Subject:
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Re: 10170 TTX Intermodal Double-Stack Car Preview
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Newsgroups:
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lugnet.trains
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Date:
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Mon, 2 May 2005 18:37:52 GMT
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Viewed:
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8506 times
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<snip>
> in the comments on your blog, I made the argument that the better profit
> margin
> of an AFOL-oriented S@H exclusive justifies the expense of the container
> doors.
> You responded:
>
> {You've made a number of assumption here that aren't necessarily true:}
>
> {- Better profit margin overall}
>
> {- The parts we used are "leftovers"}
>
> {- S@H exclusives are proven to be successful}
>
> {- S@H exclusives are AFOL-targeted}
Marc, I think maybe you need to understand the sheer expense involved in
setting up a production line specifically for parts not currently in stock.
I know of one example where some basic bricks and plates were needed in a
slightly unusual (but available) LEGO color by one of the departments inside
LEGO.
In order to stop 1 molding machine, change the color, place the correct
molds (and these are existing regular molds, not new ones) etc, a premium
that ran into 6 figures had to be paid - and that's before the cost of the
bricks. (FYI the premium ended up being 60% of the total cost)
In a set that has a production run of 100,000's or even millions, that cost
is more easily absorbed. But for a S@H exclusive, of around 10,000 units,
it's just unrealistic to do so. I know I would rather have the containers as
they are rather than pay a premium of $10 per set.
> Now, by "leftovers", I meant part/color combinations already in
> production -
> which is apparantly true. Which of my other assumptions are untrue?
>
> * Are S@H exclusives actually less profitable?
I would argue from a total revenue generation, they probably are.
Individually they probably still make the same % markup on S&H exclusives
(possibly more as they're being sold directly to consumers), but they are
produced in volumes 100's or 1000's of fold less than most retail sets.
S@H's ability to spend extra money on these sets is less than it would be in
a retail set.
Richard.
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Message is in Reply To:
 | | Re: 10170 TTX Intermodal Double-Stack Car Preview
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| (...) Jake, I wish you hadn't turned this into a personal issue when it is a corporate policy issue. Do you see the words "Jake McKee" anywhere in my post? Now the "rally round Jake" LUGNET defense mechanism has been activated, and anything I say (...) (20 years ago, 2-May-05, to lugnet.trains, FTX)
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