S@H Prices

[Athos]

Dear Lego,

I've noticed an issue with shop-at-home pricing. Specifically, once you've factored in the shipping costs, on an average size order, the price the customer pays is significantly more expensive than if they bought it in a store.

S@H prices are comparable, if not identical, to the prices seen in normal stores. Assuming an a sales tax, at said store, of 7%, the customer in the store would pay the MSRP plus 7%. When buying from shop-at-home, however, the customer will pay, MSRP plus up to 40%.

Using the most recent Indiana Jones sets as an example:

Ambush in Cairo: MSRP $10.99

-Total cost from S@H: $15.94

-Total cost from store (with 7% tax rate): $11.76

-Premium paid through S@H: $4.18 (38% more than shopping at a store)

Chauchalla Cemetary: MSRP: $19.99

-Total cost from S@H: $24.94

-Total cost from store: $21.34

-Premium paid through S@H: $3.60 (18% more than shopping at a store)

Venice Canal Chase: MSRP $39.99

-Total cost from S@H: $46.94

-Total cost from store: $42.78

-Premium paid through S@H: $4.16 (10% more than shopping at a store)

Fighter Plane Attack: MSRP $49.99

-Total cost from S@H: $56.94

-Total cost from store: $53.48

-Premium paid through S@H: $3.46 (7% more than shopping at a store)

Temple of Doom: MSRP: $89.99

-Total cost from S@H: $100.94

-Total cost from store: $96.29

-Premium paid through S@H: $4.65 (5% more than shopping at a store)

Its notable that as the order size goes up the premium goes down. However, it is not until one orders approximately $250 worth of Lego that the shipping prices become comparable to a sales tax rate of 7%. Thus, unless one is going to purchase $250 or more of Lego, foregoing S@H and shopping at your local store is the more economical option.

Further, S@H rarely offers anything at a discount, while stores will. Thus, further increasing the price disparity. Additionally, several states have no sales tax or a tax rate significantly less than 7%. This only further inflates S@H prices. When you couple all of this with the option to buy from amazon.com, which offers free shipping on many orders over $25, it is astonishing that anyone would purchase from S@H.

I noticed this issue while attempting to use my brickmaster coupon ($5 off a $20 order). Even using that coupon there was no incentive to purchase from S@H. Every thing I intended to buy, even with the coupon, would have cost me more than purchasing it in a store. This makes no sense. What good is the BM coupon then? In fact, the best arrangement I could come up with was the Hoth Battle, which would have, in the end, cost me the MSRP and left me paying the same as I would in the stores.

Steve

[Shompis]

It would also be nice if they cared to pack the stuff properly. It is not nice to get LEGO worth over 400 Euro and see that the boxes are all damaged because of that they didn't care about filling up all those empty spaces in the brown cardboard box and protecting them because of them being so fragile.

Edited July 22, 2009 by Shompis

[prateek]

This is a big reason why I don't order from S@H. Might as well go to TRU and buy it

[richb]

It is worth mentioning that S@H customers (at least in the US) are further penalized if they have a LEGO store in their state, as the customer then has to pay S@H's MSRP, plus shipping, PLUS sales tax, thereby neutering the one advantage (cost) of large Shop At Home orders. This is exacerbated when my local big box mart occasionally has LEGO-brand sales, such as buy-one-get-one-half-price, where S@H usually only has the deals on discontinued items, if I'm lucky enough to even see the deals before everything is sold out.

I placed an order for a little over $80 worth of product the day the golden minifig keychains were made available on S@H. My $80 order wound up being over $100 after S/H and sales tax, which I was billed because the Cincinnati Ohio LEGO Store opened that weekend, meaning LEGO had to charge me the sales tax too. Sadly, I didn't even know it, as the tax wasn't calculated in the online invoice and never appeared as a potential line item. I didn't figure it out until looking at my credit card statement and realizing LEGO billed me $7 over my invoice.

