Economy and Lego Events

A recent new from a newspaper in Leon, Spain, revealed that the Lego Event that we organizated (NorteBrick 2013) helped the cultural center to be still alive.

Well, NorteBrick 2013 atracted more than 2000 people a day, and the townhall of Leon has decided not to delete Espacio Vias, the cultural center, from his agenda. We are very proud of this!

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This is the new I mentioned: El Ayto. de Leon apuesta por Espacio Vias como centro cultural de referencia

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!

Lego Brickonomics

Today I bring you something a little bit different. Do you want to know how to save money buying Lego sets at stores?
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I highly encourage you to check this ALegoADay article about saving money on your Lego.

I hope you liked it!

Lego price variation on countries

LegoGBC, a youtuber, is having an interesting discussion with me on youtube. We are talking about the Lego price variation on the different countries of the world.

Dollar looks strong, at least at The Lego Group eyes

Just to have an example, right now, the Lego Technic 9398 4×4 Crawler has a price of 199€ on the oficial shop of Spain, while in the U.S shop it´s being sold at 199$… That´s a huge difference of 20 euros on the final price…

So I asked myself: Why is this happening? We are at the same world, this shouldn´t happen. A quick google search revealed me the answer.

Here is Mad Nipper, Lego Corporate Manager:

“Our selling costs in Europe and Asia are higher than in the US because of the size of US market and retailers (economies of scale). Furthermore, the US market is by far the most price competitive in the world. These factors combined mean that we have for years priced our products higher in eg Europe than the US. In recent years, the difference has been increased due to the weakening US dollar – but we have consciously decided not to let this (hopefully short term) weakening of the dollar hurt the US consumer. And in order to stay profitable as a company, we cannot decrease our European prices – especially seen in the light of increasing cost pressure on oil, labor etc. Finally, final pricing in the market place is obviously determined by retailers, which is something we cannot and will not influence.”

That will mean the next. American prices are lower, as they have competitors (Other toy manufacturers?). European and Asian market have higher prices due to the not-profitability of the American one.

So we are paying the losses of the lego company in the U.S.

Lego CEO: 'US toy market worries us'

Jorgen Vig Knudstorp, maybe they guy that is increasing the prices

What can we do? Nothing but complain to Lego. However, Lego can do something for US (Us, the consumers, and U.S. the country :P). Why don´t they stop selling on the U.S. market as it is repporting losses for them?

A simple class of mathematics for Lego

I know this sound agressive and strange to american buyers, but the fact is that European (Specially Spanish) and Asian countries are quite sick of this.

Going back to the starting point, LegoGBC is from Israel, where the Lego Technic 8043 can cost up to 430$. Not talking about higher price sets… (Mindstorms e.g.)

Ilanit Toys Ltd. (From now IT) is the retailer of Lego for Israel. As Toy´S´Rus claims, it is increasing the retail price… Here is the article.

Happy face for an evil company… Logo of Ilanit Toys Ltd.

Israel.importers are charging margins of hundreds of percent, resulting in an unreasonable increase in retail prices”

That is the reason of the high prices. Apparently, this Lego has nothing to do with this (As Eran, LegoGBC, told me), even though they have no reason… They can just change the importer, and all will be solved.

But it is not that easy… IT is the only toy company on Israelthat imports Lego, so they have no competitors. They can set the price they want. And Toys´R´Us has nothing to do there, as the law court of Israel don´t support it…

Just to sum up, the problems with the Lego price market over the world can be solved fast and efficiently, but someone at Lego Billund Denmark doesn´t want to change it.

Next time, I will talk about a real solution on the U.S Lego market. We all know Lego won´t close it, and it is not fair for the U.S. consumers, who want lego sets on their shops.

Have you any real solution?

Could next lego sets cost the same all over the world? 2 of this on U.S. is 1 on IL

I hope you liked the article. I’d really apreciate your comments on this topic ;).

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