How much?

[B.C.]

While searching the local stores for what seems to be one of the hottest toys this year, Hogwarts Castle. I was forced pay an inflated price of $149 from TRU. Now I'm not bashing these guys, they were the only ones with it and I did buy it. Some guy on craigslist here was selling one for $400.

This just brought up a question. How much is too much? Obviously I wanted to get my kid the one thing she is dying to get so I opted to pay the price. This was also the most I had ever paid for a Lego set of any kind. How much mark up is acceptable to you? How much is too much to pay for a Lego set?

[Aanchir]

I'm going to go with the really obvious answer and say "too much markup" is "however much it takes for you to decide not to buy the set". That is to say, it's however much it takes for the set to no longer be worth your money.

This could vary by person, but also by store. For some people, the fact that sets are frequently marked down at Wal-Mart does not justify spending money there, since Wal-Mart has a great deal of economic controversy surrounding it. Wal-Mart is often considered responsible for putting local stores out of business, since they are a familiar name nationwide and can lower prices by far more than local businesses can hope to. They are also sometimes accused of offering insufficient wages in order to keep prices low, and of course many products are "made in China" and considered low-quality.

On the other hand, suppose you knew a smaller, local business that stocks LEGO (surprisingly, they do exist). The prices may be marked up, but if you have close ties to the region or even to the store's ownership you might be more willing to pay an inflated price there than you would at, say, a Toys 'R' Us.

It's really subjective. In my personal opinion, I tend to look for the lowest price I can find locally, no matter what store I have to get the sets from. But it varies by what set I want-- if I can only find a set at a Toys 'R' Us, and it's a set I personally value, I'll probably be willing to make a sacrifice.

[Big Cam]

My personal feeling fall like this. Retail stores should not be able to mark up anything beyond the manufacturers suggested retail price, it just seems wrong to me, that price is determined allowing profitability for LEGO and the retail store selling the item.

Now for person to person transactions, I feel raised prices are justifiable at the point that an item becomes no longer available to the public for purchase, ie. Sold out, or discontinued. Because at that point you now have an item you cannot replace and so additional monetary value can easily be added.

In the end though, the truth is an item is only worth as much as someone is willing to pay foe it, so by paying $149 for the Hogwarts castle, you have effectively let the system know that that set is worth that much to you. Its easy to say my item is worth $3,000 but if no one will ever give me that much for it, then its really not worth that much.

[Vincent Kessels]

I will not buy a set if the markup is more than Lego online shop plus shipping.

[B.C.]

In the end though, the truth is an item is only worth as much as someone is willing to pay foe it, so by paying $149 for the Hogwarts castle, you have effectively let the system know that that set is worth that much to you. Its easy to say my item is worth $3,000 but if no one will ever give me that much for it, then its really not worth that much.

That is the truth right there. I didn't want to pay that much, but I haven't seen another Hgwarts Castle locally in a few weeks. As much as I hate to admit it, I guess it was worth the extra $20 to me at this moment.

I do have a local shop that sells only Lego products. They have a small mark-up, which based on the high rent factor of the area is acceptable for such a small shop. I don't buy much there, but I always seem to find discontinued sets still in stock which is nice.

[Aanchir]

My personal feeling fall like this. Retail stores should not be able to mark up anything beyond the manufacturers suggested retail price, it just seems wrong to me, that price is determined allowing profitability for LEGO and the retail store selling the item.

Here's the problem with that thinking, though. Yes, if a store sells a set at MSRP they'll be making more money than they paid for the set. But just because the set on its own is profitable that way doesn't mean the business can stay profitable. In a large city, for instance, rent will be higher-- even if the store makes a profit off of each individual product, the total might not be enough to make a profit after the other costs of maintaining the store are taken into account. This is the reason that even the official LEGO store in Rockefeller Center, NY charges above MSRP for many sets.

So yes, ideally the MSRP would be enough to make a profit. But not all stores are comparable-- there are other variables in play that complicate things, hence part of the reason for price variation.

On a related note, if I remember correctly, I read somewhere that Toys 'R' Us pays TLG for special rights to release sets before their release date in other stores. This is why Toys 'R' Us tends to get sets earliest in the United States, and part of why the prices there are inflated above MSRP. Of course, it's not like any store is likely going to pass up a chance to raise prices if they can count on people still buying the sets. And that's part of the point of MSRP-- it gives the stores an idea of how much people will be willing to pay for each product. If Toys 'R' Us and other big-name stores can charge a higher price than their competitors and still sell enough product to make a profit, then that's their prerogative.

