How much does TRU, Walmart, Target pay for their Lego?

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How much does TRU, Walmart, Target pay for their Lego?

Post by funnypeople » Tue Oct 19, 2010 3:15 pm

I'm a bit curious and would like to know how much the big retailers gets their Lego for? I heard if you are a small toy business or store, you get Lego for 30% off msrp.

So lets say your TRU, do you get Lego for something like 50-60% off msrp or do they get a even bigger discount than that?

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Tue Oct 19, 2010 5:57 pm

funnypeople wrote:I'm a bit curious and would like to know how much the big retailers gets their Lego for? I heard if you are a small toy business or store, you get Lego for 30% off msrp.

So lets say your TRU, do you get Lego for something like 50-60% off msrp or do they get a even bigger discount than that?

neither smaller or larger stores get that big of a discount.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by mrfootball » Tue Oct 19, 2010 8:54 pm

I would guess 40-50% off MSRP.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Tue Oct 19, 2010 10:12 pm

LEGO's discount to companies and stores is on the low end from 10-20% off.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by legogeek » Tue Oct 19, 2010 10:46 pm

Asterios wrote:LEGO's discount to companies and stores is on the low end from 10-20% off.
How can TRU have these buy 2 get 1 free sales then or walmart selling many of their sets way below retail if the discount lego offer to them is 10-20% off? That amount seems too small. Retailers will not make any profit at all with that. 10-20% off is more for customers and buyers and not for retailers. I say somewhere around 30-70% off for retailers.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by natelite » Wed Oct 20, 2010 2:43 am

Margin for retailers is 38%. It's regularly published in the ny toy fair. Check out the pics from any ny toy fair. [...] :roll:
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by hatcher » Wed Oct 20, 2010 5:56 am

Well, I don't know what retailer pay, and I'm not an expert on how toy stores work or make profits, but I can tell you this much. When I worked in grocery back in university, we'd put stuff on sale that was effectively causing us to lose money on the item. However, as my manager explained to me, when the customer comes in to buy said item, they usually then see other things they need/want and buy them too, resulting in net profits for the store. Its called a "loss leader". You lose money on one thing to get people into the store. So assuming toys have a profit margin of 20%(just a guess), and you put your lego on sale for 25% off, you are basically hoping that people will buy other things while shopping for lego.
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Wed Oct 20, 2010 10:35 am

legogeek wrote:
Asterios wrote:LEGO's discount to companies and stores is on the low end from 10-20% off.
How can TRU have these buy 2 get 1 free sales then or walmart selling many of their sets way below retail if the discount lego offer to them is 10-20% off? That amount seems too small. Retailers will not make any profit at all with that. 10-20% off is more for customers and buyers and not for retailers. I say somewhere around 30-70% off for retailers.

Remember WalMart only charges .01-3 below retail, while stores like TRU charge about $1-10 more then retail.

so in actuality you could say TRU's cost is alot less compared to their sale cost, but then again TRU is greedy.

also promotions thru TRU and Target are done thru LEGO, LEGO gives stores good offers to put their product on sale and such.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Zithy » Wed Oct 20, 2010 5:28 pm

I've always assumed the retailers got Lego direct for 50% of the MSRP. There's no way brick and mortars only have a 20% markup. Not a chance. If that were the case, even TRU wouldn't provide that much space on their shelves for Lego.

Natelite said 38% which also sounds reasonable. Even with the BOGO's, they make 13% (more for TRU with their markups). And they're also probably used as teasers. You notice how Best Buy or other places offer brand new CD's or DVD's the first day of release for a special price? That's either at no profit or a loss to get people in the store in the hopes the impulse bug bites them and they buy other things. Same for TRU or any other special for Lego, but the stores are still making a profit for Lego BOGO's.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by legogeek » Wed Oct 20, 2010 5:44 pm

Zithy wrote:I've always assumed the retailers got Lego direct for 50% of the MSRP. There's no way brick and mortars only have a 20% markup. Not a chance. If that were the case, even TRU wouldn't provide that much space on their shelves for Lego.
Totally agree with you on that one. A 10-20% would be more towards electronics and video games. Their profit of those things are very low which also explains the reason why most retailer's coupons or deals has a fine print that excludes those products. If you look at TRU, they like to give gift cards out instead of giving a discount on video game consoles. Offering gift cards are better than offering a discount (in terms of a retailer) because they force the customer to come back and buy some other goods.

