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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Sat, 17 Jan 2004 00:37:54 GMT
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Viewed:
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1132 times
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In lugnet.general, Pedro Silva wrote:
<snip>
> 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).
Yep, I meant VAT. I think Hong Kong has "GST" which is the same thing, and they
advertise that you can get some of that money back somehow if you are a tourist.
> It's actually hndier than the way to calculate the sales tax: if one has to pay
> VAT anyway, why not know the *full* price in advance?
Can't argue with that. But we (the USA) are a country founded by smugglers and
tax cheats, so it's in our culture to make it very obvious how much in taxes we
are "forced" to pay (or avoid, in some way.) I think it's a little easier to
forget you are paying a tax if you are only see it on the receipt (personally, I
usually don't look at my receipts)...hence my "disguising" comment.
I think the apparently lower pre-tax cost is also seen as more enticing to the
consumer, just as knocking one cent off the price makes a product supposedly
look cheaper (I guess $299.99 looks closer to $200 than $300 at first glance?
$99.99 looks a lot smaller than $100.00.)
>
> > 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.
Taxes might, but I'd bet it's lack of competition...I doubt competitors can
break into the Danish market when LEGO is the most famous product to come out of
that country. Probably tremendous brand loyalty there, so TLC can charge
whatever they want.
>
> 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)
Yep, I think you hit it there...competition in the marketplace usually breeds
cheaper prices, better quality/service, or both. For example, the cost of cable
modem service dropped by half once DSL became available in my neighborhood.
LEGO here has to go up against MB (Canadian, right?), Hasbro's new BTR sets (US)
(not really the same, but they are stocked on the same shelves), plus I've seen
Best-Lock on the shelves in increasing numbers (made in China, where I saw their
sets sold dirt-cheap, but apparently based in the UK...so the UK does have a
clone brand.)
One other thing is, the toy retail market is fiercely competitive here in the
US. It's driven by our #1 retailer, Wal-Mart (who is also the US's #1 toy
retailer), which uses its huge bulk-purchasing power to strike great deals with
manufacturers, and passes that on in the form of lower prices (making their
money back on high volumes.) That has forced other general retailers like
Target, and our one big toy retail chain Toys-R-Us, to drop prices. If
Shop@Home or LEGO brand stores want to compete, they have to lower their prices
as well. We just had one of the longtime giants in the US toy industry, FAO
Schwartz, declare bankruptcy...considering they sold a lot of the same toys as
other stores, but at sometimes 50% higher price, that's not surprising.
Doug
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Message is in Reply To:
 | | Re: Lego prices?
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| (...) 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 (...) (20 years ago, 14-Jan-04, to lugnet.general)
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