Something Interesting to me" Why doesn't TLG have more "Sales" and Coupons?

[DoNotInsertIntoMouth]

Honestly I am one of the people who are a little irritated with TLG's supposed new coupon policy. But I wouldn't have near as much problem with it if they weren't so stingy with every having a freaking sale or discount on something?

 

Why don't they do this more? I know a lot of supplier/manufacturers don't usually sell stuff their-selves but even having 10-15% off sales, they would make more money than if someone buys the set they sold wholesale at a 40% discount to Amazon or Target for, right?

 

The only reason I can think of is its part of their policy to keep resellers happy - but I feel like Lego has the upperhand in all of those negotiations anyway. Wouldn't it make more sense to encourage more people to buy directly from you?

[Mos_Eisley]

I don't know what the percentage is, but a good amount of TLG's sales come from places like Walmart, Target, TRU, etc. Of course TLG could undersell all of them and still make more money than when they sell something to those stores, but that would make those places not continue to order products from them. Most people don't have a LEGO store near them, so all these other B&M stores keep LEGO sets in front of people.

[Darth_Raichu]

It is all about branding.  TLG wants people to think LEGO as premium product, like Apple.  When was the last time Apple sell their flagship products at deep discounts ?

 

Plus, TLG has got to make more money supplying the big box stores rather than individual customers.  They sell the products in bulk with no overhead related to owning physical stores.  Again, the LEGO stores are just for brand recognition

[rcdb1984]

I think the answer is easier than that.  It's because they don't have to.  You still buy it reguardless.

[segreto]

To control them all!

 

Contract agreements with the other stores are the rings, my friends.  There is a company Lie-Nielsen out of Maine.  They make the worlds best wood planes and woodcrafting tools.  Other stores carry some of their product, but they all have a strict contractual agreement about the price variations available.  You will not find any sales of Lie Nielsen products in a hardware or woodworking store, and even the home company does not offer sales other than a coupon in the catalog or a seasonal special. Lie-Nielsen is very smart for controlling the prices this way.  There is a limited amount of tools they can create, and they want to make sure buyers are not gravitated to any one source.   When it comes down to actually purchasing a tool from there, there really isn't any choice.  I either buy it for the retail price from the home store, or I buy it for the retail price from a local store. Each one is pretty much the same.  Maybe I save on tax by ordering from Maine, or maybe I get it faster by ordering from a local store.  Either way, I come off feeling the same way.  I just bought a great tool at a high price.

 

Anyway, if you look at how much Lego product is being carried by Walmart, Target, etc., there always seems to be an abundance of it.  So it is a different monster, but the price contracting holds a more sinister purpose: control.

 

Now I am not sure of this, but I would guess that the reason is that TLG agrees to not have discounted sales if the other retailers agree to buy a certain quantity of product.  Target might not want 50 Jabba Barges for each store, but they will if TLG agree to keep the price up at their stores and allow Target to throw sales, and even sell at clearance levels.  Target knows that no matter how many of an item they are required to buy from TLG, they will be able to unload it if TLG never drops their retail prices.  If Lego started selling items at discounts, then the Targets and Walmarts would have stock stagnating longer than they do now, and might not agree to purchase those 50 Jabba Barges for each store.

 

It is not a bad setup.  Lego is assured of issuing large amounts of stock per Target stores, and Target is assured of pretty much selling all they agree to carry.  Lego Group is more of a window shoppers display center to catch new enthusiasts and sell in malls or areas where there most likely isn't a Target connected.    

 

I like the Lego Store.  I like buying at Target/Walmart.  The Lego Group knows this.  They planned it this way.  They gave me a choice, though the choice isn't really a choice at all. I feel powerful because I can buy wherever I want and most likely find a bargain.  This makes me happy.  The Lego Group knows this.  I get my precious Lego bricks and I am happy; the all-seeing eye of The Lego Group controlled both me and the store I purchased my precious from.   

[Scissorino]

^^^ nailed it!

[remy1492]

Nice. That was like Matrix part 2 where its all explained. It makes sense. But part of me knows... nobody really knows. Euro business models never make sense to me.

But i also agree...a coupon or more robust VIP club reward is in order. Americans bite at a good deal or discount. Heck i just recently got into Lego themes i had no interest in only necsuse it started off as a good deal.

Once a customer FEELS they got a good deal then theyll come back for more emotional satisfaction. (Note: TRU deals are not deals).

