I am a numbers guy, and I thought I would share some numbers for thought. Not
really looking for a big discussion as these are some numbers based on my own
observations & calculations that I find interesting. If you want to skip the
math section and get to the real bones of this post, scroll down to the paragraph
that begins with Now.
In the last six months, I only have two orders that I can pull up to see the
full details. One was a $37.89 sale where the fee was $0.81. The other was a
$17.84 order where the fee was $0.30.
We will get back to those numbers in a bit but first we need to look at the number
of orders that have taken place. One of my sales was on July 9th it had an order
number near 28,805,700. Looking at the last order I placed, it was on September
21st it had an order number near 29,420,700. Subtracting the July number from
the September one we arrive at 615,000 orders placed during roughly the last
two and a half months. As the summer is the slowest time of the year, the number
of orders would be higher for the winter months I am sure, but for now we will
just use this number.
Let’s start with the order with the lower fee. Multiplying the number of orders
by the lower fee ( 615,000 X $0.30 ), we arrive at $184,500.00 for the period.
If we adjust the period to three months and multiply that by four quarters for
the year ( $184.500.00 X 4 ) we get $738,000.00 for the year. While not setting
the woods ablaze in the corporate forest, it is not chump change either. The
$0.30 fee is from a $17.84 order, which for me would be at the extreme low end
for the orders I place. Most of my orders are between the $30.00 to $60.00 range.
So now we will recalculate using the order with the higher fee. Taking the number
of orders and multiplying the higher fee ( 615,000 X $0.81 ), that gives us
$498,150.00 for the two-and-a-half-month period. If we bump the period out to
three months and multiply by four quarters for the year, that figure goes to
$1,992,600.00 for the year. This is a more significant figure, but I think the
yearly figure for revenue based on fees is higher and I’ll explain my thinking.
Over the first six months of this year, I had sixteen orders placed in my store
that generated $29.00 in Bricklink fees. Eight of those had fees over $1.00,
five of them had fees of over $2.00 dollars, three were over $3.00, and broke
the bank with a fee over $7.00. You may wonder why some of the orders have such
high fees and that is because 99% of my sales are used but complete Bionicle
sets, mainly the larger ones. Using my own experienced data, taking the Bricklink
fees and dividing by the number of orders ( $29.00 / 16 orders ) we get an average
Bricklink fee of $1.81 per order. This number may be a little high for the average
parts selling store so we will put it aside for the moment and use a lower figure.
Using the number of orders and multiplying by a Bricklink fee of $1.25 ( 615,000
X $1.25) we get $768,750.00 for the two and half month period. Extending the
period to three months and multiplying by 4 quarters gives us $3,075,000.00 for
the year. To me this figure is probably the closest to the actual amount Bricklink
receives in fees each year, but I have expensive and limited number of sales
to base my calculations on. Unless Bricklink is willing to share the amount of
income received from the fees charged we can only guess what that yearly revenue
number is until we have more information to play with.
Before I end my fun with numbers, let’s calculate as in the previous three examples
but with my average sale fee for the last six months. Multiply the number of
orders by my average sales fee ( 615,000 X $1.81 ), we arrive at $1,113,150.00
for the two-and-a-half-month period. Again, extending the period to three months
and multiplying by 4 quarters we get $4,452,600.00 for the year. As you can see
from the last two examples, increasing the Bricklink fees by around $0.50 each
time, the revenue generated by Bricklink fees increases drastically.
Now that I have your head full of numbers and arithmetic, I’ll get to
the main point I want to make. One would think that with the revenue generated
by Bricklink, that the Lego Corporation would be more amenable to the wants and
needs of the users of Bricklink, instead of ramming unnecessary & unrequested
changes down our throats. Personally, I think it very short-sighted of a business
to neglect the core group of people that got you where you are and instead go
chasing a group of consumers that have proven to have a short attention span
and are only going to stay a short while (Think of the number of stores that
have opened and closed over the last few years). Lego is riding high on popularity
for now but soon enough that could change. All one must do is look at how far
NASCAR’s (excuse me I am from the South) fan base and popularity have fallen
off over the last few years. In a nutshell for those not familiar with NASCAR,
years ago stock car racing was mostly a Southern sport with a huge fan base.
With greed in their eyes the powers at NASCAR started moving race dates away
from the traditional tracks to new tracks not in the South. For a while this
was great! New fans were made! NASCAR’s pockets got fatter! But the downside
was just around the corner, those new fans weren’t the die-hard fans of old,
and they quickly lost interest and moved on. All one must do is look at the empty
number of seats in the grandstands at any recent NASCAR event to see downturn
in fan base. I will show my age by mentioning another example of a company thinking
that they didn’t need to consult their fan base before making changes to their
product. Many of you younger users won’t remember the 1985 NEW COKE debacle!
The Coca Cola Company, due to a dwindling market share (The Pepsi Company had
it going on in the 1980’s, their advertising was top shelf.) decided to change
their original flavor to a sweeter one to better compete with the Pepsi Company
without asking their consumers. The backlash was catastrophic, sales plummeted,
complaints were off the charts, it only took the Coca-Cola Company 77 days to
realize their mistake and bring back the original flavor as Coca-Cola-Classic.
