The prices, Steve, the prices

[theJudeAbides]

Steve,

This is hardly a new issue, but now that the new sets are finally available via S@H, there is no longer any need to talk about TRU pricing and speculate what the MSRP will be. We know these things now, and they are just as bad as was originally speculated.

For the record, let's get the numbers out for all to see:

Code: Select all

     Set                      MSRP   Pcs  $/Pc
     ---                      ----   ---  ----
8083 Rebel Trooper B-Pack    $10.99   79  $.14
8084 Snowtrooper B-Pack      $10.99   74  $.15
8085 Freeco Speeder          $24.99  177  $.14
8086 Droid Trifighter        $24.99  268  $.09
8087 TIE Defender            $49.99  304  $.16
8088 Arc-170 Starfighter     $59.99  396  $.15
8091 Republic Swamp Speeder  $29.99  176  $.15
8092 Luke's Landspeeder      $24.99  163  $.15


With the exception of the Tri-Fighter, the average price/part ratio on these sets is $.15! Now, I understand there are licensing fees which cause Star Wars sets to be more expensive than non-licensed sets, but these prices and ratios are far higher than we've seen in the past.

What's even more perplexing is that the price/part ratio seems to get worse with larger sets. In the past and in other lines, typically larger sets have better ratios, but one look at the two highest priced sets on the list show that they're just as bad if not worse!

I think I speak for a lot of people on this forum when I ask the following: What the frack-a-doodle-fudgestick, Steve? Does LEGO assume that just because the Star Wars line is the most popular and best selling of it's lines, it can jack the prices up to whatever it wants? Are we, your loyal and trusted fans, expected to just bend over and take it? Do you even dare show your face around here anymore?

[bigospedros]

Does LEGO assume that just because the Star Wars line is the most popular and best selling of it's lines, it can jack the prices up to whatever it wants?

yes, quite possibly ... will it work? Who knows ... the proof will be in the year end 2010 sales figures.

Are we, your loyal and trusted fans, expected to just bend over and take it?

No ... no-one is forcing you to buy at RRP. Also, brand loyalty does not mean you should pay less. If you don't like the prices, why not wait and buy sets in sales ? I've done this for the last 2 years and have never yet failed to get a set that I wanted (usually with at least 20% off) and only twice have I had to pay RRP.

Have you considered the fact that materials might be more expensive, or staff costs, or manufacturing costs or whatever costs are increasing? No manufacturer will absorb this if that is the case.

Also, this fabled "10 cents a piece" ratio is both a fan-made utopia (i.e. not a target set by TLG) that hasn't been true for a while and it totally ignores the fact that some sets contain unique parts that are more expensive than the norm.

[Crusader]

I don't think the typical purchaser of Star Wars Legos--boys between the ages of seven and eleven and more importantly their mothers', are driven by the piece count of Star Wars sets. Little boys look at how cool the model and figs are and judge a set by that alone. My eight year old couldn't care less how many pieces are in the ARC fighter, he just wants a Lego ARC fighter. To him it looks a like a big set, so he is not surprised at the price. He wouldn't purchase another LEGO set in the same price range even if it came with twice as many pieces.

And I suspect that higher piece counts are actually a drawback in selling to mothers. They view sets with more pieces as just more things to be lost or scattered around their homes. As long as the box size is relative to the price range they're fine with the set having less pieces. They may even prefer it that way.

So don't blame Lego, blame your mom. And then call her and tell her how much you love her, you ingrateful slob leaving your Legos all round the house for her to clean up.

[fredjh]

I usually take the price per piece as a REALLY rough starting point, but then you have to look at the pieces in the set itself and figure if you're getting extra value.

Just yesterday I bought both new battle packs and Echo Base to go along with it. The Snowtrooper pack has one of the worst price/piece ratios on your list, yet think about it for a minute...

Even non-licensed packs of minifigs cost $10 or more for three minifigs ($15 for some packs with 5). The magnet sets are $15 and include only three inferior minifigs.

For the battle packs, you're getting 4 licensed figures AND a small vehicle for $11, which is frankly a bargain.

