Bricklink (LEGO) is closing stores all around the world

[MAB]

8 hours ago, Plumber said:

As regards tax affairs, individuals (and entities) are responsible for their own tax affairs not TLG or anyone else, many tax authorities do  require businesses to routinely divulge sales records for the authority to cross check taxpayers submissions and yes they are asking for more detail from more organisations, but how hard can it be for a completely digital business like BL to produce a quarterly transaction report to hand over for ten or even two stores???

Bricklink has to do more than report and hand over records. When they charge fees to sellers it is a paid service, they have to collect VAT on those fees in some locations but not others and remit those. For sales to buyers, they sometimes have to collect sales tax or VAT and ensure that the correct certificates are issued. Instead of them doing this for each country, they are using 'processing partners' that are essentially a company based in the region that is responsible for correctly calculating, recording, collecting and remitting tax on their behalf. And keeping these updated, so they are always compliant with changing rules. I assume it is not worth them partnering with a company where the revenue is negligible, and it is definitely not worth their time trying to understand often complex rules about what individual countries require. 

I was looking at some of the stores in countries where there are only a couple of stores and based on the feedback numbers and the size of store, I reckon their yearly sales could be maybe a few hundred dollars. That might be a big deal for their 'pocket money'. But if it was $300, then bricklink gets $9 in fees. Even if there are 10 stores, that's still less than $100 income. If I am wrong by a factor of ten, it is still less than $1000 yearly income for BL. I don't know how much it costs them to partner was a local tax partner and to implement necessary changes in their software to collect the correct information for that country. But I doubt the numbers add up.

I used to sell to Germany via BL and I normally did maybe 20 sales a year there so relatively small. But when the new packaging laws came in and the requirements to register (at a cost) to be LUCID compliant, I stopped selling there. It wasn't worth the registration fees. Some people ignore it and get away with it but I prefer to reduce risk and comply. Occasionally German buyers ask why and try to convince me it wouldn't be caught but it isn't worth it, especially as the item is likely to sell to a UK buyer, or maybe to someone in France or The Netherlands if I wait another couple of weeks. Even if there was additional income opening up to German buyers, the additional LUCID fees don't make sense nor does the time required to look into it. I imagine it is the same for BL where there are small numbers, not worth outsourcing to a local company and not worth their employees' time.

[MAB]

8 hours ago, Toastie said:

And now it is BL. My beloved source of secondary market items. I wonder when they'll pull the plug on all that ancient stuff, that surely has items "in" them, TLG is nowadays terrified of. The 4.5V series of items, where you can swallow essentially so many parts in one go. Just as an example. I believe this could be a legal route to just happily pull the plug.

I just see todays TLG as a totally capitalistic, even rude entity. And that is totally OK with me. All these large global companies are. Otherwise, they cannot exist in such a rude environment. It is what it is.

LEGO can never kill the secondary market for LEGO products and they know that. If they remove items from BL, they would get sold elsewhere (look at the Osprey set). They can choose to destroy their site but that market will move elsewhere or they choose to have some involvement and get the information they want (and some income that is tiny compared to their other operations and probably barely covers their staff and infrastructure costs). But if they choose to have involvement it has to be cost effective.  And in some regions it won't be.

I'm surprised they didn't take preventative action against Vietnam earlier given how much trouble users there were causing. Of the 100000 or so buyer accounts being blocked, 60% of them are Vietnamese and nearly all of them are scam accounts, used to try to scam others or advertise gambling sites. Those users are pretty rude. I guess the issue is if they block them then the same users will just use VPNs to do the same thing from other virtual regions. 

[Ardelon]

The rationalizations of compliance and cost-effectiveness seem to me to be undercut by the fact that the current model has been working for years and i don't remember any huge scandals about tax fraud being linked to BL or its users' stores, nor am I aware that the expenditure on experts in local put any dent into TLGs growth into the world largest toy company. I assume these expenditures must be minuscule to the point of being negligible, like firing a few gardeners or cafeteria workers, compared to the massive earning of TLG. And i would think these expenditures are counterbalanced by the positive global image of Lego as a toy that everyone everywhere can enjoy, an image that this step would undercut.