Business is a complicated thing. I haven't taken any business classes in college yet, though my mom says if I want to work towards a career with TLG then that would be a wise decision in future semesters. So if I'm getting anything wrong, my apologies. I'm mostly just echoing things I've heard or inferred from other people.

[B.C.]

Well seems like TRU has a bit of an exclusive at this point. While looking for Hagrid's Hut I visited no less than 10 Targets and Wal-Marts. I finally found Hagrids Hut, but still no Hogwarts. If I find one at MSRP, I will buy it and return the one I have to TRU, that is a big IF. The only place left to have Hogwarts in my area is TRU, with their $20 mark-up. I guess waiting out busy, lazy, or broke parents for Christmas appears to their game plan. Sad, but the reality is they can only get away with it because people WILL buy it. Basic economics, supply and demand. They got it, you want it. Either pay up or miss out. Your call....

[prateek]

I agree with Big Cam. I don't think retailers should be allowed to mark up prices on anything, especially something like Lego which is widely available. It's called common courtesy. I mean, in some countries, like India, it's illegal to charge over MRSP.

[Big Cam]

I agree with Big Cam. I don't think retailers should be allowed to mark up prices on anything, especially something like Lego which is widely available. It's called common courtesy. I mean, in some countries, like India, it's illegal to charge over MRSP.

Now that is a good law. In my opinion.

[B.C.]

Well capitalism is what it is, and it came full circle for me today. I was still butthurt over the extra $20 (as evident by this thread). I decided to hit craigslist this morning. Saw an ad for Hogwarts Castle for $90. Must be too good to be true, right? I met up with the guy and it was all legit. Factory sealed, in good condition. So talking with the guy, he also has a Hogwarts Express set, and a Freeing Dobby set all for $150. I already had the Dobby set, so I made the deal for $135 for the Hogwarts castle, and Hogwarts express sets. I immediately went and returned the Hogwarts castle to TRU for a full refund. I put $30 back into my pocket, and got Hogwarts Express, and kept Hogwarts Castle.

[Tyrant]

I agree with Big Cam. I don't think retailers should be allowed to mark up prices on anything, especially something like Lego which is widely available. It's called common courtesy. I mean, in some countries, like India, it's illegal to charge over MRSP.

Businesses exist to make money, not be nice. That is a terrible law, unless you have a number of other government controls in place covering numerous other price factors (rent, utilities, labor, property taxes, advertising, etc). Every business has different expenses and different issues they have to deal with. Trying to make every one the same is a futile enterprise. If you have a law like that there are only a handful of outcomes in the long run. Either the store cuts other expenses (likely labor) so they can afford to sell the products, or they convince the company to raise the MSRP which hurts everyone because other stores will raise their prices if they can get away with it, or they choose to not carry the products and you have fewer options on where to buy. None of those is a positive change. Especially when in this case you are talking about sticking it to 1 store that no one is forced to shop at to begin with. If people don't like the prices at TRU they can shop some place else. Holding everyone, by law, to the MSRP is bad for speciality stores (which translates to being bad for people who like options or who have hobbies that aren't easily supported by Wal Mart, like people who prefer a diversity of LEGO sets for instance). Wal Mart would love that law as it would help deliver the finishing blow to it's local and sppeciality competition. The flip side to consider is this, if they can regulate a price ceiling what is stopping them from instituting a price floor as well? Say, MSRP for instance? If they can enforce one, they can enforce the other. Also, don't think that inflated MSRPs can't exist either. Look at the MSRP for DVDs sometime. The MSRP for Inception is $29. I'm glad no one reinforces anything related to that price (except Borders sometimes, which I will never understand).

I understand that other options may not exist around the holidays. This will sound cold hearted, but that's why you don't wait until the holidays to buy toys. Sure, there are lots of sales during the holidays, but there are also lots of other people trying to buy the same thing you are (more so if it's on sale). Don't be upset at TRU for trying to keep their doors open. Be upset at either your other stores not ordering enough stock or for TLG not having enough stock for S@H. When you wait you end up in a "beggars can't be choosers" situation. It's not pretty or nice, but it's the way the world works. I am glad that the OP was able to get a great deal from the Craigslist guy. The only deal I have ever managed to seal from Craigslist was pretty good for me.