I also got the landspeeder, which comes with five CLASSIC minifigs! $25 seems about right for such a set when you include the landspeeder itself.

Don't get me wrong, I'm the first one to whine about prices when I think they are unfair, and I think you still make a good point; the TIE Defender for example, with only two minifigs and not a lot of particularly interesting or new pieces comes in at the worst ratio.

I have no comment on the other sets (because I'm not particularly interested in most of the non-OT stuff), and it's annoying when they jack up the prices (although you have to admit, it can't stay fixed forever), it's just that, in perspective, it's not completely bad.

I will say this about defending LEGO's right to make a profit... they have the right to charge whatever the heck they want to, it's true, and then we decide whether or not it's worth it and vote with our wallets. That's good old capitalism and I've got no problem with it. But before you start citing operational costs, in 2008 TLG's increase in profits (32%) was higher than it's increase in sales (19%), which means an increased margin.

So, they have no justification beyond "we just want more money" for increasing prices in 2009. They don't need any justification at all, as I've said... I'm just saying that guessing about production costs and so forth doesn't fly with me... they are capitalizing on the popularity, they have every right to do so, they just need to be aware (I'm sure they are) that a lot of us are getting annoyed.

I think the minifig heavy sets prices are pretty fair, but the TIE Defender.... I'll wait for a sale on that one.

EDIT: BTW, first half 2009 profits for TLG showed 23% increase.

[soap]

The battle packs are a standard price. Lego has been selling them this way for the past several years. We should be happy those have not changed. Yes, in general the set prices have gone up. What bothers most AFOLs I think is the strange way they have priced the sets. Typically sets of similar piece counts are in the same price category. Now some of these sets have a large separation in price.
Freeco Speeder, Droid Trifighter & Luke's Landspeeder all at $25 with between 163 to 268 pieces
Then they give us the Republic Swamp Speeder at $30 with 176 pieces. That's when our brain says what the heck is going on with the pricing. It is in the same piece range as the others, has a similar box size and weight, yet costs $5 more.
We could use the same thinking between the Droid Trifighter (268 pieces) and the TIE Defender (304 pieces). Yet the Defender is $25 more for only 36 more pieces. OUCH!!! But notice how they are packaged. The defender is put in a larger box. It gives the appearance of being a much larger set.
This is a typical marketing strategy. You might notice that most Lego sets could be packaged in a smaller box. The brains say "You want me to pay how much for that little thing?". Put it in a big box-" Ooooooh, That looks like a good deal."
Laugh at this if you will, but I have seen it in person. I will be in the toy aisle and a mother with a child will look at the sets. The kids always go to the biggest boxes first. Then they look at the figures in the box, then the price, and sometimes lastly the piece count. My own children do this as well. Kids don't care about the amount of pieces. AFOLs do.

Do I like this. Not at all. Especially after Lego did a survey asking me about product value. I am sure any adult who filled it out checked the "lower price" box.
For me $.10 per piece is a base line. If i can get a set for less than that, then I will buy it. Otherwise I wait for a sale. If I know it is a set that won't be on sale in my area- Then I have to decide if it is really worth it.

The only way to show your distaste for the pricing is to not buy it. Unfortunately AFOLs are in the minority when it comes to buying Lego. Children are who drive the sales. Mommy and Grandpa just want them to be happy. Price isn't the main concern to them as much as will they like it.
That leaves the rest of us to deal with what we are given, and to be happy that we even have it.

[fredjh]

^^^

The battle packs were $10.00 this time last year, now they are $11.00. Looking at it one way, it's just a piddly little dollar... big deal! But looking at it another way, it's a 10% increase in a time of relative stagflation.

You make some good points, though... yes, even the battle packs seem like larger packages than their predecessors... I have some older ones still the box in the closet, so I'll compare when I go home. It IS marketing. It's a shame. When people lose focus and get all bleary eyed going ga-ga over the big box/picture, then marketing wins. It's like buying a Jeep to use for commuting after watching a commercial of one driving through rugged mountain terrain and thinking "cool!"

