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

[stephen_rockefeller]

Just what I was looking for. I'll buy from TRU for $55+tax instead of $40+VIP points.

To clarify, I have never placed an order that exceeds the Shop at Home buying limit. But over time, I have purchased about 50 funhouses, as well as 50x lloyd 9574 spinners, and multiples of other hard to find or exclusive type sets that can't be purchased elsewhere at a discount.

I am shocked that no other heavy hitters have received this message before. I am sure we all live in the glass house of reselling, otherwise, why are you on this site?

makes you wonder if those self proclaimed heavy hitters are so heavy after all! Anyways I think this is BS. If you are ordering within their limit then there is no problem. I have not been warned by email but I do think i have been flagged. I have noticed a considerable difference in customer service since my orders have been piling up. I am still waiting for someone to contact me about an issue i had 2 weeks ago. The email i received from them 14 days ago said someone would be in contact with me in 24 hours or less, still nothing.

[Ed Mack]

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 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 - it just will not make any meaningful diference in their sales.

I agree.  TLG has the right to sell their product to whomever they like, in the manner they choose.  This is not a "BASH LEGO" thread.  I want some discussion here about all the different angles of limiting resellers and their purchasing ability.  

[Diabolos80]

The manager at my local Lego store subtly encourages reselling. He says to me, "I think time may be running out on the tower bridge! If you're gonna get one to hold for a while, better do it soon!" When we first started chatting a few months ago he was happy to talk about ebay markups and international buyers, etc. He understands that his job is to move product. After that, where it goes is not his concern. We get along just fine :)

[Quacs]

The manager at my local Lego store subtly encourages reselling. He says to me, "I think time may be running out on the tower bridge! If you're gonna get one to hold for a while, better do it soon!" When we first started chatting a few months ago he was happy to talk about ebay markups and international buyers, etc. He understands that his job is to move product. After that, where it goes is not his concern. We get along just fine

 

I've seen the same thing at Lego Stores.  While I haven't divulged my intent to resell the sets I purchase, I have overheard a few other shoppers indicate they were resellers.  Each time, the clerk was more than happy to yak with the reseller about what's going EOL, what's exclusive, etc.

[StarCityBrickCompany]

People are forgetting that it is the same tight controls that LEGO has always implemented that creates the environment that allows price appreciation.

[willy431]

Hmm....smart money might say if lego is afraid there are too many resellers and value of used sets are going to crash, crashing the used market-- and taking new set pricing with it..we might second guess our buying. They have that financial data that many of us would kill for. Also hi Lego! I guarantee they are on this and other lego sites monitoring what is going on. Guarantee it.

[stephen_rockefeller]

Hmm....smart money might say if lego is afraid there are too many resellers and value of used sets are goin to crash, crashing th market and new set pricing....we might second guess our buying. They have that financial data that many would kill for. Also hi Lego! I guarantee they are on this an other lego sites monitoring what is going on. Guarantee it.

Yep!

[legopocalypse]

LEGO is spying on all of us! I think there is a hidden camera or tracking device they put in one of the sets I bought....lol

[redcell]

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 wouldn't say that Lego is on a rampage to disrupt the secondary market, but they are certainly making concerted efforts in that direction.  Dial the clock back three years and purchase limits on LEGO Shop at Home, Amazon, TRU, and Target were extremely rare.  Heck, I remember when TRU posted Chrome Stormtroopers for $3 each and you could buy as many as you wanted.  About two years ago, purchase limits started to become more frequent and prevalent.  Within the last year, the purchase limits have gotten tightened even further so that it is difficult at times to purchase more than 2-3 copies of a given set from Amazon or TRU in a single order...and TLG started taking concerted efforts to prevent obvious resellers from buying through LEGO Shop at Home.  Who knows what is driving this inside TLG, but it is unlikely to be a coincidence.

[justafrog]

 "The more you tighten your grip, Tarkin, the more star systems will slip through your fingers."

 

Okay, I'm not likening Lego to an evil galactic empire   but the quote sprang to mind and seemed to appropriate, at least for those who sell Star Wars theme. 

[redcell]

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.

 

I haven't contacted them about this, but I can guarantee you that if TLG is taking this kind of action based on the types of purchasing patterns that have been described, they aren't going to care whether you call yourself an investor or reseller.  If you're buying large quantities of sets from LEGO Shop at Home, you are going to be at risk for getting one of these reseller bans. 

[comicblast]

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.

