Subject:
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Re: Lego prices?
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Newsgroups:
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lugnet.general
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Date:
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Wed, 14 Jan 2004 17:48:05 GMT
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Viewed:
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697 times
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In lugnet.general, Don Heyse wrote:
> In lugnet.general, Pedro Silva wrote:
> > Clarifying a bit:
>
> > The tax you're referring to in the EU is VAT (Value-added tax),
> > which is a percentage of every item you buy; it varies among
> > countries and items, in my country it is currently 19% for LEGO - I
> > would not be surprised if it were higher in the UK. It is not,
> > however, in any way "disguised". In every receipt you can find the
> > percentage of the cost which is due to the tax, and in some
> > situations you can have it back on the airport when departing (dunno
> > how this works, though).
>
> > It's actually handier than the way to calculate the sales tax: if one
> > has to pay VAT anyway, why not know the *full* price in advance?
>
> That's interesting. So, in the EU the tax is included in the price
> tag/sticker, but disclosed in the receipt?
Yes, that is my experience. For instance, the supermarket bill has the full
price of every item, with the VAT percentage ahead of it. The total then has
another line to say how much VAT is being paid.
VAT can be returned if you're reselling stuff. For instance:
- I buy 10 boxes of LEGO (19% VAT on shop's price)
- I then decide I wish to sell 5 boxes
- I ask for return of VAT for those
- I sell them, with 19% VAT over my selling price
- I pay the VAT to the state.
Basically, it's a sales tax. It also has the advantage of being harder to dodge,
which is very important in southern Europe (where tax evasion is a tradition)
> Things tend to be a bit
> more dynamic here in the US so that's not as easy to implement. The
> sales taxes actually vary from state to state (and even some cities).
Here too. Among items as well.
For instance:
In mainland Portugal, food is taxed 5% and LEGO 19%; in Madeira Islands, VAT is
4% and 12% respectively, IIRC.
> Different types of items have different tax rates, and of course it
> all fluctuates quite often as the local politicians compete to bring
> the shopping dollars into their districts. For example, in CT they've
> been known to lower the rate on clothes over $50 for one week just
> before winter to pull in out of state shoppers looking for winter coats.
> That'd be a pain to implement if the tax were included in the
> sticker.
VAT is usually very stable. However, there are also loopholes: Andorra,
Gibraltar, the Channel Islands and some other places as well don't have VAT, in
hopes of attracting commerce. And there is the issue of differencial VAT as
well, take Calais in France for example where British stock themselves with wine
profiting the much lower average cost...
> > > There may also be extra costs (extra taxes, higher real estate
> > > prices, labor costs, etc.) associated with operating Shop@Home in
> > > the UK. One other thing: although Lego bricks aren't made here,
> > > they are packaged here...that may save a little money, since bulk
> > > parts will take up less space than half-empty boxes in a shipping
> > > container. I just bought some stuff here on clearance, and the
> > > boxes say "COMPONENTS made in Denmark and Switzerland" (CAPS are
> > > mine)...that is, the bricks themselves are made overseas, but the
> > > sorting and maybe even package-printing are done here.
>
> > True.
>
> > That however does not explain why LEGO in Denmark is more expensive
> > than most anywhere else except for the UK.
>
> > Actually, I'm inclined to think it's just a strategy to gain more
> > and more consumers in the US, given that the european market is
> > pretty much stabilized by now and brand-loyalty levels are very high
> > (not to mention the availability of clones is reduced)
>
> Who's restricting your access to the clone bricks, the government?
:-)
The sarcasm was nice, Don. Brings back memories from o-t.d!
But seriously, no. It's strictly a market thing, which is slowly changing (more
and more MB are gaining space from LEGO in european shelves). It could have to
do with patents, as mentioned in this thread, or merely on resistance to new
brands. Don't forget that LEGO has 50 years of history here, most of which being
the main dealer of plastic bricks for children - it's probably just as weird for
people to change brands as it is for an Atlanta citizen to drink Pepsi ;-)
Pedro
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Message is in Reply To:
 | | Re: Lego prices?
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| (...) That's interesting. So, in the EU the tax is included in the price tag/sticker, but disclosed in the receipt? Things tend to be a bit more dynamic here in the US so that's not as easy to implement. The sales taxes actually vary from state to (...) (20 years ago, 14-Jan-04, to lugnet.general)
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