But you're right... we can whine all we want (I'm really good at it, I admit), they are not targeting me.

But I think I need to make a distinction... I want to make it clear, we're allowed to whine about price increases just as much as LEGO is "allowed" to charge whatever the heck they want for their products... they are allowed to do whatever they want. I just wanted to point out to those trying to justify the price increases that there is no "technical" reason that prices need to be raised; their profits are climbing faster than their sales, which is an obvious indicator of higher margins. In other words, there's no reason besides profit for them to raise prices... but I won't argue that they need any other reason, either... it's a business, they are making a lot of money. Demand dictates prices... LEGO is very much in demand, apparently.

[legodavee123]

But before you start citing operational costs, in 2008 TLG's increase in profits (32%) was higher than it's increase in sales (19%), which means an increased margin.

Assuming that's comparing money for money, then yes-- although it strikes me as an outside chance that "increase in sales" might reflect volume rather than money. Hard to say. Certainly, it's seemed to me in the past couple years that a few sets pop up that have higher price points than I expected. I guessed $40 and it turned out to be $50, or something like that.

But since 2006, a lot of it has had to do with cost reduction-- making cheaper parts, outsourcing to cheaper suppliers or partners, etc. But they haven't been passing on the savings to the consumer, it seems.

Do I like this. Not at all. Especially after Lego did a survey asking me about product value. I am sure any adult who filled it out checked the "lower price" box.

This sentiment gets me every time. I hardly care at all about LEGO's prices. I care about LEGO's quality. That's what I responded in the survey. In fact, I made a special comment saying something to the effect of "please charge us more if you can increase quality". LEGO increasing their prices is fine with me. But what I HATE is that their products are slowly getting closer to MegaBloks. Color consistency, part tolerances, packaging, instruction printing, error checking, plastic translucency, everything-- quality has dropped significantly since roughly 2005-2007 in virtually ALL areas across the board, with the exception of set and product design, which have seen amazing leaps forward in quality.

I'd be happy to pay $.20 per piece if it meant we were back to the quality seen in the late 1990's. I used to use the $.10 per piece guideline when I was in high school and college. But since then I've come to realize that it's silly to pay ANYTHING for a piece I won't use. I have a bunch of newer elements that I simply skip over when selecting elements to use in a creation. They're sort of translucent, or their colors are sort of wrong, or they don't have the same clutch power, or the grain on the slopes is inconsistent. Or whatever. So many pieces just sit there unloved. What I'm really paying for when I buy a new set are the new elements it comes with that I don't have any of. I probably won't use those 1x1 cones or what-have-you from 8083. I paid $11.00 for a few Hoth troopers, blasters, and 1x1 bricks with studs on the sides. I would've paid the same $11.00 regardless of the other mishmash of blay and white parts it comes with. And the kicker is that I would've been willing to pay MORE if those other little parts were up to the old standards of quality.

DaveE

[soap]

fredjh, I completely agree with you.
Some times I think we have done this to ourselves though. People turn around and sell sets on ebay or bricklink for more than what they typically sell for off of the shelf. If I'm a company with a product in high demand, and I see others reselling my goods for more than me- then why not raise the price.
And there has been demand this year for some reason. This was the first year where on multiple times I saw resellers clear out the shelves of Lego that were on sale. It annoyed me at first, mostly because it makes it that much harder to get what I want at a good price. But if that was how I made money, then I guess Ok.
On the upside. If my worst complaint is about how expensive Lego has become, then I guess I'm doing ok.
Plus, this gives me something to complain about.
Hopefully prices will become more consistent, or at least bearable. Thank goodness for sales.

legodavee123, I feel for you on the quality front and I agree as well. But that will not change. We can call for quality all we want, but it is money that dictates everything. To say you don't care about price is silly. The quality will never change as long as the money continues in. This is no different from any company.
Small group makes high quality product in limited scale for good price. Product gets recognized for positive attributes. In turn company grows, lines expand, market share increases, profits grow. Company expands again, branches out, looks for way to cut costs and maximize profits, quality vs. quantity is scrutinized. Popular demand grows, manufacturing expands to keep with demand, quality decreases, profit goes up.
This continues until a negative trend begins, like profit goes down.
When we do a survey and say we will pay more for better quality, a company just looks at it as we will pay more. That is why I always mark lower prices. I also noted to increase quality on the survey as well.

