LEGO fight Against Chinese counterfeit LEGO

monkeyhanger

My reply was meant in response to eggshen, but Sumolego snuck one in while I was drafting.

CCC

If more sellers mean higher prices, then prices would drop as items get sold as there are less sellers left with stock. So the highest prices would be at EOL and slide down from there. And that doesn't happen.

CCC

eggshen said:

SumoLego said:

eggshen said:

...Thus more sellers = higher prices.

I think I just heard @pharmjod's head explode.  And frankly, this misses the entire point of understanding a market... and is just another regurgitation of the 'scalper' theory.  It feels correct, but isn't.  The 'scalper' still has to actually sell the 'inflated' priced item.

I don't know how else to explain myself. The scalper does NOT have to sell their item to affect prices. Having those higher prices out there makes people who are selling at lower prices feel much more comfortable with setting their prices higher.

And that is just one way the market can be affected. Again, my entire point is that you cannot definitively say that more sellers = better prices. 

OK. Put a Wall-E on bricklink for $1m and see what happens to the average price of sold sets over the next month.

tmgm528

datsunrobbie said:

tmgm528 said:

eggshen said:

You guys are funny. I think we all understand how basic economics works and that more competition is supposed to result in lower prices for all. We also all understand that the people with the lowest prices will sell first. 

But there are people currently in the market that are setting their prices artificially high and that is affecting the market. And historically that has happened in other markets as well. 

I remember when The Phantom Menace came out. There were tons of people buying action figures thinking that the prices were going to skyrocket due to how expensive certain figures from the 80's were to collect. There are still shops where I've seen those action figures for $30 but I've also seen people clearing out their buy in stock at garage sales for $1 a figure. So that market mostly sorted itself out. Took quite a while though. 

I could list a ton of other markets that have been affected buy new seller expectations. My point is that right now, this market is being affected by the expectations of new sellers. It won't last forever, and is most likely on the decline, but it is happening. I'm sure you can find examples that show the opposite but for those of us on the buying end of things the trend is more sellers with higher prices. 

So you think if there were less sellers the problem would be better? Of course after market prices will be higher than RRP - but with more resellers that level of highness is brought down. 

Like you said about artificially high prices - that worsens with less sellers. With more you have people trying to undercut one another to get the sales.

"So you think if there were less sellers the problem would be better?"

Yes, I do, with new, in-demand sets that are not available on the primary market because they have all stock moved to the secondary market. #75192 is the perfect current example of this.

"Of course after market prices will be higher than RRP"

So the prices DO go up when more sellers are involved.

"but with more resellers that level of highness is brought down.Like you said about artificially high prices - that worsens with less sellers. With more you have people trying to undercut one another to get the sales."

More resellers certainly means they have incentive to compete - but most won't get all the way back down to MSRP for items like #75192, because they paid MSRP to get the product. But a few primary market vendors, like Toys R US, Walmart, and Target, each with thousands of units to sell, will drive prices lower than having 1000 individual resellers with one each to sell. Absent a primary market, having a lot of resellers in the secondary market is a very good thing. 

Im not even sure what points being made here. Most anything in any collectible market will never be back at MSRP after it's out of the market. 

This isn't some opinion based thing - more resellers will drive competition. If you had one reseller of (Lets say Jabbas Sail Barge) they would charge the absolute highest price possible. More sellers gives consumers more options - and seeing as there's no price fixing/collusion among so many sellers (which could also only happen with a few sellers) consumers overall prices are driven down. 

Shall I draw a graph?

pharmjod

@TigerMoth @TigerMoth @TigerMoth....











I thought maybe it would be like Beetlejuice

SumoLego

monkeyhanger said:

My reply was meant in response to eggshen, but Sumolego snuck one in while I was drafting.

I'm very adept and messing up other people's thoughts.

SumoLego

CCC said:
...OK. Put a Wall-E on bricklink for $1m and see what happens to the average price of sold sets over the next month.

I've already got my German CMFs up for $300M.  I should get a royalty for the bump in the value of everyone else's sales!

