TLG Refuses to Sell to Resellers

Thor

For several months I have been reading how TLG is stepping up its efforts to ban reselling. A number of LEGO resellers on BrickLink, eBay and Amazon, as well as LUGs and big buyer AFOLs have received letters from TLG reminding them that LEGO they purchase from LS@H or the LEGO Stores must be for personal use only and not for resale. LS@H has already started canceling orders from "known resellers". And now the LEGO Store managers are personally confronting and reminding known or suspected resellers (i.e. large repeat customers) that their purchases must not be for resale. Toysrus and Target have also started canceling online orders from known or suspected resellers. In short, it seems TLG is getting more aggressive in this matter.

I am fairly friendly with my local LEGO Store manager and I asked him about this recently. He confirmed that TLG is, indeed, stepping up its efforts to ban or at least reduce the "problem" of reselling and that all LEGO Store managers have been instructed to remind large repeat customers of this "policy". When I asked how TLG would enforce this policy, the manager agreed that TLG cannot legally tell any customer what they can or cannot do with LEGO they may purchase. However, they CAN refuse to sell to certain customers, cancel your VIP card and ban you from their stores.

If this is truly the direction that TLG is going, I wonder how it will affect some resellers here and elsewhere, and how it will affect the AFOL hobby and reselling sites such as BrickLink and BrickOwl. Is anyone concerned about this? Are there ways to get the inventory a large seller needs without getting on TLG's blacklist?

Thor

YELLOW FARM BRICKS

Use purchasing scouts?.. there are millions of people in the world, Lego want to sell their product, they won't ban them all. TRU in UK were cancelling orders years ago, they maintained a list of eBay sellers.. result... TRU lost their business to other retailers, their market share has plummeted (also they are not top of the class in customer service!). Whilst there is a free market there will always be a way. I can understand TLG not wanting their current sets to be purchased in bulk and marked up by small resellers though but the reselling of parts through AFOL sites enables people to build amazing things which promotes Lego's brand for them for free - I think they don't have too much problem with that but inevitably, if you buy too much direct from TLG you will fall foul of their anti-reseller policies.

Robert

Graham

It gets worse, Amazon just cancelled two orders on me and I am not a big "reseller" - my 3 kids are obsessed with Minecraft (seems all are these days) so they have a 1 unit limit - I have several Amazon accounts, which I admit I set up to get around silly limits on sale stuff.

I ordered I set per each account along with a few other bits and bobs - they "caught it - and cancelled two!
I have used 3 accounts several times in the past like this with no problem.

I do know that TLG are "not happy" about (what they see as exploitation) ebay (and other) resellers buying and holding sets purely to resell.

AND they are not at all happy with BrickLink - they do not like stolen parts being sold - those unreleased parts you see, and sudden large numbers of HTF parts that "appear" on BL. Nor do they like the forgeries (chromed bricks for example) and "custom" parts.

There are several BL members who are actually TLG staff

I got this from someone who would know (a store manager) - TLG used to suggest BL if a part you wanted was no longer available, now they suggest Peeron !!!

LEGO sales are so high that they are not worried about loosing profit, by clamping down - they are a privately owned company - so no share-holders demanding more and more profit.

It would be interesting if someone were to challenge them in court with "restraint of trade"...

Graham

Sir Troys

They also do not make any distinction between pure speculators and AFOLS that buy a lot and resell some of it to finance their hobby. I recently had 2 orders cancelled by S@H, for 1 each of the Palace Cinema.

It is no secret that I am a reseller. I have retail stores and I have an ITD account.

I am also an AFOL and have been longer than I have been a reseller. I have been building and displaying for 15 years.

Guess what? LEGO doesn't care. I am now labelled a reseller and will apparently be treated as such. Don't expect any contributions you have made to "the community" to amount to anything in the eyes of LEGO.

Troy

Graham

Just as I read this I FINALLY got a definitive answer from Amazon, regarding purchase quantity limited items.
They say the limit applies per customer per 7 day period.

I would love to know what TLG's limits are - before you get struck off for being a good customer?!

When it comes to re-sellers of sets, if they cared that much they would just keep them ALL in production - which I notice seems to be the case with the modulars 10197 and up and 10188.

graham

mark1984

How about buyers that buy sets just to part out, How do they feel about that, I often heard of LEGO sending people looking for parts too BL, I myself don't buy to re-sell whole sets I part out every set I buy (besides one copy for myself) but I do buy at least 10 of each of the larger sets, Am I at risk of being stop listed in the near future, If that's the case what future do BO and BL have,

Graham

I'd really like to know how TLG feel about bricks and mortar toy stores granted a LEGO franchise finding a rather lucrative sideline selling on BL - coincidence most are in (what was) eastern Europe? :O

MouseMotors

You would think any company would be quite happy to have customers wanting to buy wholesale volume at RETAIL prices. I think what gets them in a twist is large scale market exploitation. A while back the first Minecraft set was sold out for a time. In the interim someone on Ebay made a small fortune selling them for $100 a pop.