Between the prices, the associated fees, and the poor packing that has seen me receive both the Town Plan & Market Street sets MISCB (Mint in Sealed CRUSHED Box), I don't know that I'll order from S@H again.

[brickzone]

Here's a comparison of prices between main toy chain in Ireland (Smyth's Toys) and S@H (Shipping is €15 for orders of €70 or more):

Set: Smyths/S@H

Bold = Crazy

Venator Class Attack ship: €125/€130

Republic Attack Gunship: €100/€120

Battle of Endor: €95/€110

City Garage: €80/€90

City Construction Site: €80/€90

Anakin's Y-wing: €65/€75

City Farm: €65/€75

Brickbeard's Bounty: €65/€80

Republic Attack Shuttle: €65/€75

Coast Guard Boat/Tower: €60/€75

Police Headquarters: €60/€75

City Corner: €52/€60 (€42 in Art & Hobby stores)

Duplo Fire Station: €50/€60

Duplo Thomas Starter Set: €50/€60

Magnaguard Starfighter: €50/€60

Fire Station: €50/€60

Power Miners Crystal Sweeper: €50/€60

Armored Assault Tank: €50/€60

Venice Canal Chase: €38/€45

Agents Speedboat: €37/€45

Drawbridge Defense: €33/€40

Duplo James Celebrates: €30/€37

Shipwreck Hideout: €30/€40 (crazy crazy)

I could go on through the rest - suffice to say that for *MOST* sets, S@H is stupidly more expensive. Unfortunately they are a must for exclusives (which are also priced higher for Ireland to match their imaginary "Irish prices" for non-exclusive sets that aren't actually charged in shops here)

[HumanPackMule]

For such a brilliant company, I do find the price difference between S@H and the local store(Wal-mart, Toysrus, etc). The only reason I could see that would justify the use of S@H would be if the local Lego store(or any other store in the area) didn't have the sets that the site offered. Or if I was using someone else's money.

[Eilif]

There is a premium to be paid for buying online, but that is to be expected. Shipping cost is what it is, and that can't be changed. Further, if Shop-at-home prices were less than stores, then TLG would catch hell from the retailers for undercutting their business. It's much more important for TLG to maintain their relationships with retailers than to try and match prices. Also, online prices are nearly always less than TRU.

Shop-at-home is a way to service for special items, customers without a nearbly retailer, and those who want an extra degree of convenience, and their is a premium (in the form of shipping costs) to be paid for those services. Why should this be surprising?

Lastly, for those who watch shop-at-home carefully, there are often amazing deals to be had in the "Sales and Deals" section that are much better than store sales. They only happen a few times a year, but I've ordered quite a bit from those sales.

For those with a LEGO store in their area, go to the store and if they don't have what you want (and it is available on the website) you can order it in the store and they will ship it to your house for free. The only excpetion is that this is not valid for PAB online, and they won't match all online sales.

[blueandwhite]

The reason it's more expensive is because... it's more expensive. Honestly, large retailers can move goods in mass making it far less expensive for them to distribute to their stores/warehouses than it is for LEGO to ship it directly to each individual consumer. Sending 100,000 sets to Wal-Mart's distribution centers is alot more cost-effective than shipping 100,000 sets to individual consumers. Large retailers can also distribute costs across other merchandise to produce 'loss leaders' meaning more deals on alot of sets.

When you shop at S@H, it's about convenience; not price. Honestly, set hunting can be tedious and depending on how far you're willing to drive, a bit pricy too. With S@H you know what you're going to get, and when you're going to get it. No mess no fuss.

[Buckshot]

There are other factors to consider, too. The nearest TRU for me is around 70 miles away--do I spend $15 on gas to get there or $15 on shipping from Shop at Home?

Edit: sorry--sorta said the same thing blueandwhite said--yay for redundancy!

Edited July 23, 2009 by Buckshot

[salty tbone]

When you couple all of this with the option to buy from amazon.com, which offers free shipping on many orders over $25, it is astonishing that anyone would purchase from S@H.

So don't. Problem solved.

