dollar is someting very good for the US economy and polulation!

[brickzone]

Companies have to pay a huge amount in Taxes over there. Let's face it if the people would take care of their own health care services the companies wouldn't have to pass these deductions on to the consumer. Not only that but what is the standard work week/hours over there. Here in the U.S. the standard is 5 days or 40 hrs, but I haven't worked that in years. It is more like 6 days or 60- 70 hours a week. We here in America don't take our free time lightly and therefore if something is overpriced we aren't going to buy it.

So let's face it you are paying more for your social benefit.

This is nonsense concerning Ireland at any rate (for one thing, our health system is nearly as unequal as the US!)

Sales tax in Ireland is 21% - that does not at all account for much of the price differential. I don't think Lego have operations here in Ireland, but companies here don't pay much tax - 12.5% (and only 10% for companies here since the 90s) - that is quite a bit lower than the US, and potentially far far less depending on the situation. Even income tax can be lower here in Ireland than e.g. the US because you don't pay any income tax at all up to a certain limit (about $14K) and you only pay 20% up to a quite high limit (about €50K). That's before you account for tax reliefs for renting, paying mortgage, healthcare costs, etc. Those earning a lot of money do get taxed at 40% but they can employ accountants to make use of all the various benefits and tax offset schemes. Some pay very little income tax. Quite frankly it's a miracle our govt. has any money. Motoring is taxed till the cows come home though - despite the fact that unlike the rest of Europe we have abysmal public transport (or none for many people).

Yet we pay higher prices than our European neighbours who do enjoy all the great social services. Ireland is a nice place, but really, you do sometimes feel a bit conned here. Still, I suppose the system here has facilitated people earning a lot of money in the last ten years. I've certainly been able to afford a lot of Lego, European prices notwithstanding.

To be honest, Lego does not annoy me most. The people who annoy me most are UK retailers who for no particular reason sell at large amounts more here in the Republic of Ireland. Their excuses about shipping are not valid, as it costs just as much to get goods from England to Northern Ireland (part of the UK) and goods are sold at the same price up there. Then there are the European manufacturers who don't actually sell to Ireland directly. They sell to the UK (which is not in the Eurozone) who in turn resell for a large markup to here in Ireland. So Lego could be a lot worse here in Ireland, I do admit.

[Holodoc]

Translation of the whole answer :

Europe = Cash cow

On the positive side, they're being honest. Now the second adressed question should be : "What are your plans to change this situation in the near future ?"

There are two ways to deal with it:

Either we buy more sets overseas, starting 1st of december by the time the EU is allowing to "import" goods on a higher price level (150€) without paying customs/taxes.

or

we start to buy more megablocks in Europe to be more competetive to TLC.

OK, the second suggestion is no real option.

[victor2000]

FYI

it is happening again...

remember the giant castle chess ? in Singapore its price is S$299 or only around US$230... Singapore is much further from Billund than any European country but let's compare that price to European price and you'll understand what I mean.

so let's face it

we are TLC's cash cow

but I still love Lego :-D

Edited August 1, 2008 by victor2000

[blueandwhite]

Thanks Mads Nipper ( ),

I'm probably one of the least affected here so I won't go on and complain without reason (while Europians have all reason to). However, I still don't understand why American Prices and Canadian Prices are different. It's not by much but it's still seriously annoying... just because we have 10 times less the number of people in America. Sure, prices are cheaper when you live in a cash cow. Makes sense for Canada, having <100 Million, but if Europe's suffering with 100 million more people than America... that's a problem that just doesn't make sense. In America, it's 19.99. In Canada, 29.99. Not for any other product! We're at PAR guys. Nearly exactly on par. If Lego's suffering with money it's news to me that they can't keep it real. 10 bucks more for what? I want an answer, even if I'm not mad, just annoyed to see a 120 dollar set become a 160 dollar set when I could be getting more.

It's not just LEGO.

Different jurisdictions almost alyways yield different price schemes. Cars are a perfect example. Heck, the difference is so blatant that several automakers penalize dealerships in the US who elect to sell to Canadian customers. Many dealers in the Northern US will no longer deal with Canadian customers and many automakers refuse to honour warranties for Canadians who buy their vehicles in the US. When you look at Canadian pricing compared to US pricing on most items you will find that US pricing is favourable. Pricing for clothes, food, vehicles, and even housing is very different in the US. Yes, it does suck that some people pay more for LEGO than others, but it is hardly an isolated example. Cars made in Germany cost more there than they do in the US. The same is true of countless other items.

Personally I don't mind the premium so long as it isn't out of line with the rest of the world. Canadian prices are actually pretty much consistent with most other juristictions outside of the US when it comes to LEGO (we pay an additional sales tax as opposed to VAT). There are times when a really high price cheeses me off, but at the end of the day it pays to remember that the US is an anomoly when it comes to pricing.

[Shoc]

I have looked over this statement and what I have to say is this:

The Lego Company sells Lego cheaper in the US because they want more people to buy it. That may well get more people to buy it.

The Lego Company sells Lego for more expensive prices in Europe because they have lots of buyers anyway. That would mean that Europeans are more reluctant to buy Lego products, because it costs too much... So, what is the point in that?!

:skull:

[Parax]

That statement is very misleading.

