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Banned from buying from LEGO S@H
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Comments
Why would lego want to sell to an online lego retailer who does nothing but take sales away from their own existing retail channels and those of their major customers? They want to supply lego where customers are faced with a choice of toys, everything else is a distraction. This makes perfect business sense.
They're also not stopping you doing anything you want with sets you've bought legally. They're saying if you do this with our sets were going to choose not to sell them to you (in line with our t&c). Nothing unreasonable.
And before someone says that they're still making the original sale so it doesnt matter. The sale is only one part, they want the custom too. Also if you're buying up during a deal/promo that lasts a week and then spreading those resales over the next year then lego are effectively running their promo/deal for an entire year, not what they intended. Unless cash flow or shelf space is a problem but neither appears to be for lego recently.
Also remember this isn't someone storing a couple of modulars in their lift its a business buying 50k a year at lego retail, plus presumably more at amazon, toys r us, target....
Reseller buys 100 Minecraft to resell, thats 100 people who came into a shop and were disapointed and ended up having that reseller make a massive profit. Seems odd that some people think this is something Lego would want.
A lot of the sought after sets are supposed to be Lego exclusives or limited to certain retailers, they pay a premium for these.
It doesn't seem unreasonable that these sellers don't want sets to be available from unofficial sources.
Some people might feel that lego are sticking the middle finger at $100k, personally i'm pleased that they are taking a stand for their small customers over profit
In LFT's personal situation I have no issue whatsoever with them clamping down on bulk buying. S@H and the brand stores have never been there to serve as a wholesale distribution channel. However savy individuals such as LFT have been able to exploit a loophole and I'll assume done rather well out of it. From reading the man himself doesn't have an issue with being restricted. Doesn't like it but accepts/understands the decision.
That being said to ban an individual outright from purchasing is miserable and unnecessary (sledgehammer). To be honest its also rather pointless as I'm sure LFT has a relative/friend willing to make all personal purchases under a different name and shipping address.
The collateral damage concerns me, especially the global nature of the policy. No one here in the UK has been getting rich buying sets on AFOL at 15% off and re selling. The margin isn't there. The same goes for showcase builders with the 30% discount. But those talented builders can't even use their discount on exclusives now. However the Lego hammer has spoken so we have to get on with it.
Its very easy to say buy from somewhere else then. I would agree however in the UK exclusive pretty much means exclusive. From the top of my head only the DS, TB, PS and VW Camper are available from other retailers.
http://aboutus.lego.com/en-us/legal-notice/
I actually have not seen anything in writing from LEGO, other than e-mails from customer service received this year, that buying for resale from S@H is against the rules.
Considering that retail customers don't place 70 orders in one weekend, and that they were happy to ship them all to me (promos and everything included), and lacking text on their web site saying, "don't do this", I think a reasonable person would conclude that I was not breaking any rules at the time. Perhaps. Just to flip the coin over...
If I sell on eBay or Bricklink, I'm not really on the same marketplace as LEGO, am I? TLG doesn't sell either place. Amazon is another matter, but as long as it is a current set that Amazon sells, there really is no point trying to sell there.
If TLG keeps Walmart/Target/TRU/Amazon supplied with current product, my only places to sell are really eBay and Bricklink. I get that, which is why I don't have a problem with purchase limits for promos. If I want a B-Wing for 20% off (or whatever it ends up being May 4th), along with a Hoth Han, fine, sell me one, or maybe even 2 so I can give one as a gift.
Don't let me place 50 orders in a row for 1 each to get 50 Hoth Han promos and the discount over and over, that is just lousy web site management.
Amazon does a much better job on this, the purchase limits reset once a week, so I can buy 1 or 2 of a hot selling item and 5 of a slower selling item. Placing multiple orders does not work, and they will ban you if you get around this with multiple accounts. No worries, I follow the rules. :) Perhaps just a little bit more... but $50K, or even $500K, is pocket change to TLG, but that doesn't mean they should turn their nose up at it.
There is a middle ground between allowing me to place 70 orders on Black Friday and banning me outright. How about reasonable purchase limits for hot sellers, slightly looser purchase limits on slower sellers, and limits on promo items?
All of that would be reasonable and you'd get no argument from me over it.
But to ban a LEGO fan outright and not allow them to place a single order for a single set they have never purchased before, at full price, not during a special promotion, is just overreacting in my personal opinion.
But again, it is LEGO's sandbox and they can make any rules they like. :)
They have restocked at least once a week now for the past month, they sell out within hours at RRP.
