LEGO S@H "Black Listing": Did you ever receive this re-sale warning from Shop at Home?

[spener90]

I don't know why they bother sending these out. Isn't it better for them? They get all the money, instead of having to split some of it with a different retailer. Doesn't make any sense. You get money. Why do you care what happens to them? You afraid that we will sell the sets for less that LEGO Shop at Home then lose money? Either way, the money goes to you in the first place. People say that they are cracking down on resellers and investors, but they can't really control what their own distributers are retail chains do with the merchandise they receive. The retailers could give away for free for all TLG cares. 

I get what you are saying, but Lego is trying to avoid a drop off in the value of the stuff they will eventually sell.  If the secondary market does crash then it will be flooded with inexpensive items that are retired.  Then you will see Lego as a whole take a hit.  I think it's actually surprising that Lego isn't limiting the market even more.

 

Spener, Bricklink isn't immune to VeRO enforcement - they may not hair trigger the way eBay management does (I don't know that they'd have a choice, though - the way the law is written a seller is presumed guilty until proved innocent and the venue basically has no choice in whether to enforce).

 

But, I don't mean to be chicken little - this situation could be very minor (Lego just wants to slow down their direct sales to resellers) or it could be very major (Lego is on a rampage to limit the secondary market by fair means or foul, for whatever corporate reasons).

 

I hope I'm projecting worst case scenario for absolutely no reason - I don't want brick-selling to become harder for any of us. 

I know, but eBay would throw a fit over it.  While they have plenty of other things to sell, eBay is largely about reselling things.  Would it really be legal for them to control the sale of used sets? Because if they prevent the sale of new, the price of used will shoot up.

[DoNotInsertIntoMouth]

To be totally honest, I rarely buy from TLG unless there is a killer deal, or I am buying for their PAB selection. The only advantage for the buyer is the occassional free polybag. Other than that, there doesn't seem to be any particular reason for buying from them. IDK, maybe it's my ignorance, but just buy from other retailers like Amazon to get around this crap.

 

Yeah I agree. I only buy when double VIP, Exclusive I want or coupon.

[justafrog]

I get what you are saying, but Lego is trying to avoid a drop off in the value of the stuff they will eventually sell.  If the secondary market does crash then it will be flooded with inexpensive items that are retired.  Then you will see Lego as a whole take a hit.  I think it's actually surprising that Lego isn't limiting the market even more.

 

I know, but eBay would throw a fit over it.  While they have plenty of other things to sell, eBay is largely about reselling things.  Would it really be legal for them to control the sale of used sets? Because if they prevent the sale of new, the price of used will shoot up.

 

Fortunately, they can't prevent the sale of used sets or indeed of new in box sets that were legally acquired, including through their precious Lego shops or SAH - all of these sorts of sales are protected under the First Sale Doctrine, period, end of story.

 

They CAN however issue VeRO takedowns willy-nilly to anyone they like and eBay WILL abide by those takedowns, remove the listings, slap the sellers with violations, and then it's between the seller and Lego to work out their issues (a good website of information if you are ever unfairly targeted by VeRO is tabberone.com)

 

And they can pressure their authorized resellers to limit quantities, etc.

 

Keep your receipts guys. You might need them for more than just the tax man.

[comicblast]

Some of the best money is to be made with exclusives and/or the free polybags.  Check out how much zombie car 40076 or the hulk mini figure sell for.

Yes, some of the best money can be made from exclusives and free items, but some of the best money can be saved elsewhere at Amazon warehouse deals, gold box, clearance, etc., which in my experiences, have offset the money that could have been made. Sure, every so often, I'm at the LEGO Store or buying from shop.LEGO.com, but that's usually because of the exclusive sets, not as much about the freebies.

 

One of the things about the Zombie Car or Hulk polybag is that it is just like investing, where you have to pick and choose, if you are in a similar financial situation as me, what you want to buy. To be safe, I have to skip some good deals in anticipation of better ones, and more often then not, these are not at the LEGO store.

[Deez_Brickz]

Yes, some of the best money can be made from exclusives and free items, but some of the best money can be saved elsewhere at Amazon warehouse deals, gold box, clearance, etc., which in my experiences, have offset the money that could have been made. Sure, every so often, I'm at the LEGO Store or buying from shop.LEGO.com, but that's usually because of the exclusive sets, not as much about the freebies.

 

One of the things about the Zombie Car or Hulk polybag is that it is just like investing, where you have to pick and choose, if you are in a similar financial situation as me, what you want to buy. To be safe, I have to skip some good deals in anticipation of better ones, and more often then not, these are not at the LEGO store.

I am talking about combining the freebies with the exclusives.  Do the math - Funhouse from lego store with nice promo or 25% over retail and no promo or VIP from TRU.

