Predictions on Discontinuing Sets and their Secondary Market Value

Dad

doriansdad said:

@staffmark my goal is to simply double my money after fees and shipping. Haven't had an issue doing that for the past 4 years, but I never pay retail prices either. $300 for FB is asking too much. I haven't had an issue buying them this year for $100 with the good amount of sales we have seen and cashback opportunities / promo figs to sell etc....$220 Buy It Now looks good to me and my investment. As long as this gig nets 25% and over I am a happy camper....below that it is time to keep it just a hobby and let my $$$ move into another market.

As i've said before, the profit comes from the buying price, not the selling price. In the UK we had 4842 at £50, 2509 at £12, 2507 at £25, 8095 at £25 and 8038 at I think £36. Timing is crucial but if you can't make enough profit on them then you need to give up. You have got to have the guts to go in heavy when you think it is right. But just for the record i am sat on DS's MMV's and FB's. Oh well!!

Pitfall69

I guess if you are out of work or have all the time in the world, making only a $30-50 dollar profit after fees and shipping is fine.

Billybrown

I managed to get IS's for between £160 to £170 so shouldnt be a problem doubling my money EOL in 12 Months IMO. If Id bought at retail then Id struggle to get what I want. Lego UK sales stated today that they had 58 left so they wont last long.

wilbur

I am a small time reseller (<$10,000 total investment). I have wanted to invest for a long time, but things are so volatile. One year the stock market does 15% annual roi, the next year it's -15%... I love that I have found a way to turn my favorite toy of all time into an investment strategy! Even if I make 20% roi on a set, (buying a fb at 150 and selling it at 200 a year later would be about 20% roi after shipping and seller fees) it's better than stocks. The biggest issue for me is the headache of trying to find sales and deals all the time, and then figuring out how to kick Lego out of my mind when I need to focus on other things... Like my job! I daydream about Lego all day! Seriously all I want to do is play with the sets I'm supposed to be sitting on, and I also daydream about profits, it's just how I am!.... It's easy to give a stock broker 5k and then only think about it once a month when they send you a statement in the mail. The returns here are potentially much bigger, but are they worth the extra trouble and effort? I think some people may not think so after doing it for a year or so...

j0rdantay10r

Anyone else hold out on NRG Jays?

dougts

^^ $50 profit after fees is pretty good, even if you aren't out of work. it takes very little time to pack and ship a box - well worth $50

Dad

^ Yep. Wish I could do that 4 times a day until I retired.

RTO

Almost everyone here is severely overestimating the number of Lego resellers (note this is different than the so called "ebay moms"). I don't know a single other reseller personally. How many do?

I also don't personally know any person who has even HEARD of investing in Lego - I'm willing to bet I'm the only one in my small town of 50000 people.

Pitfall69

We aren't overestimating. It has been said many times before that resellers make up a small percentage of people.

The_Sly_Fox

^^
I think you may well be right there. I do not know any other resellers either. Although my city is more than five times the size of your town.
However, a quick look on BrickLink will show there are currently 12,855 registered sellers. I know it's worldwide, but a large number for one site.

Pitfall69

dougts said:

^^ $50 profit after fees is pretty good, even if you aren't out of work. it takes very little time to pack and ship a box - well worth $50

Dad said:

^ Yep. Wish I could do that 4 times a day until I retired.

I based my comment on how much I make an hour. People make less so for them making $30-50 is worth it to them. For $30-50, I rather play with my daughter. That time is priceles.

If you are making $30-50 an hour selling Legos ...Kudos to you!!!

roxio

I live in a smallish town as well, circa 65000. I know 1 other resellers here who doesn't do much. I regularly check ebay for Lego sales within 10 mile radius and there is hardly ever anything.
UK pop apprx 62,000,000 / 65,000 = 953 UK resellers.
Crude calculation I know, but makes me feel better about all the stock I'm sat on.....

dougts

I make pretty good money in my regular job.

