Results from the quarterly survey time April 2013

[Alternator]

The survey didn't say anything about ripping off different regions of fans. It did say that Australians, New Zealanders, and Western Europeans feel the lowest value for dollar spent. It doesn't necessarily mean anything. Anyone at anytime could not feel like they got a good value for their money spent, even if it is a good deal compared to someone else.

For every person that complains about costs overseas, there are plenty of people in the States that complain of prices. No one likes spending a fortune on anything, especially their hobby. There are a lot of big exclusive sets that may be priced accordingly, but that doesn't mean I wouldn't want to get them even cheaper. It's the same thing, over and over.

Well it's unlikely we'll suddenly change our minds about the value for money thing while we can still see the price differences. While everyone no matter the region may want things cheaper, I would say that there are general threshold prices which change the way you feel towards something and if you can consider it good value for money or not - don't get me wrong, I love Lego, but it is expensive here and so I can't rate it good value for money.

The results are interesting, but not too surprising. You release it in more languages and more people respond. It is interesting that more women are involved in the community. Is it because of their children, husbands, or just simply they want to be involved? More power to everyone.

What I found interesting was that it sounded like the % of women who responded decreased, was that just because proportionally less women responded across the board, or because those other regions pulled the stat down (i.e. less women involved in the new countries in the survey). I don't think they meant more women in the community per se, but that in general terms female lego fans are more likely to be community involved (how I read it anyway). 8% is a fairly low stat, it would be cool if they manage to increase that; my partner likes Lego, but she doesn't really indulge in it (I think mainly due to that price issue).

Edited June 7, 2013 by Alternator

[Deathleech]

Reason why the US buys more...its cheaper.

That's only a tiny part of it. Look at the U.S. population compared to Australia. The U.S. has almost 314 million people. Australia? Not even 23 million. That means the U.S. has 13.5 times as many potential buyers as Australia. So you say lower prices would make you buy more Lego? Would reducing the price by half (roughly the same as U.S prices then) make you buy at least 13 more of every set? I am guessing you would get twice as much, MAYBE three times as much max. You definitely wouldn't be buying 13 times as much as you currently do. That's what it would take theoretically to get the same prices as the U.S. (yes I realize every one of those 314 million people don't buy Lego, but you get the point).

Hope you are kidding ?

If I were you, I you would start a petition to get prices on the Official Online Legostore up to 30% higher for people, say, from Montana (compared with prices for those from New Jersey).

Those difference between states you listed above are as high in the US as in the European Union.

That would be great fun ... as for us in this old Europe.

States in the U.S. are much more in line and standardized with each other than different European countries, I imagine, so your example isn't terribly accurate. A better example would be getting a medical procedure done in the Texas vs Mexico.. only a border seperates them yet the price difference is astounding (and one could argue so is the quality, but that's another debate altogether).

[Faefrost]

Hope you are kidding ?

If I were you, I you would start a petition to get prices on the Official Online Legostore up to 30% higher for people, say, from Montana (compared with prices for those from New Jersey).

Those difference between states you listed above are as high in the US as in the European Union.

That would be great fun ... as for us in this old Europe.

I don't think Lego prices have a lot to do with costs.

Those box I once ordered on Legoshop where produced in China, Hungary, etc.. (sometimes Denmark, probably the price sticker) shipped to a big warehouse somewhere among the Vikings and then delivered by a Romanian driver in a Polish truck.

I don't think cost's would have been different if he (the romanian driver) had to deliver in Germany (just turn left instead of right on the Rhine river highway).

What a stupid consumer strategy !

I live in France, in the east, the country that we called "of the three borders" (Belgium, Luxemburg, and Germany).

And there, it's worth taking you car to go shopping accross the border, not only for beers (go to Germany for long-drink beers, to Belgium for strong flavored ones, to France if you want to spend a lot for chemical ones and then leave what you haven't spent on an bank account in Luxemburg to avoid most of European taxes - I'm joking).

