The differences in retail prices that Lego attracts across different countries and regions is an often talked about subject. There is always a feeling that Lego, both with its own stores and online shop and with the suggested retail prices that most big Lego retailers use, doesn’t exactly play “fair” when it comes to pricing. The reasons for that are many and varied and are beyond the scope of this article. But what I would like to do is present some evidence that may help put into perspective some of the retail pricing discrepancies.
A couple of months ago Brickpicker expanded the information available to us to include data from 3 regions outside of the established US Ebay results. The UK, Australia (AUS), and Germany (EU) were all added to the information pages for each set. Along with the Ebay sales data we also have a small section showing the retail price of each set. It is comparing these prices that I would like to focus on.
For the purpose of this exercise I gathered the retail prices for 345 sets released in 2011 or later across many different themes. These 345 sets had retail prices available for each of the 4 regions. There are plenty of sets that have no retail price available in one or more regions so those were excluded. 345 sets should give us plenty of coverage to examine any differences.
To compare the prices in a meaningful way first we need to convert them to a common currency. So I took all the prices for the other three regions and converted them to US$ prices using the latest currency exchange rates as follows:
Now all the prices are converted we can compare the averages across the 345 sets:
From that picture you can see all the regions above the US in terms of pricing. “Aha, but wait!” some of you may be saying, “What about sales taxes like VAT?”. A very good question! Each region has a different form of sales tax added into the retail price. The UK and Germany have VAT (Value Added Tax) and Australia has GST (Goods and Services Tax). In the US the sales tax depends on which state you are in and is added on top of the retail price when you pay. Therefore to compare prices accurately we need to remove the sales tax component from the regional prices at the current rate:
VAT was increased to 20% in the UK in 2011 so that was another reason to limit the set data to that year and after to make things easier to analyse.
We can now look at the averages for each region with the sales taxes removed:
Things are a lot more even now. The UK is almost identical to the US and the EU price is 5.0% higher. Aus is still up there 28.9% higher than the US though. This gives us a snapshot of how current retail market prices differ at the overall average level. I then wondered if there was any differences between themes. So here is a look at the 345 sets broken down by themes and ranked based on the variance of the average of the 3 other regions compared to the US:
This table throws up some stark differences in the prices across the themes. You can see that Spongebob has the highest variance but only 4 sets, followed by the heavy hitting Super Heroes theme whose 18 sets are on average 28.1% higher than the US. 50.5% higher in Australia in fact! Interestingly we have the Technic set at the bottom, where apart from Australia the other 2 regions enjoy a decent discount below the US price. This is probably why the recent sales on some Technic sets at Amazon.uk have proved to be very popular with members here, with many importing them from the UK to the US at excellent prices even after shipping costs. City is another big theme where the variance is positive for those two regions as well.
How about the best (I guess best depends on which country you are in), or highest and lowest individual sets? Starting with the lowest:
The lowest i.e. the set with the lowest prices in other regions compared to the US goes to the 7553 City 2011 Advent Calendar which is an average 35.2% lower than the US retail price. In fact the top (bottom?) three spots are taken up by advent calendars with the 9509 SW one and the 2012 City one coming in next. The 42007 Moto-cross Bike comes in next with -20.4% difference, certainly one to look out for perhaps if another sale comes up.
The highest i.e. the set with the highest prices in other regions compared to the US is the 6873 Spider-Man's Doc Ock Ambush set with an eye-watering 58.9% average premium in the other regions compared to the US. 6867 Loki's Cosmic Cube Escape with 57.2% and 6866 Wolverine's Chopper Showdown with 57.2% as well. So if you live outside the US and are shopping for those Super Heroes sets it look like it could be a good option to import them from the US. All dependent on what sort of retailer discounts are on and shipping/customs costs of course.
Currency exchange rates do fluctuate and these can have quite a bearing on the differences between the regional prices. For example the AUD was trading at above $US1 for quite a while earlier this year before dropping 10% in value recently. This is probably one of the main reasons that Lego prices things differently due to what currency rates they have locked in long term through hedging mechanisms etc. Because of these changes I may look to update this info perhaps quarterly or 6 monthly.
The overall differences between the regions after sales tax removal have been less than I had envisaged. Though the swings between different themes and individual sets with them have been wider than I thought. It would seem Lego likes to price things not only on currency but what the market may bear. I’ll leave the possible reasons for another discussion or feel free to post your thoughts in the comments below.