Are new Molds Expensive?

[Jareth]

Huh, it is interesing to hear that TLG recognizes that cheaper plastic is being made in China. I would say that it is crazy to make a $10,000 mold and then sell it as a small part in a set. Mabye this is why the sets are getting so expensive?

Considering how long lego has been around, I think the inflation issues are miniscule. Especially compared to Gasoline. Anyway, I've noticed lego sets have gone up in price by about 10% and I think that it is because of rising oil prices.

My Evidence? Well, lots of the standard bricks and plates are lighter by using hollow rods and thinner walls. Making a piece more complex white reducing the mass means that the raw material is now more expensive than the labor.

plus there's this set

http://shop.lego.com/Product/?p=6161&sku=3b850642-995d-4e47-bed8-d1fc825c6368

A basic brick box which used to be $15 in the US, and now it's $20. No new molds, exact same set, BUT it has a lot of 2xX bricks. The only things that can explain this price increase are devalued currency and higher plastic prices. Although either is possible, I think the plastic prices are a whole lot more likely.

[davee123]

TLG would use much more advanced molds than BA does...

I don't really know about BA per se, but I believe LEGO has a pretty wide range of mold complexity. The most difficult being things like the "chain" element, where plastic elements wind up interlocked, and the plastic is delivered to links in such a way that the mold can cool JUST RIGHT. That's supposedly one of the most complex, and likely most expensive molds that LEGO has.

I don't know, but I also would expect that element size has something to do with it. A small element will probably cool pretty quickly, whereas a larger element probably won't. So if you've got to inject plastic from one edge of the element to the other edge, that gives the plastic time to change slightly-- temperature, consistency, color, sheen, etc. So if that distance is large, I would think (again, I'm just guessing here) that you're more likely to get things like color discrepancies, and thus, would need more careful attention to the actual process of the plastic injection. I would think that would make larger elements' molds more expensive, unlike smaller elements (like the minifig accessories we're seeing in the collectible Minifigures lineup).

One thing that also occurs to me is that for the Chinese molds, if they're doing 1-offs for the Minifigures, why not make ONE mold that does (say) the clown's bugle, the nurse's syringe, and the cheerleader's pom-poms? That way, you're only buying ONE mold. That would make sense (and save money) assuming that those elements are ONLY ever going to be used in the Minifigures lineup.

DaveE

[davee123]

I've noticed lego sets have gone up in price by about 10% and I think that it is because of rising oil prices.

Well, that should be relatively easy to test theory-wise. Cost of ABS is reportedly $1-$2 per pound, and 1 pound of LEGO is typically about 350 pieces, IIRC (assuming you're talking about system sets). I've seen other quotes as low as $0.50 per pound, too, so I'm not sure what the ACTUAL price is, but we should be able to get a ballpark figure.

That would mean that:

at $2/lb, 1 element is about $0.0057

at $1/lb, 1 element is about $0.0029

at $0.50/lb, 1 element is about $0.0014

So, less than 1 penny per piece. The set you linked to has 221 pieces, meaning the raw ABS cost is between $0.31 and $1.20, which is between 1.5% and 6% of the set cost. So... no, that doesn't work, since the current cost of the ABS isn't even 10% of the set. That's still not factoring in how much of a percentage cost the oil is of the ABS, either. I'm not sure if oil is 5% of the ABS cost, or 99% of the ABS cost.

That's not to say it's not a factor, of course-- just that it's not more than 6% of a factor.

DaveE

[Brickdoctor]

I don't know, but I also would expect that element size has something to do with it. A small element will probably cool pretty quickly, whereas a larger element probably won't. So if you've got to inject plastic from one edge of the element to the other edge, that gives the plastic time to change slightly-- temperature, consistency, color, sheen, etc. So if that distance is large, I would think (again, I'm just guessing here) that you're more likely to get things like color discrepancies, and thus, would need more careful attention to the actual process of the plastic injection. I would think that would make larger elements' molds more expensive, unlike smaller elements (like the minifig accessories we're seeing in the collectible Minifigures lineup).

Well the larger molds do have multiple injection points. If you look at one of the big Belville fences, it's easy to spot two injection marks on either end. Not sure if that was actually your point.