Toys like Lego have high profit margins because production cost of it is rather low. Plastic is cheap. The only thing that is expensive is the designing process.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Wed Oct 20, 2010 5:53 pm

ok lets say its 38% like some think, and you say it can't be like 15-20% off cause sales prices are lower then that, it seems alot of you forget that stores even like TRU have sales on items which reduce the price below 50% quite regularly, then shall we talk about clearance items? and so forth not too mention coupons and such, sometimes you can get new items for as low as 30% of retail price (and not TRU whacked up price).

like today with coupons and sales I bought a crud load of LEGO for about 28-32% of Retail price and this was at TRU, remember as I said before when stores have sales on items its because the company gives them deals and such (like Black Friday 50% off sales on certain LEGO sets), you should check around, even known store owners told people LEGO does not give a big discount to brick and morter stores, in fact I once saw the retail agreement from LEGO to stores and companies and the discount is not alot.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by natelite » Wed Oct 20, 2010 6:05 pm

as i said before, [mod edit: this is not the first time I disagree with someone else]

here's proof.

hyperlink not working. copy and paste the entire link in your browser. i will look for more pics.

Image
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Wed Oct 20, 2010 6:11 pm

natelite wrote:as i said before, [mod edit: this is not the first time I disagree with someone else]

here's proof.

hyperlink not working. copy and paste the entire link in your browser. i will look for more pics.

Image

you notice what LEGO has that set priced at?

http://shop.lego.com/product/?p=8038&La ... &ShipTo=US

$30 cheaper then the advertised price on your pic, [mod edit: it does not match the $99.99 USD price]

or could it be that price is for Canadian which country pays alot more for its LEGO then we do since $129.99 converts to about $126 US dollars and were still paying alot less then you, yeah the mark up is high in Canada, but thats because they have to pay duties and such unlike the US.
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Wed Oct 20, 2010 6:38 pm

heres the pic of his item SRP = Standard Retail Price:

Image

alot of people complain how LEGO prices are higher in non-US countries, this is due to Duty taxs being paid for product shipped into the country which they pass along to the end-consumer, so yes LEGO does have better % rates for countries outside of the US, but that is because the retail stores have to pay duty taxes too, but in the end the retail stores do not make much profit on product.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Ice » Wed Oct 20, 2010 6:40 pm

Lets all stop the flaming and continue back the discussion. Ok guys?
natelite wrote: hyperlink not working. copy and paste the entire link in your browser. i will look for more pics.
Fixed.

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by natelite » Wed Oct 20, 2010 6:45 pm

Asterios wrote:
natelite wrote:as i said before, it's not the first time someone got caught fibbing.

here's proof.

hyperlink not working. copy and paste the entire link in your browser. i will look for more pics.

Image

you notice what LEGO has that set priced at?

http://shop.lego.com/product/?p=8038&La ... &ShipTo=US

$30 cheaper then the advertised price on your pic, so whos lieing now.

or could it be that price is for Canadian which country pays alot more for its LEGO then we do since $129.99 converts to about $126 US dollars and were still paying alot less then you, yeah the mark up is high in Canada, but thats because they have to pay duties and such unlike the US.
that's the canadian's wholesale price set by lego. the price was shown at a TOY FAIR. :lol: :roll:

as i said before, it's not the first time someone got caught fibbing. show proof and stop bringing up your imagination. :roll: scan your imaginary catalog and show us your "proof"... so far you did none of the above. no proof, nothing. ziltch. nyet. and you call me a liar? :lol:

btw, it's http://www.krisabel.ctv.ca/image.axd?pi ... egos10.jpg
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Wed Oct 20, 2010 6:50 pm

Well then please enlighten us why Canada whos dollar is almost on par with the US is paying $30 more then the US, oh wait could it be what I said? and that their mark up is so high because they have to pay import taxes unlike the US?

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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by natelite » Wed Oct 20, 2010 7:04 pm

[img]http://www.krisabel.ctv.ca/image.axd?pi ... legob5.jpg[/img]

bionicle = 38%.

btw, someone flunked economics at school. import tax is high, so margin is higher. umm... i don't see the logic in that. :lol:

let me spell it out for you. retailers buy from lego for the retailer's price (or wholesale price) which is $90.99, and sell at the suggested retail price of $129.99. margin of 30%. everything is spelled out in the tag. import tax to whom? umm... am i missing something here?

btw, just want to put this out there before a certain someone pull numbers from nowhere again, lego's margin averages another 34%. check out the earnings reports on its website.

