Has The Lego Company gone a bit stupid?

[Mister Phes]

Is it just me or has The Lego Company gone a bit stupid since the late 90's?

They seem to have been making many decisions which seem illogical to me.

There are probably countless examples, but as I follow the Pirate theme I'll provide an example from there.

In 2002 the Black Seas Barracuda was re-released as a Legend because it was voted most popular set to return. http://guide.lugnet.com/set/10040

I've been into toy stores and I see this set on sale for under $US65, then I search on eBay and see it sell for over $US165. That's 100 US DOLLARS DIFFERENCE!!! And I thought why is this so? Then it occurred to me, beyond their website Lego did absolutely nothing advertise this set. So naturally those who wanted it didn't realise they were in stores, so instead they stumbled across them on eBay. Presumably doing a basic serach for "Pirate Lego on".

What's happening is Lego collectors and resellers are buying multiple copies of these sets from the Toy Stores at discounted prices (because they're not selling). Then they sell these sets over eBay and making a huge profit. No doubt this happens with sets from other themes too.

But why is Lego stupid enough to let this happen? They're losing upto US$100 a set here!

[snefroe]

you're right! there is a group of customers who are buying those sets as an investment, hoping they will be able to push the price of these sets in the future and make money out of it. one of the reasons is that many sets are not available anymore after 1-3 years of the release.

I guess the real mechanism is the fact that lego is trying to be more efficient as far as distribution and production of sets is concerned. TLC wants only to produce and distribute the sets she can sell within a limited time frame. that leaves a lot of opportunities for third parties...

TLC can't set a monopolist price, 'cause that would be bad for the image and very dangerous for her market position. the gap between tlc and Mega Blocks and others would grow even further... she would also alienate herself from her customers, because they wouldn't be happy either.

in any case, she'd sell even less than today, because of a higher price. it's basic economics: if price goes up, then demand goes down.

another problem with auctions is that price fluctuates. today it's 165$, tomorrow 200$ or 60$. TLc can't just change prices on a daily (monthly,...) basis, based on price evolutions in auctions. i don't think tlc's accountant and the Danish/European government would be happy with that, cause it wouldn't be transparent. i'm not even sure tlc would be allowed to follow this strategy...

I think that TLC would go for the image argument, tho

[xwingyoda]

Another problem (like scaling, ages...) TLC could "easily" solve by much better communication and marketing strategies.

[The Middleman]

One thing would solve all their problems: putting it to the vote.

For themes/sets, maybe not all, but for some, just do this.

Have people submit ideas, via submission cards/links in LEGO Magazine/Brickmaster/LUGNET/lego.com/shop.lego.com. The most popular ideas are picked over by the people upstairs at LEGO, and the most feasibly marketable ones are put onto a ballot that's put to the vote on all the aforementioned sites/publications (limit one vote per IP address for sites).

It would reach into the KFOL and AFOL markets, and it would give everyone what they want.

[Mister Phes]

One thing would solve all their problems: putting it to the vote.

For themes/sets, maybe not all, but for some, just do this.

Have people submit ideas, via submission cards/links in LEGO Magazine/Brickmaster/LUGNET/lego.com/shop.lego.com. The most popular ideas are picked over by the people upstairs at LEGO, and the most feasibly marketable ones are put onto a ballot that's put to the vote on all the aforementioned sites/publications (limit one vote per IP address for sites).

It would reach into the KFOL and AFOL markets, and it would give everyone what they want.

To me that sounds like a good idea!

I have 1000's of ideas which I'd love to share with people, but it clearly states at Lego.com that Lego do don't accept ideas from ordinary people.

I believe they had a competition once (circa 2001) allowing people to design their own set. The winner's set would then be made into a set avaiable for purchase from their website.

I think the winning set was a farm house intended for the Castle theme. However the farm house was completely out of scale and looked too big amongst the other castle sets. There were pictures of it at Lego.com once, but since Knights Castle returned last year I think they've been removed.

[Mister Phes]

Another problem (like scaling, ages...) TLC could "easily" solve by much better communication and marketing strategies.

I tend to agree with this. The communication and marketing strategies are almost non existent beyond Lego.com for the Legends and re-releases. If the people don't know the product is available then how can they purchase it?

Aside from the Black Seas Barracuda, I've seen King Leo's Castle on sale at Kmart for A$67/US$53. Then I've looked on eBay and seen it sell for A$150/US$118.

I guess the real mechanism is the fact that lego is trying to be more efficient as far as distribution and production of sets is concerned. TLC wants only to produce and distribute the sets she can sell within a limited time frame. that leaves a lot of opportunities for third parties...

TLC can't set a monopolist price, 'cause that would be bad for the image and very dangerous for her market position. the gap between tlc and Mega Blocks and others would grow even further... she would also alienate herself from her customers, because they wouldn't be happy either.

Is this the best way to go about it though?

