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In lugnet.general, Chris Gray wrote:
>
> When we buy up all of the stuff on sale, that means that parents and kids
> can't buy it. That means there are fewer people exposed to more Lego, and
> quite possibly there is then less demand for new sets at regular prices.
You say many good things, but I believe that this is a stretch. When a store
decides to carry LEGO products, they make their best guess how much they can
sell. This is typically called 'up front buying' and can happen many months in
advance (posibly even a year plus). These days, stores are like a pipeline.
Stuff goes in one end, then has to come out the other (sooner or later). It
can't sit there forever(as TRU is learning in more difficult markets in the US).
The store's objective is to make the best profit possible while not hanging on
to the stuff to the point that they are climbing over it to get to other stuff.
WM seems to be fine-tuning this processs into an art form.
Now, anyone who wants to buy a LEGO set it welcome to walk into that store and
buy it. Anytime. What ? You don't like the current price ? It's too high ??
Well, perhaps you need to check back later "after your sons birthday" or "during
the clearance cycle". People are busy these days. They do not have the time to
keep checking back and checking back, etc, etc. If no one was buying it (us, the
AFOLs in your analysis) do you expect that the store will continue to sit on it
forever ? Nope, its not that kind of world anymore. The stores *must* get that
stuff out the door, either out the front door (in pretty little bags) or out the
back door (on surplus/scrap palettes, or in rare cases into the dumpster). What
some (or perhaps many) of the AFOLs are doing is buying at (or near) distress
prices. They are taking a semi-commodity item from a market place where it was
not selling and moving it to one where it does (hopefully).
Does this impact the moms and kids who would have bought it ? Perhaps. When I
am out buying and someone spys something in my cart, depending on the item and
how hard I have been looking for it, I might be willing to share one out of the
cart[1]. I work hard to track down the things that I have. In every case, the
stores had many many months and years to sell those sets, with few if any
takers. In some cases, it is purly a case of the store personel being lazy and
not marketing the sets so that someone can see them and actually purchase
them[2].
In summation, I don't see us as part of the problem[3]. If anything the LEGO
small-fry resellers are helping to pry stuff loose in little towns here and
there and from markets where LEGO just doesn't sell all that well. There is
nothing that I am doing (or others I suspect) that any hard-working person could
not also do. We are also exposing these unsold products to people in other
markets who want to buy it, but can't find it because the retailers (and TLC)
underestimated the demand.
Solve the supply/demand equation, get the stores to care about how they market
the product and show people why this is a superior product and you will wind up
with less to be clearanced[4]. Thats the real solution[5].
Ray
[1] If they want the entire cart-full they can take a hike (all the way to their
ebay store most likely). Not every mom out there in the clearance rush is buying
for their own kids presents.
[2] like the two Rebel Blockade Runners I found sitting high on a store riser.
To the best of my knowledge, the store had never put them down on the shelf
since they came off the truck.
[3] If anything we may be helping the stores by moving the stuff at above
distress (even if it is below MSRP and occasionally below wholesale).
[4] and trim the prices a bit to help it sell more in the first place. but that
gets into a long discussion on pricing theory and psychology. I think some
people will never pay retail no matter how low the price might happen to be.
Many of us have developed a 'wait until its clearanced' psychosis that may never
go away.
[5] as far as it goes that is.. the world is a changing place. LEGO bricks no
longer capture the mind-share that they did 10-30 years ago. It is a very
competitive market for a child's attention.
fut to .market.theory
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Message is in Reply To:
 | | Are *we* part of TLG's problem?
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| I've been reading the recent articles about The Lego Group's financial problems. Its sad to see a company with a long history of good practices in trouble. But, it has occurred to me that we AFOL's might be part of the problem. What do we do? Well, (...) (20 years ago, 23-Oct-04, to lugnet.general)
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