Do "Traditional" Toy Dealers Feel That Lego Has "Sold Out"?

[JoshTX]

I stopped at a couple of Mom and Pop's "traditional" style toy stores last week while patrolling WalMarts for clearance, and noticed that neither sold Lego of any sort. The first one didn't even sell anything really comparable except craploads of Playmobil and the second store actually sold some extremely generic knock-offs that looked worse than mega bloks. Has Lego's licensing of pop culture franchises and films caused these dealers to step away because the product is too "commercial" to be sold in their stores now? If that was the case, why don't they just sell the modulars, the Creator line, or the architecture sets? Why dismiss Lego completely for knock-off bricks?

[Talon]

I've been told by a couple of local stores that they just don't make enough money in Legos. They don't get the big discounts that the big box stores get as they only get 30% off minus shipping. Then, they don't do a huge volume so they make a lot more money with other toys. Their typical toy discount is around 50% or more of MSRP.

[redeemed763]

This is the reason why many of the mom and pop stores that DO offer Lego, sell them at TRU prices, they need to eat too and thus the markup. After offering them at those prices for a while and never seeing sales, they decided to drop the line.

[JoshTX]

It seems to me like nearly everything at a traditional toy store is overpriced, but I see the point you guys are making. My guess is that these smaller toy shops can't meet Lego's quota to receive a "bulk" discount, so they are choosing not to sell it at all. If that is the case, I wonder how much Lego you have to buy to qualify for the discounts that they are giving the bigger stores.

[Darth Lego]

This is the reason why many of the mom and pop stores that DO offer Lego, sell them at TRU prices, they need to eat too and thus the markup. After offering them at those prices for a while and never seeing sales, they decided to drop the line.

It is the same way at my local toy store. The sets are all marked up and nobody buys them. Then they are put on clearance which means the store ends up selling them at a loss. Mom & Pop toy stores just simply can't compete with Amazon and the other bigger retailers. Sad that this is what it comes down to. Now they reduced their Lego section down to 25% of what it was before. The other 75% is now the Mega-Bloks section. Yuck!

[Blackjack]

My mom and pop store had them at full retail, but their selection was good, including Star Wars and LOTR. (they had a few Helm's Deeps and some Republic Frigates) They didn't have any real clearance however.

[shudameister]

I work at one that does sell Lego. Lego is the number 1 seller. Lego is "interesting" to say the least. In order to sell it you have to order from 80% of the themes. So sometimes the Spongebob like sets sit for ages. And the traditional stores I know don't like putting stuff on clearance. In addition, Lego first charges the credit card, then ships out, then charges more. And you sometimes don't always get what you ordered. They will change the order's last minute and you are stuck with it.

[Snowcrash]

Without getting into any specifics, I will simply say that I have never before encountered a company so reluctant to take a large customer's bulk order. I realize I am not Walmart, but I thought that a 5 figure initial order well above the 10k minimum (with the promise of many future orders to come) would be sufficient. For the record I would not disclose the type of information Lego required to the NSA, let alone to a potential business partner whom I was proposing to wire a cash payment to prior to delivery of product based solely on said company's reputation. And the restrictions; limited access to the product line, no guarantee that what is ordered will be delivered, long delays, inventory loading, and no compensation for inventory damaged during shipment. No, I won't be doing that for an effective discount of 20% off MSRP. I can see why independent retailers can't survive selling Lego. There's no profit in it. Walmart can make $2 profit on the $100 sets because they're a volume business, but I need slightly bigger margins to make this enterprise worthwhile. Looks like I'll continue to source my stock from traditional sources. This stinks, this should be the simplest transaction in the world. I wire a big cash payment, Lego ships me 100 Vampyre Castles, 100 Helms Deeps, 50 Grand Emporiums etc. Who cares what I'm doing with them? Selling them, hoarding them, building a life size replica of an F-14, even incinerating them on my front lawn! TLG, you're either in business or you're not.

[JoshTX]

Without getting into any specifics, I will simply say that I have never before encountered a company so reluctant to take a large customer's bulk order. I realize I am not Walmart, but I thought that a 5 figure initial order well above the 10k minimum (with the promise of many future orders to come) would be sufficient. For the record I would not disclose the type of information Lego required to the NSA, let alone to a potential business partner whom I was proposing to wire a cash payment to prior to delivery of product based solely on said company's reputation. And the restrictions; limited access to the product line, no guarantee that what is ordered will be delivered, long delays, inventory loading, and no compensation for inventory damaged during shipment.

No, I won't be doing that for an effective discount of 20% off MSRP. I can see why independent retailers can't survive selling Lego. There's no profit in it. Walmart can make $2 profit on the $100 sets because they're a volume business, but I need slightly bigger margins to make this enterprise worthwhile. Looks like I'll continue to source my stock from traditional sources. This stinks, this should be the simplest transaction in the world. I wire a big cash payment, Lego ships me 100 Vampyre Castles, 100 Helms Deeps, 50 Grand Emporiums etc. Who cares what I'm doing with them? Selling them, hoarding them, building a life size replica of an F-14, even incinerating them on my front lawn! TLG, you're either in business or you're not.

That's pretty crazy, and pretty well explains why we aren't seeing Lego in the smaller shops.

What do you mean by "limited access to the product line" and no guarantee that what is ordered will be delivered", are you saying that when you place an order they do not allow you to pick and choose what sets you need and just send you what they feel like?

[Anakinisvader]

Its kinda sad really. Beanie Babies thought they got "too big" for their retailers and started imposing silly rules cutting out smaller retailers to boost sales and what not. Now where are they? Anyone bought a beanie baby lately?

[Guest ph4tb0i]

Without getting into any specifics, I will simply say that I have never before encountered a company so reluctant to take a large customer's bulk order. I realize I am not Walmart, but I thought that a 5 figure initial order well above the 10k minimum (with the promise of many future orders to come) would be sufficient. For the record I would not disclose the type of information Lego required to the NSA, let alone to a potential business partner whom I was proposing to wire a cash payment to prior to delivery of product based solely on said company's reputation. And the restrictions; limited access to the product line, no guarantee that what is ordered will be delivered, long delays, inventory loading, and no compensation for inventory damaged during shipment.

No, I won't be doing that for an effective discount of 20% off MSRP. I can see why independent retailers can't survive selling Lego. There's no profit in it. Walmart can make $2 profit on the $100 sets because they're a volume business, but I need slightly bigger margins to make this enterprise worthwhile. Looks like I'll continue to source my stock from traditional sources. This stinks, this should be the simplest transaction in the world. I wire a big cash payment, Lego ships me 100 Vampyre Castles, 100 Helms Deeps, 50 Grand Emporiums etc. Who cares what I'm doing with them? Selling them, hoarding them, building a life size replica of an F-14, even incinerating them on my front lawn! TLG, you're either in business or you're not.

Sometimes I wonder if it's Lego that's the one calling the shots in this case or the retailers (e.***. Walmart/Target). Don't forget that when it comes to negotiations the big retailers have a TON of leverage against the manufacturer too. Based on that I feel like there's a reciprocal agreement in some of these contracts that goes out to deliberately screw the little guy.