Bosstone100

^^^ Please no!

eggshen

I love the sarcasm by the way. Yes, I'm saying that it totally makes sense to put your prices millions above market price. Yeah, that will drive up all the prices. Makes total sense. 

Back to reality though, I think we can all say that demand has also increased. More people are getting into LEGO than ever before. An increase in supply AND demand results in a change in the average price of item.  Whether it is up, down, or stays the same depends on how much each of those shift. I think that currently both have shifted enough to increase prices. I can draw a graph if you don't know how that works ;)

Also, all of you snarky blokes are completely ignoring my statements about these newbies that are messing with the market. It happens all the time! Real estate, collectibles, bit coin, new investors mess up markets all the time. It goes beyond simple 10th grade supply and demand. And no, I'm not talking about scalpers.  I'm talking about people that don't understand a particular market jumping in with both feet. 

The way that you guys are acting like every market obeys supply and demand at all times makes me feel like you're messing with me. Supply and demand theory is about equilibrium price and where it ends up over time, it isn't how you describe the day to day heartbeat of the market.

MAGNINOMINISUMBRA

Why do I still have a stack of Tower Bridges (that have essentially cost me money to hold) and no Imperial Frigates (of which I think the least amount I made was 400% profit) when all sets were bought in the same transaction?
Supply vs Demand...

MAGNINOMINISUMBRA

I also think that the average EOL LEGO buyer is pretty savvy.  When you take ancillaries like shipping, insurance, customs duty and local taxes into account (which sometimes can apply at both ends) it makes it much more difficult to calculate regional differences.  The buyers however, in nearly every instance, are well aware of what to pay to sellers in each region.  This is also affected by time and the climate of the market within individual regions.
  As an example, prior to around 05/06 I could walk into most Australian retailers, pay RRP (or a little bit less) and almost always double my money selling to US based buyer.  Fast forward to now and I'm extremely lucky if I can buy a set for close to US RRP. 

xwingpilot

SumoLego said:

And 'scalper' is just a pejorative term for a reseller.

I'm not sure that's necessarily correct is it? I mean it might be used as such, but isn't scalping specifically denying consumers product at RRP buy cleaning-our stores and then flipping it for well above RRP?

Th1nDiesel

^ I've always felt that the difference between scalpers and resellers is a matter of timing. Scalpers buy up high demand or reduced price items to flip for short term profit. Resellers buy up items to sell for higher profit over the long term.

xwingpilot

xwingpilot said:

SumoLego said:

And 'scalper' is just a pejorative term for a reseller.

I'm not sure that's necessarily correct is it? I mean it might be used as such, but isn't scalping specifically denying consumers product at RRP buy cleaning-our stores and then flipping it for well above RRP?

Apologies for the multiple typos there (buy = by, our = out)...

SumoLego

xwingpilot said:

SumoLego said:
And 'scalper' is just a pejorative term for a reseller.

I'm not sure that's necessarily correct is it? I mean it might be used as such, but isn't scalping specifically denying consumers product at RRP buy cleaning-our stores and then flipping it for well above RRP?

In the context of describing a market 'RRP' is an arbitrary term.  If doesn't matter what a seller thinks a product is worth - the market sets the price for a product.  Thus why my German CMF set isn't going to sell for $300M, even though that is my RRP.

eggshen said:

The way that you guys are acting like every market obeys supply and demand at all times makes me feel like you're messing with me.

In the context of the LEGO secondary market, it's just about as close to a free market as possible.  Yes, there are people that buy or sell sets way above or way below the market price.  And finding equilibrium isn't instantaneous.  However, markets follow supply and demand.  Everytime.  All the time.  For every buyer that pays too much, there is a buyer that gets a below market deal.

eggshen said:

An increase in supply AND demand results in a change in the average price of item.  Whether it is up, down, or stays the same depends on how much each of those shift.

Now I think you're messing with me.  You do realize you immediately contradicted yourself?