As for the rest, LEGO will see two retail channels B&M and Internet. Whether its amazon marketplace, ebay, you're own web-shop you've set up or to a lesser extent bricklink (because you probably wouldn't stumble upon it) they're all internet based in TLG's eyes and hence detracting from possible sales at S@H and their major customers. It may also be that TLG are preparing themselves for the increasing popularity of things like google shopping or whatever its called bringing together an infinate number of online shops into one marketplace. I wonder what this means for those with online shops, like www.brick-a-brac-uk.com, selling lego exclusives?
LEGO could jump through all kinds of hoops letting you buy 2 of something you've not bought before or one a week then resetting. Or they can just stop you outright. One of those is much much easier and easier to defend. Why only two, what if you or someone else in the same situation has three kids, or four, or a nephew.... I agree its a little harsh and perhaps unreasonable but I totally understand why they might take that route.
It is also possible that they have a legal duty in all of this - in particular with exclusivity agreements (toys-r-us is the obvious one in the UK but I understand they have others in the US as well). If they are inadvertently supplying another retailer with sets that they have agreed to only supply to one retailer. In that situation a blanket ban on any reseller they find is a lot easier than trying to pick out those buying exclusives.
I have no idea how many minecraft/Lloyds/friends advents you bought but I suspect you're taking the brunt of this from those that played the system and made TLG look stupid and no doubt caused them a massive headache.
But yeah, TLG is handling this poorly. There are much better solutions, like those that have been presented here to "combat the evil of reselling."
Oh, hang on a minute ...
If you don't like people disagreeing with you, when you yourself post a comment that disagrees with someone else, you're going to be in a world of confusion, sure 'nuff. LOL
;oP
I mean come on it's just Lego, if you get this worked up over Lego reselers I'd hate to think how worked up you get over things that are really important in life.
Most sets have sales figures I'm sure that look something like the 2nd half of a bell curve (chopped in half). Sales start out big, and then trail off over time, short of seasonal spikes at xmas. At some point, usually after about 2 years, it's in TLG's best interest to retire the set, spend the money to design a new one, and release it instead. Then rinse and repeat.
The fact that the FB (and the Death Star as well) are still around must be that this threshold hasn't been met for them yet, and they're still selling well enough to make it worth it to keep them on the market, compared to replacing them with something else. That's my take anyway. :)
I have a feeling that maybe the FB will be replaced with a Police Precinct (the PP!) at some point (maybe the next modular?). That will then run for a long time, and then maybe we'll see a newly (re)designed FB again to replace the PP. If they don't always have both on the market at the same time, maybe they'll settle for one at a time.
Without resellers, retired product supply will be insanely low, and as a result, aftermarket prices will be sky high.
And yeah, it is worth discussing (not arguing) what is right or wrong with the concept of reselling in a thread that is 100% about what has happened to a person as a result of the perception of reselling rightness or wrongness.
Should TLG be banning people? Yes, if they don't play by the rules. But until a clear directive is posted illustrating what those rules are, I can't see how it's okay to be banning people.
So the big question is which reseller is going to supply the ex-reseller with items for personal use and what will the mark up be?
I have no problem playing by the rules. I may not always *like* the rules, but I at least respect the rule maker.
It is not a reasonable business plan to run my business in such a way that I'm in violation of the rules, that has no long term success behind it.
I started my first business in 1996, I've learned a lot in that time and perhaps the single most important lesson is that if you do not play well with others, you won't last long in business. This includes employees, business partners, vendors, etc.
Everyone has to benefit, or it will always be a short term situation.
That has been my learning experience over the years.
They have no doubt identified a number of people they think could be damaging their business. They get banned. Not given further chance to continue. Just banned. Lego don't need them as customers, they will be fine without them.
Of course resellers will also be fine, there are plenty of places to get stock. It's just going to be slightly more awkward for exclusives and things like May 4th promo.
How is it abuse to order the limit of what you're allowed to order? If LEGO said, "you may order 5x of these sets", then I order 5x of those sets, is that abuse?
Now I agree it would be abuse if I used 10 accounts to order 50 total, but I'm not doing that, just buying the 5 allowed. While it is true that there are customers that are worth firing, it should be a very rare thing.
In this case, I want to order things like the Friends pencil cup holder and the salt and pepper shakers. 1 of each.
Regardless of anything else, how is not allowing me to do that good for TLG's business?
If they said, "due to concerns about reselling, we have limited your account to 1x of each item, per year." I'd be fine with it, it would at least let me order items for personal consumption.
In my personal opinion, complete bans should be reserved for fraudulent and abuse customers who are cheating and doing illegal or immoral things. Returning open box sets with missing minifigs, using 10 different accounts to get around the rules, drop shipping to customers (if that is against the rules), etc.
