I got banned from Lego.com and Toy Dealer dept is not responding...

[Johnny_Lemonhead]

About 6 weeks ago I got banned from the Lego.com site for being too good of a customer (buying too many items). I challenge you to try getting banned from virtually any other retail store for buying too many items. Coach handbags is possibly the only one I can think of. Can you imagine getting banned from a car dealership for buying too many cars? How about McDonald's banning you for buying too many hamburgers? In fact, according to the New York Times many retail stores have VIP and concierge services which are extended to customers who spend a lot of money each year. Not only did I not get such a benefit extended to me, I was told to hit the bricks (pun intended). What the ban means is that all of my orders are cancelled after I place them. I can't use my VIP points online (because they won't ship any more orders to me) but I can use them in stores oddly enough which I guess is alright.

 

In both of the letters I got from the Lego executive he told me to contact their reseller dvisison. Here is the passage:

 

"If you represent a retail business and are interested in purchasing LEGO products for resale, please contact our Independent Toy Dealers department to discuss our reseller requirements by calling 1-800-673-0360, or email [email protected]."

 

I emailed them over a month ago to ask for info and they have not responded to my request. Does anyone have any experience with this department? Should I try calling them? I talked to a friend of mine who owns a small toy store and she said she didn't sign up as a reseller with them because they require a minimum purchase of $10K up front. I am OK with that requirment but if they don't respond to me I don't see how it's ever going to work.

 

Anyone have any experience with all of this?

 

Thanks in advance!

[shudameister]

I don't know anything about the process, but I do know some information about independent toy shops selling Lego.

 

You would also have to purchase 75% of everything. You can't just get Star Wars, City, and Friends. Would need everything. (At least, I am pretty sure of this)

 

In addition, if you order one thing they may send you whatever they see fit. Only Chima sets? Well here are three cases of speedoz, that you are buying.

 

They will max out the credit card when billing occurs, to make sure it works.

 

Selling occurs on Tiers, you will be on the lowest, and least priority. Everyone else will get new sets before you.

 

Toys R Us gets all the sets before any other retail. This is because of an agreement between Lego and Toys R Us in the UK and it just happens to carry over to the USA.

 

However, they have reimbursed for damage goods pretty well. 

 

Oh and the website you buy off is very slow and tedious.

 

That is all I can think of at the moment.

 

Wait, one last comment. The margin is pretty low. Lego is expensive...

[Coneil21]

Emazers has said numerous times that this program is terrible. You might want to search the forums to see specifically what he has to say.

[emazers]

Anybody trying to set up a Lego account will make a huge mistake, You have to carry 75% of the Lego Themes, Every Set in the theme, You need a Retail sales License, You have to show a actual Picture of your Store, plus paying State taxes every quarter."Now here are a few examples of how much Lego are Wholesale. Lets take the New SW Gunship and Jabba's Barge. Retail is $119.99 your Wholesale price is $83.99 a piece, 2 to a case so $10 a box to ship so you are paying $88.99 each for them. Now Amazon and Target just had 2 big sales that you could of gotten both as low as $65-70 each, not counting all the other great sales they had, so why on earth would anybody want a Lego account and Loose money most of the time as most people are buying from Amazon,Target,Etc. Plus you can't carry no Hard to Find and Exclusives." Another thing Amazon and Target,Walmart Lost money on most of there sales, so wasting $10,000 or more to set up a account will loose big time. Before you could order what ever set you wanted, so me and 65% of Wholesale buyers were buying 99% of Large Sets and we made lots of money. Now 75% of Wholesale sellers like me has had there accounts cancelled because we would not accept there terms. ED

[Johnny_Lemonhead]

Wow...these replies have been eye opening to say the least. Yeah, I am not really a player for getting stuck with a bunch of Galaxy Squad sets and Emazers' point about the Jabba set is an excellent one. I guess I will steer clear of the Toy Dealer Department. I actually have multiple avenues for procuring Lego sets; the Lego.com site was merely one of them. In fact, being banned by them led me to another source that I am finding even more beneficial. I don't really want to get into all that because I don't want Lego to know anything about my business, but let's just say things are going well and I am selling about 350 sets per week online and I am having no trouble getting new inventory. So sorry Lego but banning me from the site is not hurting me or my business; it's just forcing me to adapt. Thanks a bunch for the replies which have proven to me that the Toy Dealer program is to be avoided like the plague.

