In 2003, the toy maker LEGO looked like it was on its last legs. It was running at a loss and there was speculation it would be bought out by a rival company. That didn’t happen though and it was thanks to a man named Jorgen Vig Knudstorp, who was brought in to rescue the firm. He managed to do just that.
He made this a profitable company once more and in the years since, LEGO has grown into something incredible, as these stats on the current state of the company and its product show.
Every minute, around 117,000 LEGO pieces are made. This amounts to over 50 billion pieces a year. These pieces go into regular kits and into special edition kits, all of which can retail anywhere from $5 to $10, right up to hundreds of dollars. Some of these are so collectible that they retain their value and even grow in value for many years. That’s why many recommend LEGO as an alternative to stock investing.
In other words, they may just be little plastic blocks, but as an investment they have performed better than precious metals like gold and silver in the last couple decades. Of course, you could say the same about comic books and first edition novels, but the beauty of LEGO is that the investment worthy versions are a little easier to spot and their value grows at a more reliable rate.
More than 600 billion of these bricks are said to have been created, which is enough for more than 100 bricks for every person on earth.
LEGO is a very unique product in many ways. One of these is the fact that it costs very little to produce, which means there is a sizable profit margin on everything they sell. The products get a big mark-up because they are limited editions and/or collectible, but there is still plenty of room for profit with everyone earning a piece of the pie.
The manufacturers, the big retail stores, the independent stores and even the affiliates of the affiliates, such as sites like LegoWays, which earn a slice of the retail pie, can all profit from it. And because the product is so loved and has so much respect, the customer doesn’t feel like they are overpaying.
The manufacturer’s margin is said to be 24%. That might not sound like a lot, but for a manufacturer making the product and selling direct to distributors, it is huge.
Bigger Than Michelin
Here’s a killer pub quiz question for you, who is the world’s biggest manufacturer of tires? If you were asked that in your local pub quiz you might opt for Michelin or Goodyear. But LEGO actually make more tires than both of them. Of course, we’re talking about small toy tires and not the real deal, but with a production of more than 300 million a year, they eclipse any other manufacturer of tires.
More than 60% of LEGO sales occur during the Christmas holidays. In other words, despite being a toy that is a popular birthday present, a toy for which adult and children’s competitions are held and a toy that sells big during releases of film and TV tie-ins, it is still heavily reliant on the holiday season to keep those sales high.
Mind Boggling Creations
One of the things that makes LEGO so unique is that they can be used any number of ways and for any number of creations. You are only limited by your imagination, literally. Because if you have just 6 classic LEGO bricks then they can be arranged over 900 million different ways! And that’s before you even consider the special edition bricks, the tires and everything else that makes up this great brand.