Lego Gives Away a Lot of Free Bricks, Doesn't It?

[ResIpsaLoquitur]

I was just thinking about the sheer volume of free bricks Lego gives away on a monthly--maybe a weekly basis. For example, I took my daughter to every Monthly Mini Build at the Lego Store last year. According to Brickset, we racked up 428 free bricks (plus spares) in the course of a year. And that's JUST from the MMBs on the first Tuesday of the month. The Store did a few "extra" builds that we didn't go to--I recall a Superman model, a grill, a Friends box, and a Yoda Chronicles robot. Also also, there were a few free builds elsewhere, like a Friends model and a Police car which we got at Toys R Us.

428 bricks is probably the equivalent of a decent-sized set--maybe $20 US worth of bricks? Maybe $30? The Stores plan on 250 kids attending, so that's 107,000 free bricks they're potentially giving out every year. I'm too lazy to count how many Lego Stores there are, but one website said there's 93. Let's assume it's now 100. That means Lego is potentially giving out 10,700,000 free bricks per year in Monthly Mini Builds alone. If that's $20 worth of bricks, then that's $214,000,000 worth of free bricks being given out yearly. Unless my math is off, that's insane.

Remember, that's a very lowball number, too. I'm not counting the free promotional sets given out at Toys R' Us, the Factory Tours, or elsewhere. On the one hand, I have to say that is incredibly generous of Lego. I cannot think of any other toy company that gives out free product at that rate. Granted, a lot of companies can't do that--giving out free action figures would be ridiculous. Still, nobody else does it. I've never heard of free Play Doh events or anything like that.

On the other hand, Lego Marketing must have done incredible analysis to determine that giving away that much product is worthwhile. I can't fathom what the statistics are on that. I do remember waiting in line for the Monthly Mini Builds and seeing kids come out of the Store with $100 sets, so it must work. Me personally, I play it conservatively--we'll either do the Pick-a-Brick or buy a small set while waiting, so our purchases tend not to go past $15. We're probably on the low end of the sales, though--obviously, Lego isn't being all that altruistic. The MMBs are motivated entirely on the idea that people will come into the store and buy stuff.

Anyway, does anyone have any thoughts or observations? Is my math ridiculously off--and even if it's by one decimal place, isn't that still a crazy amount of bricks being given out?

[Infernum]

What an interesting post! Giving away that many pieces must be profitable for LEGO, I guess all the people brought in by the builds bring in a ton of business. Eh, more free LEGO for us FOLs though!

[TheWolffe]

Let's all be honest here, once someone gets 100 bricks or so. They'll want more to build stuff. LEGO triggers something that makes you want more and more

[rollermonkey]

With the price of getting in to one of the factory tours, I wouldn't call that a 'free' set.

At the same time, a company that uses minifigs as business cards shouldn't surprise you that they give away bricks.

:)

[ResIpsaLoquitur]

Oh, and don't they give their employees a free exclusive set every Christmas? I'm moderately jealous of that reindeer game they put our a few years ago.

[deraven]

I do think it's a nice promotional thing to do, and as you said there's a lot more not included in that number like the stories you see of Lego sending kids free sets in special circumstances (like this one, and this!!). I think those other spontaneous things speak more to their generosity and good spirit than the builds designed to get folks into the stores. I, uh, get something in my eyes each time I see one of those stories.

Your math, however, is indeed very far off. Let's go with your number of 428 bricks (in a year) x 250 kids, x 100 Lego Stores. That does indeed give us 10,700,000 bricks. I think those 428 bricks would be closer to a $35 set (given the retail pricing for Creator sets without minifigs tend to come in just a bit under the $0.10/piece rule of thumb pricing). If 428 pieces is one set, then we simply have 25,000 annual "sets" of 428 bricks given out (which comprise those 10,700,000 total pieces), and 25,000 x $35 is $875,000. All told, I'm sure Lego gives away multiple million dollars of product each year, but definitely not $214M!

Anyone else have some favorite examples of Lego giveaways/philanthropy or, more to the topic, any official source for what Lego actually has in the budget for that kind of promotion?

[cmg]

Here's some more complete statistics: Over the time the MMMB has been happening (since 12/2008 - the "trial" run at the MOA store), and up to April of 2014 (the last inventory on BL as of today, including spares (when known), a total of (approximately) 2,466 parts (639 different parts). This includes the "extra" builds and country specific builds. At BL prices (last 6 month sold average as of today) this is $242.81 for the parts.

However, the number of stores has grown quite a bit in that time frame: At the beginning of 2009, there were only 33 stores world wide. That quickly jumped: 48 to 61 to 74 to 90 to 106 to approx 114 today (I haven't been keeping quite as good statistics on the store openings recently...)

[Brickbuilder0937]

In 2013 the LEGO company produced over 55,000,000,000 pieces, giving away 10,700,000 yearly (about 0.02% of total production) doesn't sound like all that much when you look at it that way.

[ResIpsaLoquitur]

I should note that a lot of the pieces in the MMBs--not all, but a lot--tend to be smal parts like 1x1 tiles or plates. Price per brick can be a little hard to calculate on these things. I guess they're a lot like a small polybag, which would probably have a $3.99 US value.

...which, multiplied by 12 months, is $47.88 worth of free bricks per customer. At 250 customers, that's $11,970 in free bricks. Times 100 stores, that's $1,197,000 in free bricks. :D

[Sid Sidious]

Although the bricks given away may be worth $875,000 or $1,197,000, they don't cost Lego that much. The costs to produce an object are much less than the cost to consumers. So, although Lego gives away around a million dollars of bricks each year, it probably only costs the company a few hundred thousand dollars.

[naf]

Was just going to post what Sid said above. You can't go by retail costs, most bricks probably cost the company pennies to make. A lot of the cost for a set comes from packaging, marketing, distribution, labor costs for designers, etc.

[iamwhoiam]

Don't forget the various sets that Lego donates to conventions for prizes!

[Zzz]

Still, nobody else does it. I've never heard of free Play Doh events or anything like that.

On the other hand, Lego Marketing must have done incredible analysis to determine that giving away that much product is worthwhile. I can't fathom what the statistics are on that.

The amount of statistics, research and market evaluation you have to deal with in marketing is close to rocket science. And even if the subject is a product that is aimed at children, seems fun and cheap, the level or intensity of the research is basically the same as in media, automotive etc. There are entire departments that only deliver massive amounts of numbers on a daily basis to the marketing department, which in the end are making the final decisions about the money spend and on what channels it is spread. Giving away free samples is a very common way of marketing in the fast moving consumer goods business (and I count toys towards these), many companies are doing that.

On the other hand, having own brand stores is a two-edged sword. There are many opportunities but you also have to communicate the benefit of purchasing here - and probably ignoring the discount of other / online retailers. Luring people in your shop is done with eg. free samples or other benefits, ideally money-can't-buy benefits like building events.

And having said all this, think about what the automobile industry has to spend on marketing to sell one car in the end - to one customer. There are easily several hundred € / $ spend on marketing for only a single purchase, and while there is no actual sample-in-a-bag in that business, there are many other, comparable methods that lead to your purchase decision.

Oh and btw - I didn't get any free sample from Lego at the Nuremberg toy fair, but I got something from Playmobil!

[Master_Data]

Wow! I have never taken the time to calculate all of this, but this is incredible!

Edited June 29, 2014 by Master_Data