[legoman12323123]

Wow...these replies have been eye opening to say the least. Yeah, I am not really a player for getting stuck with a bunch of Galaxy Squad sets and Emazers' point about the Jabba set is an excellent one. I guess I will steer clear of the Toy Dealer Department. I actually have multiple avenues for procuring Lego sets; the Lego.com site was merely one of them. In fact, being banned by them led me to another source that I am finding even more beneficial. I don't really want to get into all that because I don't want Lego to know anything about my business, but let's just say things are going well and I am selling about 350 sets per week online and I am having no trouble getting new inventory. So sorry Lego but banning me from the site is not hurting me or my business; it's just forcing me to adapt. Thanks a bunch for the replies which have proven to me that the Toy Dealer program is to be avoided like the plague.

Why would you ever use lego.com for your lego supply? They sell sets at MSRP .. you could buy elsewhere for 20%+ discounts on most sets

[Johnny_Lemonhead]

I used them mostly for stuff that was on sale. Occasionally I would buy sets at retail if they were about to be retired/sold out.

[legoman12323123]

I used them mostly for stuff that was on sale. Occasionally I would buy sets at retail if they were about to be retired/sold out.

 

Usually lego sale items are junk .. how do you make a business selling the stuff nobody wants? Why not just use walmart or target?

[Johnny_Lemonhead]

Well, as I said they were only one of my avenues. Also I did just fine reselling their sale items.

[justafrog]

If he's selling 350 sets/week online, he's probably figured out the money angle by now (or, he's independently wealthy and doesn't mind doing it as a charity   )

 

Welcome, btw, Johnny. I hope you'll stick around and chat, I enjoy picking the brains of my victims fellow sellers who look like they can teach me things. 

[Johnny_Lemonhead]

Thanks. Will do!

 

I wish I could speak more freely about procurement but I have to be paranoid given Lego's need to control resellers. I am positive that they read this forum. It's not paranoia if they really are out to get you, and Lego has already banned me from their site so that is a sign of their determination in this respect.

 

Goodnight everyone and thanks again for the replies.

[roxio]

Re the opening post about bans from others, I've been banned online by toysrus (uk)

[tonysbricks]

Re the opening post about bans from others, I've been banned online by toysrus (uk)

For what?

[Anakinisvader]

I have banned myself from being banned so if they try to ban me I will force them to take my money because I called it first.  Nannie nannie nah nah.

[BrickPick3r]

I still don't get it. Why lego would prevent people buying a lot from them? Could anyone tell me?

[Johnny_Lemonhead]

Warning letter, before I got banned:

 

Hello,

 

In an  effort to reinforce existing LEGO policies, I am sending this message to you.

 

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.

We reserve the right to cancel or suspend your order for further investigation if we suspect it is being used for resale.

 

If you represent a retail business and are interested in purchasing LEGO products for resale, please contact our Independent Toy Dealers department to discuss our reseller requirements by calling 1-800-673-0360, or email [email protected].

 

 

Kind regards,

**** ******

[justafrog]

I still don't get it. Why lego would prevent people buying a lot from them? Could anyone tell me?

 

 

There are numerous threads on Lego's remarks and actions and a variety of speculation and theories as to "why".

 

Here is a fairly comprehensive one:

http://community.brickpicker.com/topic/5378-lego-makes-a-statement-on-lego-investing-and-resellers/

[Guest TabbyBoy]

Thanks. Will do!

