Subject:
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Re: What Kids really want. Not Juniorization.
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Newsgroups:
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lugnet.general
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Date:
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Wed, 14 Mar 2001 04:21:53 GMT
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Viewed:
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456 times
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In lugnet.lego.direct, Kevin Johnston writes:
> In lugnet.lego.direct, Mike Petrucelli writes:
> > In lugnet.lego.direct, Dave Schuler writes:
> > > In lugnet.lego.direct, Steve Bliss writes:
> > > > $0.0167 for LEGO
> > > > $0.0143 for Mega-Bloks
> > > >
> > > > Or about a 14% markdown for MB (looking at it the other way, LEGO is marked
> > > > up about 17% from MB).
> > > >
> > > > That sounds about right to me, based on the current differences in brick
> > > > quality. I'd actually expect LEGO bricks to cost at least 25% more than
> > > > MB.
> > >
> > > Since the tubs are a bulk dump of basic bricks, they're not necessarily
> > > the best indicator of piece:price ratio.
> >
> > Ok you missed my original point. Bulk tub prices are an acurate reflection • of
> > material costs. Actual sets from both Mega Blocks and Lego have added • printing
> > and R&D costs. So why the huge price difference.
>
> Hmmm, I don't agree that bulk prices are an accurate reflection of pure • material
> costs. For one thing, there's the manufacturing costs-- Lego bricks have
> superior (and more consistent) binding performance.
OK. I committed treason and bought one of the neon color MB tubs. The binding
performance while less powerful than Lego was totally consistant. I fully
belive that the differnce in quality at this point in time is directly related
to the different types of plastic and nothing else. That is a big
improvement for Mega Blocks. (now I have a moral delemia about wheather or not
I want to spend a decent portion of my Lego budget on grey Mega Blocks. The
quality is more than sufficent for my needs. <sigh>)
>
> There are other, less tangible costs: Lego advertises, MB does not (not in any
> significant way that I'm aware of, anyway). One could argue that MB • essentially
> trades on Lego's brand to get better consumer awareness-- effectively getting • a
> negative cost in its column.
That is a cost not related to materials but will affect set cost slightly.
(More than likely adding less than a dollar to any given set. You forget it is
distributed over all sets not just one.)
>
>
> > ... Consider that TRU had Mos
> > Espa Podraced sets at clearance for $34.99. They still make money on that. • At
> > KB when sets are marked half off, they still turn a profit.
>
> Just because the retailer is making money selling Lego's overstock doesn't • mean
> Lego is making money on the same transaction. (And when a retailer like TRU
> sells at half off, it's not always at the manufacturer's expense anyway-- they
> may be taking the loss if they over-ordered the product in the first place.)
>
> Besides-- Lego *actually lost money* last year. The money went somewhere-- I
> don't think there's much argument in that. You might pick a bone over how • they
> spend their money, and whether it's on things that you as a consumer are • willing
> to foot the bill for (as I would), but I just don't see how their actual • losses
> (2000, and 1998) jibes with an outrageously high profit margin (including a
> profit from clearanced overstock).
How about R&D for products of inferior quality that no one wants. The pathetic
software/games stick out in my mind. They also have to recoup the inital
creation of new molds. They have made quite a few of those recently. I do not
mind the creation of GOOD new parts and am willing to pay for that.
>
>
> > ... Simply put we are
> > paying for the name and nothing more.
> >
> > -Mike Petrucelli
>
> While I do think there's some merit to the general argument (the brand itself
> adds cost to the product), I just don't believe Lego's profit margins are • *that*
> high. They wouldn't be in the position they're in now if they were.
>
> Kevin
As an assistant Manager at KB I know for a fact that at least 40 percent of the
cost is retail markup. TLC's profit margins are not that high unless you go
through Shop at Home. Obviously there profit margins are decent enough though.
If they stop wasting money on things kids do not want from them, maybe they
will start turning a profit again..
-Mike Petrucelli
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Message has 1 Reply:
 | | Re: What Kids really want. Not Juniorization.
|
| (bits snipped for brevity) (...) My most recent clone purchase (if anyone repeats that I'll deny it :-) ) was the Blue Thunder Pro Builder set (blue & yellow jet plane). The inconsistency I experienced (which I haven't seen change much over time) (...) (23 years ago, 14-Mar-01, to lugnet.general)
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