as someone else mentioned earlier...plastics. cheap. nuff said. :lol: brickforge can make it in the US (crazy expensive as heck and most litigious nation in the world) and highly customized and crazy shape parts for $1 or less per piece. lego make bricks (mostly standardized squarish, blocks and plates) in mexico, czech, poland, china with cheap labor and mass production, but only can afford 10% margin. well, you do the math. :roll: :lol:

btw, apple - high tech stuff, ipad, ipod, iphone, all miniaturized electronic parts, complicated as heck,...guess what? latest financial results, gross margin = 36%. umm, yeah...i guess 10% margin for everyone! :lol: :roll:

to the rest, if you want a more informed answer - margin for toys are high. 50% is not unheard of. lego averages 38%, lower for licensed themes. i suspect TRU probably get higher margin since they sell more lego than the others. 30% is about where the retailers just manage to scrap by, having to pay rental, bills, wages, etc. the time when we all fleeced bn.com for like 40-46% off the lego sets, they really got hurt... bad. now you know why those coupons don't work on lego sets on bn.com any more. :lol:
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by Asterios » Wed Oct 20, 2010 7:30 pm

natelite wrote:[img]http://www.krisabel.ctv.ca/image.axd?pi ... legob5.jpg[/img]

bionicle = 38%.

btw, someone flunked economics at school. import tax is high, so margin is higher. umm... i don't see the logic in that. :lol:

let me spell it out for you. retailers buy from lego for the retailer's price (or wholesale price) which is $90.99, and sell at the suggested retail price of $129.99. import tax to whom? umm... am i missing something here?

btw, just want to put this out there before a certain someone pull numbers from ass again, lego's margin averages another 34%. check out the earnings reports on its website.

as someone else mentioned earlier...plastics. cheap. nuff said. :lol: brickforge can make it in the US (crazy expensive as hell and most litigious nation in the world) and highly customized and crazy shape parts for $1 or less per piece. lego make bricks (mostly standardized squarish, blocks and plates) in mexico, czech, poland, china with cheap labor and mass production, but only can afford 10% margin. well, you do the math. :roll: :lol:

btw, apple - high tech stuff, ipad, ipod, iphone, all miniaturized electronic parts, complicated as hell,...guess what? latest financial results, gross margin = 36%. umm, yeah...i guess 10% margin for everyone! :lol: :roll:

to the rest, if you want a more informed answer - margin for toys are high. 50% is not unheard of. lego averages 38%, lower for licensed themes. i suspect TRU probably get higher margin since they sell more lego than the others. 30% is about where the retailers just manage to scrap by, having to pay rental, bills, wages, etc. the time when we all fleeced bn.com for like 40-46% off the lego sets, they really got hurt... bad. now you know why those coupons don't work on lego sets on bn.com any more. :lol:


[mod edit: Do you not know of basic economics], ever hear of VAT (Value Added Tax) or even import fees, when LEGO sells to retailers product that costs say like $90 that retailer has to pay import duties when it is shipped to them from another country (some places even in the same country), that import fee could be about $20 (or more) on that $90 item which raises the price to $110 automatically, then there are other taxes which are incurred upon delivery, so the stores retail price is more.

but then if you knew even basic economics and retailing overseas you would know this but it is obvious by your own words you are ignorant of this and are most likely a 12 year old child, as it goes why don't you go find some US LEGO toy fair with their price and SRP price (won't find any because LEGO does not list them) or better yet go over to BrickLink and ask on their forums since there are a half a dozen LEGO retailers on the site and they will respond or even ask Mnementh he has a business with a LEGO contract, or any of the others who do and they will tell you the hard cold facts.

Also ABS plastic is not cheap since it is made with Oil and when Oil prices gop up so does ABS plastic, another misconception of yours.

[flame comment]
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Re: How much does TRU, Walmart, Target pay for their Lego?

Post by natelite » Thu Oct 21, 2010 4:41 am

Do you pay like $20,000 a barrel of oil or something? I guess it's time to save up the plastic bags from grocery stores, not becoz I care about the environment but becoz they are expensive. :D

Vat is value added tax. Retailers pay tax on profit and is called corp tax. Vat is a form of consumption tax which consumers pay to consume. Guess who's the real 12yo here? Corps do not pay vat or sales tax on their inventory. Go look it up. What "value" do you even add on an already finished product?! You have no concept of a value chain, no idea about how things are produced, no idea about commodity markets, talk crap about stuff u can't back up, and spout garbage all day long.

If lego is so expensive, I guess everything else that tru sells is subsidizing it's lego sales. If you're a business man you would know the first thing to do is to cut dead weight. But what do I know? Guess all those lego must be causing customers to also shop for googlie bands??? I wonder why even carry any lego at all? Why borders or bn even bothered with lego when they are already losing profit margins currently? Bring in another low margin good to sell and speed up the demise? Common sense fails you!

Final fact. I guess walmart's too dumb when it comes to lego. They squeeze pennies out of every supplier just so they can sell lego at a loss. Yup. That makes super perfect sense. While TLC makes 34% gross margin on the lego it sells to retailers, walmart bend over to TLC just so it can sell lego at a loss to consumers. If anyone believes that, I guess they also believes elvis is still alive and aliens exist. Yup, they are advanced and smart enough to have travelled millions of light years to end up under a scalpel.
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