 

I wish I could speak more freely about procurement but I have to be paranoid given Lego's need to control resellers. I am positive that they read this forum. It's not paranoia if they really are out to get you, and Lego has already banned me from their site so that is a sign of their determination in this respect.

 

Goodnight everyone and thanks again for the replies.

 

I know of a Merlin employee (works in Big-Shop at Legoland Windsor) who is a member on here and other forums but, I can't mention the name for obvious reasons.  Therefore it's a given that LEGO employees and maybe management are watching us right now.  I now buy the largest amounts from Amazon and high street shops when they have a good sale (that LEGO Shop at Home can never match) and only buy exclusives from LEGO Shop at Home if (and only if) there is a good promo at the time.  I'm not the only one thinking that LEGO are mad and I hope this is short lived.  If I sold my product, you could buy as much as you damn well want!

[Ed Mack]

I have spoken to LEGO reps directly and here is the basic requirements to become an Independent LEGO Retailer...

1. $5000 initial order

2. No exclusives

3. You must buy from 75% of all themes

4. You must own a BRICK AND MORTAR TOY STORE that sell other toys besides LEGO sets

[Alcarin]

I know of a Merlin employee (works in Big-Shop at Legoland Windsor) who is a member on here and other forums but, I can't mention the name for obvious reasons.  Therefore it's a given that LEGO employees and maybe management are watching us right now.  I now buy the largest amounts from Amazon and high street shops when they have a good sale (that LEGO Shop at Home can never match) and only buy exclusives from LEGO Shop at Home if (and only if) there is a good promo at the time.  I'm not the only one thinking that LEGO are mad and I hope this is short lived.  If I sold my product, you could buy as much as you damn well want!

 

Yes you can... AND they can DENY you buying from them as much as they WANT... its by the law and their TOS or whatever....

 

getting butthurt over this is just not a way to go....  spend less and your wallet wil lbe happier together with TLG apparently

[Johnny_Lemonhead]

Totally agree, which is why I also added the (admittedly churlish) part about my sales and procurement going so well despite the website ban. I just wanted them to know that they are not stopping or even slowing my game.

 

As far as previous posts speculating about the reason for all this, my theory is the following: Lego wants to have as much control as possible over resellers because they are selling an item with a low inherent value. Lego items have a high value because of name and design. Without name and design they are simply pieces of nearly worthless plastic. This is similar to Coach handbags, another company which tries to stop resellers (they go even further than Lego in their zeal to stop resellers) because they also know that their items have low inherent value. They are selling fabric bags worth around $5 in actual money. They become $500 because of the Coach name and design. The diamond cartels also engage in similar practices of strict control because diamonds are not actually scarce, contrary to public opinion. The diamond market is artificially created. Go try to sell a used diamond and you will find out really quickly what the inherent value of a diamond is. In fact, most diamond dealers have a strict policy of not buying used diamonds. I could go on and on but I think you get the idea.

 

The bottom line is this: if you are selling an item with a low inherent value you need to tightly control the flow (sale) that item. If the market gets flooded with items like this the price will drop precipitously and the whole house of cards will collapse. Lego knows this. Coach knows this. The diamond cartels know this. I don't think it's much more complicated than this.

[Guest TabbyBoy]

I have spoken to LEGO reps directly and here is the basic requirements to become an Independent LEGO Retailer...

1. $5000 initial order (Not a problem)

2. No exclusives (Bummer - those are the among the most important sets)

3. You must buy from 75% of all themes (Bummer - who in their right mind wants Duplo, non-chess games & Chima?)

4. You must own a BRICK AND MORTAR TOY STORE that sell other toys besides LEGO sets (I know someone who does so it's doable at a push)

 

Replies in purple to match my current favourite theme. ;-)

[Guest TabbyBoy]

Yes you can... AND they can DENY you buying from them as much as they WANT... its by the law and their TOS or whatever....