Don't worry though, Wally World will always take your money! As long as you don't mind 6'5 LP guys with "cool beards" giving you the stink eye when you load up a cart with LEGO. :-\"

Hoddie

I personally think TLG only has an issue with those who buy to flip, for instance those who use various methods to get around purchase limits of limited items like the recent Technic set, just so they can sell them on eBay for a clear $100-300 profit each. As YELLOW FARM BRICKS points out, it's in TLG's interests to have a thriving after-market that helps people create all sorts of free advertising for them.

If they clamp down on resellers who part out, all this will do is concentrate the after-market in the hands of the few who are willing to go the extra mile to get the inventory. This will inevitably push up prices until such time as it becomes attractive for entry-level resellers again. Then the whole circle starts again. It's a futile exercise really.

Elvislives

Has anyone else had their Amazon LEGO purchases limited to 2 sets per title? I just discovered this new change on my account today. :{

Teup

Toysrus and Target have also started canceling online orders from known or suspected resellers.

I don't really get that. Toys R Us is a reseller too, right? How can TLC be against resellers? My suppliers give me discounts if I would order like €20.000 a year, and that discount goes via TLC, which in turn provides a similar discount to my supplier. Maybe toystores don't want to offer their stuff to resellers since their collection would get wrecked, but I don't see why or how TLC would discourage resale, especially if they give out discounts.

Teup

As for the part-out bizz versus 'regular' toy store, my main supplier even offers part-out advice to resellers. They really seem to encourage it, and they get discounts directly from TLC..

Jiries

There are several BL members who are actually TLG staff

I wonder if they take home the pieces that had been swept away from the PAB wall? Recently I saw them doing it in Orland Park store in Chicago and last weekend at Westfield store in London, they sweep it away instead of putting it back on the wall. I ask them what they do with it? I was told they throw it away which horrified me as a such a waste of new parts being binned. Can't tell what behind the door if they do actually throw them away or they keep it for them to take home or return them to Lego factory to sort and re-box them for selling again?

Loremonger

I don't really get that. Toys R Us is a reseller too, right? How can TLC be against resellers?

LEGO is insanely protective of their brand. They have established distribution channels through large resellers, like Wal-Mart, TRU, Target, etc. that they can tightly control. They have merchandisers who travel to these stores to arrange the shelves, put up displays, and manage the distribution of their product.

LEGO cannot control the thousands of online resellers. For instance, I don't think they would approve of my store name, Brickmonger. Not to mention the condition of set boxes, distributing retired sets when they'd rather move new product. That's my best guess, anyway.

Teup

I don't really get that. Toys R Us is a reseller too, right? How can TLC be against resellers?

LEGO is insanely protective of their brand. They have established distribution channels through large resellers, like Wal-Mart, TRU, Target, etc. that they can tightly control. They have merchandisers who travel to these stores to arrange the shelves, put up displays, and manage the distribution of their product.

LEGO cannot control the thousands of online resellers. For instance, I don't think they would approve of my store name, Brickmonger. Not to mention the condition of set boxes, distributing retired sets when they'd rather move new product. That's my best guess, anyway.

Maybe that is a US only thing? I know plenty of Lego stores here. A guy I knew had a shop here in town, he got his stuff directly from the plant in Czech Republic. And he was just just some regular guy. There are plenty of Lego webshops here too, and many business suppliers that supply Lego solely for resale (you're not even allowed to buy it for personal use). The more of a physical shop you have, though, and the more advertising you have and the more children you draw to the store, the higher your discout at most suppliers (and possibly access to buying directly from Lego), but even on a small scale it's really easy to come by some resale intended Lego. There's no way over here that you could buy something from a toystore and still get a good profit rate on it. You just buy your stuff from the suppliers, the same suppliers where the toystores buy.

Graham

That sort of explains something, I have noticed that there are many more bigger sellers in Germany, Austria and Czech Republic, also Denmark to a lesser degree.
In that I thought that these sellers are able to buy unlimited quantities (of even HTF and exclusive items) because they are "a toy shop" - that being loosely applied there - whereas from my experience in the UK and US, it is not possible to get a discount other than from sale items from retail outlets.

On occaision I find this very annoying - having 4 kids all wanting the same item... by example when the Minecraft set came out. TLG sold one per address (we tried different names) and Amazon were sold out, yet they were all over eBay (and BL) in seemingly unlimited quantities at 2x retail. TLG got a Mr Angry call from me.

So why are they penalizing some and favoring others?

They complain about re-sellers (sharks - IMO- selling current product at a hefty price over retail) - simple answer there - increase supply.

I see no benefit to TLG stemming supply to mostly parts sellers UNLESS they are wanting to take hold of the parts market thru S@H??

I would see a possible lucrative business opportunity for "someone" over there selling wholesale (sets) over here

Graham

Maybe that is a US only thing? I know plenty of Lego stores here. A guy I knew had a shop here in town, he got his stuff directly from the plant in Czech Republic. And he was just just some regular guy. There are plenty of Lego webshops here too, and many business suppliers that supply Lego solely for resale (you're not even allowed to buy it for personal use). The more of a physical shop you have, though, and the more advertising you have and the more children you draw to the store, the higher your discout at most suppliers (and possibly access to buying directly from Lego), but even on a small scale it's really easy to come by some resale intended Lego. There's no way over here that you could buy something from a toystore and still get a good profit rate on it. You just buy your stuff from the suppliers, the same suppliers where the toystores buy.