[legodavee123]

To say you don't care about price is silly.

That's why I expressly changed what I said after hitting "Preview" from "I couldn't care less" to "I hardly care at all". That is to say that I recognize that I care about price, but given the current situation, it pales in comparison to how much I care about other things.

The quality will never change as long as the money continues in.

Totally agree. And I'll continue to complain about quality as long as the quality is lower than it was in the 70's, 80's and 90's. Quality from before then is arguable, as old CA bricks clearly warp with time versus ABS bricks.

When we do a survey and say we will pay more for better quality, a company just looks at it as we will pay more.

Yes-- and I'm willing to pay more. Especially to a company like LEGO that's headquartered in Denmark-- the nation with supposedly the lowest amount of income inequality in the world (and highest minimum wage too? Didn't know that until just now)-- and from what I know of LEGO employees, that's pretty accurate. By contrast, I'm not interested in paying more money to companies like Walmart, whose income inequality is off the charts (by comparison), and who try to get by with the pure minimum to their workers and customers. And if LEGO continues to degrade its quality, or outsources more to China, maybe it's time for me to start buying only after-market stuff from BrickLink. But if LEGO wants to charge more? That's fine. LEGO is one of the few companies that I trust with my money.

And in the meanwhile, yes, I'm 99% positive that their quality won't improve, ever, unless some newfangled technology steps in. If (say) pieces could be constructed without injection molding-- perhaps similar to rapid prototyping or maybe some sort of molecular construction process, THEN maybe quality will go up. But that would only happen if that method would be shown to be cheaper-- either in direct cost, maintenance, or some other bizarrity, like environmental fees (compensating for carbon footprint or something).

DaveE

[Inzane]

I care about LEGO's quality.
...
But what I HATE is that their products are slowly getting closer to MegaBloks. Color consistency, part tolerances, packaging, instruction printing, error checking, plastic translucency, everything-- quality has dropped significantly since roughly 2005-2007 in virtually ALL areas across the board, with the exception of set and product design, which have seen amazing leaps forward in quality.

Agreed.

Another area of quality that I've noticed slipping is the customer service on the replacement parts end of the business. I've noticed a big decline just in the last year. Things like:
staff retention (a couple of the really nice ladies I've dealt with repeatedly over the last few years are gone now. Instead I had to deal with a guy that didn't seem nearly as willing to help),
parts inventory/selection (I had a 2005-era SW set recently that I needed a few pieces to complete and most of them were discontinued. With either no alternatives, or they offer to sell you pieces in a totally different color. This compares to only a couple years prior where I had successfully gotten parts for sets dating back to '99-01.),
billing (they want you to mail in a cheque now before they'll send anything. They used to provide the occasional parts for free, or send them with an invoice for you to pay afterwards).

Maybe we've been spoiled with the "good life" for so many years, but the impression I got is they are trying to get out of that part of their support business.

[fredjh]

Yeah... I can't say I've found really bad pieces, but up until last year (when I started buying a lot of sets) I had only one problem; but then it seemed like half the sets were missing pieces.

This is the thing, if they cut quality to cut costs and keep charging the same price then it's one thing (a bad thing), if they charge us less then... well, we'd rather be paying what we were paying for the same quality. If they went to a higher quality and charged more, then I could understand... however, higher quality just puts them back where they were before all this started, and as the increased profits over sales show, we're paying relatively more.

Now it occurred to me a long time ago that LEGO is playing "Beanie Baby" with the market; restricting certain sets and being happy that the after market sales were so high... that's fine, as I've said before... I'm a capitalist. But knowing how they are playing the game changes the way I feel about paying for it.