One thing that also occurs to me is that for the Chinese molds, if they're doing 1-offs for the Minifigures, why not make ONE mold that does (say) the clown's bugle, the nurse's syringe, and the cheerleader's pom-poms? That way, you're only buying ONE mold. That would make sense (and save money) assuming that those elements are ONLY ever going to be used in the Minifigures lineup.

I wouldn't be surprised if they did do that. BA does that. I remember reading that one of the factors determining the time between prototype and product is how many other finalized prototypes are ready so that they can 'fill' up the space on one mold.

[Aanchir]

Considering how long lego has been around, I think the inflation issues are miniscule. Especially compared to Gasoline. Anyway, I've noticed lego sets have gone up in price by about 10% and I think that it is because of rising oil prices.

My Evidence? Well, lots of the standard bricks and plates are lighter by using hollow rods and thinner walls. Making a piece more complex white reducing the mass means that the raw material is now more expensive than the labor.

plus there's this set

http://shop.lego.com/Product/?p=6161&sku=3b850642-995d-4e47-bed8-d1fc825c6368

A basic brick box which used to be $15 in the US, and now it's $20. No new molds, exact same set, BUT it has a lot of 2xX bricks. The only things that can explain this price increase are devalued currency and higher plastic prices. Although either is possible, I think the plastic prices are a whole lot more likely.

While we're on the subject of molds, oil isn't the only thing that's risen in price in the past few decades. Steel, too, is rising in cost. And steel is necessary to make new molds.

I don't really know about BA per se, but I believe LEGO has a pretty wide range of mold complexity. The most difficult being things like the "chain" element, where plastic elements wind up interlocked, and the plastic is delivered to links in such a way that the mold can cool JUST RIGHT. That's supposedly one of the most complex, and likely most expensive molds that LEGO has.

I don't know, but I also would expect that element size has something to do with it. A small element will probably cool pretty quickly, whereas a larger element probably won't. So if you've got to inject plastic from one edge of the element to the other edge, that gives the plastic time to change slightly-- temperature, consistency, color, sheen, etc. So if that distance is large, I would think (again, I'm just guessing here) that you're more likely to get things like color discrepancies, and thus, would need more careful attention to the actual process of the plastic injection. I would think that would make larger elements' molds more expensive, unlike smaller elements (like the minifig accessories we're seeing in the collectible Minifigures lineup).

One thing that also occurs to me is that for the Chinese molds, if they're doing 1-offs for the Minifigures, why not make ONE mold that does (say) the clown's bugle, the nurse's syringe, and the cheerleader's pom-poms? That way, you're only buying ONE mold. That would make sense (and save money) assuming that those elements are ONLY ever going to be used in the Minifigures lineup.

DaveE

Keep in mind, though, that while most (not all) of the collectible minifigure parts have remained exclusive to the collectible minifigures, many have been re-used within the collectible minifigures. If LEGO introduced a new series of minifigures that reused the syringe, there's no reason they'd mold new bugles and pom-poms at the same time unless they were actually using those pieces in that series. Also, as I understand it, LEGO's machinery is designed so that each mold gets fed one color of plastic at a time. Thus, unless those parts were all going to be the same color, they couldn't use the same mold for all three. Never mind the difficulty of sorting out the parts once they're molded-- as I understand it, each mold just dumps the parts out all at once, as seen here and here.

[fred67]

My Evidence? Well, lots of the standard bricks and plates are lighter by using hollow rods and thinner walls.

Perhaps... but I don't think this is even possible. I mean, if you make the "wall" of a brick thinner, then either it wouldn't clutch or you'd get gaps that are too large between consecutive bricks. I realize this sometimes happens (consecutive bricks not matching as well as they used to), but I don't think it's substantial and most bricks seem to fit together just fine. Moreover, we have the point that davee123 makes (quoted in part below).

plus there's this set ...

I'm sorry, but sometimes it's just a case of a company wanting higher profit margins. TLG is a profit driven company; they may be more magnanimous to their customers than other companies, but the bottom line is still profit, and they apparently are not making as high a margin as they'd like to. That's all the explanation that's required when someone raises prices - they are selling enough units that an increased price more than makes up for decreased sales in profit. I'll say this, too, based on previous discussions here, TLG insinuated that low prices in the U.S. were subsidized by higher prices elsewhere. Now, I think that's a load of bunk... if anything, I'd say lower profit margins were subsidized by higher profit margins elsewhere, and now they are slowly but surely raising profit margins in the U.S. to be more consistent with elsewhere so that TLG's overall margin met a certain goal (a pretty high one at that, by my estimation). You need look no further than two consecutive 10% jumps in battle pack prices and a 50% increase on CMFs (we are talking U.S. here, as that example you gave was in the US).