That said, $50 profit for 5 minutes of work (done after my kids go to bed), is easy money no matter how much one makes, until you get into silly salary territory

Pitfall69

I wish it took 5 mins to list, sell, print shipping labels and find right size box, pack nicely and tape up. You are fast. What are your secrets?

You must work at a Walmart shipping center ;)

dougts

^ I was only talking about the pack and label print part, not creating listings. i have my boxes all nice and lined up and organized by size, so I know immediately where to grab the right size box for the job. print labels from ebay or paypal, pack and tape the box, affix labels, put in back of car for next trip to post office. pretty darn easy.

dougts

Pitfall69 said:

You must work at a Walmart shipping center ;)

hehe. not even close. not sure that would qualify as "pretty good money"

Pitfall69

^ of course I'm being funny, but it takes me at least 5-10 mins just to list my item. I check Brickset and Ebay listing to get approximate listing price. Then list my item uploading the right pictures and typing a description.

dragonhawk

^cough use eBay templates cough

Pitfall69

dougts said:

Pitfall69 said:

You must work at a Walmart shipping center ;)

hehe. not even close. not sure that would qualify as "pretty good money"

Was being funny on how well they pack and ship :)

Dougout

Are we overestimating? Those ebay auctions don't include the newcomers stocking up on DS or FB. IMO there is a massive fluctuation between new resellers and new AFOLs coming out of their Dark Ages.

Pitfall69

dragonhawk said:

^cough use eBay templates cough

Ok...???

Pitfall69

Ok. I'm done. Obviously $30-50 is worth the time. I don't know how to list an item on Ebay correctly and I'm far too slow packing an item.

Let's continue on speculation.

dragonhawk

It makes listing faster by pre-populating similar fields

Pitfall69

At least we are commenting on this discussion. We have awoken it from it's ancient slumber :)

Dougout

I'm with @Pitfall69 on this. Although I would list items for $30-50 profit all day long, I think people should take time with their listings. Templates are ok if you are selling the exact same items, but you still need to pack, print label, ship and go to the post office unless you get pick ups. Don't forget the time to research legos, find deals, drive around, buy your items, ohhhhh and speculate. :)

I think resellers here make it seem too simple. It's not just post, sell, ship and you're done. There is usually a lot of time and effort spent on the resellers part and no one here ever seems to mention fees for ebay, paypal and shipping.

Pitfall69

Omg!! Someone agrees with me!!! I just looked outside and I didn't see pigs flying, so it must be a dream!!!

Renny

Okay, what are people's thoughts on the City theme in general in regards to market value after retirement? I know trains fall under this category like the Passenger or Cargo train and they tend to do well, but I'm talking about the trucks, airports, planes, police/fire/train stations, etc. Some have gone up in value a good bit but it depends because Lego is almost always coming out with a newer version of these "core" sets. The thing is there is usually enough of a difference in the newer release that the older set can sometimes retain it's value (perhaps some folks prefer the older model over the new one?)

dougts

outside of a very small subset of City items, they just aren't worth it in general

Pitfall69

Even though Lego always cones out with a Fire Station and Police Station it seems they do decent in the aftermarket. As a whole, I don't invest in Lego City, but there are exceptions like #8403 and maybe #7641.

Legofanscott

Dougout said:

Are we overestimating? Those ebay auctions don't include the newcomers stocking up on DS or FB. IMO there is a massive fluctuation between new resellers and new AFOLs coming out of their Dark Ages.

I would say so in a place like the UK, i imagine the reseller stock here is extremely small compared to to the US obviously.

What i would like to know is if demand for a certain set goes up in the US, does that affect the demand of that set in other countries?, or is each aftermarket different in each country?