Nonetheless, feel free to believe what you like.  I've repeatedly made and reinforced my point.  A little bit of time with an Economics textbook or even Wikipedia would help.

xwingpilot

In this context I intended RRP to mean the price of current sets direct from LEGO or high street retailers. Scalpers buy current sets from retail stores so there's no stock left and then flip for a profit causing consumers to either go without or pay over the odds.

eggshen

How about a youtube video that explains increasing supply and demand. Supply and demand is not as simple as everyone likes to say. It's just like in chemistry class. In yheory if you mix element A with element B it yields X grams of element C. But when you run the experiment you get Y grams of element C. Reality is messier than theory.

Anyway, here's the vid - https://www.google.com/url?sa=t&source=web&rct=j&url=https://m.youtube.com/watch?v=CTlf6H5x2RE&ved=0ahUKEwjX68PEqOnYAhVIVK0KHb1KC3sQwqsBCEswCg&usg=AOvVaw0biAr-G3GPEqMybvVgTBp1

tmgm528

I dont really buy the idea that demand for Lego is increasing at a rate greater than Lego is meeting the supply, or even really that after market demand is much more than supply. 

eggshen

eggshen said:

The way that you guys are acting like every market obeys supply and demand at all times makes me feel like you're messing with me.

In the context of the LEGO secondary market, it's just about as close to a free market as possible.  Yes, there are people that buy or sell sets way above or way below the market price.  And finding equilibrium isn't instantaneous.  However, markets follow supply and demand.  Everytime.

Yes, in this we absolutely agree. Everyone agrees to this. The current equilibrium price is in flux. Due to too many sellers messing with the market.

MAGNINOMINISUMBRA said:

I also think that the average EOL LEGO buyer is pretty savvy.  When you take ancillaries like shipping, insurance, customs duty and local taxes into account (which sometimes can apply at both ends) it makes it much more difficult to calculate regional differences.  The buyers however, in nearly every instance, are well aware of what to pay to sellers in each region.  This is also affected by time and the climate of the market within individual regions.

I would say that this is true about AFOL's. However, I think the people on this forum too often forget that we are a drop in the bucket compared to the rest of the market, even the aftermarket. Most people in the world are buying sets for their kids or grandkids and are not fans themselves.

I think all of us are savvy and smart. I will never pay RRP for a LEGO set. Neither will most others on this forum. But the vast majority of the world is pefectly cool with paying full price.  Same thing happens on eBay, Craigslist,  Bricks and Minifigures, BrickLink, etc.

SumoLego

Just when I thought I was out...

I watched the video, and perhaps you don't realize that it bolsters what I've (now) repeatedly posted.  The only definitive conclusion the video notes is that if you increase both supply and demand, then there is a higher equilibrium quantity.

The graphs in the video also indicate unless you know exactly how much either (or both) supply and demand increase, you cannot ascertain the resultant price.  That's why you can't draw an exact conclusion to the question asked.

But thank you, nonetheless.

xwingpilot said:

In this context I intended RRP to mean the price of current sets direct from LEGO or high street retailers. Scalpers buy current sets from retail stores so there's no stock left and then flip for a profit causing consumers to either go without or pay over the odds.

Perhaps I should clarify - a 'scalper' is a pejorative term for a type of seller.  However, a seller - no matter the moral connotations - is only able to sell an item or product at what the market will bear. 

A supply shortage or a sharp lack of demand are outside factors that certainly effect markets, but are also the factors that bring the market to equilibrium.  LEGO underproduced Minecraft sets, overproduced UCS B-Wings.  But for the most part people purchased both products at the equilibrium market price.

And now I'm done.  I promise!

Aanchir

With all this talk of reselling and secondary market value, for a page or two there I actually forgot what thread I was reading.

catwrangler

^ The secret ultimate goal of every Brickset thread, tbh.

SumoLego

I suppose we are past misidentifying 'counterfeit' with 'clone' brands.

AndyPol

Aanchir said:

With all this talk of reselling and secondary market value, for a page or two there I actually forgot what thread I was reading.

Just to make things perfectly clear, I think we are talking about counterfeit resellers who sell genuine products at an inflated price in a forged secondary market of legal clones and illegal copies.....what is there to be confused about? :)

It makes the debate / argument about whether it's a Polish or French supermarket selling copies (on page 5 of this thread) seem quite on track!

xwingpilot

SumoLego said:

xwingpilot said:

Scalpers buy current sets from retail stores so there's no stock left and then flip for a profit causing consumers to either go without or pay over the odds.