It is worth also for Lego, as long as you intend to buy a big set.

[i could there also speak about anticipated and limited series, themes that are not issued in a country, etc...]

Wow! You completely miss the point. Much of those fixed costs that I mention, they are purely artificial costs applied by the region or locality themselves. Australia is unfortunately legitimately somewhat screwed. They don't impose particularly high costs on business as a matter of policy. However the traditionally overly extended supply chain combined with the relatively small customer base increases costs. This is further complicated by the simple rule that merchants will sell at a price the consumers are willing to pay. That is that balance point of perceived value, Australia is so used to paying more for everything because of how remote they are generally considered to be, that they continue to pay more. US consumers traditionally tend to be a bit less forgiving on this subject.

And then we come to the absolute perfect example. One that I have been more than a bit hesitant to bring up. You live in France. Which is bar none the current record holder for worst industrialized nation to do business in. Much of those costs of doing business stem from artificial costs imposed by the locality or nation. And there is no nation on earth at imposing said costs as France, that are not actually engaging in corruption. And these costs get passed to the consumers. Heck did you see this weeks stories regarding the French Culture Mnisters actions against Amazon because they threaten local French bookstores when they offer discounts? Or the degree that French Law places limitations on the larger block vendors such as Amazon in order to keep their prices inflated to be the same as the small local shops? You cross the border to buy cheap beer with better quality. Do you not understand that the same forces apply to Lego? And that the differences between US and Euro pricing is just the same mechanism on a larger scale?

As far as New Jersey vs Montana. The costs vs profits differences balance out to close enough that most large multi state merchants will flatten the pricing to keep it even. New Jersey has the higher population and customer base so they will sell more. But Montana has the much lower costs of doing business. Both states are still operating under the same core tax and regulatory system. Local taxes and cost differences are therefore much more limited than what they are cross border in Europe. The European Union has been an attempt to similarly flatten these costs accross the boards. But currency union without fiscal union does not work as well for that.

And once again an element of he equation is that perception of value. Pricing will where possible rise to what people are willing to spend. And in Europe people have become horribly conditioned to spending more and getting less for it. This is neither limited to nor an effect of Lego.

[LegoPohm]

New Zealand just doesn't have the population to support a big Lego buying base. I always shop around and go overseas via the Internet, I always look and wait for sales/specials. It's the same for just about anything here, hobbies to food, a small population and very little competition. The real bugbear for me is the fact that not all sets make it out here, poly bags for instance. I'm lucky that relatives in the UK help out but I do feel that the hike in price is not a true reflection of shipping cost additions, but is that a taxation thing that is out of control of Lego?

[daoudbazaar]

Wow! You completely miss the point. Much of those fixed costs that I mention, they are purely artificial costs applied by the region or locality themselves.

I do agree that taxes (and sometime national lobbies) don't help, but it can't explain the great part of the mess about prices.

Like Amazon in Europe, most of Web vendors are fiscally located in Ireland and pay all of their taxes there. That's the way they legally escape local taxes.

So why is Lego shop cheaper for Germany delivery than for France ?

Why is this often the contrary (for Lego sets) on Amazon ?

3 of the 4 toy shops in my shopping district display the same price grid for Lego set. The fourth one is a Belgian franchise : bigger sets are often much more expensive as smaller set are often cheaper, sometimes up to 25%. You may find there themes that comes not out in France, or find them earlier. And exceptionally, you may find limited set restricted to another network. It's obvious their supply chain comes from abroad.

Taxes and regulations do not vary with size of sets, themes, playmobil release date (news are released 6 month earlier in Germany), etc.

But Lego prices difference between countries do.

And the cheaper is not always the same place ...

Juste realize that, for instance, set 10232 is 7% cheaper in The Galerie Lafayette Haussman, THE very big department store in THE very centre of Paris where local, national taxes, excise duties, rent ... everything is higher than anywhere in France (and even in the World according to you) than Legoshop @home a web seller without go-between and with minimum taxes ...

