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Contact Us - Customer Service - LEGO.com US

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LEGO System A/S, DK-7190 Billund, Denmark. Must be 18 years or older to purchase online. LEGO and the LEGO logo are trademarks of the LEGO Group. ©2024 The LEGO Group. All rights reserved. Use of this site signifies your agreement to the terms of use.

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After you learn the deal behind the economics of LEGO production, be sure to check out the current best LEGO sales.

LEGO sets are, of course, known for their high quality and durability. But how much does it actually cost to produce a LEGO set? And what kind of margins does LEGO make on its products?

The Production Process

First up, it's important to understand how LEGO bricks are made since the production process itself represents a significant portion of the actual cost. If you're a LEGO fan, you probably already know that the bricks are produced using injection molding. In simple terms, injection molding is a manufacturing process that uses heat and pressure to force molten plastic into a mold. The mold is made of two parts, the top and the bottom, which are held together by screws. The molten plastic is injected into the mold through a small hole, and the pressure forces the plastic to fill the mold cavity. Once the plastic has cooled and hardened, the mold is opened and the part is ejected.

Here's a great video from LEGO themselves that walks through the actual production process.

While the cost of producing a LEGO set varies depending on the complexity of the set and the number of pieces it contains, the most significant portion is the cost of injection molding the plastic bricks. The process can become very expensive, but it is also very precise, which is why it is ideal for producing LEGO bricks. It's easy to look at a LEGO brick and wonder how this little piece of plastic could cost so much, but the material itself is only part of the production cost.

Before you can actually produce anything using injection molding, you first need the mold itself. Molds can cost hundreds of thousands of dollars and they wear down over time, requiring a costly replacement every so often. At scale, this gets very expensive. If we taken into account the material, labor, and MRO costs of production, each brick costs roughly 2 to 3 cents to make.

Additional Costs

In addition to the cost of manufacturing, there are other costs that must be accounted for. We have to consider every part of the LEGO supply chain - things like:

Still, though, the cost of injection molding the bricks themselves represents the single biggest cost.

Profit

Before we get down to the numbers, let's take a brief detour into the world of corporate accounting. When a company talks about profit, it generates that number by taking the total amount it spends to do business and subtracting it from the total amount of money it received. This is referred to as margin.

There are two types of margin that you'll see cited:

Gross Margin (sometimes called operating margin) includes all of the company's operating costs, such as the cost of salaries, marketing, and research and development. These amounts are subtracted from the money made selling the goods, resulting in the gross margin.

Net Margin, on the other hand, only includes the company's profits after it has paid all of its operating costs and taxes. This is, at the end of the day, the actual money made.

So how much profit does LEGO make on its products? According to a 2022 report by Statista, the LEGO Group's net profit margin was 24.0% in 2021. This means that for every $100 in revenue that LEGO generates, it keeps $24 in profit. If we look only at gross margins, LEGO ran a gross margin of 69.6% in 2021.

It's important to keep in mind that this profit margin varies depending on the specific product. For example, LEGO sets with a lot of expensive licensed characters, such as LEGO Star Wars or LEGO Harry Potter, tend to have lower profit margins than more generic sets. However, the 24.0% average net profit margin across all sets is still very impressive, and it shows that LEGO is a very profitable company.

So there you have it, a brief overview of the economics of LEGO production. As you can see, the cost of injection molding is a major factor in the cost of producing a LEGO set. However, LEGO is able to maintain high profit margins by selling its products at a premium. That's why we exist - to provide a simple, clean, easy to use LEGO price checker that allows you to get the best deals on your favorite LEGO sets.

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After you learn the deal behind the economics of LEGO production, be sure to check out the current best LEGO sales. LEGO sets are, of course, known for their high quality and durability. But how much does it actually cost to produce a LEGO set?

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Legos used to be simple child's toys that could unlock their imagination.

The interconnecting blocks allowed children to make all sorts of different creatures and structures.