(Wouldn’t it be nice if Lego did something similar and went back to per-integration
Bricklink?)
I share these two examples of not consulting your consumers/believing you know
what they want without asking type of business thinking to ask the question;
What is the downside of listening to your users/consumers and giving
them the product or service they want and deserve?
I apologize for the length of this post! It's the prednisone plus coffee!
LOL!
Howard
Login integration is not about attracting new members, but having a single login
across all LEGO owned sites presumably as it is easier to ensure security and
data compliance for one system than it is for multiple. It does also appear to
help cut down spam on the forum and presumably it will also help prevent scams.
Login integration is not about attracting new members, but having a single login
across all LEGO owned sites presumably as it is easier to ensure security and
data compliance for one system than it is for multiple. It does also appear to
help cut down spam on the forum and presumably it will also help prevent scams.
I am sorry but it is about attracting more buyers. Lego account integration was
just another way for Lego to drive prospective new parts buyers from Bricklink
to the Lego main site. Otherwise why would you need a Lego site membership to
be a member of Bricklink.
Site security could have been handled with the simple addition of multi-factor
authentication solely through the Bricklink site. I mean if it is good enough
for sites like PayPal, Amazon, and the Lego site before this merge mess, it must
be pretty good.
Spam on the forum and from member to member could have been blocked by simply
strengthening the account registration process. All you need to create an account
at Bricklink is a valid email address. It is harder to register as a seller due
to the hoops one must go through. But most of the posts in forum for products
that shouldn't be mentioned there, were from 0 feedback buyers that recently
registered. The few that weren't were from hacked dormant accounts that should
have been purged anyway or by people creating multiple accounts and posting
fake feedback between those accounts.
While I'm talking security issues, lets talk child safety just a bit. If
you want to keep children safe, you keep them out of situations where they can
be exposed to danger. This is true in both the physical world and in the online
environment. I suggest a Bricklink Jr. site or registration where they could
view the data, for the sets, inventories, price guide, & change history but would
be restricted from placing orders, posting in the forum, viewing the forum, or
directly contact other users.
Looks like it's past my bedtime! G'night all!
Howard
Login integration is not about attracting new members, but having a single login
across all LEGO owned sites presumably as it is easier to ensure security and
data compliance for one system than it is for multiple. It does also appear to
help cut down spam on the forum and presumably it will also help prevent scams.
I am sorry but it is about attracting more buyers. Lego account integration was
just another way for Lego to drive prospective new parts buyers from Bricklink
to the Lego main site. Otherwise why would you need a Lego site membership to
be a member of Bricklink.
Because they want a single login site for all their websites and apps, so that
they only have to manage one.
I really doubt that they are trying to kill off bricklink sellers' sales
by driving customers away from BL and to their own parts service.
One would think that with the revenue generated
by Bricklink, that the Lego Corporation would be more amenable to the wants and
needs of the users of Bricklink,
The Lego Group had revenue in 2024 of $10.8 Billion and net profit of over $2
Billion. That is $30 million in revenue and $5.5 million in profit per day.
I would think Lego Group see BrickLink as a Fan/Community advertising expense,
probably just covering the costs to operate with fees.
I am a numbers guy, and I thought I would share some numbers for thought. Not
really looking for a big discussion as these are some numbers based on my own
observations & calculations that I find interesting. If you want to skip the
math section and get to the real bones of this post, scroll down to the paragraph
that begins with Now.
....
I apologize for the length of this post! It's the prednisone plus coffee!
LOL!
Howard
Being a numbers guy, you should realize Lego talks in numbers significantly larger
than most. To them a few thousand dollars is pocket change.
I know this 1st hand from another major international company. I worked in a
part of the organization with $100 million a year in sales. We came back from
the end of the year holidays to find out our org was being shutdown to free up
headcount for another major product under development. That other project had
1st year sales $500million and has netted the company billions of dollars every
year since.
Large companies think differently, often it is about revenue per employee. Sacrificing
50 people and $100 million then replacing them with 200 people and billions was
the right choice. If they didn't sacrifice the 50, they never would have
gotten the other product out the door.
Our leverage is not in the revenue Bricklink provides; it is in the marketing
and customer satisfaction area. Many of us have kids/grandkids and influence
over purchases. In essence Bricklink is outreach and marketing for where the
real money is made for Lego. Bricklink could lose money as long as the loses
are less than equivelant marketing and outreach would cost.
What Lego can't do, is allow Bricklink to tarnish their reputation. The pain
we're going through now is nothing compared to what would happen if Lego
did not get a handle on the negative activities that have been increasing in
frequency. That means the safeguards Lego has on all of its other online entities
needed to be applied to Bricklink.
For those who want to say 2nd factor authentication, or any number of other 'simple'
solutions could have solved the problem they didn't need to merge accounts.
For Lego, it would be 2nd technical stack with limited support resources. The
loss of a single employee with critical knowledge could take months to recover
from. Adopting the same technical stack as Lego means there is a larger pool
of knowledge and more resources available.
Which also comes back to the 1st point, making Bricklink more economical to run
lowers the cost of ownership this making it easier for Lego to justify the expenses
of keeping Bricklink alive, it's the best bang for the buck.
USA, South Carolina
United Kingdom, England
France, Nouvelle-Aquitaine