Teup

I'm surprised that this could be that different. There should be wholesale suppliers for every item, in every branche. Every shop out there, whether in the local shopping centre, online, a local pub, whatever.. they're owned businesses by people who have access to their suppliers. If you decide to have a fastfood restaurant, you get to buy milkshake cups on an industrial scale for business prices. If you decide to have a toystore, or a bricklink store, you get to buy lego on an industrial scale for business prices. That is just how running businesses work, as far as I've always known.

Maybe it's the American big corporation thing that's to blame? I don't know, but I often hear Americans call stores by their names (like Home Depot or Target) instead of by what kind of shop they are, so it seems like some business is much more restricted to the few big fish. If you're a store manager under those, you're totally restricted to what you get to buy and sell. Me, I'm my own boss, if someday I would decide to go and combine selling Lego with something else, I'd just get myself an account at the appropriate suppliers.

CastleBricks

They complain about re-sellers (sharks - IMO- selling current product at a hefty price over retail) - simple answer there - increase supply.

I don't think name calling is so useful. A reseller is a reseller. I agree that there are differences between current set and old set resellers, but not so much between someone that sells a current set at 20% over RRP or 100% over RRP. Who decides what hefty means and therefore who is a shark? For example, you are selling the Mini Cooper (a current product) at over retail price. Is there a certain price at which you change from being a "good" reseller to a "shark" reseller? For me, a reseller can charge what he likes, and the buyer can choose to buy from him, or leave it. The reseller might double the price of a current set, and be happy for it to sit at that price for a few years in his store, as that is the profit that he wants to take from the set. It is then up to the buyer to decide whether to purchase at his price, or go elsewhere. If the reseller's price is crazy, then there will be other cheaper options. If not, then the price is not crazy.

Loremonger

They complain about re-sellers (sharks - IMO- selling current product at a hefty price over retail) - simple answer there - increase supply.

I also have a Tickle Me Elmo doll I'd part with for a couple hundred bucks.

Graham

They complain about re-sellers (sharks - IMO- selling current product at a hefty price over retail) - simple answer there - increase supply.

I don't think name calling is so useful. A reseller is a reseller. I agree that there are differences between current set and old set resellers, but not so much between someone that sells a current set at 20% over RRP or 100% over RRP. Who decides what hefty means and therefore who is a shark? For example, you are selling the Mini Cooper (a current product) at over retail price. Is there a certain price at which you change from being a "good" reseller to a "shark" reseller? For me, a reseller can charge what he likes, and the buyer can choose to buy from him, or leave it. The reseller might double the price of a current set, and be happy for it to sit at that price for a few years in his store, as that is the profit that he wants to take from the set. It is then up to the buyer to decide whether to purchase at his price, or go elsewhere. If the reseller's price is crazy, then there will be other cheaper options. If not, then the price is not crazy.

I don't see that as "name calling" as I wasn't referring to any particular seller - anywhere!

The "sharks" AGAIN - I.M.O (in my opinion) reside mostly on Amazon, eBay and BL - when selling at 2x retail (or more) on new HTF/exclusives that are strictly limited OR using deceptive practices: -
such as using "fulfilled by Amazon" waiting for Amazon to go OOS - it then *looks* like the customer is buying from Amazon, unless they look carefully and/or know what the RRP is.

These practices are not much liked by TLG - that much I know, and are the "type" of reseller they are (mainly) attempting to thwart - it seems that US (and UK) consumers are the main target - that is my opinion/observation too, however, and in closing it does seem to me that we may all suffer due to the unscrupulous minority - that I choose to refer to as "sharks"

Graham

Brickr

I know this an old thread, but I have to vocalise this somewhere! After placing an order for replacement parts today I received what appears to be an automated email barring me from ever buying ANYTHING direct from Lego again, parts or sets! I am speechless, the has come out of nowhere, I had no clue, no warning, and no idea why they would even do this to anyone, can someone shed some light on this?

robernat

@Brickr
This is most likely not 'just' related to your recent purchase of replacements (unless you bought an unusual high amount of the same items), in most cases it's triggered by your total purchase history, for example if you would go in 10 times in 2 weeks to get the same freebie, then it gets tagged, or if you frequently buy several copies of the same set, they will start to 'tag' you.
I try to avoid to buy much from LEGO itself, and limit myself to the strict minimum, all 'non exclusive' sets I buy only in regular shops, or from retailers I know (who buy straight from TLG), for exclusive sets I don't have much choice these days (formally a local store/webshop had them in high quantities, but it seems TLG even cut them off, they probably realised too many where going over the shelf for such a small country LOL), so if I wanna stock some, I let a certain amount of time go buy before I buy another one... Basicly keep 'low profile' or you get burned sooner or later...

Eric