Pitfall69

That is a fantastic question. I just hope the responses don't turn into "I hate that your Lego is cheaper than mine"

gmpirate

wilbur said:

I am a small time reseller (<$10,000 total investment). I have wanted to invest for a long time, but things are so volatile. One year the stock market does 15% annual roi, the next year it's -15%... I love that I have found a way to turn my favorite toy of all time into an investment strategy! Even if I make 20% roi on a set, (buying a fb at 150 and selling it at 200 a year later would be about 20% roi after shipping and seller fees) it's better than stocks. The biggest issue for me is the headache of trying to find sales and deals all the time, and then figuring out how to kick Lego out of my mind when I need to focus on other things... Like my job! I daydream about Lego all day! Seriously all I want to do is play with the sets I'm supposed to be sitting on, and I also daydream about profits, it's just how I am!.... It's easy to give a stock broker 5k and then only think about it once a month when they send you a statement in the mail. The returns here are potentially much bigger, but are they worth the extra trouble and effort? I think some people may not think so after doing it for a year or so...</p>

Its nothing like the stock market. To be successful, you have to do your research for both, but really Lego is at least a part time job. I have really done nothing but buy all year and am amazed at the amount of time that requires. There is research, driving to sales, dealing with damaged product, storage, organization, filing and bookkeeping. When people here talk about 200%, 100%, 50% returns compared to the stock market, it really is not an accurate statement. Your time has a value. Imo, and myself included, we tend to discount this factor because it does not seem like work. But it is, and it has a price.

I'm seriously reconsidering this whole thing. At this point, I will for sure finish out the year being so close to all the BF sales and realizations of what is finally EOL'ing, but after that I may just put a stop to it. My business suffers and I "never" have any free time. Maybe if I had a regular 9 to 5 it would make sense, but not like this. As far as just keeping it small scale, well, I just can't do that. If 10 sets get me x, then 25 gets me more x, and 50 gets me even more :P

If I had a compatible warehouse type business this would probably be a no brainer. Here and there I try to think about opening another business that I could incorporate with Lego.

Storage is very expensive here in California. It would cost me $500 a month to store everything, "now". We haven't even hit BF, after Christmas, or the New Year's clearances.

Quality of life. For me, I think it suffers, but its probably just my personality that if I'm going to do something I'm going to go big.

just random thoughts to think about :P

gmpirate

Legofanscott said:

Dougout said:

Are we overestimating? Those ebay auctions don't include the newcomers stocking up on DS or FB. IMO there is a massive fluctuation between new resellers and new AFOLs coming out of their Dark Ages.

I would say so in a place like the UK, i imagine the reseller stock here is extremely small compared to to the US obviously.

What i would like to know is if demand for a certain set goes up in the US, does that affect the demand of that set in other countries?, or is each aftermarket different in each country?

Sure it affects it. Supply and demand. If one country is high on demand and short on supply the prices will naturally go up. However, at some point that price will cap as it relates to other countries supply and price. To use your example, the price in Britain cannot rise much more than the price + shipping from the US.

Its more hassle/work, but there are many sets here in the US that can sell for more money over seas because of lower "overall" prices or availability.

nkx1

@gmpirate: I have friends that are serious investors in the stock market. To be a successful investor, it generally requires significant investment of one's time (you can't just "set it and forget it"). Instead of packing Lego boxes, you're sitting in front of your computer researching. And it's more stressful. Outside of 401k's, I generally steer clear of the stock market because I feel it often results in of the transfer of money from average investors to wall street investors (ie those with inside information). For the average investor, I feel much more money and more consistent money can be made renting property. But I digress.

I agree with your general sentiment- I, too, am getting out of the small-time sales of Lego. It's not worth the frustration and consumption of my time for the relatively small return. I'll be happy to sell my used sets when I'm done with them for what I paid or more.

Bandit

gmpirate said:

Its nothing like the stock market. To be successful, you have to do your research for both, but really Lego is at least a part time job. I have really done nothing but buy all year and am amazed at the amount of time that requires. There is research, driving to sales, dealing with damaged product, storage, organization, filing and bookkeeping. When people here talk about 200%, 100%, 50% returns compared to the stock market, it really is not an accurate statement. Your time has a value. Imo, and myself included, we tend to discount this factor because it does not seem like work. But it is, and it has a price.

