Subject:
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Re: According to TLC...
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Newsgroups:
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lugnet.lego
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Date:
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Wed, 22 Sep 2004 16:55:23 GMT
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Viewed:
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3400 times
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In lugnet.lego, Mark de Kock wrote:
> About the costs: the costs for different layers of sales companies may affect
> prices of LEGO sets in the stores. But how can it affect prices of LEGO sets
> that I buy _directly_ from the company?
Generally, S@H prices reflect the markets they're sold in, not the cost to Lego.
Let's say a toy store buys a set from Lego at $10 per unit, sells it at $20 per
unit as their markup. Lego "sells" the product to S@H for $5 per unit, and can
afford to have the same $10 markup and sell it at $15 to the customer (let's
say). Well, the toy store will get pretty mad at the company for underbidding
them to the end customer, and customers would probably stop buying retail Lego.
Hence, S@H prices are generally the regular MSRP that are seen in stores in the
corresponding area.
> It was also mentioned that the US "has a LEGO factory", so the prices could
> be lower. Correct me if I'm wrong, but there are _several_ factories in
> europe, shoul'dn't our prices be lower then?
I'd doubt having the factory accounts for much-- Especially since the US no
longer has a factory, and even when it did, not all the pieces were manufactured
here. Much still had to be sent from Denmark.
> Oh and apart from some "strange" countries 1), we have one currency now in
> the EU; the euro. So that argument fails as well.
Ok, forget currencies (although as you pointed out, it still is an issue if you
include those "strange" countries), but still, there's different laws governing
imports/exports, dealing with different merchandisers, translating to different
languages, advertising on different networks (and again in different languages),
etc. The point there was really that selling to a single country (the US) is
probably much cheaper than selling to multiple countries.
> No, apart from the stronger competition from clone brands, I see no direct
> reason for the differences in set prices.
>
> However, I will admit that my experience with international sales is limitted
> to a european computer manufacturor that sells almost exclusivly to european
> countries. And the reason that the same computer could cost almost twice as
> much in Belgium as it does in the Netherlands was, and I quote a collegue
> from Marketing:"because we get away with it!".
Yep-- that was my first point. Most Americans are cheapo. People in the US may
just be used to paying less, hence, you can't get away with charging a crazy
markup. You have to judge your price based on what you think people will be
willing to spend, which means figuring out a lot about your target demographic.
I also wonder if Samsonite set a precedent here in the US-- since they produced
their own Lego sets and governed their sales, when Lego took over production
here in '73 (or was it '72?), they couldn't suddenly bump up the prices to their
"regular" European rates, since it might have resulted in a huge drop in sales.
Sure, they could've gradually brought the prices up over the years, but on the
other hand, perhaps it set a standard that hasn't since deviated.
DaveE
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Message has 1 Reply:
 | | Re: According to TLC...
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| (...) I think this may be the key point - charge what the market will bear. Except where there is significant competitive pressure which drives makers to seek cheaper ways of supplying product, there is no need for a product's price to have much to (...) (20 years ago, 22-Sep-04, to lugnet.lego)
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Message is in Reply To:
| | Re: According to TLC...
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| (...) And this is the first time that the competition is mentioned. As far as I know (I'v been to dutch, german, belgian, british and danish toystores), there is almost no competition from other (clone) brands. That could account for the lower (...) (20 years ago, 22-Sep-04, to lugnet.lego)
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