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Comments
You're trivializing the work that goes into production and distribution. They aren't just firing up the molding machines at a moment's notice to make more sets when something sells out. It's not always the case that replacements for the product are already en route from half way around the world. And still others are saying the answer is to just build more factories as if that were so simple. While you're at it, TLG, change the current formula of LEGO as a collectibile by reintroducing sets just to sour the aftermarket and dissuade reselling. People are suggesting all that as relevant, viable, efficient solutions rather than TLG pointing big resellers to their resale program?
What about everyone else though? If that is the way it went, every dealership could store my previous model and sell it a year later for double, maybe even putting me out of business eventually because this is a horrible business model for anyone.
"Let me have a huge lot of your stock right as it becomes most valuable and you can spend all your resources to design, develop and produce new products" - that is failure by design
They owe the best interest o their employees and owners first.
Again, LEGO's rules. If you don't like it, then move along.
P.s. I read your post while sitting on the couch (not pooping).
Second, and I think this is the big thing... by not using their "reseller" program, you are effectively circumventing their system. Their requirements want you to spread around the funds to a wider range of their products, instead of only a select few. EVERYONE should have to play by the same rules. They are the big dog. They make the rules. Break them and they ban you. They don't have to play fair.
I'm sure all the resellers will find another way...
Banning the resellers from [email protected] is the equivalent of poisoning the [email protected] well. However, as we all know there are many other wells (Walmart, Target, etc) where resellers can benefit from.
Nowhere in LFT example did he preclude you as "the dealership" from also storing last years models to sell in the years following.
Lego could also "store" (see re-release) old stock at a high price but that would be bad for their market as a whole.
I.E. your example of old merchandise breaks the whole metaphor.
The issue here should not be resellers buying items to store and resell after EOL. The issue is selling merchandise concurrently while available from [email protected]/retail locations.
I didn't make the metaphor of old merchandise, LFT suggested he sell last year's truck.
American Girl does, to the point the are specific with the last date something is available. Now, this does not apply to everything they sell, BUT, it does apply to the Girl of the Year line, and any doll collection they are archiving. In addition, there are often lists that folks in the store give to adult customers that specifically mention items that will be going out of stock, so they should purchase while they can. (That is a bit more like what Lego is doing, but AG does it more via word of mouth.)
There is much analogous between the two companies. High end toy, with serious collectors, that has to figure out a way to handle resellers.
What AG has done that is different than LFT has suggested, though, is they have begun a limit on sales for everyone. I believe it is a max of 5, when they expect items to be tight. They do not let resellers buy 1000 of an item. 5.
AG has a doll that retires every year. It comes out 1/1, and folks know that after 12/31 everything is gone. In some cases it is gone before then. AG became very smart last year in that they put items on backorder, and kept slipping the backorder. There were some backorders for items scheduled to be out of production by 12/31 that were set to May of this year.
They did this to make sure everyone that really wanted an item, could order one, but they kept up that limit of 5, to help avoid the retailer issue.
I don't think there is anything wrong with a published list for certain Lego lines. I just don't see TLG allowing resellers to purchase huge quantities.
I can't remember what I posted or what I started trying to post, but didn't. LFT, did you ever try talking with them again to see if they changed their policies, since you last tried to establish an account to purchase volume?
If every year the model that was made last year doubled in price, the dealership would only sell last years models. They wouldn't sell anything from "the new stock" that would sit unsold until it appreciated to 2x next year.
Thus applying this argument to anyone selling EOL'd sets doesnt work.
Lego has absolute control over if they keep selling sets or EOL them.
Perhaps Lego should consider having a corner of the store dedicated to a library, not unlike how Cabela's does with their Gun Library, in which it's a corporate place for reselling of retired, collectible firearms.
(and btw, it's you're, not your)
My example didn't state that every truck would double, it implied some would and some wouldn't. Just like only some lego sets double and some go no where. Resellers can thank TLG for creating the image LEGO has that drives those aftermarket prices and if they don't want to play by TLG's rules, then that is too bad. Others disagree, but you can't have things every way you want them. Life is full of compromises. If you don't want to sign up for the designated reseller program just so you can increase your profits, you will get shut off. Play fair, every other mom&pop shop selling LEGO has to follow the rules. Why should only some people follow the rules and others skirt them? LEGO is a huge brand with a huge demand and it shouldn't be hard to sell in the right locations, hence why it is sold basically everywhere.
I think we need to distinguish LFT, an AFOL, and LFT, the business entrepreneur. It seems to me that in the eyes of TLG, LFT's business got too big for its liking and is now forcing him/her to get his/her LEGO inventory like other ITD partners. I don't think TLG handled this perfectly but I am not sure if they are in the wrong.
Ford sold 645,316 F-series pickups in 2012...
Assuming there was a reseller business for such things, we would be selling a few hundred of them in the "aftermarket", so while the price might be double, the volume wouldn't be there.