Other games I've seen... things outside the Star Wars sets, are like not selling straight train track separately. That's annoying, too.

[theJudeAbides]

That's just the point, guys: LEGO is raising the prices without raising the quality. It would be one thing if they were raising the prices to compensate for increased quality and the costs associated with new molds, but they aren't. It's pure and simple greed: nothing more, nothing less. Yes, I realize that in a capitalist economy they are well within their rights, but that doesn't mean we have to like it.

Unfortunately, you're also right about us not being the target audience. Little Childrens everywhere will scream for new sets and their parents will oblige them, oblivious to the fact that they're being fleeced. In all likelihood, LEGO will not only "get away with it," but do so while pulling in record-setting profits. I just find it sad that a company that was founded on quality now only seems concerned with money. "Play Well?" More like "Profit Handily."

[legodavee123]

"Play Well?" More like "Profit Handily."

I think the one that gets my knickers in a twist is that they still say "Only the best is good enough". It's closer to "Only the level we decided to compromise to is good enough".

DaveE

[bigospedros]

costs associated with new molds, but they aren't.

what about all the new molds for all of the new minifigures and minifigure accessores that we get in the SW line ?

Oh and let's not forget inflation :P

[kelano28]

I think what gets me the most is the Swamp Speeder.. take away Bariss and the new Clone and you're left with:

1) Not very interesting parts
2) Stickers
3) 2 Battle Droids and 1 Super Battle Droid

This doesn't seem worth $20 to me (look at the recent Hailfire Droid set in comparison). I just am amazed that the two new figs cause a set like that to jump to $30.

On the other hand, I picked up the ARC-170 and it is quite big, not a good price (I think 50 would be just right) but not horrible in my eyes.

[fredjh]

costs associated with new molds, but they aren't.

what about all the new molds for all of the new minifigures and minifigure accessores that we get in the SW line ?

Oh and let's not forget inflation :P

Many sets require new molds; even ubiquitous pieces need new molds every so often; I don't believe it.

As far as inflation goes, we're still basically having a period of stagflation, and yet we've seen around a 10% increase.

I won't berate TLG for profiting, I just wish people wouldn't be apologists for them... despite how much we want to like TLG as being some magnanimous, different kind of company, they are a for-profit company that wants the highest profit margins they can get.

[dWhisper]

Actually, when looking at inflation, you can't just go at the US dollars (given that they're not made here, or based here), or just the buying power. You also have to look at the cost of goods and raw materials, which has been rising for almost all manufacturing.

These changes aren't limited to LEGO. Take a jaunt down the action figure aisle, and look at what your money buys you there. Star Wars figures have gone up almost 100% in the last 5-10 years (in just the last 12 months, they've gone up over $1 on MSRP). In fact, almost all toys have been on a considerable rise over the last few years. When the "classic" GI Joe figures came out, they launched at $5. Now, they're 8, and it's been less than 2 years.

Does that make it right or wrong? No, but it is what it is. Stop buying if you don't want it, but you can't fault LEGO for moving with the market.

[theJudeAbides]

If it can truly be marked up to inflation and an increase in manufacturing costs, then why don't we see this across all lines and sets? Look at the Atlantis sets, which required far more new molds for all the new minifig parts. Most of the sets there are around the $.10 price/piece ratio, only going up as high as $.12 in the worst case. Then, of course, there's the Creator line which is still holding steady BELOW the $.10 price/part ratio. Granted, they've always been this way due to their lack of minifig parts, but that's precisely my point: their price ratios have remained unchanged.

So, if market factors are truly to blame, then why hasn't this affected all lines and products? Because it isn't market factors. It's just LEGO realizing they can charge more for their most popular line.

[Solo]

Anyone ever consider maybe Lucas or his cohorts told Lego to dial up the profit margin? I'm not trying to be an apologist for either side (tired of that card) but I do want to throw out a different angle. We all know Steve can't really answer stuff like this, but I haven't locked it down because I'm interested in the speculation you guys churn out.