[MAB]

42 minutes ago, Ardelon said:

The rationalizations of compliance and cost-effectiveness seem to me to be undercut by the fact that the current model has been working for years and i don't remember any huge scandals about tax fraud being linked to BL or its users' stores, nor am I aware that the expenditure on experts in local put any dent into TLGs growth into the world largest toy company. I assume these expenditures must be minuscule to the point of being negligible, like firing a few gardeners or cafeteria workers, compared to the massive earning of TLG. And i would think these expenditures are counterbalanced by the positive global image of Lego as a toy that everyone everywhere can enjoy, an image that this step would undercut.

Many countries have new marketplace laws around tax reporting and collection that are coming in, or have come in in the last couple of years. In the UK, tax was always due on sales (on profit after expenses) whether it was sold on BL, ebay, vinted, etc. But, guess what, people didn't declare it. So now sites have to pass on details to government when someone hits 30 orders or £1700 per year. The EU has similar rules, as do many other countries. Similarly VAT was never charged on BL fees but now it is, it has to be collected and remitted in each country where they operate. Laws change and even though business models worked in the past, that doesn't mean that they can ignore new legislation. 

It is true that any costs are tiny compared to the LEGO groups total earnings, but that doesn't mean that it should not be financially well managed.  Even though links are closer than ever with LEGO now accounts are merged, it is supposedly a separate company and if it became loss making I would imagine LEGO would just cut it.

I'm not sure how much of an issue it is for the global image. I don't think many customers in LEGO stores or toy stores know about bricklink, or use bricklink,  or care about people in other countries access to bricklink. I imagine the numbers are small and get smaller in that order. 

A lot of youtubers made videos about it once other people had, but I wonder how much of that is because they actually care and how much is because outrage at LEGO gets them hits and they profit from that, or they need to because if other youtubers are outraged then they need to be to keep up. 

[Mikdun]

This discussion is really enlightening! I only wish LEGO posted such information (assuming it's the real reason - which it seems to be), I was very surprised to read about store closing in selected countries.

[MAB]

7 minutes ago, Mikdun said:

This discussion is really enlightening! I only wish LEGO posted such information (assuming it's the real reason - which it seems to be), I was very surprised to read about store closing in selected countries.

I imagine it is part but not all of the reason. I expect there to be a whole list of different reasons for different countries, some where it is clear cut and others where it could have gone either way. And although it would be nice, I doubt bricklink/LEGO would ever tell us because then it would be "why country A, when country B has the same or similar rules", "country C is more important than country D", and of course there might also be financial reasons and/or strategic partnerships where they would not want to disclose secretive information.

Not that any of that helps the genuine sellers or buyers where they are affected by it. But at least they have a little longer to both benefit from pre-Christmas sales this year and to decide whether and where to shift their business to.

On some forums and youtube, some people are saying it is the end of bricklink with such bad press. But it really only affects about or less than 2% of buyers when you discount the scam accounts from Vietnam. So it will be interesting to see what the order numbers are like going forwards. For me, they have been tending to an all time high over the past two years when looking month by month (although I keep records on order value rather than order numbers). Even in the last two weeks, about 1/3 of my orders have been from  what appear to be new, zero feedback buyers. Whether they are new or just messed up the account integration and need a new account I don't know, but if bricklink can tap into the large number of AFOLs that have been buying / collecting sets and get them to start MOCing as well, then I imagine it will continue to grow. I guess most people (especially adults) start by buying sets then discover bricklink when they want to take the hobby further than just official sets. If so, then then the increase in LEGO fans in recent years will continue to filter through to growth in BL too.

[Toastie]

Soooo ;)
Just signed up on BrickOwl ... why? Because on BL, the price tag for a 9750 was $130 upward, on BO $42. NOT the point. It was aThe thing was the signing up experience: Within 2 minutes done, including verification. Next was: "Please ask for quote for shipping" (as the 9750 was hiding in the US). One half day later: Shipping costs were (of course) substantial, but in total far less than a total of $130 + shipping (from the Netherlands). Clicked yes, yes and yes - and delivery is underway. What a smooth experience, got in contact with the seller, all really, really nice. Even their web interface is so much smoother. 

So yes, BL is a good resource. So are other places. Plus, I did not need to choose a (totally stupid) avatar, nor did to answer (any stupid) questions.

Best
Thorsten

 

 

[dr_spock]

Perhaps the seller on Brickowl had no idea how much (and rare) that interface card would be worth to the right buyer.  It pays to shop around.  

[hrdknxbrix]

For comparison, BrickOwl has banned these countries.