People always say this, "Your time has value, you have to factor that in!", but unless you're unemployed and are doing this instead of getting a job, that doesn't make sense. I do this in my spare time. Time I spend doing this is time I don't spend watching tv, or reading, or playing video games, or any other leisure activity I may do. It costs me nothing to do any of this, time wise. It's not like I'd be working nights or weekends at a second job if I wasn't doing this instead. That's ridiculous.

nkx1

^We all have a very finite amount of time to live (generally about 80-90 years if you are lucky). To say that your time costs you nothing is not true- it costs a portion of your life that you will never get back. Also, not everyone has a 9-5 job (me, for instance). The more I work, the more I earn. Therefore, my time really can be valued in dollars.

dougts

^ and ^^ sounds like you are both right in each of your cases.

Bandit wasn't saying his time spent selling LEGO didn't have value that could be spent elsewhere, he's simply saying that it wouldn't have produced any monetary value if spent elsewhere. So in his case (and likely many other resellers, including me), the time spent is not relevant to the monetary equation at all. It only matters (from a financial perspective) if you have lost opportunity to earn other money doing something else.

BrickDancer

^^Actually, even spare time has a value. Its kinda like 'opportunity cost' since you've allocated a certain portion of time to reselling as opposed to an activity of your choosing at that point in time. As a rough measure for myself personally, I equate my spare time to be worth 20% of my wage/salary per hour. I apply this to a wide range of activities that may take up my Saturday or Sunday off-time. Just my personal view on the "Is $50 worth it?" question...

dougts

^ it has value, but equating it to monetary value is quite a bit different. after all, it's not like that 20% would be in your pocket if you chose to do something else rather than sell LEGO. THAT would be true opportunity cost.

Everyone of course should apply their own set or rules and standards for themselves, but this is most definitely not a black and white equation across the board.

staffmark

Thing is, I have to dabble in the resale market, just to justify to my wife that all these purchases will pay off! :). Seriously, when I start getting nagged for my purchases, a few quick sales get her off my back. Hey, even if its only $30 a set, you do what you have to do. I may never get all my money back, but reselling does help defray the cost of my collection, and that's all I'm after.

At the end of the day, though, I love the whole thing. I love the thrill of the bargain hunting, the anticipation walking into the clearance aisle hoping to win big. Even if I am not making much, at least I am making something, and I enjoy it immensely. If you don't love reselling, don,'t do it- but if you do love it, keep doing it, with % return on investment be damned. Just my $.02 ...

gmpirate

Bandit said:

I do this in my spare time. Time I spend doing this is time I don't spend watching tv, or reading, or playing video games, or any other leisure activity I may do. It costs me nothing to do any of this, time wise. It's not like I'd be working nights or weekends at a second job if I wasn't doing this instead. That's ridiculous.

Well, that's kind of goes with what I said. We tend to discount our time because it is something we enjoy. Its a hobby as well.

And like @nkx1, there is a more intrinsic value to my time. It costs me money if I decide to watch tv or go to my nephew's birthday party. Because I am aware of this it just gets factored into everything I do. I suppose that's why we have the saying "nothing is free".

In the very least, additional time spent selling Lego is time away from my kids and family. That does have value.

Bandit

^^^^ certainly, time has a 'value', but in my case it has zero monetary value, like dougts said. I like doing this, I enjoy doing this, as much or moreso than any other leisure activity I may do. If I didn't, I wouldn't do it.

And I don't spend so much time doing it, that I actually can't or don't do other things I enjoy. And it certainly doesn't interfere with other more important ways I spend my time, such as time with my family or other things I may do on weekends and whatnot. It just doesn't make any sense to associate any kind of monetary value with it in this case.

Bandit

gmpirate said:

And like @nkx1, there is a more intrinsic value to my time. It costs me money if I decide to watch tv or go to my nephew's birthday party. Because I am aware of this it just gets factored into everything I do. I suppose that's why we have the saying "nothing is free".

How do either of those things cost you money?

dougts

Bandit said:

How do either of those things cost you money?