[pat_teeth_hurt]

 

I don't know why they bother sending these out. Isn't it better for them? They get all the money, instead of having to split some of it with a different retailer. Doesn't make any sense. You get money. Why do you care what happens to them? You afraid that we will sell the sets for less that LEGO Shop at Home then lose money? Either way, the money goes to you in the first place. People say that they are cracking down on resellers and investors, but they can't really control what their own distributers are retail chains do with the merchandise they receive. The retailers could give away for free for all TLG cares. 

 

I wonder if Lego has legal agreements with the big retailers that limits how many items they can sell for resale and this is their good faith effort to meet that obligation. I don't know much about the retail industry, but for shopping malls, lease agreements often have limits on how many other retailers can set up shop in the mall.

[Quacs]

Some of the best money is to be made with exclusives and/or the free polybags.  Check out how much zombie car 40076 or the hulk mini figure sell for.

 

I just sold Jor-El yesterday - netted $11.  That's a nice freebee that took an $82 Lego Store order down to $71.

 

I think some investors tend to underrate the Lego Store as a retail outlet because of the perceived high pricing.  However, when this is the only place to get certain exclusives, and the only place to get other exclusives at MSRP, it's doesn't make sense to ignore it. 

 

Amazon is great, until you want to buy Tower of Orthanc, Palace Cinema, new X-Wing, etc.  Then you're paying over retail.  As time goes, their price will fall, but except for the rare sale, it's impossible to ever find these for anything less than MSRP.  The Lego Store's VIP program bridges the tax gap so that it's nearly a wash.

[Anakinisvader]

Once again, "reseller profiling".  Where the heck is Al Sharpton and Jessie Jackson.  We need someone to shake down TLG. 

[choppers605]

"Fortunately, they can't prevent the sale of used sets or indeed of new in box sets that were legally acquired, including through their precious Lego shops or SAH - all of these sorts of sales are protected under the First Sale Doctrine, period, end of story."

 

That's what i am talking about!

 

I would love to see them push Amazon to have there sellers limit what they sell, i doubt that would ever happen,  ebay on the other hand would fold instanly and pull sellers auctions.

[Ed Mack]

There is a well known poster at Brickset.com that had the same issue.  Read about his travails here:

 

http://www.bricksetforum.com/discussion/10381/banned-from-buying-from-lego-s-h/p1

 

This is the very reason I wrote the "Hazzards" article a few weeks ago.  During my research for a now defunct idea for an article, I read what LegoFanTexas wrote on Brickset - in his case, his entire Lego VIP account was shutdown.

 

The reality is TLC is starting to crack down on resellers.  That's going to make it tougher for folks who invest for a living since they are now vigilantly monitoring their sales for mutliple orders.  My gut feeling is they are going to try to find more ways to crack down harder.

Yes, this was a very interesting thread that I was fortunate enough to participate in.  LegoFanTexas is one of Brickset's most knowledgeable members and is a large LEGO reseller, with multiple employees servicing his LEGO reselling business.  While I don't believe that is his main source of income, he is at the top of the LEGO reselling food chain nonetheless.  He was banned from using LEGO S@H.  This sort of "black listing" seems to be increasing.

 

Just today, Jeff and I received an email from a member talking about the same thing.  We are waiting to see how this individual wants to move forward with this issue.  This is a complex issue with multiple angles and levels.  The "black listing" of LEGO resellers and investors is an interesting topic that I would like to see discussed further in these forums...

[pat_teeth_hurt]

Has anyone contacted Lego to understand if they differentiate resellers from investors and what exactly is the definition of a reseller? I haven't found it necessary to since I have not received any reseller warnings - I've never sold legos yet, but buy on average 3 sets over a period of time, but sometimes up to 20, to sell around two years after retirement. I've got about 20 months to go still on my first set (21016) before I see if I can make money on this.

[Jackson]

I don't understand why LEGO doesn't want to sell to resellers who comply with the ordering limits. 

[Msudawgs56]

I just sold Jor-El yesterday - netted $11.  That's a nice freebee that took an $82 Lego Store order down to $71.

 

I think some investors tend to underrate the Lego Store as a retail outlet because of the perceived high pricing.  However, when this is the only place to get certain exclusives, and the only place to get other exclusives at MSRP, it's doesn't make sense to ignore it. 

 

Amazon is great, until you want to buy Tower of Orthanc, Palace Cinema, new X-Wing, etc.  Then you're paying over retail.  As time goes, their price will fall, but except for the rare sale, it's impossible to ever find these for anything less than MSRP.  The Lego Store's VIP program bridges the tax gap so that it's nearly a wash.

I just bought a Jor-El.. did you sell it on Amazon? Ha.

