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Just for fun, lets look at a more "retired set"
MMV, oh how was this one talked about a year ago...
It could be found for $90 often and sometimes a bit less...
Today, selling at $160 on Amazon, that seller is netting $129 after all the fees.
Not counting inbound shipping to Amazon which will average $2 or so for that set, plus about 40 cents a month in storage fees per set for that one.
If you bought that set a year ago for $90 and shipped it to Amazon, your net after all fees and shipping and buying the set would be $30.
Not bad for a $90 investment in one year, right? Well...
It is a 30% return on investment, so long as nothing goes wrong. Customers can return that set after opening it and Amazon will give them a full refund, out of your money, and you'll have an opened, used set to deal with. If you do enough volume, it isn't too bad, but if you sell 10 of these and 1 gets returned opened... Yuck!
If these sets don't sell within a year, you get charged long term storage fees from Amazon, which for this set is an annual charge of $36.04. They split that into two payments a year of $18.02, just to be nice. :)
Yea, no kidding, so be sure not to do FBA on anything you are not sure you can sell within a year.
Boy, what a business... :)
BTW, I expect FB to do even worse numbers than MMV, it has just been out too long. There are already 78 sellers for FB including offers that will net below retail price. There are over 1,000 copies of FB already listed for sale, and that doesn't include the pallet full that I have and other sellers such as myself have.
Hmm, anyone want to buy a LEGO business? :)
Amazon may be a bit worse because of the returns that you must take, but it is pretty much the same no matter which way you split it though. At the end of the day, you have to answer to the man.
$142.50 w/ free shipping.
Since you can't... :)
And frankly, most people can't ship MMV for $10.
Amazon nets you more, in return for taking more risk. That is simply a trade off a seller has to make.
Back in 2010-2011, I could look around and see I was already somewhat late to the party (as many others were coming in around the same time), but I hoped for a few more good years at least. The last two years have met my expectations, but we'll see what happens going forward in the next couple of years.
I can say with certainty that I would not want to be the one left holding the "investment bag" and be working for no profits just to recover my costs, so buying a lot of inventory is not in my future plans.
But maybe enough people feel the same way and then the reseller market thins out a lot going forward.
But you can enforce no returns on that, and aren't subject to the harsher rules of Amazon.
And frankly, if you look at the sales rank on Amazon, they aren't selling very fast at that price, it needs to come down $10 to move more volume.
The money made last year on sets that retired in 2011 was nearly double the profit margin per set as this year.
The year before that, even nicer...
Sadly, some resellers will have to learn it the hard way before they see that times have changed, so while some will exit, another will take their place, searching for the easy money.
That is ok, welcome to capitalism. :)
15 years ago I did a good business selling 3.5" 1.44MB floppy drives on eBay, clearly THAT business wasn't going to last. It wasn't a great business, but I sold a hundred or so a month for $7 w/free shipping, at the time, shipping was about $3 via PM flat rate box, and I paid, on average, less than $1 for each drive (they were system pulls, some new, some used).
It wasn't the main thing I sold, but it was nice gravy, very easy to pack and ship and very few problems. If a customer complained, just send them another one and tell them to throw away the bad drive. Easy as lemon pie, but for obvious reasons that business did not survive the 90's. :)
The real trick was finding a steady source for $1 good condition floppy drives, I bought and sold thousands of them, but over time they became hard to find as system pulls no longer existed after some point.
So if it is selling for $160 on Amazon now and $180 on Amazon in a year, you'll net $17 more by selling it in a year.
Is it worth holding onto for another year for another $17?
Of course, that is why so many are for sale (many sellers have come to the same conclusion) and why the price hasn't gone up more.
Frankly, I expected it to be around $180 today, prices are soft and there are many reasons for it. One of the biggest might just be the huge number of sets that LEGO is releasing each year now and the large discounts everyone is doing on them.
As someone else said, why pay over RRP for retired sets when LEGO is releasing hundreds of new sets every year that are good quality and good prices? (compared to retired sets)
Buy it for full price the day it retires, not 10% years before it retires.
I have enough inventory that I can't really get out of it this Christmas, but my goal is to have everything sold by next Christmas. What will happen after that is anyone's guess, but the margins aren't what I'd like to be seeing for the risk and time being taken.
It will be interesting to reassess after Christmas and see how it all rolls out.
The key difference is when every yahoo starts hording every set LEGO produces, it is then that the 2 year line starts to not matter.
Also it does not help when TRU has over inflated prices which then cause a cap until their stock sells out (see the 8043).
I see the days of sleeper sets being over as you have too many speculators and sites set up to specifically talk about 'sleeper' sets, which negates the whole idea.. Does not stop yahoos from buying the bull though, and it makes LEGO happy, it really does, because that means more people buying their product, regardless of their publicized ploys to thwart the 'evil reseller'.
10219 Maersk Train - $280
10217 Diagon Alley - $290
4842 Hogwarts Castle - $248
10212 Imp Shuttle - $422
8043 Excavator - $306
4184 Black Pearl - $169
Pretty happy with the results. I realized 10219 would be off as the guy who has his 4 listed for $1k on bricklink really skewed the results at the beginning of the year....predicted $249 without those outliers.
Ill post predictions for my 2013 investments at the end of Jan 2014.
Biggest disappointment for me was 10217. It is only now gathering momentum. Decided to hold all of my 2012 sets for another year. 2 year cycles from now on.
8043 has probably reached its reasonable volume peak, it will keep going up, but I think slowly now, only to be rehashed in a few years.
10212 has no where to go but up, it is unlikely to be done again and it is one of the best models, SW or no SW, LEGO has ever done, IMHO.
That being said, that was then and this is now... at $400, still worth building, and that is saying something... (for me at least)
Lots of factors have contributed to my now, almost non-existent reselling.
• Lots more competition.
• Weaker dollar.
• No discounting on Exclusives in the USA.
• Better local pricing by TLG.
• More supply of the larger exclusive sets locally.
Some of the initial price spike was speculators thinking it would go to $700. Some of it was just hype from the launch.
I said it then, and some disagreed, that it would be forgotten about with time, being such a limited release. A few people would want one, but at some point, everyone would move on and no longer care.
Frankly, I had forgotten about it, it was a one and done.
Will it go back up? Probably, it might settle around $450 sometime next year and have a long, slow climb to $600 over the course of 2 years.
The fact is... any time you can double your money in a week, take it... bird in the hand and all that. :)
That being said, I won't ever really know since I sold all mine, I'd be crazy to not take $450 less than a month after buying them for $200.
I tried to tell people that the initial sellout didn't seem indicative of the total 20,000 that would be made, and to temper expectations accordingly (and to wait if you were trying to buy on the aftermarket)
Or not, the beauty of capitalism is that he gets to try if he wants to.