Subject:
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Re: Bulk Ordering - Secrets Revealed.
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Newsgroups:
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lugnet.general
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Date:
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Wed, 11 Aug 1999 19:20:19 GMT
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Viewed:
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2047 times
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In lugnet.general, Tom Stangl writes:
> Jon Kozan wrote:
>
> > To an earlier point, the returns simply cannot compare in selling separate
> > parts to those of selling complete sets.
> > 1) There is a market here certainly
> > 2) It is far, far too small
>
> It is only too small if they do a rotten job of marketing it. If the info on
> ordering were in every set, and they had an easy online ordering system, I'm
sure the market would grow rapidly.
It's more than the size - it's also the potential to reduce other sales where
the buyer (remember, I'm talking about their real customer base - kids)
buy parts they don't need in sets just to get the parts they want. LEGO sells
a ton this way. And we're not going to change their mind.
If you're selling a product to a sophisticated buyer in a commodity market,
sure sell them exactly what they want, and serve your customer better and turn
sales away from the competition. LEGO isn't in that market.
They sell to unsophisticated buyers, a non-commodity product, with weak
competition. Hence they sell everything they can via a package called a set.
The more a product is a commodity, the more customized it will be toward the
buyer. LEGO just isn't. Look at houses, most people buy houses with things
they don't want or without things they would have liked. As many houses are
built each year, they aren't a commodity, and buyers get what the builder wants
more often than not.
>
> > 3) It doesn't offer adequate returns to service it.
>
> Not true. TLG sells a set to TRU, they make a small profit (single digits,
> I'm sure). TLG sells a piece to a Legoneer at a retail price, they make 100%
> profit or more. Properly market it and make it easy to use, and it WILL
> become a decent part of the bottom line.
Sorry, you're confusing gross margin and net/operating margin. They certainly
do make double digit gross margin on sets, in fact they are probably well into
the double digits. And, we don't offer 100% gross margins, there is still
costs to run the operation and get the parts to us.
> ... we are a window into a much larger audience that is either not
> connected, or is but simply doesn't know what is out there.
Yes, and they don't want that audience to stop buying parts they don't need
-Jon
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Message is in Reply To:
 | | Re: Bulk Ordering - Secrets Revealed.
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| (...) It is only too small if they do a rotten job of marketing it. If the info on ordering were in every set, and they had an easy online ordering system, I'm sure the market would grow rapidly. (...) Not true. TLG sells a set to TRU, they make a (...) (25 years ago, 10-Aug-99, to lugnet.general)
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