You are not investing in Lego because of your love for Lego, you are investing to make $. (Not suggesting you don't love Lego, just that its not why you invest).
So if TLG's resale program doesn't work for you the obvious answer is to take your cash somewhere that will.
Being the 3rd largest Toy company, they are not going to change their policy's (which are making them record profits), to help resellers such as you.
Lego is far from the only thing on the planet worth investing in.
The analogy completely fails if we try to equate previous year cars to retired LEGO sets because their values are headed in different directions. I suggest we ditch the analogy, but if not, we have to to correct the following:
- Rather than approaching a dealership, you would be approaching Ford and asking them to produce more of a few certain models
- You only want the most popular models, which may or may not be what they have available or what they're able to produce
- You'd be approaching them with 3 months remaining in the calendar year (the equivalent of 6 months remaining on a 2 year LEGO product cycle)
- When they ask you to open a dealership so they can receive and fulfill your order just like everyone else, you say you don't like their dealership model, and they should be changing to fit your needs
Not sure how this isn't utopian for your "resellers must die" platform...
Thats what customers always do no matter who they are reseller\mom and pop\gift giving grandparent.
The company can choose to respond as they see fit.
Any of these requesting the company do things to suit them should not be offensive to anyone.
Lego is obviously responding to perceived or real customer desire to reduce reselling.
Also lets be super clear here with the "Break the rules you dont get to play" blanket statements. No one is arguing this point.
The incident that lead to this thread is an example of someone who was "following the posted rules".
It doesn't matter if you disagree with them then or now. The rules were being followed.
Yes, LFT and a few others have been "banned" cut off or whatever. TLG made a decision and they are standing by it. No amount of complaining (I know that is not what you are doing) or petitioning is going to make a difference. There are other things to invest in. LFT was wanting to scale back anyway, so this will jump start that decision. Although, I gather he won't be getting out of the game altogether.
Only time will tell if this was a good decision by TLG or a bad one.
@phonebooth - I think you forgot to flush....oh wait, that was your post. ;o)
@rocao and @LegoFanTexas - I know the comparison dies on aftermarket value but I just loved the car dealership example in supporting each of your sides. :o)
@pitfall69 - I've got nothing for you this time, buddy. ;o)
I think you'll be able to do so and, as such, consider this ban to just be silly.
It won't affect resellers as [email protected] rarely gives discounts.
It won't appease the masses since they're not telling anyone.
It won't eliminate the profiteering on lightning in a bottle sets.
I think it's obvious that TLG just doesn't like Texans or daughterless moms. ;o)
In my opinion the hate towards resellers is mostly due to shelf clearing during clearance sales and then the sellers turning around and selling for 5x+ profit. Firstly it’s a clearance and the stores just want to get rid of the items as quick as possibly, and every one still had more than enough time to get those sets at RRP, no one should expect to get a set on clearance.
I understand people being upset about the Minecraft debacle but that situation is very rare and if you were patient you could and still can get it at RRP.
People will also argue that somebody having to pay 3, 4 or more times the RRP after EOL for a set are then not spending dollars directly with Lego on current set, but consider if the large resellers like LFT all stop doing business, what do you think happens to the aftermarket? I believe that prices would rise even more and even quicker as sets would be harder to source as there will be less of them avaliable and the demand would still be just as strong. Sure somebody who may have bought a EOL set for $500 may not at $1000, so they go and buy current sets direct from TLG worth $500, but somebody will come along and spend the $1000, which if there was more resellers around would have only been $500, so potentially TLG misses out the same amount money.
My point is that resellers are not affecting the TLG’s bottom line as much as some people would like to think, and Mincraft aside they are also not really stopping you buying any current sets at RRP.
Also TLG is in it to make money the best way they can, and I’m sure they do lots of things that are not in the best interest of the customer, such as allowing TRU to sell above RRP for example. You may say they have no choice as TRU are so big and can dictate it, but it doesn’t change the fact that it occurs and it is not in the best interest of the customers. I see a lot of people being quite hateful towards resellers and acting like they are soulless beings (personally I dont belive this to be the case). If you have the belief then that’s fine but don’t kid yourself that TLG or any large corporation is any different they are not. In most cases they are worse as the people running the companies de personalise what they do in the name of shareholders and boards etc.
Many have said that LFT should not expect TLG to pay attention to his needs, but they certainly should. Like it or not, the growth of their current market share is partially attributable to the collectable/valuable aftermarket of their product. To ignore that is a terrible business model.
Most everyone agrees that TLG is using double standards...on one hand ban resellers without warning and on the other reward them by allowing them to purchase 5 B-wings.:-) in most cases a regular consumer won't need 5 of those.
