I have heard that LEGO have (or had) a programme called LUGBULK whereby clubs can purchase bulk lots of LEGO components direct fom LEGO.
Is that true? If so, is it economical and how can I get involved?
The Brick Blogger describes in detail how the LUGBULKS system works.
I recommend visiting the original article for more infomation. In particular which LUG (LEGO user groups) are qualified to use LUGBULK.
Yes, it does exist and it is indeed a logistical nightmare, but at least it does exist.
From what I understand from the participation from the LUG I'm a member of, all participants must provide their data to LEGO and must agree not to resell parts they buy.
The participants don't buy things on their own; rather, the club is responsible to select elements it wants to buy and quantities. There are limits, but I don't know for sure which ones (I think max 80 different elements per order), so the club must find a way to make sure all its members get something they want.
The way my club chose to do it is to select some elements which are likely to please a lot of people (basic dark red bricks, for example), then they buy them with their own account and resell them to members.
The prices are somewhat cheaper than if you would call LEGO yourself (which works in certain countries, by the way) or if you used the online pick-a-brick, but I can't say by how much. And since the club as a whole is involved, it's sometimes frustrating for individuals.
As how to get involved, you will need to be a known club, in which case you're likely to already have contacts with LEGO, so use these to ask how the lugbulk works.
If you're a new club which is yet unknown from LEGO, by all means, try to make yourself known, this can bring many advantages other than the lugbulk.
LUGBULK does allow members to buy things at a reduced cost that is determined by LEGO's production pricing.
I know our LUG allows each member to pick a certain number of elements that we want and then vote on the remainder. That way, everyone is guaranteed a certain amount pieces they want. Plus we can choose from the rest of the line-up also.
But of course, you have to be a member of a LUG, hence the name LUGBULK. I'd recommend contacting your local LEGO store to see if they know any members of your local LUG (if there is one). Otherwise, you can always start your own. You do need a certain minimum of members to be able to order LUGBULK and there are monetary requirements to meet also.