How come other retailers offer a cheaper price?

[mobi]

How come it is possible that other retailers (e.g. Argos, Amazon etc.) offer cheaper price on many sets compared to Lego's own price?

For example, Amazon is selling 9398 for £116.58 against Lego's price of £139.99

http://www.amazon.co.uk/LEGO-Technic-9398-4X4-Crawler/dp/B006ZS4SXQ/ref=sr_1_1?ie=UTF8&qid=1361461188&sr=8-1

[CorneliusMurdock]

Retailers buy huge amounts of sets in bulk from TLG itself and then sells them at retail price for a profit. S@H and Lego brand stores sell at retail price directly to consumers and TLG keeps that profit.

[Hrw-Amen]

So if you knew say a thousand people who all wanted a particular set could you phone up Customer Service and get a huge reduction in price for buying in bulk?

[Bighappysmiles]

So if you knew say a thousand people who all wanted a particular set could you phone up Customer Service and get a huge reduction in price for buying in bulk?

To get something like that, I think you would have to be a registered retailer. So no, you couldn't do that unless you own some kind of business that has a reason for wanting to buy 1000 sets.

[CisFran]

Retailers buy huge amounts of sets in bulk from TLG itself and then sells them at retail price for a profit. S@H and Lego brand stores sell at retail price directly to consumers and TLG keeps that profit.

That's true..Here, Migros (Switzerland) sells lego way much cheaper than Manor and Franz Carl Weber..Since Migros have hundreds of branches, they buy bulk sets for all their branches, and for sure got a huge discount.

Example is the Technic 8110 Unimog, Migros sells it for CHF198.00 vs CHF249.00 in Manor and FCW.

Consumer wins!

Edited February 21, 2013 by francisalmario

[Faefrost]

How come it is possible that other retailers (e.g. Argos, Amazon etc.) offer cheaper price on many sets compared to Lego's own price?

For example, Amazon is selling 9398 for £116.58 against Lego's price of £139.99

http://www.amazon.co.uk/LEGO-Technic-9398-4X4-Crawler/dp/B006ZS4SXQ/ref=sr_1_1?ie=UTF8&qid=1361461188&sr=8-1

In the case you linked, that isn't Amazon selling that. That is a private seller darin1471 offering it at that price. There can be any number of reasons he may be seeking to sell it below list, some legit, such as he got it as a gift, or profited in some way from a currency conversion or import, to the less legit such as he may be doing a drop ship scam.

It also looks like the regular Amazon price is 139.00 but it is on sale today or this week for 20% off. So 120. Amazon will routinely run short one or two day sales on an item to churn stock.

[Navy Trooper Fenson]

Retailers buy huge amounts of sets in bulk from TLG itself and then sells them at retail price for a profit. S@H and Lego brand stores sell at retail price directly to consumers and TLG keeps that profit.

That doesn´t explain anything.

If LEGO sells their set for 140 and Amazon sells their set for 140, shouldn´t LEGO be making a greater profit by cutting out the middleman? They should technically be able to give the best prices, yet S@H is the most expensive LEGO retailer I know and rarely makes special offers or price reductions compared to the other retailers that charge 4 to 40 bucks less for every single set.

Seriously, the only things I buy on S@H are their exclusives.

[TanTile]

from what i under stand The LEGO Group sell there Sets at full Retail so as not to compete with other retailers (their Main income) because if they do they would get less orders and therefore sell less, and the fact the other retailers are able sell cheaper is because they get bulk order discounts and are able to offer a percentage off sale and in return turn over more stock and in the long run make more profit.

[TheLegoDr]

I agree. LEGO typically is the most expensive option for LEGO products, but I still buy from them from time to time. The VIP program is neat and all, but if you wait for sales you typically will save more than what VIP offers. But the dilemma is waiting for the proper sale.

[AndyC]

Many factors come into play with things like this. Different companies will have differing overheads, for example. And major retailers like Amazon can take advantage of economies of scale and a much broader product range to decrease their costs per item (in simple terms someone buying a set from Lego will only be buying that set, but someone buying from Amazon may well be persuaded into buying other things at the same time)

[Leo604]

Some stores (like Walmart which I find to be on average the cheapest place for me to buy Lego) are also large enough in that they don't require/aren't pressured to boost the prices for a greater profit. It's a small difference but chump change to them in the long-term.

[LEGO Historian]

Selling at full retail so as not to undercut the prices of their customer retailers is a common practice of not just LEGO, but of most ALL consumer items.

It may result in their profit being much higher than that gotten by the retailers selling their products, but that's a benefit to them of keeping their retailers happy.

Edited February 22, 2013 by LEGO Historian

[paanjang16]

Large retailers like Amazon can have a low price on sets because their income and profit does not only come from Lego alone. They are able to keep a very low even no profit margin on Lego sets just to attract customers to their site which might buy other products which will result in a better profit than the profit generated from the Lego set. Also due to the large volume of sets that is purchased they can get a competitive pricing from Lego.

Lego sells its products at RRP so that it does not compete directly with its retail customers such as TRU, Walmart etc which buys in very large quantities. If you want to have maximum exposure for your product and want it to be sold in major retailers you need to ensure your retailers are able to move your goods in the first place. Unless of course Lego wants to invest lots of money to open a Lego Shop in every town and city in every country to sell its products which I doubt they are able to.

Imagine if Lego set up a roadshow inside a shopping mall with its products at 30% to 50% from the normal retail price. While it may be good for customers it will undercut any TRU or major retailer/toyshop in the same mall which bought the sets from Lego in the first place. In the future all these retailers would refuse to buy from Lego anymore since Lego will forever undercut them and leave them with stock they cannot move.

Lego is doing what Samsung, Apple, HTC, Sony etc al do; While these companies have their own store, the pricing inside the brand store does not undercut major electronic retailers like K-mart, Walmart, Carrefour etc.