Proportionally a LEGO set in the states represents about the same percentage of take home pay as it does in Europe. This is how companies set their prices. they want 1% of your income however much that may be. It works out very fair to everyone (ie kids here get the same as kids there) until you look over the boarder, you want to pay US prices but you dont want US wages. There are more factors involved such as what % of pay a parent spends on childrens toys, but that is basically the reason why prices vary.

(It doesnt cost anymore to make or ship the sets! and exchange rates really only come into the equation when you are building a new factory! say in Mexico.)

P.

[adik_sa_lego]

price in other country near Singapore is as the same as Indonesia. Malaysia, Thailand, Vietnam and Philippines price is as expensive as Indonesia.

but why Singapore's price always cheaper? because Singapore is under TLC !!! it's not fair. completely not fair. not counting that Singapore always got the new item 1 month earlier than its neighbor.

Lego is also handled by a private company here in the Philippines, hence the very jacked up prices. The smallest indy set (jungle duel) and the smallest batman set (buggy and mr. freeze) cost around US$30. it is much cheaper to order off bricklink or eBay, since my post office won't charge me for customs. only drawback is it might get lost in the mail (never lost a parcel, but already lost 2 small orders).

this private company, which is somewhat affiliated to our local Lego group, gives customs and shipping charges for the price. But heck, if i could bring sets over airmail for a much lower price, why can't they? (i have ordered bulk sets and still no customs, per box price is very much lower). the only sets i wouldn't order online are the impulse sets, which are by far the only sets cheaper to buy here than online.

i really do hope TLC expands globally, so that other companies won't steal their profits and cheaper sets would be available to more countries (as compared to the non-TLC countries' situation now).

[Kogyik]

I think my only follow up question I would have CopMike ask TLC would be concerning the cost of petroleum, and the long term effect on the LEGO product. Shipping and manufacturing costs aside, the bricks are petroleum based products. So, what effect will the rising costs of oil have on production? Will LEGO maintain brick quality, but increase the price, or will they sacrifice quality to keep the price relatively stable? I think that the issue of resource availability for LEGO production, and the long term effect of this on consumer pricing, is something more pressing than whether or not the clone battle pack is cheaper in SE Asia.

I don't think we have even began to feel the effects of the price of oil in our beloved hobby. ABS stocks probably haven't dipped into the recent (past few years) upswing of oil prices( purely speculation on my part). TLC will increase their prices for sure , maybe they are doing it slowly and gradually so we don't notice . You can be sure they won't loose money.

Cardinal Brick and brickzone. Thank you for enlightening me in your situations.

Edited August 2, 2008 by Kogyik

[fugglewyg]

Holodoc said

Either we buy more sets overseas, starting 1st of december by the time the EU is allowing to "import" goods on a higher price level (150€) without paying customs/taxes.

Even this is not as good news as it first looks. All they are dropping is the duty part of it (about 5% at the moment, i think). We will still have to pay VAT on the cost of the item & shipping which means adding 17.5% here in the uk. it may still be a bit cheaper but not the deal i first thought it was going to be

PS. how do you get the name in the quote box like the other posters have done ?

[Shoc]

PS. how do you get the name in the quote box like the other posters have done ?

Click the "quote" button next to the "reply" button at the bottom of the member's post, then click reply.

:skull:

[Karto]

The USA doesn't try to ban other brands like certian other contries. It's an open market, and Coby/Bestlock, MB, and Knex are both putting out a construction product at price points that are much lower, lower and equivalent, respectively. If the US was charging European prices, LEGO simply woudn't sell, and then LEGO would really start losing money. USA prices will rise some, but significant raises in US prices simply are not an option if LEGO wants to remain viable in the USA market.

Selling thousands of F-16's all around the world is great, but ordering a few Airbus AAR planes (at lower cost and way more efficient) is seen as 'high treason' at the Congress. Now that's an example of an 'open market'. (you can find thousands of restrictions and protections like this one...).

The USA is a fair open market, but not more than most of the other industrialized countries, including the EU.

The European market has also plenty of cheap clones and other types of construction toys; Megablocks, Bestlock, KNex, Meccano, etc. Most of stores have more and sell more of these brands than Lego, just like in the US. So, it has definitely nothing to do with competition within the EU. Germany is the largest market for Lego in the world. The official prices are also on the higher hand compared to other EU members. The demand is high, the prices are high, it's that easy.

I think that the price differences could be explained by the way the Lego toy is seen in Europe. Having a long tradition for about 50 years, it became a real traditional, luxury toy. Parents, who probably used to have Lego during their own youth, see this toy as the perfect way for their kids to enjoy and learn at the same time. Therefore, they're probably ready to spend more money on this ultimate quality toy than on any other type of entertainment. I would compare this to how wooden toys and metal scale cars were seen during my youth. I'm not sure that Lego is seen in the same way in the USA (I mean by most of the people, not just a few fans).

To get a better idea: I don't know any guy who never had Lego during his youth.

Edited August 2, 2008 by Karto

[Lasse D]

Lego maybe feels like we helped in WWII and therefore cuts us a break on the price.

If that was the case, LEGO should be free in England and Russia!

It's all about supply and demand, and as mentioned, this is the same for all products.

[The Cobra]

Finally, final pricing in the market place is obviously determined by retailers, which is something we cannot and will not influence.

What about Shop at home?

What about the German catalogue, which comes with prices?

[Snake...SNAKE...SNAAAAKE?!]

^

^

Ouch.

Well said.