That's so frustating and irritating to find next door the same set you bought 25% more.

Who want to buy Lego Tower Bridge 10214 EUR 219.99 when it's on shelves for a year at EUR 169.99 in my local toy shop (a brick and mortar toy shop with employee, taxes, rent..) ?

And that the differences between US and Euro pricing is just the same mechanism on a larger scale?

As far I'm concerned, I don' care. The funny thing is that is sometimes cheaper to (re)import even with USPS shipping fee (~50/60 $), VAT (+19,6% on value including shipping) and customs tax perception fee (~26 $) added.

This is less a problem of high price but more a feeling of inequitable differences.

Big price differences on the same set noticed in a short period of time within a finally small area tend to show inconsistencies in prices and develop the feeling of being outsmarted, duped.

Say that, it won't ruin my enjoyment of buildind more and more with my Lego bricks !

[Faefrost]

I do agree that taxes (and sometime national lobbies) don't help, but it can't explain the great part of the mess about prices.

Like Amazon in Europe, most of Web vendors are fiscally located in Ireland and pay all of their taxes there. That's the way they legally escape local taxes.

So why is Lego shop cheaper for Germany delivery than for France ?

Why is this often the contrary (for Lego sets) on Amazon ?

Doesn't French Law limit online stores and Mass Merchants that their pricing has to be within 5% of the small brick and mortars, that need French "cultural protection"?

And guess what? Amazon and Lego etc have gone to great lengths to avoid onerous French taxes and anti business regulations and policies. They are not going to be all that anxious to pass those savings back through to French customers. I think the technical term is "Fudge 'em!" I know I argue that regional pricing stems from costs calculations and normal business flow, and not any sense of spite or desire to punish a particular group. France today might be an actual exception to that. They aren't going to jack the prices up simply out of spite. But they aren't going to go out of their way to bring them down either. And they will make sure the consumers see every increase. It's just as much politics as it is economics.

[Aanchir]

There's also the fact that if TLG offers sets online for less than you'd pay in a brick-and-mortar store, then brick-and-mortar stores will be less willing to carry their products. This is a Bad Thing. Certainly LEGO can make a lot of money through their online shop, but at brick-and-mortar stores they're more likely to get customers who weren't necessarily looking for LEGO in particular, which means a wider customer base on the whole.

[Peppermint_M]

In general, fans outside of Northern, Central, and Southern Europe don’t feel they’ve had good opportunities to participate in events with other LEGO fans, fans in Eastern and Western Europe especially feel this way.

I certainly do. The Event was my only real chance for it this year, I am looking into Fan Weekend though.

[ShaydDeGrai]

(snip)

So why is Lego shop cheaper for Germany delivery than for France ?

(etc.., more snips)

Taxes and regulations do not vary with size of sets, themes, (snip...)

But Lego prices difference between countries do

I think there _are_ subsidies involved in the price differences, but they're not things under the control of TLG. One aspect of an economy of scale that I think people are overlooking is how easy does the government make it to promote consumerism, and do they use tax dollars to do it. I can't speak for higher prices elsewhere in the world, but in the US, we have cheap fuel; we subsidize trucking; we subsidize airlines and air freight; and, in general, through one inflated budget after another, use tax dollars to push down costs that would (normally?) be passed down to the consumer - (and then we try to get that money back through sales tax, income tax on jobs created, excise taxes, estate taxes, etc. but that's a different issue).

For example, due to the wonders of the internet I was able to find out that if I wanted to ship a palette of goods weighing 100 Kilos and taking up a 1 meter cubed in volume from Berlin to Paris it would cost about 130 Euros (173 USD) based on averaging quotes from three random private companies I found online. To ship that same palette from Boston to L.A. (5 times the distance) in the US it would 36 USD, roughly one quarter of the price (I didn't factor in time, but 24 hour delivery would have been much more)

Now a 1 meter cube can hold a lot of Lego, but let's say these were big kits and the palette held 4 kits per layer stacked 10 layers tall (40 kits). Amortizing the cost in the US would add 1 dollar to price per kit. In Europe, it jumps to about 3,25 Euro (~4.25 USD) per kit. If there were 100 kits on the palette, the amortization would be spread wider (only 1,30 Euro) so really, the size of the box matters regardless of it content. Keep in mind this is an expense incurred by TLG before they even put the kit on the shelves, this is just to get it to the local distribution warehouse and just one of many factors that _could be_ (just guessing here) contributing to the wild price deltas in different markets.

