Lego Economics, part 2

Do you remeber this article? Today I present you the second part.

Some new information has been discovered by our Leprecautns (:P). The Lego Market in the USA is based on a low number of distributors, 4. Three of them are big shopres, and the other one is Amazon.

However, the European Union has not an unique distributor or a low number of them. In fact, every country has its own Lego Dsitributors, usually more than one per single country.

What is the point here? Well, less distributors means less problems/headaches for Lego, which is traduced into lower prices. So American people are lucky about Lego.

But you may ask, “what´s happening with the prices in countries like Israel or China, where there is only one distributor?” This was pointed out by two commenters in the last article.

On the one hand, having only one Lego distributor in your country may lead, and I am quite sure that it is true, to lower transport costs for Lego, which should decrease Lego prices. What is the problem?

Two words: FREE TRADE.

When you are on a bussines with no competitors in your whole country you can do whatever you want with the prices of your products. This is what is happening with Lego sets on China, Israel or similar countries.

SOLUTIONS?

We are getting to the end of the article and we have come to no solution yet. Is there any solution? Your suggestions are apreciated.

This are my final thoughts, which include what could be a (Not ideal) solution.

In the first article I wrote down that the main problem was the American Lego market. Maybe I was right. But what everybody wants is not to have the same high price, but the lowest.

For EU, if the countries finally agree to be a real union, there could be a single continental distributor which would decrease Lego prices. Then some minor distributors in each country will mantain the Free Trade. Or, Lego could do everything and work as a distributor so prices would fluctuate as they wish.

For the rest of the countries, the new Lego industry in China will soon reduce transport taxes. That should be noticed. But we still cannot do anything with the distributors…

Do you have any idea or suggestion? Please share it with use wrtitting a comment below!

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6 Comments (+add yours?)

  1. LegoGBC
    Jul 05, 2013 @ 00:21:18

    As I see it, more distributors meaning better competition and lower prices…
    As for the prices in Israel – no improvement. The 9398 costs here around 430$,
    the unimog – 500$ and all because of having just one importer 😦

    Reply

    • yiharuablog
      Jul 06, 2013 @ 11:40:01

      Not a low number but a large number neither. A reduced group of distributors (3 or 4) should be enough o mantain the prices right and not to make lego crazy :/.

      Reply

  2. Illnino
    Jul 06, 2013 @ 10:28:57

    I have doubts on the thought of lowing prices due to the about-to-be-opened factory in China.

    Currently, we in China buy Lego products mostly smuggled from Hongkong, for the sake of price and variety of products. It makes no sense Lego China isnt aware of it. I suspect the high price may be contributed by VAT. Therefore, the official product distributors have to sell them at a relatively high price.

    Besides buying smuggled products from Hk, we also buy products from Amazon US and German. As you said in the article, the price is much cheaper especially when it is on sale. The huge difference could cover the transportation fees. If you are lucky enough, customs wont charge you any tax. They only check cargos randomly. Then the business is a big bargain.

    I went to UK last month. I noticed the price of normal sets there cant be cheaper than the ones in China if we have a simple conversion on the currency. This made me quite disappointed. However, I could still find they keychains and magnets are worth to spend your money.

    Reply

    • yiharuablog
      Jul 06, 2013 @ 11:44:56

      Thank you for your comment. ;).

      We will soon see how the new factory will affect the sales on China, but my previsions are good.

      Do you have a high VAT on China? That, of course, may be one reason for the high prices. However, not the only one.

      I’m quite interested where you search the prices in the UK. Anyway, the UK Lego Shop is cheaper. Check the prices for big sets, eg.

      P.D.: what a pitty that of the keychains! A lego AFOL wants to buy lego sets, not only Keychains… :/.

      Reply

      • illnino
        Jul 08, 2013 @ 16:59:00

        Sorry I cant give you a specific number. The VAT is included in the final prize and it will not be reflected in the receipt in China.

        I forgot to mention that I only went to shops like Hamleys London, local toy shops and Legoland. I found prices for sets in those shops are similar to China. Say, 79003 £69.99, 76000 – £19.99, Minifigure – £1.99.

        But I also checked the price in Toys R Us and Argos. The price are more or less the same.

        Not sure the price in Israel.

      • yiharuablog
        Jul 08, 2013 @ 17:53:34

        Ok so China is almost the same. Right?

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Nortebrick 2013March 23rd, 2012
The big day is here.
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