Seriously, though, I understand the points and they make sense. My take is that if Lego were gung-ho serious about online sales, they could obviously undercut retailers (no middle-man, after all), but that's not their desire I think.

Maybe there are toy manufacturers that do offer their product for cheaper than what you pay in stores, but I'd imagine they're rare. Buying stuff direct from Hasbro certainly doesn't come cheaper, e.g.

And it's a shame some people haven't had good luck with Lego's packing. I've never had a problem with crushed boxes, and Lego S@H doesn't at least as good a job as Amazon for me.

Still, I'm so cheap, I rarely buy things MSRP. If I do, I try to buy it from a Lego store just because I figure they make more money off me that way. Massage the hand that feeds you, or some such.

Edited July 23, 2009 by salty tbone

[CP5670]

I mostly only buy at S@H to get exclusives or the 50% clearance sales that Eilif mentioned. Everything else comes off ebay. As an NJ resident I have to pay sales tax as well as shipping, which means that it's rarely worth it to buy other items, and going to retail stores is too time consuming for my liking.

The main gripe I have with S@H is how they calculate shipping based on the cost of the order instead of volume. This makes specialty parts like PF elements cost way too much to ship.

The reason it's more expensive is because... it's more expensive. Honestly, large retailers can move goods in mass making it far less expensive for them to distribute to their stores/warehouses than it is for LEGO to ship it directly to each individual consumer. Sending 100,000 sets to Wal-Mart's distribution centers is alot more cost-effective than shipping 100,000 sets to individual consumers. Large retailers can also distribute costs across other merchandise to produce 'loss leaders' meaning more deals on alot of sets.

Not really. This is more than offset by the fact that TLG gets to keep all the S@H revenue themselves, without any middleman. A lot of small companies sell their products online exclusively for this reason.

[blueandwhite]

Not really. This is more than offset by the fact that TLG gets to keep all the S@H revenue themselves, without any middleman. A lot of small companies sell their products online exclusively for this reason.

LEGO can't simply undercut other retailers. I can't imagine that either Wal Mart or Toys R Us would continue to distribute LEGO if they were being undersold by the manufacturer? It's not the retail pricing that makes S@H expensive; it's the shipping. Smaller companies don't have to concern themselves with this simply because they have no outside distributors. Now I'm not terribly informed when it comes to large toy companies, but do other companies like Hasbro or Mattel offer free shipping or wholesale pricing to their online customers? I'm not sure, but my guess is that S@H isn't looking to compete or eat into the sales of local markets.

[madoka]

The reason it's more expensive is because... it's more expensive. Honestly, large retailers can move goods in mass making it far less expensive for them to distribute to their stores/warehouses than it is for LEGO to ship it directly to each individual consumer. Sending 100,000 sets to Wal-Mart's distribution centers is alot more cost-effective than shipping 100,000 sets to individual consumers. Large retailers can also distribute costs across other merchandise to produce 'loss leaders' meaning more deals on alot of sets.

Spoken like a kid with no business experience.

Shipping costs are trivial compared to paying for retail locations and the employees required to run them.

[blueandwhite]

Spoken like a kid with no business experience.

Shipping costs are trivial compared to paying for retail locations and the employees required to run them.

Um, I'm 32 with a law degree.

Edited July 23, 2009 by blueandwhite

[CP5670]

LEGO can't simply undercut other retailers. I can't imagine that either Wal Mart or Toys R Us would continue to distribute LEGO if they were being undersold by the manufacturer? It's not the retail pricing that makes S@H expensive; it's the shipping. Smaller companies don't have to concern themselves with this simply because they have no outside distributors. Now I'm not terribly informed when it comes to large toy companies, but do other companies like Hasbro or Mattel offer free shipping or wholesale pricing to their online customers? I'm not sure, but my guess is that S@H isn't looking to compete or eat into the sales of local markets.

You do realize that the customers pay for shipping on S@H items and not TLG, right?