While children still play with Legos, a lot of adults continue to collect Legos as well.

These days, you can even find whole Lego sets that end up costing a lot of money.

Why Are Legos So Expensive? (10 Reasons)

The average price of a single Lego brick is around 11 cents.

That means you can find Lego sets going for around $20 to $50.

However, you can also find more expensive sets going for $200 to even $1,000.

Certain factors like its resale value, licensing partnerships, and collectibility make Legos expensive.

Let's look at these factors in more detail.

1. Popularity

There's no question that Legos are popular.

From their emergence into the children's toy industry to today, Legos have been a staple of fun and imaginative children's toys.

There have always been toys similar to Legos.

Various toys came with parts that you could put together.

The Lego Group took those ideas and made them better.

They introduced different-sized and shaped bricks.

All the bricks could connect snugly to form whatever structure or creature the child wanted to make.

They could also then be easily disassembled to start all over again.

Legos provide endless hours of imaginative fun.

Because of that, they've always been popular.

As the first children who grew up with Legos also became older, they continued to play with Legos.

Instead of putting the pieces together to create whatever was in their imaginations, they started putting them together to make art instead.

Lego encouraged the new use of their sets by making more sets for this particular purpose.

Its architecture sets, for example, were geared more towards adults than children.

As such, the company has kept its hold on both children and adults with its products.

This makes Legos expensive because it means there's usually a lot of demand for their sets.

You have children and adults both trying to get sets.

Since the demand is high and there are only so many sets on the store's shelf, the price can get quite high.

2. Durable

Another reason Legos make great children's toys is the fact that they're durable.

A lot of problems with children's toys is that they're not made to last.

Children don't develop the concept of gentle play until later in their development.

As such, when they get their hands on new toys, it's not uncommon for those toys to break.

Legos presented an extremely durable product.

Anyone who has stepped on a Lego before knows just how durable they are.

This durability makes Legos expensive for a few reasons.

The first is that it means the Lego Group uses high-quality materials to make its products.

In particular, Lego uses ABS plastic to make the bulk of its plastic.

ABS plastic is extremely thick and durable.

Since Lego uses ABS plastic throughout its bricks and pieces, it tends to spend a good amount of money.

Those costs then become offset by higher prices on its products.

Durability also means that parents need to buy fewer versions of the same sets.

They're likely going to last no matter how hard the child plays with them.

As such, Lego knows a lot of parents aren't going to be buying the same set twice.

Since they can't count on repeat purchases, they have to get as much money as they can from the initial purchase.

That means putting a higher price on the product.

3. Research And Development

The Lego Group spends a lot of money investing in its research and development department.

While it may not seem like Lego has any competitors, that's only because the company has done a great job of continuing to release new sets that people want.

If they started releasing sets that people didn't care about, their customers might turn to their competitors instead.

The continued use of high-quality materials also matters.

Lego continues to investigate different materials that are better and safer to use.

Without investing in its research and development department, there's a good chance that the company wouldn't have been as successful as it is today.

When it comes to toys, if you want to have a successful business, then you need to figure out how to grow your product line.

Children become bored easily.

If you're able to keep providing them with new toys that fit your brand, then you're going to keep your customers.

In particular, the Lego Company's research and development department looks into new sets that they think their customers might want.

They're responsible for introducing the architectural sets.

Those releases arguably opened the door to collecting Legos as an adult.

They also regularly keep an eye on emerging licenses that they can partner with to make Lego sets.

For example, if there's some big cartoon, movie, or TV series that's a hit with audiences, they're going to want to get in on the Lego action.

The department is also responsible for looking for new ways to bring Legos to new audiences.

That might be in the form of making new video games, TV shows, or movies, themselves.

Because Lego invests a good amount of money in its research and development department, they need to ensure that they have enough money to do so.

That means having high prices on their products.

Legos are expensive because of the funds they need to invest in their research and development department to stay on top.

4. Sustainability

Because it uses ABS plastic to make its Lego bricks, the Lego Company is aware that it needs to change.