Those are all reasonable reasons you ban customers. If my business were based on promos and exclusives, this would be a challenge, but that is just a part of the business, so yea, I'll be fine.
Which makes the ban even more senseless, since it actually accomplishes nothing useful and creates ill will.
@Legoboy is correct however, I've been cutting back and I've now taken some time off to look at my options. I did really well last year, but my question becomes, is this where I should keep my capital invested for the next few years, or should I consider another business venture.
I'm exploring my options and will make a decision by the end of the summer. TLG's policy doesn't really affect that much, other than to be one more data point in the whole thing.
For me personally, I try to diversify what I purchase and probably don't have more than a few of any given set; especially sets over $20. I wouldn't expect this to become an issue for my approach, but I still can't believe TLG would not want someone's cash. Unbelievable!
They could make more money by not selling the expert creator models to the public but to me directly, I'd pay them 10% more than the RRP for the exclusivity of the set, I can then sell them as I see fit and at whatever price I choose,. There is no issue, Lego has made more profit.
You don't have the stats, you think the idea of buying up all the Minecraft is a small issue, it clearly isn't.
Lego is a toy for children, if my son had wanted Minecraft I'd have done my best to get it, i might have bought off ebay. Next year I see my son wanting another Lego set, I remember the year before and suggest he'd prefer a Scalextrix. I tell my friends the same thing as ebay sellers buy the stock and rip you off. Thats a lot of lost sales and bad PR.
If people are buying off resellers they are not buying Lego off Lego.
So the logic to Lego is that they'd make no less money by not selling to resellers, just the resellers would not make their profit
They know on past behaviour that you are a reseller. They want to stop that. Yes, they could impose limits, or just ban outright. Is it good for business? Losing a now ex-reseller is not really going to affect them, they are losing just one regular AFOL buying directly, and they can rest peacefully knowing they have done something to stop reselling for items bought through their website. Losing the sale of a few small items is not going to affect their profits.
They are reasonable reasons to ban customers. But they have decided to also ban resellers from buying from them, and it is their opinion that matters. If a reseller says he is now "reformed", should he be allowed to buy again? That is up to lego. It is slightly crazy, since you can buy items for resale elsewhere, but they cannot stop that, unless they impose sales limits on customers of other retailers. Which is highly unlikely. Walmart and Amazon decide how much to sell to their customers.
It may create ill will from you, but it might also create good will from other customers if they know that lego are now doing something about stopping resellers buying huge amounts direct from lego for resale. Even if the resellers were only buying permanently in stock items.
Who knows, maybe they will monitor how much people are buying during May 4th promo, and banning people that are ordering large multiples then for the promos.
I agree that they are probably not going to tell people that after X amount of sets bought you will be band. I also imagine X would not be static.
A nice polite warning is all that was needed in this case, would have saved everyone a bunch of time & trouble.
Do you really think its easier for TLG to just ban some one, and have to deal with the back and forth asking why & trying to get reinstated etc?
I am almost positive that TLG will be spending more man hours dealing with the outright ban than if they just asked politely to stop buying in large quantities. The result would have been the same if not better as they wouldn't have had a large number of AFOL's on forums discussing how unfair they are being.
Their order system is clearly not flexible enough to be able to adjust their order system to allow resellers to buy just one of an item, yet impose no limits or different limits on others. Some people may want five of a set (say the pencil box) for personal use so a limit of five might be reasonable. Yet if a reseller buys five, are they then buying for personal use or reselling? That needs time to look into, or check whether they are a reseller and adjust the order to just one. Should they believe a reseller when they say it is for personal use, should they spend time on managing their account to ensure they are only buying one of anything, or just stop them buying completely and be done with it.
Do they care about AFOLs discussing whether or not it is fair? They don't seem to care about the discussions of limiting numbers of discounts on AFOL days, or having to sign up through LUGs for AFOL days, or the unfair distribution of valentine's keychains, etc.
Any kind of hardening of their position between the original letter and now is probably just a firming up of their policy - could be minecraft could be legal issues from other retailers? It could also just be the old 'making an example of someone' kind of thing.
From TLG's perspective resellers don't drive LEGO sales - someone buying from LFT isn't choosing between LEGO and something else, if they don't buy LEGO from LFT they'll almost certainly buy the same or different LEGO from someone else, perhaps even S@H. Its not like Amazon etc who provide LEGO and various other toys to customers looking to buy a toy - they are driving new sales, resellers (particularly current set resellers) in the main are just bringing forward the time that sales are made. Unfortunately because these resellers are clever, shrewd customers they are often bringing forward those sales to when its least advantageous to TLG (promo figs, double points, discounts). Throw in the additional downside really only applicable to Minecraft that somone spending 3xRRP on a single set has less money to spend on other sets (at christmas as well!) plus the bad customer experience of not being able to get from LEGO what you want and what LEGO advertise, plus the negative PR of LEGO looking like they badly underestimated demand (they probably did but the problem was certainly exasperated by resellers).
