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Brickworkz LEGO mosaics : Blog : The Cost of Doing Business? The Cost of Doing Business?This week, I joined Jeff and Olivia at Toys R Us. Jeff's site- CustomTacos.com - had collected about $3,000 in donations from his patrons, and a handful of them came to Toys 'R Us to buy toys for the worthy charity Toys for Tots. Buying toys for kids is a ton of fun, and spending someone else’s money is even better. So, off to the LEGO aisle I went with $100 of that money to spend on as many LEGO sets as I could with the money. Man, was I disappointed. As a kid, LEGO really made me happy, so giving LEGO toys to kids would be doing my part in spreading the love. But walking down that aisle, I wasn’t even feeling the love. With $100 to spend, I was shocked to discover that I could get about 6 sets, and 5 were the cheapest on the shelves. Most of the LEGO kits were priced between $12-25. To this day, I vividly remember my grandfather taking me to Toys 'R Us to buy a tiny little LEGO box. That was a major treat for me. The 35 LEGO parts inside the box would create a car, a LEGO castle theme boat, or maybe a catapult. It couldn't have costed more than $5. Sometimes, I would save up for a LEGO box of my own. To function as a business, LEGO must:
In terms of making money, I have no doubt that LEGO is doing well. There have been rumors of factory closings and layoffs, but I don't believe that they are losing money on products. I think they are losing their stronghold on toys because of electronics and video games. Addressing competitive prices, most agree that LEGO prices are higher than other building toys and puzzles in similar quantities. LEGO even addressed this at the recent Brickfest conference in Virginia this past August. "There is a higher price for higher quality" was the general idea. Sure, that makes sense. Each brick is simple injection-mold technology, but to a very precise specification. LEGO continually impresses engineers with high standards of quality during the manufacturing process. Each LEGO brick leaves the factory strong and durable, brightly-colored and always just right. I have contacted LEGO about the need to reduce prices in bulk orders. I personally spoke with the head of Marketing of the LEGO Digital Designer program, as well as other executives at LEGO corporate in Billund, Denmark. They understood my concern, and directed me to their site, where each brick is seven cents each. This is not a solution. I would close my doors for good before I paid that much for LEGO parts in the thousands. So what's the solution? As much as I love LEGO, I do worry about their future. Even with such high-quality parts, can they really afford to lose customers over their highly-inflated costs? And where are the $5 kits at the stores? Is LEGO doomed to be a toy for reminiscing adults with a regular income only? Something's got to give, and I hope the new generation of young people aren't the victims. Play well,  Posted by Brian Korte on December 16, 2006 What do you think? Let us know! « Previous: Richmond Provident Banks | Home | Next: A Very LEGO Christmas » TrackBackTrackBack URL for this entry: CommentsI hear what you are saying and I totally sympathize. I have a nine year old son and I have been thinking about this a lot in terms of his weekly allowance. When I was his age I could buy a comic book AND a chocolate bar for a buck. I went to the local comic shop (what's that all about?) recently and looked at what I considered a comparable comic and it was priced at like $12.95. LEGO here in Canada has NEVER been cheap but the X-Pods and the new little Creator sets are fun and cost less than a comic book so I think we may simply need to adjust our expectations. : ) Posted by: Ted Godwin on February 15, 2007 11:50 AM |
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