As for the overall anti TRU sentiment I see here and elsewhere, I just don't get it. No one is forced to shop there. If you are there, I assume it is because you are after something you can't find any place else. So, consider if TRU simply wasn't an option (a likely possibility if they can't charge over MSRP). Then where would you go? Nowhere, that's where. TRU is a speciality store and can't compete with a store like Wal Mart that can take cost hits for years if they succeed in killing their competition. TRU sells one thing (more or less, they do dabble in movies and games), toys. Their selection is greater than any chain store. They have exclusives that we would otherwise not likely have. They have a frequent buyer club (even if it is on the terrible side most of the time). They get sets before other stores (and usually charge MSRP for the first few weeks that they are exclusive). They bought into the collectible figures while the other stores weren't sold on the idea. They have decent sales (better than anything you will see at Wal Mart or S@H, short of clearance). They are an overall positive force in our shared hobby, so I just don't get the dislike. If it's around the holidays, you may be hard pressed to find another option. However, if they charged MSRP like everyone else, isn't it just as likely that they too would be sold out and you would be left with no options instead of an option you don't consider perfect. Which is better, an imperfect option or no options?

[fred67]

Agree with Tyrant and might add (with the exception of the rare occurrence of finding something like that new on Craigslist... which seems quite dubious to me), that if TRU wasn't selling that set at $149, you would never have found it at all. Even S@H is sold out. So gripe all you want about the price, but it was worth it to you to pay it instead of not having it at all.

As far as MSRP goes, the second word is "suggested," passing a law that requires no higher price than that is anti-competitive and ends up being worse for consumers (although most don't realize it... politicians pass a "feel good" law against a victimless crime to win voters who don't understand capitalism).

For that matter, while I'm on a bit of a rant, there's no such thing as "price gouging." The price is what the market will bear, no more, no less. If there's a shortage of something, high prices make it less worthwhile to "hoard" necessary products. While Hogwarts Castle isn't exactly a "necessity" (bite my tongue, right?), that you paid $20 more rather than not have it proves the point. It sucks, but it was more worth it than not having it. Substitute gasoline, generators, and bottled water during an emergency... better to pay twice as much than be left without because someone hoarded it.

Edited December 12, 2010 by fred67

[Arigomi]

All I know is that nobody is willing to pay the huge markup for the LEGO Board Game 3862 Harry Potter Hogwarts at Toys R Us.

The MSRP is $29.99 but Toys R Us is trying to sell it for $39.99 just because it has the Harry Potter branding. That amounts to a markup of about 33%. Whoever at Toys R Us thought this was a good idea is clearly off their medication.

[B.C.]

While Hogwarts Castle isn't exactly a "necessity" (bite my tongue, right?), that you paid $20 more rather than not have it proves the point. It sucks, but it was more worth it than not having it.

[Sandy]

There's a saying at least in my country that says "the stupid one is not the one who asks, but the one who pays".

If someone is willing to buy the Hogwarts set for $400, then the seller has obviously made a smart choice in the pricing. If not, then the seller must suffer the consequences.

We consumers can affect quite much to the market with our choices, believe it or not.

[SilentMode]

If something isn't readily available, and there's no chance of it turning up somewhere in the near future, I'd be willing to pay a little bit more for the privilege of ownership - otherwise I'd exercise patience. It's a little bit like Christmas/January sales, although I haven't seen a genuine Christmas/January sale to date.

[blueandwhite]

As much as I hate prices being marked up, the seller has every right to do so. It's not as if LEGO is a necessity of life. That being said, I rarely buy LEGO at the MSRP and I almost never purchase anything from Toys R Us as they do like to bump up their prices. In a free market, the seller has the right to sell a product at any price (hence the $3.99 collectable minifigs at Toys R Us) so long as there isn't any price fixing involved.

If you must have a certain set, you're going to pay the asking price. Just remember, many people don't even agree with the original MSRP on some sets. This is certainly true in Europe, Canada, Australia and Asia where LEGO is priced significantly higher than it is in the US. Still, we gladly pay that price because we want our bricks.

[fred67]

That being said, I rarely buy LEGO at the MSRP and I almost never purchase anything from Toys R Us as they do like to bump up their prices.

Exactly... because of their ridiculous markups, I will only buy when they have a sale and I get things for a below-MSRP (on average) price, like the recent rash of BOGO 50% off. If they charged MSRP I would actually end up buying more from them at higher prices than I pay now, since few sellers sell LEGO below MSRP without a sale, and often enough I end up paying the full price... so I buy elsewhere. IOW, they are not making as much money from this informed buyer. If we were all informed buyers, they wouldn't get away with charging over MSRP at all (at least until everyone else was sold out, and that just doesn't happen with most sets).

As for the Harry Potter game... that's just plain laughable; even at BOGO50% you end up at MSRP.