Ordinary every day people buy say 20 of your sets on sale for 50% off then sell them on eBay for profit for 50% profit? Sure occassionally one sells for less than its worth (I got an Amarda Flagship for A$42/US$33), but generally I've observed the MISB sets sell for more than the price on shop.lego.com.

Personally I DID feel alienated by Lego as I had purchase the re-released Pirate sets online. These sets weren't available in stores in my area. When I did go to another area there was <b>nothing</b> to make me aware these sets were available anyway.

another problem with auctions is that price fluctuates. today it's 165$, tomorrow 200$ or 60$. TLc can't just change prices on a daily (monthly,...) basis, based on price evolutions in auctions. i don't think tlc's accountant and the Danish/European government would be happy with that, cause it wouldn't be transparent. i'm not even sure tlc would be allowed to follow this strategy...

Why would TLC want to base their prices on auctions in the first place? The point I'm making is if TLC advertised and marketed sets properly, then people wouldn't be able to buy 10-20 of them on sale for 50% off, and sell them for 50% more than the set's original value.

[Brett]

King Leo's castle and The Black Seas Barracuda, even after re-release have not been available in the states in any retail form in almost two years. That is why the prices are high. If you can still find them in other countries, you should buy them. The last time we had a King Leo's Castle at my Brand Retail store was during the initial KK run in 2000. We last had the BB in 2003. So, hope that helps.

Why would you communicate a LEGEND or a re-release when they are limited in time and numbers to begin and marketed at a direct market mainly of fans who want a set brought back (obviously familiar with the company)? That is a waste of money. Both sets sold briskly in the US.

Dan Siskind designed 'The Blacksmith Shop' in 2002 for the MOC LEGO theme. It was very well done, even if Dan's design was slightly changed to make the set cheaper to the public. (He used some rare and odd colored bricks in his design)

The problem with having the general public design LEGO sets is easy. There is liability in it. You would have to enter into contracts with each designer. It could cost lots of money more then in-house designs. There is extra time involved, and LEGO would not be in control of the process. It wouldn't work well outside of a VERY un-often special event.

-Brett

[snefroe]

look at this from tlc's point of view:

first: it's far too costly to keep machines running for the production of one set for many years. consequently, they will try and limit the use of those machines because they're not cost efficient. That means those sets (especially Legends: unique parts, remember) will only be available for a limited time frame. it's a fact, you may not like it, live with it. the best answer that TLC has found to deal with the negative results (higher price on auctions,...) is to rerelease those sets after a couple of years. tlc is not going to distribute Legends through out the world if she knows that the set will not be sold in massive numbers... Retailers might not even want it in large numbers.

second: TLC is not going to pay for an extremely expensive distribution to all retailers, to all in the smallest towns, villages all over the world. and retailers are no wholesalers, the retailer doesn't buy 2000 clone turbo tanks for the next six months, followed by another 2000 for the rest of the year. they want 12 for this month, perhaps 15 the next one,... TLC is not going to spend millions just to get a handful of sets to all over the world. they are setting up a network of shops of their own and a network of large distributors (international chains, mostly). And then they will simply deliver their entire cargo to a few headquarters of those chains to limit their transport costs. the chains will then do the rest.

TLC is now saying to you, as a customer: "if you want to buy a set, and you cannot find it in your local shop, then please visit Lego.com and order it there. if you want to buy a set via Ebay for 165$ instead of 65$ with us, then that's not smart, but it's your choice." that's a good marketing strategy. it will even increase cost efficiency of the lego.com. the only thing TLC needs to do now is to use the lego shops as a storage for lego.com. if a German buys an exclusive set via lego.com, it should be the lego shop in Aachen, Germany, to send the set to the customer. that's cheaper than to send the order to danmark. you may not like it, i don't either, but that's the way it is. why? Because it's a lot cheaper for TLC! And because of that we're seeing sets that are cheaper then they would have been 2 years ago... i think TLC knows about the negative dimensions of the changes, but gave full priority to a lower price...

third: there is a MAJOR problem with tlc's communication. to my knoledge, tlc still hasn't appointed a spokesperson for the company to talk with us, afols. there's no one who's listening to our ideas, complaints, suggestions... we've got Jake and Jan beyer, but i have no idea what it really is what they're doing... there is no one who's explaining why Tlc's taking all these decisions,... i also don't think that Lego.com is doing a good job on that aspect either. there was a question on the availabilty/release of the viking sets in the US. Why didn't TLC publish an official statement on the website, instead of stimulating the confusion with their silence? Frustration, irritation is a result. tlc is simply not taking us seriously. i very often think that Danmark is an island... in a galaxy far far away...

[xwingyoda]

One thing would solve all their problems: putting it to the vote.

For themes/sets, maybe not all, but for some, just do this.