Well, that should be relatively easy to test theory-wise. [...] So, less than 1 penny per piece.

...

DaveE

So making a tube hollow instead of filled is essentially pointless from a cost savings point of view; I don't believe they're trying to use less plastic, at least not by modifying existing bricks to eliminate 1/100th (or less) of the plastic used; the effort would cost more than any savings could possibly give them.

To stay back on topic, I know for certain that TLG makes molds to do multiples; I think we've ironed that out by now... I don't want to discuss the story of the 9V tracks (as a lesson for TLG of what NOT to do), but we learned that straights and curves were made in pairs (don't know how many pairs per mold, though, and it was apparently just a single mold)... much to the dismay of customers who needed more straights. I think they haven't learned when they went to the new plastic only tracks (I believe it's a different mold, even if based on the old one, because the old one left room for the metal).

But if you're trying to figure out if molds add a significant amount to the price of an item, I'd have to say no. Everything adds something to the cost, but I don't believe it's significant. More money is probably spent on salaries for employees, advertising, shipping, compliance (each country with it's own rules and regulations and systems of taxation)... raw materials and processing is probably the least of it.

I also believe TLG intentionally limits production so as to keep demand high, and I don't begrudge them that... I think part of their problems 10+ years ago was over production.

Edited February 16, 2011 by fred67

[AndyC]

I'm sorry, but sometimes it's just a case of a company wanting higher profit margins. TLG is a profit driven company; they may be more magnanimous to their customers than other companies, but the bottom line is still profit, and they apparently are not making as high a margin as they'd like to.

Or one of the intermediaries. If the distributor or stores feel their margins are too small, then the final price is going to go up.

But if you're trying to figure out if molds add a significant amount to the price of an item, I'd have to say no. Everything adds something to the cost, but I don't believe it's significant.

Of course that assumes you can amortize the cost of the mold across all the pieces it could produce in it's entire lifespan. If you make a highly specialised one-off mold for a piece and then barely sell any of the sets the piece is used in, the cost starts to become extremely significant. The more likely a piece is to be used in different sets the less risk there is associated with producing the part and therefore the less significant the mold cost becomes.

[davee123]

Well the larger molds do have multiple injection points. If you look at one of the big Belville fences, it's easy to spot two injection marks on either end. Not sure if that was actually your point.

That's certainly a result of my point :) Effectively, my guess is that some parts are so large that they require multiple injection points, and figuring out where those points go, and when they should get flooded is extremely complex.

Keep in mind, though, that while most (not all) of the collectible minifigure parts have remained exclusive to the collectible minifigures, many have been re-used within the collectible minifigures.

Yep-- that's why I mentioned only parts that I didn't think would be likely to be re-used. And of course they may not do it at all, but it could always be one way that they're saving money to bring us more new molds every year.

Also, as I understand it, LEGO's machinery is designed so that each mold gets fed one color of plastic at a time. Thus, unless those parts were all going to be the same color, they couldn't use the same mold for all three.

Well, that part I'd be curious about since they can do the blended molds, and because they supposedly inject the dye at the same time as the plastic nowadays, rather than the pre-colored ABS pellets. Again, as you point out it might be more trouble than it's worth, but I believe it's feasible given the technology.

Never mind the difficulty of sorting out the parts once they're molded

Well, we know that for some elements (like the steam train wheels), they indeed do both sets of wheels in the same mold, so they manage to sort them out somehow.

Anyway, I'm not trying to imply that they do it, or even that it's probable (I honestly doubt that it's true) but more that it's another possibility that might make new molds effectively cheaper on a per-part basis.

DaveE

[benhead]

I do believe so.I`ve seen the process of creating a master mold for casting parts.It is not cheap,thousands of dollars for each steel master mold.

It also depends on the price for plastic at the time.Lego probably has there process all automated with computers controlling milling machines and the like.

I used to have a job where I got to use a giant plastic injector,it looked alot like an old steam engine without the wheels.These machines were very exspensive to operate,more so when some of the plastic pieces refused to come out from the mold and you had to stop the machine and climb inside to pry them out with out getting your arms burned(why I don`t do that anymore).