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In lugnet.lego, John Guerquin wrote:
> <snip>
> >
> > I was wondeing...how do LEGO work out their prices?
> >
> > By my calculation, 10152 is being sold at the following:
> > $74.99 US is roughly $105 AUS
> > £54.99 is roughly $140 Aus
> > EURO 79,99 is roughly $136 AUS
> > $144.95 AUS
> > (About 30% higher outside North America)
> >
> >
> > Now, seeing as the sets are being produced in Europe, WHY are those buying them
> > there having to pay so much more? After all, Wouldn't it seem logical that those
> > buying from the source should be getting it CHEAPER than those who have to get
> > it shipped from the source to an overseas (literally) S@H centre, and then
> > forwarded from there?
> >
> > I COULD be wrong, but it seems to me that the rest of the world is SUBSIDISING
> > the LEGO being sold in North America so that they can keep getting the cheaper
> > prices.[1]
> >
> > Is there any truth in this theory...I guess that's up to LEGO to either confirm,
> > or to try and explain the pricing discrepencies.
> >
> > [1] I probably shouldn't be surprised...after all, the only way we hear from
> > LEGO is via North American LEGO company sources, and in general LEGO (produced
> > in Europe) arrives on sale in North America before it does in Europe...Maybe
> > they don't even realise that those who don't live in North America buy LEGO?
> >
> > Benjamin Whytcross
>
> Benjamin, I believe that the answer is (at least) twofold:
> 1. LEGO's way of setting prices for different markets is very complex (I believe
> that Jake has stated this before), and the price only partially depends on what
> the given market will put up with. For example, in North America I think LEGO
> has much more competition from lower priced Canadian MegaBlocks than in Europe.
Well, I still don't see why they shouldn't equalize the playing field...If they
can afford to be selling the sets at $X in North America, then why don't they
try and INCREASE sales by selling sets at this price EVERYWHERE. After all,
Megabloks seem to do reasonably well down here in Australia. (In fact, you can
buy a decent sized mega-blok set for roughly HALF (or even LESS) the price of a
comparable LEGO set...and get a much better parts selection and more
playability. Therefore, I would argue that LEGO would need to begin dropping
their prices here as well.[1] (The only exception is the Teenage Turtle sets,
and power rangers, which like Harry potter and Starwars are overpriced to cover
licensing.)
In addition, BestLock have some quite good sets available down here at VERY good
prices...
I assume that in Europe there is a similar problem...
I'd also LOVE to know what OTHER considerations are involved in setting the
prices. (subsidies for North America perhaps...)
> 2. TAXES
>
> In europe the Value Added Tax (VAT) is built into the price of the items on the
> shelves and Shop@Home. A quick Google search revealed that the VAT is 15% to
> 25% in various EU countries. In North America, the taxes are added on top of
> the purchase price (this helps maintain the illusion that you're paying less).
> In the state of Connecticut (LEGO north america is located in Enfield), you'll
> pay 6% tax on top of the 75 USD. In other states, the sales tax is different. In
> Ontario, Canada, we get the GST and PST for a total of 15%, or the 15% HST in
> the Maritime provinces.
>
> While in Poland last spring, I found that prices in an official LEGO store were
> about 20% to 30% more expensive when converted into Canadian (or US) dollars. I
> think the VAT is about 22%.
>
> I comfirmed this by pricing the 10152 Maersk through different countries on
> Shop@Home, including inputting fake addresses in order to get to the final cost
> page for each country:
> - canadian order from Ontario - 15% tax added
> - US order from Connecticut - 6% tax added
> - US order from Washington state - 0% tax added
> - German order - 0% tax (VAT is built in)
> - Australia - 0% tax added
Yep...we have a 10% GST that adds 10% to the price before it is listed in
$AUS...therefore dividing the price by 11 gives you the tax paid.
SO, without GST:
$74.99 US is roughly $105 AUS
$144.95 AUS => $131 plus $13 GST
(STILL nearly 30% higher outside North America)
Similarly, 10030:
$299 US is roughly $420 AUS
$569.95 Aus => $518 plus $51.80 GST
(About 20% higher outside North America)
Similarly, 10123:
$99.99 US is roughly $140 AUS
$199 Aus => $180 + $18 GST
(STILL About 30% higher outside North America)
Similarly, 4750:
$7.99 US is roughly $11 AUS
$14 Aus => $12.70 + $1.27 GST
(About 20% higher outside North America)
SO obviously TAX is NOT the reason for the higher prices...
It still looks like North America is expecting the rest of the world to support
its prices. After all, why else do they allow such a large discrepency in
pricing to occur?
It seems to me that LEGO should either be selling to ALL markets at the same
base price (before taxes are added) or they should admit that they are milking
the rest of the world to support a market where they are unable to compete on
the merits of their product without subsidies from other markets. (The only
reason I don't recomment MegaBloks to other shoppers when I'm in the
"Construction brick" isle of a shop is that they still need a little work on the
quality control...otherwise they could quite easily become a better product.
<<SNIP>>
> I've gone through some of this research last year, when I discovered that the
> prices in Poland and Germany were quite high compared to north american prices.
> Hope this helps...
>
> play well
>
> John
Quite interesting, but still misses the important bit...WHY can't LEGO get all
prices to an equal level? All I would like is an explanation from someone as to
why LEGO don't seem to want to equalise the pricing...
Benjamin Whytcross
[1] When the soccer sets came out in 2000 they were pictured in the Australian
catalogue but didn't show on shelves. Then, after many aussies contacted LEGO
Australia they changed their minds and decided to import them into Australia.
However, instead of giving them a high mark-up, they sold them at a very
reasonable price, and in almost all stores they seemed to have sold out of these
sets in about a month. This has shown that if LEGO will sell at a lower margin,
they will obviously sell more product, and will probably end up further in front
as they will be selling a lot more product.
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