I suppose if you worked a job where you billed per time and could in theory put in billable chunks of time at nearly any time of day or night from most any location (like an attorney for example), then in that case either of those things could cost you money if you could have spent that time working and billing instead.

gmpirate

dougts said:

^ and ^^ sounds like you are both right in each of your cases.

Bandit wasn't saying his time spent selling LEGO didn't have value that could be spent elsewhere, he's simply saying that it wouldn't have produced any monetary value if spent elsewhere. So in his case (and likely many other resellers, including me), the time spent is not relevant to the monetary equation at all. It only matters (from a financial perspective) if you have lost opportunity to earn other money doing something else.

Of course we can always justify anything to ourselves (myself included), lol

I don't mean to say it cannot be worth it to some people, because obviously it is. And in my original post, I did specifically say if one had a typical 9-5 this Lego venture makes more sense. My post was just illustrate where I'm coming from -- one perspective.

If one does not put a value on time, then yes, this Lego venture can be very profitable. I wholeheartedly agree.

dougts

I think there is far too much conflating of "intrinsic value" and "monetary value" of time - which are two entirely different things. My time is very valuable to me, but the time I spend selling LEGO would not otherwise be spent making money on some other venture. Therefore, that time costs me exactly $0.00 of actual money, no matter how much time I spend. Of course it costs me the intrinsic value of whatever other personal pursuit I could have spent the time on instead, but that isn't the same thing as actual currency. I've been pretty careful in this conversation to try and reference "time value" in strictly monetary terms - the personal value of that time is a huge variable for everyone in the conversation, and it's likely a different metric for most people.

Saying that means I "don't put a value on time" is both an inaccurate assessment of mine (and Bandit's I presume) position on this matter, and also reads as a bit of a slap in the face. If you want to instead say "If one does not put a MONETARY value on time, then yes, this Lego...", then you would be spot on, and I would agree with the statement.

jasonord69a

gmpirate said:

However, at some point that price will cap as it relates to other countries supply and price. To use your example, the price in Britain cannot rise much more than the price + shipping from the US.

Its more hassle/work, but there are many sets here in the US that can sell for more money over seas because of lower "overall" prices or availability.

I would have to disagree on this point. I purchased a 10187 from the US to the UK. I paid approx £250 including shipping which I thought was a fair price. Unfortunately I had to pay another £60 on top if that price for import duty!
If you add the extra import duty to the price and the fact that the product may travel half way around the world, I think many would pay a higher price for a set from their own country if just to avoid the extra charges and the increased probability of damage to the set.

Bandit

^^ agree!

dougts

One other thing to consider is not just time, but relative effort. I could certainly make more per hour if I decided to take up a second job freelancing in the same type of work as I do in my "day job". However, that work is much more mentally taxing, could not be ramped up and down nearly as quickly or flexibly, and would require more "administrative" attention to setup and continue to operate going forward. And let's face it - I do that 50 hour a week already. My LEGO hobby selling is mindless fun that can be ramped up or down on a whim as I so choose.

BrickDancer

dougts said:

^ it has value, but equating it to monetary value is quite a bit different. after all, it's not like that 20% would be in your pocket if you chose to do something else rather than sell LEGO. THAT would be true opportunity cost.

Yes you're right, I was struggling to find the correct word and settled on 'opportunity cost' as close enough. But I'm sure there is a more apropos phrase to fit what I was trying to say.

I think the big differentiator is whether or not one considers the activity of reselling as pleasurable or not. If not, then it is a chore that would be similar to cleaning or mowing the lawn, and thus require a minimum wage at least for that time.

Taking an inverse view of the scenario, if I was idle on a Saturday afternoon and just enjoying the time, then I would gladly pay $5 not to have to pack a box and give up 10-15 minutes of my relaxing time. But if you were a big time reseller, you'd be looking at sorting/packing for half the day. Its no longer optional, its now a commitment. How much would you pay not to do that job on a Saturday? So yes there certainly is a tangible $ value associated, unless you have ample spare time for which the cost goes down to nil. I think this still might be a poor analogy though =) But you get my drift...