The thing is, I've never bought LEGO from TRU, partially because it is too far, from my house, and its expensive! I do understand the angle that you are coming from though...

[redcell]

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

 

Who knows exactly why they have decided to take this action, but I have represented companies who have taken similar actions and know some of the reasons that a company would do this.  One of the main reasons is to exercise control over who is representing their products to consumers.  I would suspect that many folks here would think that this is a stupid reason because TLG is making money off of every set sold to a reseller.  However, if you've invested as much money and effort as TLG has to build one of the strongest toy brands in the world, you want to protect that brand and exercise control over the retail experience that your ultimate customer has when they purchase your product. 

[dimsumonly]

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.

Quacs,

 

I do agree with what you're saying but to the resellers are just as important as regular end users. You said they just posted their most profitable year of all time. How much do you think resellers contribute to that mark? I mean if you compare resellers to end users, 1 resellers, like myself, can spend upward of $2,000 each time while an end user may only buy one set of City or LOTR for less than $100. Resellers are a huge part of Lego sales and it seems that TLG is shooting themselves in the foot but singling out resellers. 

[justafrog]

Resellers are a huge part of Lego sales 

 

Do you have figures you can share that illustrate that claim? And define "huge" while we're at it?

 

(Edited for spelling)

[redcell]

Quacs,

 

I do agree with what you're saying but to the resellers are just as important as regular end users. You said they just posted their most profitable year of all time. How much do you think resellers contribute to that mark? I mean if you compare resellers to end users, 1 resellers, like myself, can spend upward of $2,000 each time while an end user may only buy one set of City or LOTR for less than $100. Resellers are a huge part of Lego sales and it seems that TLG is shooting themselves in the foot but singling out resellers. 

 

Resellers may buy more in one shot than an average consumer, but there are far more average consumers than there are resellers, otherwise there wouldn't be a secondary market sufficient to support reselling.  In the grand scheme of things, resellers are a small small drop in the bucket of Lego sales. 

[comicblast]

Do you have figures you can share that illustrate that claim? And define "huge" while we're at it?

 

(Edited for spelling)

I know they make up a percentage, but there is a miniscule percentage of investors and resellers in comparison with all the other fans. We may make a large percentage of sales, but it isn't that much. This is probably a terrible guess, but I think investors make up about 10% of LEGO sales.

[Grolim]

I think we need to keep in mind that Lego is a business, and a very successful large one.  They don't make these kind of decisions and policy changes without good reason, with the goal of maximising profits.  Literally every decision they make boils down to how can we make more money.

 

I can think of a few reasons Lego would want to restrict sales to resellers.  A "sale is a sale, and you'd think they would be happy" doesn't really hold true.  This is because all sales are not equal in terms of profitability.   Large volumes purchased in a cheaper market (mainly the US) and sold by resellers via Ebay or other market places to international customers can impact the potential profits for Lego.  This is because Lego charge far more in some of those other countries and have excellent margins.  This means the resellers cannibalise some of the demand in those markets.  Lego want to control distribution chains to final customers as much as possible in order to squeeze every cent out of the system.  There is also the reputation and brand image aspects that some potentially dodgy resellers can bring, they want to control the customers sale experience.

[redcell]

I know they make up a percentage, but there is a miniscule percentage of investors and resellers in comparison with all the other fans. We may make a large percentage of sales, but it isn't that much. This is probably a terrible guess, but I think investors make up about 10% of LEGO sales.

 

If resellers made up 10% of Lego sales, that would be somewhere in the neighborhood of $300 - $400 million in 2012.  Do you really think that there are that many sets being set aside for resale?  I would be surprised if resellers accounted for more than 1% of TLG's sales in any given year...that would be $30 - $40 million in sets put away for resale.  How much do you think the average reseller spends in a given year on Lego?  I know there may be a perception that there are resellers on every corner, but there really aren't.  They may be a lot of hobby resellers who stick a few sets away on the hope that they'll strike gold, but there aren't that many who are spending enough to make resellers a large percentage of TLG's sales.

[comicblast]

If resellers made up 10% of Lego sales, that would be somewhere in the neighborhood of $300 - $400 million in 2012.  Do you really think that there are that many sets being set aside for resale?  I would be surprised if resellers accounted for more than 1% of TLG's sales in any given year...that would be $30 - $40 million in sets put away for resale.  How much do you think the average reseller spends in a given year on Lego?  I know there may be a perception that there are resellers on every corner, but there really aren't.  They may be a lot of hobby resellers who stick a few sets away on the hope that they'll strike gold, but there aren't that many who are spending enough to make resellers a large percentage of TLG's sales.