I dont know if lego is trying to be a posh brand. Even Lexus had sale events. Its a toy afterall, not a status symbol.

But i cant think of any ecplanations ad vlear as already stated.

[sadowsk1]

They don't need to give out coupons.  They sell a quality item and it doesn't require a discount to move product.  If Lego never discounted a set and any other retailer never discounted a set I would still be buying Lego. 

[beeblet65]

I think the answer is easier than that.  It's because they don't have to.  You still buy it reguardless.

pretty much sums it up!

[DoNotInsertIntoMouth]

They don't need to give out coupons.  They sell a quality item and it doesn't require a discount to move product.  If Lego never discounted a set and any other retailer never discounted a set I would still be buying Lego. 

 

 

I think the answer is easier than that.  It's because they don't have to.  You still buy it reguardless.

 

 

I agree with the sentiments above, but thats not the point. Think about it like this:

 

You own a business and have a 75% profit margin bringing in $150K a year.

 

You see an opportunity that would lessen your profit margin to 55% - but you would make $200K a year. What would you choose?

 

You don't think if Lego had more discounts, you wouldn't buy more from the Lego store? I mean, everyone here is pissing their pants for double VIP points when you can get things 20% or more off everyday on Amazon. This is men included, just saying.

 

And I definitely understand the retailer issue and them not having stores everywhere, but the places they do still have Walmarts and Targets. And if these people were going to pull out, they probably would have when TLG started the whole you have to buy almost every set we sell policy.

 

Just playing Devils Advocate a bit here - like I said, interesting.

[Guest eightbrick]

Interesting topic and great read, segreto. The harder part for me is finding the coupons in the first place lol since I don't get the catalog. On a somewhat related note, when we see in-store discounts for 10-20% off damaged items did the person who dropped that item or whatever have to pay that 20%? Or do they only discount ones that came shipped badly? I'm not going to go drop (kick, punch, brutally mutilate etc.) a bunch of Lego boxes, but I was just wondering.

[Scissorino]

The sales they do have in brand stores are a joke!

[Scissorino]

Interesting topic and great read, segreto. The harder part for me is finding the coupons in the first place lol since I don't get the catalog. On a somewhat related note, when we see in-store discounts for 10-20% off damaged items did the person who dropped that item or whatever have to pay that 20%? Or do they only discount ones that came shipped badly? I'm not going to go drop (kick, punch, brutally mutilate etc.) a bunch of Lego boxes, but I was just wondering.

not sure but I regularly check my local toy shop and argos for these.

[DoNotInsertIntoMouth]

Interesting topic and great read, segreto. The harder part for me is finding the coupons in the first place lol since I don't get the catalog. On a somewhat related note, when we see in-store discounts for 10-20% off damaged items did the person who dropped that item or whatever have to pay that 20%? Or do they only discount ones that came shipped badly? I'm not going to go drop (kick, punch, brutally mutilate etc.) a bunch of Lego boxes, but I was just wondering.

 

At least at the retail place I used to work at, if someone broke something, they didn't have to pay for anything. The store just lets it go - but we didn't discount stuff. We damaged it out and sent it to a place that sold it for 40 cents on the dollar. So maybe that was why we never saw people doing it on purpose. lol

[segreto]

Interesting topic and great read, segreto. The harder part for me is finding the coupons in the first place lol since I don't get the catalog. On a somewhat related note, when we see in-store discounts for 10-20% off damaged items did the person who dropped that item or whatever have to pay that 20%? Or do they only discount ones that came shipped badly? I'm not going to go drop (kick, punch, brutally mutilate etc.) a bunch of Lego boxes, but I was just wondering.

Thanks.  I have no idea about the boxes I see in the corner of my Lego Store.  You should get the catalog, though.  I haven't used mine yet, since you can't use them on exclusives, but I will use it by Christmas, and the catalog itself is nice.  Since Lego is not a public company, they don't have to release anything to shareholders about their business models or policies.  The closest I can compare them to is the Lie-Neilson company I was talking about because I know that company intimately.  I think the person who compared The Lego Store to The Apple Store was spot on, too.  Either way, whatever they are doing is working, and TLG has made mistakes that they quickly pulled out of before (video games, theme parks...something else I cant think of).

 

Lego Stores are pretty showrooms for amazing products...or are they amazing showrooms for pretty products?