ABS plastic is not the cleanest type of plastic out there.

With more and more businesses looking to reduce their carbon emissions, Lego also knows it needs to do its part.

Not only are governments starting to push corporations into becoming more carbon neutral, but their customers expect them of it, too.

Climate change is becoming more noticeable, and customers around the world are doing what they can to push larger businesses into being more sustainable.

Lego has quite a few missions that it's following to reduce its carbon emissions and become more sustainable.

One of those is by launching Lego Replay.

This program encourages parents to collect their children's old toys and donate them.

Children who may not be able to afford Lego sets can then get their hands on them.

This helps make Lego more sustainable because it means they have to produce fewer sets to meet demand.

It also means there are fewer Lego sets in landfills.

Some parents simply throw out their children's Lego toys when they're older.

Since they're made out of ABS plastic, those Legos are just sitting in landfills.

By donating them, parents can prevent that from happening.

Lego is also looking at making its bricks from cleaner types of materials.

Their goal is to make entire sets from sustainable materials by 2023.

That also means they're looking at making their packaging sustainable as well.

All these changes mean that Lego has to spend more money.

The sustainable materials they want to use might cost more than their usual materials.

As a result, they end up with more operational costs.

To cover those, they need to place higher prices on their products.

5. Licenses

One of the things Lego is best known for is its licensed partnerships.

It's hard to think of Lego and separate it from its incredible Star Wars and Harry Potter sets.

Through its licensed partnerships, Lego has been able to release some incredible builds.

Its Death Star set alone featured several thousand brick pieces, although it has since been retired from production.

You can find the same sort of incredible builds with all of its licensed partnerships.

Lego has partnered with Disney, DC, Jurassic Park, Minecraft, and even Stranger Things.

Those sorts of partnerships don't come cheap either.

They have to purchase a license to use both the logos and likeliness of certain characters, buildings, and objects.

It's a sizable investment that does carry some risk.

After all, if no one wants to buy certain sets, then Lego likely wasted a good amount of money on the license.

Licenses are ideal for Lego, however, since it gives them new ideas.

They can create sets featuring vehicles and iconic settings in the licensed property's world.

They have Hogsmeade and Hogwarts from Harry Potter, for example.

You can build Avengers Tower from its Marvel collection.

There's no shortage of different spaceships you can build from Star Wars.

Fans of those particular properties may want to buy those sets.

Since they appeal to children and adults, both want to get their hands on them.

It becomes a great way for both Lego and the licenser to earn some money.

Lego is expensive because of the cost it takes on with its licensing partnerships.

6. Number Of Pieces

A Lego set that has a handful of pieces is going to have a substantially different price from a Lego set that has several thousand.

Lego sets that only contain a few pieces tend to be on the cheaper side.

You can usually find them for $20 or $50.

When you start getting into the more advanced sets, however, that's when you'll see the price of Legos become very expensive.

Pieces that use hundreds or thousands of bricks to make the building or item or scene cost several hundred dollars.

Some even cost thousands of dollars.

There are a few reasons for these prices.

The first is just basic manufacturing costs.

Since a set has more bricks in it, it's going to cost more money to make.

Since it costs Lego more money to make it, they're going to offset those costs with higher prices.

Another factor is the perceived prestige of the set.

Large sets tend to target adults and older children rather than young children.

The assumption is that adults in particular have more money to spend on larger sets.

They're doing it more as a hobby than as a desire to play with Lego toys.

Since adults are more likely to buy larger sets, Lego can get away with charging higher prices for them.

7. Collector's Sets

While some Legos are primarily for children to use and make whatever they want, others are clearly made for collectors.

One of the best examples is the architectural series of Legos.

Each one features an iconic location in the world.

Collectors can put them together and build an aesthetically pleasing Lego creation.

Other collections tend to be those that had a limited release.

Like other companies, Lego is no stranger to making certain sets that have a limited release.