Perhaps I should clarify - a 'scalper' is a pejorative term for a type of seller.

Agreed, but I think it's an important distinction. I wouldn't necessarily refer to all resellers scalpers.

SumoLego said:

However, a seller - no matter the moral connotations - is only able to sell an item or product at what the market will bear.

Again agreed. I fall into the category who go without, and I would assume that those who actually pay over the odds aren't happy either. Their actions certainly perpetuate the practice though.

I should note that none of what I'm saying refers to aftermarket prices of retired sets. To me that's a different market, and less affected by short term manipulation.

SumoLego

xwingpilot said:
I wouldn't necessarily refer to all resellers scalpers.

Neither would I.  But that concerns morality, rather than identifying a market participant.  Taking 'advantage' of the market can depend on one's particular point of view.

xwingpilot

Is scalping taking advantage of a market or profiting from artificially creating one by reducing the supply of a high demand product and then reselling it?

CCC

xwingpilot said:

Is scalping taking advantage of a market or profiting from artificially creating one by reducing the supply of a high demand product and then reselling it?

Both, but the latter is very difficult these days due to limits imposed by Lego on the type of sets that you used to be able to scalp (by scalp, I mean quick flip a current set due to lack of stock).

SumoLego

xwingpilot said:

Is scalping taking advantage of a market or profiting from artificially creating one by reducing the supply of a high demand product and then reselling it?

Yes.  But you're not 'artificially' reducing supply.  You are participating in the market by purchasing product.  You could be considered making a wise investment... 10,000 years ago I got my hands on four Tickle-Me Elmos (Elmoes?).  One paid to rebuild the engine in my car, another got me a nice promotion and pay increase, another paid my gas for 12 months, and the last is in my basement.  But because I consider all of those outcomes to be noble, I wouldn't consider myself a scalper.  But I got WAY more than RRP for those annoying toys.

Just keep in mind that nobody feels any sympathy for the person that buys up the tickets and then can't sell them on the street immediately before the event!

(I happen to agree with your underlying point that it is immoral or wrong to scalp/profiteer LEGO.)

xwingpilot

SumoLego said:

xwingpilot said:

Is scalping taking advantage of a market or profiting from artificially creating one by reducing the supply of a high demand product and then reselling it?

Yes.  But you're not 'artificially' reducing supply.  You are participating in the market by purchasing product.

I think we agree, but scalper market manipulation is quite a specific (and immoral) subset of market participation. That's why retail stores often have a limit to the number that can be purchased by an individual.

dougts

eggshen said:

Back to reality though, I think we can all say that demand has also increased. More people are getting into LEGO than ever before. An increase in supply AND demand results in a change in the average price of item.  

I actually think secondary market demand has decreased significantly over the past few years. If not in raw numbers, certainly in proportion to sellers and availabile secondary market inventory.

Through a variety of means, LEGO (and maybe Lepin even!) have managed to significantly impact that dynamic.  

CCC

dougts said:

I actually think secondary market demand has decreased significantly over the past few years. If not in raw numbers, certainly in proportion to sellers and availabile secondary market inventory.

Through a variety of means, LEGO (and maybe Lepin even!) have managed to significantly impact that dynamic.  

I think this has a bigger effect than the number of resellers. The fact that there is so much great LEGO to purchase at retail keeps prices of not-so-special sets down on the secondary market.

AndyPol

Well, I went back to the Chinese supermarket in Poland last week and they are still selling the most appalling sets, including some from Lepin. The worse sections was the minifigures they had, but I was getting strange looks taking photos of the sets so didn't push it! (You can see numerous boxes behind the Lepin Ninjag set)

I put the "Sqonyy" one in just because it amused me how they try to avoid using official names by poor spelling, and even my young son (in fact he spotted it before me) could recognise a counterfeit PS controller!

In fact this Chinese supermarket probably has every IPR infringement you could imagine and LEGO copies are just a small part of the shop! I still find it strange that some European countries seem to accept these supermarkets, like this one that has been in existence for about 5 years at least?