Other issues that crop up relating to scale and shipping is how many times do people need to touch the product. If I know I'm going to sell an entire shipping container-full of Ewok Village via US S@H, I can have my factory pack the palettes, fill the container to the brim, put the container on a train, transfer the container from a train to a boat and ultimately back onto another train which takes it directly to my automated distribution hub. I pay for bulk shipping, clear customs once, pay any applicable duties and tariffs, and I'm go to go. I can do this a lot more cheaply than if I need to unpack the container at some point, then send 2 palettes by truck to A, 1 by truck to B, 6 by Train to C, etc. where at each destination they have to break the palettes into even smaller lots and sent 10 kits here, 5 kits there, and deal with local import declarations, duties, tariffs, etc. In the first scenario, I'm effectively moving one very big thing from point X to point Y across one border (and once at Y, I can charge for shipping explicitly on a per unit basis). In the latter, I need people to unload, make decisions, and repackage things at multiple stops along the journey from point of production to point of sale and that incurs a lot more overhead which, naturally, gets reflected in the price. If I can't even fill an entire palette with all one type of kit (or all the kits for one ultimate destination) the situation gets even worse.

So yes, Americans do get good prices, in part due to volume of Lego purchases, but also very much because of our spending habits in general and a government set up to use tax dollars to make cheaper and easier for suppliers to get their products into our grubby little hands (just as airfares to Orlando are some of the cheapest around because the theme parks and the state of Florida pay the airlines to keep it that way) I'll be the first to admit that our railway system is pathetic for a nation of our size and technological capability, but the fuel costs, air, trucking and shipping infrastructure designed to get goods to and from our shores and move things around internally does a pretty impressive job of cutting overhead charges out of the MSRP here.

The thing that _I_ more often wonder about (more so than how much more kit X is in Australia than the US) is the relative pricing of Lego in various economies. How does, say, the local MSRP of 10237 Tower of Orthanc compare to other things you could be buying with that money?

For example, my wife and I went out to dinner last night (not a particularly fancy place but not McDonalds or anything). We had two appetizers, split a pizza and split a desert. She had a glass of wine, I drank tap water. Food, tip, state and local taxes later we'd spent 107 USD, so when I look at the price for a "big" kit like Tower of Orthanc, I think "that's _only_ the price of dinner, a movie and a couple drinks - stay home and cook a few more nights this month and it's effectively paid for.

Out of curiosity, what does dinner and movie cost in Australia, or France or Germany? How do local Lego prices compare with "typical" recreational expenses?

[Faefrost]

) I'll be the first to admit that our railway system is pathetic for a nation of our size and technological capability, but the fuel costs, air, trucking and shipping infrastructure designed to get goods to and from our shores and move things around internally does a pretty impressive job of cutting overhead charges out of the MSRP here.

Brilliant explanation. Although in defense of some friends who work in that industry I feel the need to correct a common misconception. The US Railway system is actually one of the finest in the world. And it has vastly improved in leaps and bounds in the past few decades. It is rare that you will see any stretch of track not moving swiftly at peak capacity. But the US railway system is 99.9% a freight system. Now passenger rail in the US is horrible. And the railways fight hard to keep it that way. Passenger rail is low profit, inefficient and it clogs the freight arteries with higher priority passenger trains, slowing down the delivery of freights, fuels, raw materials and goods. Which kind of goes back to oneof the questions as to why US prices are lower than Europe. Because transport costs are cheaper. US Rails are used to deliver cargo very far very cheaply.