[Baylego]

Even though you you can choose to shop at somewhere other than TRU, I have seen less educated people been turned off from buying Lego entirely. Last year around Christmas, they had the Freeco speeder and all other sets that were $25 marked up to $35 just because it was buying season. Some lady shopping for Christmas was so frustrated with the prices that she said " Why do the toys he wants always have to be so expensive? I am not getting any Lego then." That is why I am frustrated with TRU, they are turning away people from Lego.

[Tyrant]

Even though you you can choose to shop at somewhere other than TRU, I have seen less educated people been turned off from buying Lego entirely. Last year around Christmas, they had the Freeco speeder and all other sets that were $25 marked up to $35 just because it was buying season. Some lady shopping for Christmas was so frustrated with the prices that she said " Why do the toys he wants always have to be so expensive? I am not getting any Lego then." That is why I am frustrated with TRU, they are turning away people from Lego.

I hear the same thing at Wal Mart. LEGO isn't cheap (obviously I mean relative to other things in the U.S., on a global level it is cheap here) no matter what (obviously barring a sale or clearance, but we're talking MSRP so those don't matter) and the fact is there is a cheap clone brand (or brands, as the case may be) right next to it in most stores. I would also note that the TRU nearest to me has shelves that would be almost barren if they didn't have some 2011 sets on them right now.

Just to be clear on my stance, I don't pay the inflated TRU price unless I absolutely have to. I try to plan my purchases so I can grab things during sales (there and elsewhere). I am not most buyers (draw whatever conclusions you want from that about the state of the buying public). If people are in disagreement about the pricing, the smart thing to do is look elsewhere not just give up and not buy anything. They may end up not buying anything if they can't find it elsewhere, but they will likely learn something along the way about being an educated and/or patient shopper.

[nicoga3000]

I bought the Pyramid mega set from TRU for only a $8 markup. I don't feel that's too terrible given the cost of shipping from the online store or taxes at the actual LEGO store. The only thing I hate about buying at retail stores is the incredibly bare selection. My local Wal-Mart, Target, Meijer, and K-Mart are all carrying nearly identical product, and it's all really kind of crappy. The TRU has the best selection, but the highest markup, so it's definitely a tough game.

[LegoDad42]

Target in Elmhurst, Queens NY is a big offender on LEGO markups (even some popular Transformer sets too). They had the Hogswart Castle at $159.99. Outrageous!

And just about every LEGO set (especially Star Wars) was about 15% higher. And this is with a LEGO store just, literally, 3 blocks away selling the same items at retail.

I'd say, just like others, to the original poster, you gotta' shop around man. eBay, even LEGO shop dot com could've gotten you the Hogswart Castle at retail.

I usually shop at the LEGO store but have gotten tremendous deals on eBay.

EDIT...to be fair, my local Target used to be right on retail prices and even a couple bucks lower the past 7 years I've shopped there but this past year to 2, on anything popular (even Beyblades), they're above retail 'cause they know parents will spring for the hard to get, hot item. I think it's dispicable but like another poster said, higher rents in certain areas (NYC area in general) can justify the retailer going above. I for one, just won't pay above retail. I just shop around and be patient.

Edited December 20, 2010 by LegoDad42

[fred67]

I bought the Pyramid mega set from TRU for only a $8 markup. I don't feel that's too terrible given the cost of shipping from the online store or taxes at the actual LEGO store.

That makes no sense. Are you saying you didn't have to pay taxes at TRU? And you would have gotten free shipping from S@H.

[nicoga3000]

That makes no sense. Are you saying you didn't have to pay taxes at TRU? And you would have gotten free shipping from S@H.

The nearest LEGO store to me is nearly 3 hours away, so this is relative. S&H charges for standard shipping is $12.95. So I paid $113 (after my $5 coupon) versus $112.94, which to me, sounds like a pretty obvious choice.

E: Not meant to sound like a dick, sorry if it comes off that way. :) Just pointing out the uniqueness of my situation. Low taxes here in Indy, and oddly low markup compared to what I'm reading in this topic.

Edited December 20, 2010 by nicoga3000

[Brickdoctor]

Interesting topic here. I was just thinking about this going through the 2011 Rumors thread over in the SW forum. Personally, I don't think markup under 15% is unacceptable; I'm willing to pay the standard TRU markup if there's some sort of discount or freebie involved. Maybe it's different for me, given that I live within a half hour's drive of a LEGO Brand store, multiple Targets, a Walmart, and a TRU, so for me it's a matter of finding who has the best deal and the set I want in stock, and buying it there. Sometimes, though, I've encountered situations where another store had a discount to the point that comparatively MSRP was a big markup ($10-$25) but I was willing to buy from LEGO knowing that more of the money would likely support TLG.