Answers.Body: <p>The <a href="http://aboutus.lego.com/en-us/lego-group/annual-report" rel="nofollow noreferrer">2012 annual report</a> on the LEGO Groups site states the following:</p>
  
  <blockquote>
    <p><strong>Research and development activities</strong> 
    Each year, new launchings account for approximately 60% of the LEGO Group’s sales to consumers. Therefore, the Group has considerable development activities, comprising anything from trend spotting and anthropological studies to the actual development of specific products and campaigns. Approximately 160 designers from about 20 different countries make up the creative core of product development that is mainly based at company headquarters in Billund, Denmark.</p>
  </blockquote>
  
  <p>It's hard to quantise exactly how much of each set goes into the various different aspects you're asking about as different sets will have different margins on them. Taking some of the numbers in the report however, you can see things like:</p>
  
  <p>On Revenue of 23,000mDKK:</p>
  
  <ul>
  <li>6,800m was spent on "production costs" (about 30%) - these are defined as "raw materials, consumables, direct labour costs and indirect production costs such as maintenance and depreciation, etc.". These are further broken down to include:
  
  <ul>
  <li><strong>4,400m on Raw materials and consumables</strong></li>
  <li>1,500m on Licence and Royalty expenses</li>
  </ul></li>
  <li>1,200m was spent on "other operating costs" (about 5%) - these are defined as "[including] royalty and research and development costs". This is further broken down to include:
  
  <ul>
  <li><strong>451m on Research and Development</strong></li>
  </ul></li>
  <li>6,100m was spent on "Sales and distribution expenses" (about 27%) - these are defined as "costs in the form of salaries to sales and distribution staff, advertising and marketing expenses as well as depreciation, etc."</li>
  </ul>
  
  <p>In terms of where parts are made, <a href="https://bricks.stackexchange.com/q/217/56">this answer</a> covers most of it, but as you rightly note, <a href="https://bricks.stackexchange.com/a/162/56">Minifigs, and some painted parts now come from China</a>. In terms of R&amp;D, <a href="https://bricks.stackexchange.com/q/1379/56">this answer</a> talks about how new pieces could come about.</p>
  
  <p><strong>Updated:</strong> Some of the actual break-downs in here come from the "2012" columns in the 2013 report.</p>
  
Answers.ContentLicense: CC BY-SA 3.0
Answers.CreationDate: 2014-02-20T13:32:11.803Z
Answers.Text: So it's about 30% on production/manufacturing cost, more than I've thought. I've also heard that paper box often costs 10% of set price, and ABS plastic is cheap so it's surprisingly that box might cost more than bricks inside it :). Thank you.
Answers.UserDisplayName: Tien Do
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Answers.CreationDate: 2015-02-16T10:35:50.107Z
Answers.Text: Not 23m DKK but 23,095m DKK, which is a thousand fold more! In USD, that would be $3.5 billion.
  And from 2013 report, the revenue was 25,382m or $3.9 billion.
Answers.UserDisplayName: Ron1
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Answers.CreationDate: 2015-02-16T14:14:15.003Z
Answers.Text: Good catch @Ron1 - I've updated the figures - however the percentages haven't really changed.
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Body: <p>What percentage of a LEGO set's price goes toward research, design, manufacturing, marketing etc.</p>
  
  <p>It's just my curiosity since all my minifigures (from Series 3) are made in China and I don't know if LEGO has factories in China or they just outsources it to other Chinese manufacturers.</p>
  
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2014-02-20T12:40:29.357Z
Comments.Text: @jncraton: Thanks so much for correcting grammar errors :)
Comments.UserDisplayName: Tien Do
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Comments.CreationDate: 2014-02-20T13:13:54.333Z
Comments.Text: It's no problem. :)
Comments.UserDisplayName: jncraton
Tags: <manufacturing><lego-group>
Title: Cost of different works in a LEGO set price?
UserDisplayName: Tien Do
ThreadText: # Cost of different works in a LEGO set price?
  
  (Asked by: username_0 on 2014-02-19)
  
  What percentage of a LEGO set's price goes toward research, design, manufacturing, marketing etc.
  
  It's just my curiosity since all my minifigures (from Series 3) are made in China and I don't know if LEGO has factories in China or they just outsources it to other Chinese manufacturers.
  
  **Tags:** manufacturing, lego-group
  > **Comments:**
  > **username_0**: @jncraton: Thanks so much for correcting grammar errors :)  
  > **username_1**: It's no problem. :)  
  
  ---
  
  ## 1 answers
  
  ### Answer by username_2 on 2014-02-19. Score: 7 | Accepted answer
  
  The [2012 annual report](http://aboutus.lego.com/en-us/lego-group/annual-report) on the LEGO Groups site states the following:
  
  > **Research and development activities**
  > Each year, new launchings account for approximately 60% of the LEGO Group’s sales to consumers. Therefore, the Group has considerable development activities, comprising anything from trend spotting and anthropological studies to the actual development of specific products and campaigns. Approximately 160 designers from about 20 different countries make up the creative core of product development that is mainly based at company headquarters in Billund, Denmark.
  
  It's hard to quantise exactly how much of each set goes into the various different aspects you're asking about as different sets will have different margins on them. Taking some of the numbers in the report however, you can see things like:
  
  On Revenue of 23,000mDKK:
  
  * 6,800m was spent on "production costs" (about 30%) - these are defined as "raw materials, consumables, direct labour costs and indirect production costs such as maintenance and depreciation, etc.". These are further broken down to include:
    + **4,400m on Raw materials and consumables**
    + 1,500m on Licence and Royalty expenses
  * 1,200m was spent on "other operating costs" (about 5%) - these are defined as "[including] royalty and research and development costs". This is further broken down to include:
    + **451m on Research and Development**
  * 6,100m was spent on "Sales and distribution expenses" (about 27%) - these are defined as "costs in the form of salaries to sales and distribution staff, advertising and marketing expenses as well as depreciation, etc."
  
  In terms of where parts are made, [this answer](https://bricks.stackexchange.com/q/217/56) covers most of it, but as you rightly note, [Minifigs, and some painted parts now come from China](https://bricks.stackexchange.com/a/162/56). In terms of R&D, [this answer](https://bricks.stackexchange.com/q/1379/56) talks about how new pieces could come about.
  
  **Updated:** Some of the actual break-downs in here come from the "2012" columns in the 2013 report.
  
  > **Comments:**
  > **username_0**: So it's about 30% on production/manufacturing cost, more than I've thought. I've also heard that paper box often costs 10% of set price, and ABS plastic is cheap so it's surprisingly that box might cost more than bricks inside it :). Thank you.  
  > **username_3**: Not 23m DKK but 23,095m DKK, which is a thousand fold more! In USD, that would be $3.5 billion. And from 2013 report, the revenue was 25,382m or $3.9 billion.  
  > **username_2**: Good catch @Ron1 - I've updated the figures - however the percentages haven't really changed.  
  
  ---
  
  