 

getting butthurt over this is just not a way to go....  spend less and your wallet wil lbe happier together with TLG apparently

 

Absolutely, under UK laws (and those of many other places) you can refuse service to anybody you wish without giving a reason.  We all know ways around such bans if they ever happen.  All you need are willing family/friends to order on your behalf.  I've cooled my purchases from LEGO Shop at Home until next year.  There's no promo at the moment anyway.

[redcell]

Totally agree, which is why I also added the (admittedly churlish) part about my sales and procurement going so well despite the website ban. I just wanted them to know that they are not stopping or even slowing my game.

 

As far as previous posts speculating about the reason for all this, my theory is the following: Lego wants to have as much control as possible over resellers because they are selling an item with a low inherent value. Lego items have a high value because of name and design. Without name and design they are simply pieces of nearly worthless plastic. This is similar to Coach handbags, another company which tries to stop resellers (they go even further than Lego in their zeal to stop resellers) because they also know that their items have low inherent value. They are selling fabric bags worth around $5 in actual money. They become $500 because of the Coach name and design. The diamond cartels also engage in similar practices of strict control because diamonds are not actually scarce, contrary to public opinion. The diamond market is artificially created. Go try to sell a used diamond and you will find out really quickly what the inherent value of a diamond is. In fact, most diamond dealers have a strict policy of not buying used diamonds. I could go on and on but I think you get the idea.

 

The bottom line is this: if you are selling an item with a low inherent value you need to tightly control the flow (sale) that item. If the market gets flooded with items like this the price will drop precipitously and the whole house of cards will collapse. Lego knows this. Coach knows this. The diamond cartels know this. I don't think it's much more complicated than this.

 

Comparing Lego to Coach bags and diamonds is a bit of a stretch.  If your theory was true, then the part-out value of sets would be a fraction of the cost of the set because when you're selling individual parts, you've removed the design and name, and are simply peddling plastic bricks.  However, the part-out value of sets often tracks somewhat closely to the cost of the set.  If you took a Coach bag, stripped it down to the fabric, you couldn't sell that for anything close to the value of the assembled bag.  There's not really an appropriate comparison to diamonds, but the value there has been created through a monopoly cartel and savvy marketing. 

 

IMHO, the reason that Lego bans resellers is that they want to control their distribution channels and build long-lasting relationships with the customers who buy directly from LEGO Shop at Home.  As a result, they don't want resellers using their in-house retail channel as a wholesale channel and draining all of their inventory when a set goes on sale.

 

I have no problem with TLG controlling their distribution mechanisms in this way and also have no problem conforming my buying to their wishes.  If TLG only wants my retail dollars,that's fine...there are plenty of others out there who will gladly accept my wholesale dollars.

[Johnny_Lemonhead]

I'm only comparing the strategy of the companies who originally sell the items. I understand that once broken up they are very different animals. I think the corporate philosphy is the same, however. I agree that Lego wants every mother who comes to the site to be able to buy a set for little Johnny but I don't think it's their primary concern, other than in the respect that it relates to the control of the flow of the goods.

 

They can do what they want in a strict legal sense but I don't think the strategy will have a measurable effect long term. Drugs are illegal but I don't think most drug users are stopped by those laws. Lego can put up these speedbumps but they are just that--speedbumps. They are not roadblocks.

 

Lastly, the point is that Lego doesn't even want my retail dollars anymore. This would strike most retailers as a little extreme. I didn't ask the Lego site for special volume discounts, wholesale prices or special treatment. I merely purchased items at the full asking price within the quantity limits that they themselves set. I did so fairly often (meaning I was a good customer) and I was told to hit the bricks.

 

This brings up an excellent question: why do so many items on the Lego site (especially items on sale) have limits of 99 if they do not want resellers using the site? Does the average person need 99 of an item? There are several items on their site right now with a 99 limit including polybags, regular sets and on sale items. Why not just make everything on the site a limit of between 1 and 5? I don't get this.