I can understand that they may signed distribution contracts that prohibit them from lowering the S@H prices below certain levels, but on a per-unit basis it is certainly more cost effective to sell online. TLG sells Lego through retail outlets because of the widespread exposure and high volume sales they get out of it, not because they make more profit per set.

[brickzone]

Well, the "buffer zone" between Irish S@H prices and local toy shop prices is I think on the crazy side. Besides - those are the prices that S@H is for other European countries - and when I was in Germany even the non-Lego store prices seemed to mostly be the same too - certainly not differences of €10+!

As for shipping costs and economies of scale - well, the flip side is that Lego doesn't have to allow for the margin of resellers. Plus they have economy of scale because they ship from central hubs and presumably have pretty good contracts with the couriers/post services who also have economies of scale (they don't just ship my Lego order from Germany to Ireland, but rather a whole consignment of things various people and business have asked them to ship to Ireland).

[blueandwhite]

You do realize that the customers pay for shipping on S@H items and not TLG, right?

I can understand that they may signed distribution contracts that prohibit them from lowering the S@H prices below certain levels, but on a per-unit basis it is certainly more cost effective to sell online. TLG sells Lego through retail outlets because of the widespread exposure and high volume sales they get out of it, not because they make more profit per set.

I think I need to clarify.

I appreciate that purchasing from S@H is more expensive to the consumer; not to LEGO. It's not a question of being hosed on shipping or anything else. You're still paying MSRP. You simply agree to pay for the shipping of your own product instead of leaving it to a large retailer. I'm not espousing some expertese on LEGO's pricing. I just don't think it's unreasonable to expect prices to be higher when you shop online from LEGO. Retailers are always going to have an edge because as you said, they provide LEGO with high volume sales and a level of exposure that simply isn't possible through online sales. The S@H model is an alternative to good old-fashioned retail shopping, but I still don't think it was intended to compete directly with LEGO's conventional distributors.

[CP5670]

I think I need to clarify.

I appreciate that purchasing from S@H is more expensive to the consumer; not to LEGO. It's not a question of being hosed on shipping or anything else. You're still paying MSRP. You simply agree to pay for the shipping of your own product instead of leaving it to a large retailer. I'm not espousing some expertese on LEGO's pricing. I just don't think it's unreasonable to expect prices to be higher when you shop online from LEGO. Retailers are always going to have an edge because as you said, they provide LEGO with high volume sales and a level of exposure that simply isn't possible through online sales. The S@H model is an alternative to good old-fashioned retail shopping, but I still don't think it was intended to compete directly with LEGO's conventional distributors.

That makes more sense, if by "prices" you mean the final prices paid by the customer. Those will obviously be higher because of the shipping (but that may be nullified by the lack of sales tax, depending on where you live), but there isn't any reason for the advertised base price of a set to be higher than retail.

In any case, as I said earlier the problem I have is how they calculate the shipping cost. It's estimated from the price of your order and in discrete price brackets instead of going by the volume or weight, which can give something quite different from the true shipping cost. I have in the past dropped out small sub-$5 items from my orders because they were putting the total cost into the next shipping price bracket.

[Navy Trooper Fenson]

Like brickzone said, prices are mostly the same between stores and S@H but still I don´t get why LEGO can´t just make shipping costs lesser. I wrote to S@H an E-Mail where I asked why shipping is so different compared to Amazon, and they wrote me this answer:

Other than Amazon we don´t have warehouses in every country, but one for Europe. This sits in Billund, Denmark, where our central is placed. Whith the shipping costs we charge from our customers, you can imagine that this only covers a fraction of the original costs.

But I have a friend who lives near a LEGO entrepot, and I am shure that he doesn´t live in Denmark.

Another feature I have is that Galeria Kaufhof had exclusive rights for past 100€ Star Wars sets (Star destroyer, MTT, LAAT/I and Venator) and they managed to sell 6211 Star destroyer for 100 to 120 bucks for its whole lifespan and the only place where you could buy it for the original retailprice was S@H, where it costed 150 bucks plus 4,50€ shipping all time long.