Also, I'm hoping some intrepid lad will throw down some actual facts beyond part count - set weights spring to mind, because across the board we're getting some larger parts in recent sets and more plastic obviously means more money. Maybe it's not that obvious though since no one has brought it up.

Last thought: maybe the 10 cents per part rule should never have applied to licensed sets in the first place. Blasphemy, I know, but here's my reasoning: the Star Wars line has been around since just before Lego nearly went bankrupt - maybe those are related more than we thought? They've since spun around and have been turning a huge profit in recent years, all the while raising prices... see where I'm going with this? Frankly it never made sense for these to be priced on par with in-house themes, because they still had to pay uncle George at the end of the day.

[fredjh]

Of course licensing could play a bigger role; didn't the contract run out in 2009? I thought it was ten years. Which means they signed a new one, that could play a significant part.

But we do see the other things... it's not molds or plastic costs (because, as pointed out, you can look at unlicensed themes and not see such price inflation on those sets). The boxes have gotten bigger... it's true, the battle packs boxes are much bigger than they used to be, there's a lot of empty space in those boxes... there's a lot of marketing games going on...

Profits are sales after costs (and sometimes after taxes, depending on which number you look at), and increases in profits are greater than increases in sales, it's really just that simple. Licensing fees are a cost, they wouldn't be included in profits. The problem is we don't know the stats for the second half of 2009, but what Solo says makes some sense, it was around mid year (if I'm not mistaken) that the battle packs jumped 10% in price, and it was around that time (August release time frame) that we started getting all at the prices of the new sets (like $40 for the midi Falcon... I still can't get over that one).

Still... licensing doesn't explain the rather arbitrary differences in prices. Battle packs are a bargain compared to the larger sets; battle packs, in fact, cost less than other comparable items, as I pointed out... magnet sets with three licensed figures are $15, yet battle packs are $11 and include FOUR figures and a vehicle.

Even the landspeeder, upon reflection, with FIVE classic figures and a larger vehicle seems like a bargain when given consideration... by that measure, the TIE Defender seems like an absolute rip off.

The only conclusion I can draw is that it's simply arbitrary pricing, partly based on (as soap pointed out) perceived "size" of the sets. The TIE Defender "feels" big, and comes in a much bigger box than, for example, the land speeder... that it comes with only 2 (compared to 5) figures and doesn't have many significant parts, it's the only conclusion I can draw... they've probably done a lot of market research on what price they can get away with.

And while price/piece is only a very rough gauge, it's also true that the LARGER sets used to be considered the "bargains" in price per piece and minifig ratios... now it's all topsy-turvey.

I'll repeat it again, because while I am a whiner, TLG can do whatever legal thing they want to do... they could charge $1/piece, it's entirely up to them, but we're allowed to notice and comment on it, and if we "feel" like we're being ripped off and buy less because of it, it's certainly a topic for discussion.

That said... I had nearly COMPLETELY gotten out of buying Star Wars LEGO at all... but now LEGO is sucking me back in with so many OT sets that I'd missed... now I can't wait for my Slave 1, or my Wampa Cave (because I don't have a Snow Speeder), and I already got my Land Speeder... I'm very happy about it. So they are selling me what I want, and what I've bought so far in new sets (including last August), I don't feel ripped off about... Echo Base, the two new battle packs and the land speeder... I simply don't feel like I overpaid.

Now, that said... I got the midi Falcon for $25 during the Walmart sale; I simply refused to pay $40 for it. I will not pay $50 for the TIE Defender. So... we've all got our own ideas of what's worth it or not, it really just boils down to that. When the TIE Defender inevitably goes on sale (because I don't believe a significant number of people - relative to other sets - will buy it at that price), then I'll get it.

Last thought: maybe the 10 cents per part rule should never have applied to licensed sets in the first place.

It's a rough estimate. A VERY rough estimate. I do it right off the bat, then I look at what you're getting... a lot of figures make it worth more; certain other pieces make it worth more (larger/uncommon). I often conclude that prices well above $0.10/piece are worth it... like I did with the battle packs.

Still, I'll defend the $0.10 "rule" as a decent starting point.