Taken from that stand point I can totally see why LEGO have taken this new stance and can see why they wouldn't care at all if the harsh treatment of LFT is just a bit of collateral damage they're willing to accept. I suspect there'll be more collateral damage as well but LFT was probably a simple target purely down to the amount spent.
I also wonder, given a comment I got from LEGO yesterday that they're actively looking at ways to stop people buying multiples to sell on ebay, if the 50% off a B-Wing in the US might be a tempting little LEGO honey trap? I'm sure they wouldn't do it just for that but if they wanted to reduce stock/have a good discount anyway then it might have a nice little side effect - or is that a little too much like CSI-Denmark?
None of that matters though, as I wasn't suggesting they should bring in wide spread limits, I just think that they could have easily asked LFT to stop buying for resale. If he ignored the request/warning then ban. I still believe that would have been relatively simple and saved a tone of effort from both sides.
I think they did wrong not informing him that the order was cancelled because he was a reseller. If they cancel an order, they should let the customer know it has been cancelled. As for cancelling / allowing future orders, that is up to them.
If he wants to buy direct from lego, he can always go into a store and pay cash.
Before that e-mail, I was placing an average of an order a week, after that time, I didn't order again for 2 months, until the 1 order at the start of April that started all this.
So their e-mail did ask me to stop, and I did, but it didn't seem to help.
Minecraft blew up in TLG's face, they clearly underestimated demand by an order of magnitude... or two... The demand was so high that for a current set the price was over triple RRP on eBay before Christmas. Reminds me of Tickle Me Elmo and Furbies from years past, too much demand can be a bad thing.
I'm quite sure LEGO's customer service received many, many phone calls in December from upset parents about the issue, and I'm also sure the LEGO cares FAR more about that than anything from me. I agree with this as well, and I totally understand TLG's position on this.
I am primarily in the market to sell retired sets, not current sets that are in short supply.
I suspect (but don't know) that LEGO cares far less about the retired market than what they are currently marketing. If resellers all banded together and got out of the "current set" game, LEGO might well stop caring about resellers.
Or not, but it would be interesting to know what their true feelings are, current set resellers vs. retired set resellers.
Given that they often refer people to bricklink, I agree. It may not stop reselling, but it will help cut down on reselling of exclusives. Plus they feel that they are doing something about the problem. Whether it will work may not matter to them. Just that they are trying to do something about it.
Exactly.
There is absolutely no question in my mind that Minecraft (and Lloyd), is what caused this.
American Girl had something similar happen a few years back. They archived a doll and a collection of her belongings. The information went out in September. Things quickly began selling out, because of their equivalent of AFOLs and also due to resellers. The Christmas Catalog came out in October advertising that the doll was being archived, so buy quickly before Christmas.
Well, guess what? A number of items from her collection were already sold out, by the time the Catalog came out to the average user.
There is no question that American Girl must have been inundated with phone calls. They modified and changed policies on some items after that.
Different situation, but the same. Toy companies do not want a bunch of ticked off parents. That can snowball, and cause them to not buy, and cause them to tell their friends about a bad experience.
Both companies have seen the impact of resellers in both these cases, and then took steps. Sadly, some people get hosed in the process.
The part that bugs me the most is that it really is just bad policy. That is true anywhere in life, politicians are the worst about it, but so are large companies.
Doing something so that you can waive the flag of "well, we did something" is a very low intelligence tactic. But people fall for it, both smart and dumb, because it isn't about brains, it is about wisdom, and for some reason people in power often lack it.
Just because you're paid well or the head of a company doesn't mean you can't pull a stupid. Look at Netflix 2 years ago with their 60% price increase and Quickster announcement. Cost shareholders $10 Billion in Market cap for that nonsense. Could have been done in stages, rather than all at once, and the splitting of DVDs from streaming, while a nice idea in the boardroom, was ill conceived.
If I was in the boardroom of TLG right now, the first business risk that I would identify is not resellers, but the lack of spare production capacity. My understanding is that they are running 24/7/365 in all their facilities just trying to keep up with demand. That is not a good thing, it is a problem.
If they had 10% spare production capacity, they would have been in much better position to deal with events like Minecraft. Yes, they tout that they can switch their production in 10 days from 1 set to another, but that doesn't help if they already have delivery commitments to Amazon for Police Stations and are running at 100% capacity. How do you make more Minecrafts in that situation?