LEGO no longer selling to Independent Toy Distributors?

DadsAFOL

News from the only US Lego wholesaler, Entertainment Earth: "Unfortunately LEGO has stopped all 3rd party distribution and for now we are not able to sell them. I don't know if this will ever change, but if it does, I'll let you know. Trust me when I say this is not a good thing for us at all."

This seems to apply to ITD accounts (which doesn't include Amazon, Target, Walmart, and TRU). Anyone have an ITD account that has heard any more details?

This would be sad news for the US market as TLG would be cutting off all the remaining independent toy stores. If this is a "strategic" decision by TLG, I'd really like to hear the reasons. If its a production/supply issue, then the answer is to produce more, not try to throttle the demand! If its a market strategy/presence issue, then I think it goes against the core values of TLG that want everyone to play well. Limiting access seems to say "only the big boys can play". I wonder how many remaining independent toy stores will go out of business now that they can't stock the world's most popular toy line.

yys4u

Does that include places like B&N? Because they have some really good sales sometimes.

doriansdad

Hmm I wonder if this is the reason that bloke was trying to peddle his Lego account on this forum a few weeks ago. I hope nobody purchased it!

y2josh

Here's the thing (or at least one thing to consider)... for independent toy stores, it's almost always cheaper to buy stock from your 'big box' retailers than it is to buy wholesale from a distributor like Entertainment Earth (who I really wouldn't recommend dealing with if you have your own business... but that's a story for some other place).

As for dealing directly with TLG, the prices are better to be sure, but still often not as cheap as what a decent sale provides, and TLG is actually pretty restrictive as to what an independent retailer can buy and also what they have to buy.

Granted, getting your stock on sale from other retailers isn't going to get you the newest sets immediately, but it just seems like a better deal. But what do I know? I typically don't stock LEGO as a 'regular' product.

All that said, I'd still be curious to know the reasoning at work here.

Pitfall69

doriansdad said:

Hmm I wonder if this is the reason that bloke was trying to peddle his Lego account on this forum a few weeks ago. I hope nobody purchased it!

Yes, that would be a really awful thing to do to someone. I hope nobody took him up on his offer.

Pitfall69

Here's the thread

http://www.bricksetforum.com/discussion/7012/lego-business-for-sale#latest

gmpirate

^^ probably why he wouldn't answer any pm's with specific questions . . .

DadsAFOL

I tried too and he sent me a pm that he already made a deal with someone. good thing it wasn't me -- assuming what I heard is true. no ones confirmed it yet though.

LegoFanTexas

@DadsAFOL - I do not see this posted anywhere on EE Distribution, however I also don't see any of the LEGO sets listed there anymore.

They are on the consumer side, with a buy 1 get one 25% off special, but the dealer side is empty.

But I haven't received an e-mail about it either.

Did they e-mail you, or did you have to contact them?

DadsAFOL

it was a reply email from the sales guy. not a formal announcement email.

jarom_moroni

I'm a LEGO ITD, and I'm the one selling my LEGO business. I've been in contact with my sales rep at LEGO in the last few days and nothing has been mentioned about this. She asked me some curious questions about making sure I was still selling online. Maybe that had something to do with it.

I'll be sure to give the contact info of my sales rep to the guy I've been talking to about buying my business. Certainly need-to-know information. On the plus side of things, I may be able to confirm or dispel this rumor fairly soon. I'm going to email my sales rep right now.

Nadana86

In 2007 there was a press item where Lego announced that in Germany all retailers below 20.000€/year now have to go through 3 specific wholesalers...

Maybe that's a system they want to try everywhere now?

As I am not a retailer or anything, I am not sure if that's the way they do it now in Germany or if it has changed back...

prof1515

EE has indeed gotten rid of their distributor stock. They were selling off entire cases of some sets (not just the Collectible MiniFigures like they used to but cases of regular sets). They informed me earlier this year that Lego was severely limiting their available stock so this isn't a surprise.

jarom_moroni

Just got a message back from my sales rep. Here is part of that communication...

"We are no longer selling to any distributors within ITD. We are only looking to sell to traditional brick & mortar specialty toy stores."

This means that online only distributors are getting cut off. Distributors with physical stores are still in good shape.

mressin

Stupid question: what does ITD stand for? Internet Toy Distribution?

Legoboy

^ Not so stupid. I've been wondering also. I came up with Independent, but then I'm sure how that excludes B&M. :-)

dougts

this makes sense. LEGO stopped adding internet-only stores to their distribution chain years ago. It was probably only a matter of time until they cutoff the existing ones as well.

cheshirecat

Also makes sense as they are surely only taking business awayfrom [email protected]?

DadsAFOL

@mressin - ITD is Independent Toy Dealers i believe. It's what Lego calls their business unit that supports the non-national chain accounts.

@jarom_maroni - thanks for getting that clarification. It answers the question about EE distribution.

bootz

LEGO has not cut off independent retailers, online or B&M, only companies that were acting as distributors. You can still buy direct from the LEGO Wholesale group if you sell online, they just revised their selling policy. And to be honest, the wholesale discounts are not that great, especially for the low-priced items. Then you have to deal with freight charges and damages. Anyone who has dealt with LEGO Wholesale knows that the damage rate is always 10-20% of a shipment. To top it off, it is like pulling teeth to get them to refund you on damaged goods. I told them years ago they need to either improve the quality of their shipping cartons or go to a inner/outer carton model. They told me that wasn't eco-friendly. Well, spending countless hours dealing with returns isn't eco-friendly, either!

Love the site, btw!

Diggydoes

^you know what's eco-friendly?getting a 150€ set that comes in a box that's only half filled with bricks!

brickmatic

Hmm, so now if anyone on eBay claims they can offer new sets at super low prices because they get it from a wholesale distributor, we'll know they are lying for sure. Of course, we already were pretty sure those kind of listings were fraudulent, but still...

madforLEGO

So what does this mean for Amazon.com? Or is that a different thing as they are, in all regards, a 'retailer'?

Does this have something to do with that Ruling in the supreme court?
Maybe B&M retailers are miffed that people were somehow getting stuff cheaper, or TRU complained about how they are being squeezed out by this practice? (yknow, cause it isn't their exorbitant price increases over retail that could possibly be causing that) Or does this have to really do with that?

LegoFanTexas

^ Amazon.com is a special case, they are large accounts and have nothing to do with distrubitors.

Amazon, Target, K-Mart, TRU, Walmart, etc. don't go through distrubitors the way you and I would, they buy direct from LEGO, truckloads at a time.

It isn't just them, if you went to LEGO and offered to buy $100 million worth of product, I'm sure you could get the same treatment as well.