Like I said... "probably a terrible guess". In that case I was right that I was wayyy off.

[Ed Mack]

I think we need to keep in mind that Lego is a business, and a very successful large one.  They don't make these kind of decisions and policy changes without good reason, with the goal of maximising profits.  Literally every decision they make boils down to how can we make more money.

 

I can think of a few reasons Lego would want to restrict sales to resellers.  A "sale is a sale, and you'd think they would be happy" doesn't really hold true.  This is because all sales are not equal in terms of profitability.   Large volumes purchased in a cheaper market (mainly the US) and sold by resellers via Ebay or other market places to international customers can impact the potential profits for Lego.  This is because Lego charge far more in some of those other countries and have excellent margins.  This means the resellers cannibalise some of the demand in those markets.  Lego want to control distribution chains to final customers as much as possible in order to squeeze every cent out of the system.  There is also the reputation and brand image aspects that some potentially dodgy resellers can bring, they want to control the customers sale experience.

Excellent point. Resellers affecting international sales could be a major issue at play. That being said, the LEGO reseller also gives LEGO fans from around the world, without access to a LEGO store, Target or Walmart, the ability to buy a set. This is a valuable service that helps LEGO increase their fanbase.

[terrymc4677]

LEGO is spying on all of us! I think there is a hidden camera or tracking device they put in one of the sets I bought....lol

you had better open up all of your MISB sets so you can find it!

[janedoe]

Quacs,

 

I do agree with what you're saying but to the resellers are just as important as regular end users. You said they just posted their most profitable year of all time. How much do you think resellers contribute to that mark? I mean if you compare resellers to end users, 1 resellers, like myself, can spend upward of $2,000 each time while an end user may only buy one set of City or LOTR for less than $100. Resellers are a huge part of Lego sales and it seems that TLG is shooting themselves in the foot but singling out resellers. 

 

Nope. The only reason Lego investing is viable is because of the large group of consumers, not resellers. Otherwise who else is going to buy up your stock of EOLed sets? Lego wants to retain their focus on buyers, not resellers.

 

I also see it as a way for Lego to make it fair to their sellers/merchants who actually follow the reselling program guidelines.

[Guest AnnexBrett]

Somebody at the TLG CS office, sitting in a cubicle, had a lot of time to F@K around between two coffees... Myself dont buy a lot from LEGO Shop at Home either anyways ( I also wont order 50 copies of the same set at the time).

What I dont understand is the following:

The buyer pays full price and tax and shipping (optional) for the order, gets what he wanted =happy

TLG gets a tremendous amount money from investors - full retail price paid, got rid of inventory=happy

Government gets sales tax (in my case 13%)=happy

Shipping couriers gets orders to fulfill=happy

 

So why is this discriminative measures from TLG? How they can PROVE it that the merchandise I buy will be re-sold? Its like a car dealership wont sell you a popular car because you might dare selling it to someone later on...

 

Total BS!

 

Luckily there are some sources out there that only cares revenue and they dont care if Johhny and Jane's parents buying them one by one or Mr. Investor who gets 50 at the time.

[TheDarkness]

Excellent point. Resellers affecting international sales could be a major issue at play. That being said, the LEGO reseller also gives LEGO fans from around the world, without access to a LEGO store, Target or Walmart, the ability to buy a set. This is a valuable service that helps LEGO increase their fanbase.

 

When Lego price DeLoreans at $69.99 here then they are pricing themselves out of the toy market

I think they need to be very careful in how they are placing their prices. Online shopping has exploded and people constantly check now to see if they can get rarer or cheaper items. If they increase the costs in the cheaper countries, then international buyers might simply stop buying Lego altogether.

The B-Wing for example has a $350 price tag here, which for the parts is simply ludicrous. I was able to get one imported for $150 (and yes others to resell). If I couldn't have picked it up cheaper though, I simply would have not acquired it at all. Lego is supposed to be a child's toy after all. I am seeing more and more Lego here left on the shelves waiting for store discounts due to current pricing. Once decent discounts kick in then it starts to move.

 

Lego had a fair run with what they were charging internationally for smaller markets, but a lot of people are looking harder for better deals now. Lego themselves had to start offering free shipping (the minimum here previously was $40 I believe) to even be competitive.