How is it possible that the manufacturer is 30 bucks more expensive than the only retailer?

[Brickvergnugen]

Not having to spend my free time driving in congested shopping centers and deal with the masses is well worth the cost of shipping. There may be better prices to be found at other online retailers, but having a single source is mighty nice. I like to build, not shop.

[Randamatrix]

I don't really mind the higher price for using S@H. I commonly wait until around Christmas, when they have free shipping on orders over $99.99. There is a Walmart and a Target only five miles away from my house, but they are always crowded. Not to mention the fact that they have a really small Lego selection, so I have to go to S@H anyway.

Edited February 4, 2021 by Randamatrix

[jonwil]

I wish that the Lego store in New York would close though. It is 136 miles away and is therefore almost useless. But since it is there, I have to pay 8.25% sales tax on top of shipping costs when I buy from S@H.

Send it over here, we need a LEGO store in Australia :(

[fenrir]

Like brickzone said, prices are mostly the same between stores and S@H but still I don´t get why LEGO can´t just make shipping costs lesser. I wrote to S@H an E-Mail where I asked why shipping is so different compared to Amazon, and they wrote me this answer:

But I have a friend who lives near a LEGO entrepot, and I am shure that he doesn´t live in Denmark.

Another feature I have is that Galeria Kaufhof had exclusive rights for past 100€ Star Wars sets (Star destroyer, MTT, LAAT/I and Venator) and they managed to sell 6211 Star destroyer for 100 to 120 bucks for its whole lifespan and the only place where you could buy it for the original retailprice was S@H, where it costed 150 bucks plus 4,50€ shipping all time long.

How is it possible that the manufacturer is 30 bucks more expensive than the only retailer?

I realy don't know, But I like Galeria Kaufhof for that. When I'm in Germany I always visit the Kaufhof. Most of the times they have some good discount on LEGO.

( I believe they don't make a lot of profit on the big sets, but they do on the smaller sets you'll buy as well. Or at least they compensate with something else from the warehouse. Perhaps they make you enter the warehouse to buy the Star destroyer, and you buy something else too. I guess it works that way.)

S@H offers exclusive sets I can't buy anywhere else. (not cheaper anyway) So sometimes I order an exclusive set (and a couple of other sets) through S@H. And 50% off (for example) a castle chess set is nice. (I never find that much discount on Lego anywhere in Holland)

So S@H is great. You purchase an exclusive set, a set with discount to cover the shipping costs and some other sets you want. And they bring it to your home. You don't need to leave the house.

I think it's great!

Fenrir

[SuperCow]

Here in the Netherlands the shipping costs are normal, compared to other online shops, so that's OK.

The pricing ...well bit expensive, they use the same pricing as big toy shops as "bart smit" and "intertoys"

But then you have shipping costs extra, so its cheaper to get it in a store.

But I order my Lego at third party online sellers, its much cheaper. The Crane Truck 8258 costs 159,99 Euro (227 dollar) at S&H

But by third party its 122,50 Euro (174 dollar) that's a big difference.

And the second thing that bugs me a little is, when I buy exclusive Lego stuff, like the

Power Functions Extension Wire 8886

is at S&H 3,99 Euro (5,66 dollar)

When I change it to the UK (also Europa) the price is 2,45 pound, that is 2,85 Euro.

That pisses me a bit off, why is Lego much cheaper at UK? there is no hidden tax. (no offence to the UK people here )

[Big Cam]

If you have a LEGO store in your close vicinity, then you should'nt be ordering from Shop @ home, it's just redundant.

Anyone who expects to order something and have it shipped to you for free is ignorant. Someone has to pay for it, why would the retailer pay, you wanted it so you pay for it.

Shop @ home is just what was said above, a convinience for people who don't want to travel to a store, think of the shipping cost as an alternative to fuel costs and your time.

And to the person who said to order through amazon? Go for it, although free shipping is only on items that amazon.com actually has itself, if it comes from another retailer, you're paying shipping.

Edited August 13, 2009 by Big Cam