When they stop the production of those particular sets, only those who got their hands on them initially can sell them from there.

It adds a lot of value to the set because they're rare.

Collectors want to get their hands on them to add to their collections.

Whenever something has some sort of collectible value to it, the price tends to be pretty expensive.

That's because the company knows that other people are likely going to make money off their hard work.

They might even make more money than the company did on the set.

As such, they put a high price on certain sets to get their cut of the cake, too.

8. Resale Value

Legos also have a high resale value.

Even outside of certain sets that are collectible, Legos themselves hold their value.

Part of the reason is that they're so durable.

Because they don't break, you can find some of the original Lego bricks still in circulation to this day.

Others who are collectors may be looking for a particular character or item to complete their set.

People who have that character or item know that it's in high demand.

They're then able to sell it at a high price.

That's why it's often cheaper to buy Legos from the actual company initially.

If you try to buy it on the secondary market later, then you're probably going to need to pay even more for it.

9. Great Toy For Children

There's a lot of demand for Legos because of how great a toy they are for children.

Legos provide many benefits to young children.

For one, it helps them develop their motor skills.

They work on picking up pieces and putting them together.

It also helps them develop their problem-solving skills.

They learn what pieces fit together and what ones don't.

It also encourages imagination.

Imagination and creativity can give them an edge later in life.

Because they're ideal toys for children, it means there's a lot of demand for them.

With so many parents trying to get their hands on the same sets, a shortage is inevitable.

Whenever a shortage occurs, the price of the item becomes expensive.

10. Marketing Costs

A final reason Legos are expensive is that the company spends a good deal of money on marketing.

Whether it's the holiday season or not, you can expect a lot of commercials from Lego.

That's because the company knows that if it wants to continue to be one of the leading makers of children's toys, then it needs to show why it's a great choice.

As more and more children are introduced to technology at a young age, the old tactile toys are seeing less use.

Lego and similar toy companies have to do even more marketing to show why they're so much fun.

That means they add more operational costs to their business.

That then requires them to increase the prices of their toys to offset those costs.

NEXT: Does McDonald's Have Breakfast All Day? (2023 Updated)

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Why Are Legos So Expensive? (Top 10 Reasons)

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You may be wondering, why are legos so expensive? We give you the reasons and so much more in our complete guide.

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Why Is LEGO So Expensive? (And Is It Worth It?)

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LEGO sets are wonderful gifts that can teach valuable skills like creativity, engineering, and coding to kids (and adults!) of all ages. But these learning

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high-quality LEGOS

durable LEGOS

add more different kinds of LEGOS

popularity increase

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low quality

less LEGO productions

won't last long

popularity decreases

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additional costs

packaging

shipping

marketing

research and development

administration

LEGO Group's net profit margin was 24% in 2021 (every 100 they make they keep 24 dollars in profit)

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Popularity

provides endless hours of imaginative fun

easily disassembled to start all over again

lot of demand for their sets

Durable

made to last

high quality materials to make LEGOS

ASB plastic (extremely thick and durable)

Research and Development

spends a lot of money investing in its research and development

investigate different materials that are better and safer to use

responsible for introducing the architectural sets

Sustainability

making its bricks from cleaner types of materials

sustainable materials cost more

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Variety

Collectability

Licensing Deals

Longevity

LEGO brick was from 50 years ago

Name Recognition

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Should Legos keep their pricing for Lego sets?

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Should Legos keep their pricing for Lego sets?

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After examining the issues surround LEGO set pricing, it is clear that they should not change the pricing. One reason to support this position is because a lot of hard work and money goes to making the LEGO sets. Source 1 explains how LEGO has other additional costs besides making the Legos and designing them. This research clearly suggest that LEGO has to spend a lot of money on other things like packaging, shipping, marketing, research, and etc. However opponents may claim that not everyone can afford to buy the sets, but have they considered that there are other LEGO building blocks for cheaper pricing. For these reasons, it is evident that LEGOs should just keep the pricing for the sets.