Have people submit ideas, via submission cards/links in LEGO Magazine/Brickmaster/LUGNET/lego.com/shop.lego.com. The most popular ideas are picked over by the people upstairs at LEGO, and the most feasibly marketable ones are put onto a ballot that's put to the vote on all the aforementioned sites/publications (limit one vote per IP address for sites).

It would reach into the KFOL and AFOL markets, and it would give everyone what they want.

Bloody Jay:

To increase better communication (and unbreach the gap) between TLC and AFOLs & KFOLs here is a little suggestion:

Because, concerning Europe (and maybe elswhere, I dont know), Lego is divided into different geographical zones, TLC should nomminate a communication adviser per zone. That person would be in charge of relaying info, complaints, suggestion (and what have you...) directly to TLC.

Also, to continue on Bloody jay's idea, that zone rep should do surveys on what themes / sets us, AFOLs, want. How to do those surveys (or idea submission)? This would be quite easy to implement:

If I take the exemple of Paris, where to buy Lego sets? Like I wrote previously in a thread, 3 shops work directly with Lego France. It would be easy to have a survey form (info requests...) in those shops. Those forms would be given to the rep zone (who will sort it out, give %, write comments...) and then relay the info to TLC.

And there is still (for the moment) TRU that have some exclusive sets. Do the same procedure here as well.

You could make the reproach that there are more shops where to buy Lego sets. Sure, but the AFOL & KFOL community will not go to shops where the sets are X% more expensive, and that do not have the WHOLE line of products.

Snefroe1:

Sure TLC need o decrease costs. If you take the Legend line (or total lack of it) it will not be interesting for retail sales for all the reasons we already know. BUT, if you make a REAL Legend Line (that use common bricks for the most parts, and not some fancy expensive ones) you save on production costs and retail sales would work.

[Jipay]

One thing would solve all their problems: putting it to the vote.

They should use the actives shop at home account to make the votes. That would help them to have one man one vote

[Jipay]

I have a funny story about lego France. On shop owner once told me she hated lego because she never knew when they will be deliverin the goods and what they will be delivering :-D

[xwingyoda]

It depends on what shop and where it is. I know that the "Lego shop" I always refer to has great relations with Lego France and have the sets earlier than every shop in Paris. ROTS will arrive this week :)

[Jipay]

Well that's a problem : they just act as typical parisian megablocks : you are nice to me and close to my hangar, I will help you more than the other businesses. It should never be this way but in France, it's always like this... A shame IMO, every shop owner should be treated equaly since they are still buying the Lego goods even if they are not selling well in certain cases... *devil*

[xwingyoda]

I know, this is true but face the harsh reality of the toy industry in Paris nowadays.

All the toy stores I went to as a kid all disappeared. Furhermore the ones that still exist are real crap: one ex is La Grande R

[Jipay]

I know. Megablock has taken the shelf space. But I think they have financial problems. At least I hope so :-D . I agree : there are fewer kids int he shops. I think that now when you are 7 you are ashamed of going into a toy shop because you are too old for it.

[xwingyoda]

Hey, I'm nearly 30 and far from being ashamed ;)

Also those darn kids nowadays only want technology crap like cell phones, MP3 players.... And I'm not talking about teens but kids. Thats ridiculous. Hey I'm 8 I want a Blackberry :-D

[Jipay]

yes I agree it's stupid...

[DoubleT]

Well im very soon 28, and im proud that I have an creativ hobby :)

And given me some good friends ;)

[xwingyoda]

Amen to that ;)

I'm going on 30 and I'm proud to do some creative Lego building ;)

Its also great when a hobby like ours put people together ;)

[snefroe]

I know, this is true but face the harsh reality of the toy industry in Paris nowadays.

All the toy stores I went to as a kid all disappeared. Furhermore the ones that still exist are real crap: one ex is La Grande R

[xwingyoda]

Really thats too bad :'(

Its not great for a kid to order stuff online, how impersonal!!!!!! I rarelly order stuff on S@H because I really like toy stores, it reminds me of my childhood :-D

[Mister Phes]

Personally I don't like the idea of re-releasing Pirate sets anyway. I prefer new ones. I just used the Black Seas Barracuda as an example and it was on the top of my mind.

I don't follow or pay attention to any current Lego themes so I can draw examples for them. But some have caught the corner of my eye.

But definitely the communication problem needs to be rectified as soon as possible.

[Jipay]

Really thats too bad :'(

Its not great for a kid to order stuff online, how impersonal!!!!!! I rarelly order stuff on S@H because I really like toy stores, it reminds me of my childhood :-D

Not to mention our kids don't have credit cards yet (unlike the US :| )

[Mister Phes]

Personally I'd rather be able to into a store and buy the Lego set off the shelf, rather than send my money to a stranger I've never meet before then wait a couple of weeks for the set to be posted to me then hope nothing bad happens to it in the mail.

Ohhhhhhh... I long for the 80's and 90's when I could do that...

[xwingyoda]

Then do it again ;) Have fun mate ;)