Its been an interesting read, carry on.:-)
I reached that conclusion based not on some dislike of resellers but purely on how I perceive the situation as a disinterested third party - kind of like an arbiter or judge. And in particular, I based my conclusion on the following:
1) LFT appears to be a big reseller enterprise, that is, s/he doesn't appear to be selling off a few extra sets or parts here and there. As I said before, the way LFT's reselling business was described, it sounded pretty darn big. I could be wrong but I thought s/he described his/her business as being bigger than the run of the mill mom and pop toy store. In any event, TLG found this objectionable. Perhaps it was because they want more control over their direct to customer sales channel (again, I'll point out that selling has many items now is not the only goal, TLG and other like it want to sell its brand and get people to buy more stuff in the future and provide TLG with information so that it can rinse and repeat until kingdom come) or because they thought LFT's method of procurement was unfair to those working within its ITD parameters. Whatever the reason, TLG wanted an admitted big-time reseller to procure its goods like other ITD partners. And, to me, TLG's action is not objectionable.
I would feel differently if it started banning direct sales to those who merely dabble in reselling on BL, eBay, etc, but that does not appear to be the case.
2) While I have not doubt that LFT works hard to run his/her business, the fact of the matter is that s/he is making money off TLG. And the way I think about this is like this: If I came up with a really good product that I can sell directly to customers or through third-party sellers who have agreed to buy from me and resell the product on my terms and then another party comes along and starts reselling it outside of the way I want, I would want to stop that because it could hurt my brand, hurt my bottom line, or piss off my other ITD partners, or because I don't like the fact that someone is making money off of my hard work. Again, to me, TLG's action is not objectionable.
I didn't want to perpetuate the endless loop of the never-ending story as Pitfall69 described above but I felt the need to add this comment. I, and I think other too, answered because we were asked. And I answered as unbiased as I could, based on the facts presented.
As an aside, I am usually a forum lurker who has not added much to any discussion but this topic got me off the proverbial bench.
So about these new rules you want LEGO to adopt for you @LegoFanTexas...
1. Do you want to be allowed to have a business where LEGO makes up more than 50% of your sales?
2. Do you want to sell LEGO via a website without a bricks and mortar store front?
3. Do you want to pick and choose which product lines you take? Would those have to include exclusives and hard to find items that they either don't provide to any other retail outlets or only to a small number of their most important outlets?
Now imagine you roll up and get 50 F-150s direct from Ford at 20% below RRP. You spend no money on promotion, you don't pay anything for your franchise and you don't have to meet any sales targets or buy any less profitable models. You sell them at a competitive price to the local dealerships.
Would those dealerships be understandably pissed? Would Ford be in a better position having sold you the 50 F-150s but pissing off their franchisees?
Big retailers, give me a contract that I can place an order for 50 of each set 12 months in advance (with my choice of sets) that I will pay you upfront your cost price + 10% and I will collect when you EOL the set and put it on sale in store. You can place the order with TLG and make money on it, and I will not clear out your shelves when you put them on sale, so little Timmy gets his deal and his parents shop in your store.
Big time resellers do not create the aftermarket, that is the point.
They are a relatively new phenomenon, the aftermarket is driven by the many, many thousands of ordinary people who buy/sell, not huge resellers that consider themselves larger than most Mom/Pop Shops.
The best thing TLG could do for The Aftermarket is let it be, as has been their long-standing byline; instead it seems they are trying to control it, put the cat back in the bag. But here again, market and aftermarket are two different animals: Little Timmy can't have his Emerald Night because it has ceased production; Little Timmy can't have his Lloyd because...?
The whole thing is an oddity, not entirely senseless but not exactly sensible either. I was hoping the "Retiring Soon" labels were the end of the story rather than the beginning.
In Europe, TLG does sell the big sets to ITDs (including DS and the modulars), they just don't do it in the USA.
I do understand that store exclusives are just that, a Walmart set is only going to Walmart. I don't expect those.
BTW, just another thought... How much would I need to spend at once to get TLG to change their mind? Clearly Amazon and Walmart get special treatment, if I had $100 Million to spend, would that change TLG's mind? There must be some number that would cause a change of heart.
For that matter, for $100 Million, could I get my own store exclusive? Hmm... :)
Little Timmy has no excuse on Emerald Night, it was out 2 years, it was everywhere, even on sale many times from multiple places. That I cleared out my local LEGO store at the end of the line had no effect on Little Timmy whatsoever.
Lloyd, that is not the case... Amazon sold out the first 48 hours they got him in stock, the local LEGO store sold out in 2 hours. Every time they restocked, gone in 1 hour.
Little Timmy really did miss out on that one, unless his parents paid over the moon for him or got lucky.
But that isn't my fault, that is TLG's fault for way underproducing Lloyd. The problem is easy to solve, just make more. It was produced for perhaps a month, total... For a hot item at Christmas.
In many respects, TLG can get a pass for missing the extreme demand for Minecraft, however they have zero excuse for Lloyd, they had 18 months of sales data on Ninjago and in Feb of 2012 the Ninjago line briefly passed Star Wars in total sales for the year, first time any line other than City has done that in 13 years.