[Quacs]

Has anyone contacted Lego to understand if they differentiate resellers from investors and what exactly is the definition of a reseller? I haven't found it necessary to since I have not received any reseller warnings - I've never sold legos yet, but buy on average 3 sets over a period of time, but sometimes up to 20, to sell around two years after retirement. I've got about 20 months to go still on my first set (21016) before I see if I can make money on this.

 

First, I wouldn't tell TLC that you're either an investor or a reseller: in their eyes, it's exactly the same thing. 

 

I would assume volume purchasing (especially of the same set) sets off red flags in their sales system.  Remember the discussions in the B-Wing thread about the delay between online purchase and order confirmation?  I bet a lot of that had to do with the time it takes for TLC to check the order isn't a "resale" order, and the crush of orders they got at a normally slow time (midnight) created a logjam of verifications required. 

 

If you're buying 2-3 sets at a time, and not repeating in large multiples, I don't think you have much to worry about.

 

I just bought a Jor-El.. did you sell it on Amazon? Ha.

 

Nah, eBay.  But hopefully soon we will be able to transact on Brick Classifieds!

[justafrog]

 

"Fortunately, they can't prevent the sale of used sets or indeed of new in box sets that were legally acquired, including through their precious Lego shops or SAH - all of these sorts of sales are protected under the First Sale Doctrine, period, end of story."

 

That's what i am talking about!

 

I would love to see them push Amazon to have there sellers limit what they sell, i doubt that would ever happen,  ebay on the other hand would fold instanly and pull sellers auctions.

 

 

Oh I see what you're saying. I was not clear -- there is a difference between what TLG can do to Amazon and what they can do to Amazon's third party sellers (thee and me).

 

IF Amazon.com themselves is an authorized Lego retailer (i.e, they buy through TLG and then retail on their site and ship from their warehouses), LEGO can force them to limit sales if LEGO wants to. (I.e, you can only purchase three of these, period, or whatever).

 

For Amazon's third party sellers, they cannot necessarily limit the QUANTITY we sell (though Amazon could, if they wanted to make nice with TLG) but what they CAN do is under VeRO (Verified Rights Owner laws) force Amazon, eBay, Bricklink, whoever, to remove any given third part seller's items from their site by telling AZ, eBay, BL, etc. that they believe those items to be counterfeit or not legally acquired.

 

AZ, eBay, BL, etc., at that point have no choice but to comply. And then the third party seller must go to TLG and say, "Hey, TLG, guyz, here's my receipts showing this is perfectly legal so you need to rescind this takedown." Some manufacturers deal well with these situations, some don't, I have no idea about TLG (very wet behind the ears with legos specifically, but know a fair amount about VeRO in general).

 

It isn't eBay management being pansies, it's just the law and they're not going to stand in the legal line of fire when they (eBay) has NO way of knowing if we're selling fakes, stuff that we got on the black market, whatever.

 

I don't know which directions, if any, TLG will become more aggressive at eliminating as many resellers as possible, but two ways for them to try are limiting the ability of their licensed retailers to sell in bulk, and through spurious VeRO action that puts the burden of proof on the reseller.

[TheDarkness]

Wow, certainly an intriguing wrinkle. I really don't buy much from LEGO Shop at Home due to their inflated AU pricing but i would have thought Lego would love to be moving more of their sets. They themselves are contributing to the secondary market now with promotions like Mr Gold, limited Minecraft, the Technic Crawler reissue and even store exclusives.

[Darth_Raichu]

 

The LEGO Shop sells and ships products to end-user consumers only. You may not purchase LEGO products for resale via the shop.LEGO.com site or LEGO Brand Retail Stores.

 

How are they supposed to enforce the ban in store ?  If I was the manager of that store and someone wanted to buy $2k worth of LEGO why would I be dumb enough to say no ?  Especially when that $2k order could make my store profitable during slower months. 

[Quacs]

How are they supposed to enforce the ban in store ?  If I was the manager of that store and someone wanted to buy $2k worth of LEGO why would I be dumb enough to say no ?  Especially when that $2k order could make my store profitable during slower months. 

 

They can't unless you present your VIP card.  So, you're essentially paying a  5% premium if you can't use your VIP account. 

 

They will also likely challenge any sale for >5 of the same set.

[Quacs]

Wow, certainly an intriguing wrinkle. I really don't buy much from S@H due to their inflated AU pricing but i would have thought Lego would love to be moving more of their sets. They themselves are contributing to the secondary market now with promotions like Mr Gold, limited Minecraft, the Technic Crawler reissue and even store exclusives.

 

This is the reason I included eliminating exclusives (in the Hazzards article) as one option that TLC has in their arsenal to combat resellers.  While I don't think they'll go that route, there's always the threat.