(In case you are wondering, no I didn't buy anything!)

Shib

Wow, that joystick will only shock you twice? I’d have thought it would give an electric shock with every use :-P

CCC

The first is a warning, the second you're dead.

SumoLego

AndyPol said:

...I went back to the Chinese supermarket in Poland last week...

Rimshot!

AndyPol

Shib said:

Wow, that joystick will only shock you twice? I’d have thought it would give an electric shock with every use :-P

You are quite right, but I don't think it would probably even work long enough to give you a shock! I should have said, the price on that deadly controller was £5, which should set alarms bells ringing for anyone!

The LEGO copies ranged from £5 for the Angry Birds to £25 for the Frozen Palace, so you can see the attraction for parents. In Poland, the prices were cheap by Polish standards as they were easily half (or more) what you might pay for the genuine article.

Some of the reputable Polish shops selling genuine LEGO sets are charging similar prices to what you would pay in the UK, making them out of reach of many, as in most countries where parents do not have as much disposable income as they would wish.

Pitfall69

Do they have a Polish supermarkets in China? Like, if you want to purchase a sausage?

SumoLego

AndyPol said:
In Poland, the prices were cheap by Polish standard...

In America, you can always find a party.  In Soviet Russia, The Party can always find you!

Pitfall69 said:

Do they have a Polish supermarkets in China? Like, if you want to purchase a sausage?

The Chinese definitely enjoy perogies.  Dyngus Day is huge in Guangzhou.

It is clearly 2:42pm EST, and I have lost my marbles.

AndyPol

Pitfall69 said:

Do they have a Polish supermarkets in China? Like, if you want to purchase a sausage?

The Chinese definitely enjoy perogies.  Dyngus Day is huge in Guangzhou.

It is clearly 2:42pm EST, and I have lost my marbles.

LOL, I have travelled all around the world and if there was one nationality that you were almost certain to find in the remotest parts of the world would probably be the Poles!

So yes, my Polish wife has suggested there are plenty of Polish shops in China!

Enjoy Smigus-dyngus!

And now back onto the topic of Chinese Counterfeit LEGO..... :)

FowlerBricks

Ninjag: Thunder Swordsman?? WHAT. THE. HECK?? Do they really think that'll fly? 

The_Rancor

I love the brazenness that apparently un-pluralising Angry Birds to 'Angry Bird' makes all the difference.

Cyberdragon

The_Rancor said:

I love the brazenness that apparently un-pluralising Angry Birds to 'Angry Bird' makes all the difference.

Yep, pretty sure it's still totally illegal. Is there any way you can report shops selling illegal goods to the authorities?

VorpalRyu

Some of the weird names the chinese knock-off merchants come up with are so funny, when it comes to action figures, I've seen Avengering Heros, Justice Fighters, Teen-Aged Freak Fighter Turtles, Hereos of Justices, Avengerers of Justice, etc, etc...

dmcc0

^ Teen-Aged Freak Fighter Turtles has a nice ring to it!

Jawa

If one is to understand the great mystery, one must study all its aspects, not just the dogmatic, narrow view of the LEGO. If you wish to become a complete and wise collector, you must embrace a larger view of the bricks.

Bobflip

The_Rancor said:

I love the brazenness that apparently un-pluralising Angry Birds to 'Angry Bird' makes all the difference.

I'm glad you pointed that out cause I couldn't spot what they'd done! I don't really Angry Birds though. Makes you wonder if they tried Star War at any point before going with Star Wnrs.

TheOriginalSimonB

Interesting carry handle on the Ninjag set.  Imagine how that would freak out the box collectors...

alaskaguy

If Lego is not willing to sell me what I want, I've got no problem buying a "fake" that meets my requirements from someone who will.

I'm not, however, going to pay ridiculous inflated prices from the "secondary market" for Lego-produced items. 

alaskaguy

...just as a followup - just recently I went to go buy two $20 sets (track accessory kits) that I bought a few months ago, only to find it discontinued and people selling for 3x the price.  Screw that.  If Lepin or anyone else wants to sell me an equivalent for $20 or less, I'm on it.

They're children's toys. I buy them for my child to play with.