[mayor]

As I have said before: "Lego does not like us". The richest man in Denmark, wants to be the richest man in Europe. Our numbers must be strong.

If we were to Boycott Lego for one set/item or for several months or Every Lego set/item produced for one month, two months, six months or a full year

they would cry, they would feel the difference on the way to their Danish Banks. We could do it!!! because Lego puts stuff out for months more like YEARS!

Don't buy it, especially from LEGO Shop at Home as soon as it comes out. Wait, wait, wait, wait and wait some more. By waiting, our Boycott will start. Then see how it affects the Richest Man in Denmark! Wait don't buy. if our numbers are large, they will not hassle us in the future.

Remember Lego sued Mega Bloks in Every court in the World! That must say something about that cute little boy on the cover of the "Town Plan" when Samsonite 

distributed their product over 50 years ago. They are watching us, this attitude of theirs could bring them a Negative backfire in the News.

In another Decade will Lego be around?

[sadowsk1]

I have to disagree with this one.  If a company is selling a product on thier site or in the mall and they have no restictions like ( limit 3 per customer ) like they do on their site for many sets, and i want to buy 50 to take to my local toy show thats my business. Once i buy it i can do whatever i want with it in reason, burn them, give them to charity, throw them away, sell them to my neighrbor,  ect.

Lego.com can make whatever rules they want when they sell a set through their website.  A person can choose to follow them, work with them to start up your own partnership with them, or ignore their rules, but in ignoring them there may be consequences.

 

Lego.com is clearly sending a message to the poster of this topic and while a person can disagree with it ultimately Lego.com will dictate how they run their business.

 

Do I think it's fair?  So long as Lego treats everyone that has the same purchasing practices that signals a reseller to them, yes.

[Pirate]

This is nothing new, and has happened to many people. If past history is any indication, you've already been banned, despite what the email says, and you'll never be able to order from S&**** again. Not even 1 set.

[terrymc4677]

Thank you - this was helpful and the sort or experience I was hoping would be shared.  Have you continued to use your VIP account to make purchases from Lego (in store or online)?

my VIP account was "frozen" for a few days during this situation, but was activated again with all earned points available. I have since used it online as well as in person with no problems. I just buy more carefully now when I want an exclusive that I can't get elsewhere. also, when I am shopping in person in the lego store I always have my 7 and 6 year old children with me, so maybe that helps my cover. lol

[Quacs]

As I have said before: "Lego does not like us". The richest man in Denmark, wants to be the richest man in Europe. Our numbers must be strong.

If we were to Boycott Lego for one set/item or for several months or Every Lego set/item produced for one month, two months, six months or a full year

they would cry, they would feel the difference on the way to their Danish Banks. We could do it!!! because Lego puts stuff out for months more like YEARS!

Don't buy it, especially from S@H as soon as it comes out. Wait, wait, wait, wait and wait some more. By waiting, our Boycott will start. Then see how it affects the Richest Man in Denmark! Wait don't buy. if our numbers are large, they will not hassle us in the future.

Remember Lego sued Mega Bloks in Every court in the World! That must say something about that cute little boy on the cover of the "Town Plan" when Samsonite 

distributed their product over 50 years ago. They are watching us, this attitude of theirs could bring them a Negative backfire in the News.

In another Decade will Lego be around?

 

mayor, did you just watch Les Miserables?  Your mini-rant sounded very French Revolution to me... 

 

I have to disagree with a few of your assertions:

 

1. TLC will not get bad press from cracking down on resellers. 

2. Boycotting Lego would be more damaging to resellers than to TLC.  You're WAY overstating the number of resellers there are throughout the world.  As Ed says, Lego sets are overwhelmingly bought for children.  They fuel sales, not resellers.

3. TLC isn't going anywhere.  They just posted their most profitable year OF ALL TIME, and there's no reason to think they will not maintain sales.  Any idea what the largest toy store in the world is?  You guessed it - Lego!  Bigger than Hasbro, bigger than Mattel.  There not going to vanish in 10 years.

 

I get that you're trying to be proactive about this, but reseller boycotting would be akin to peeing in the ocean to get sea level to rise - reseller boycotting will not make any meaningful diference in their sales.

[justafrog]

my VIP account was "frozen" for a few days during this situation, but was activated again with all earned points available. I have since used it online as well as in person with no problems. I just buy more carefully now when I want an exclusive that I can't get elsewhere. also, when I am shopping in person in the lego store I always have my 7 and 6 year old children with me, so maybe that helps my cover. lol

 

I may have to hire a 7 year old... mine are too old to provide cover. 

 

Seriously, though, if they're going to crack down there's going to be a bean-counter algorithm done through a computer, through the VIP system. It's the easiest way to catch all us naughty resellers.