Predictions on Discontinuing Sets and their Secondary Market Value

Pitfall69

I'm still scratching my head though on this one:

If one person bought 50 sets for quick flips and netted $1,000 and another person bought 5 sets and waited a bit and then netted $1,000; how are the quick flips better than just selling 5 sets? Definitely more time to pack and ship and more $$$ spent on packing materials. Unless you are just putting a poly into a bubble mailer, it takes more than 3 mins to carefully pack a Lego set.

Here's another scenario:

If 2 people buy 50 Lego sets and one person sells all of his in a month or two and the other person waits awhile longer and sells all of his and made more money; how is that not better?

Maybe I'm missing something. I consider Lego sets to be a little like Stocks. I'm not saying they are like stocks, just how one approachs buying and selling them. Buy low and sell high. Why would anyone want to sell their stock before it has reached its peak?

It also seems that the quick flippers have caused the most distress in the Lego community. Minecraft, Lloyd and the Limited Edition Crawler to name a few.

Shib

^shelf space. I don't do any reselling myself but if I did I would need to move stuff quickly because I have very little shelf space to store it. If you factor in the "cost" of storage.

Renny

Not sure but I'm thinking by quickly flipping those 50 sets they can them buy and flip another ”x” amount of sets in the time it takes a long term seller to sell their first batch of sets.

doriansdad

Pitfall69 said:

Why would anyone want to sell their stock before it has reached its peak?

For most people emotion overides intelligence. That reassuring need to be right that the human brain covets is the reason why patterns in markets have not changed in thousands of years. People love to take quick profits and love to sit on losses. It is simple human nature. Selling FBs while holding TLR makes a person feel good. Selling TLR and holding FB will make them $$$ but that takes patience and the ability to admit they bought some dogs lol.

Bumblepants

There are also those who are selling at low prices because their cost was really low (or almost zero due to theft or fraud).

Pitfall69

Renny said:

Not sure but I'm thinking by quickly flipping those 50 sets they can them buy and flip another ”x” amount of sets in the time it takes a long term seller to sell their first set of sets.

That doesn't always work out because you may not get the opportunity to grab 50 more of a set that's popular to flip again. Let's say you buy 50 Research Institutes, now they are all sold out. What do you buy then?

monkeyhanger

Pitfall: You might get more waiting longer (sometimes), but it does depend on the set. Some sets need to be sold while they're still hot and supply is lacking, they may not be in such huge demand 2 or 3 years down the line. If you flip quickly, you have more opportunities to flip again with the same investment money. If you can double your money in 6 months to a year and be able to reinvest to do it again, or triple your money in 2 years, i'd go for the quick flip.

Set x sells for £50 at RRP, but is short in supply or just EOLed. You sell up your 5 sets after a year for £100 each and reinvest in set Y at £50 RRP. You then have 10 sets of Y to double in another year. You started off with £250 in and after 2 years you have £1000.

Or do the same for set X, but keep it for 2 years, they'll have to quadruple in value to beat a quick flip on sets X and Y. Some will and some won't.

Different sets require different tactics. For me, i'm not prepared to go in on 10 x #10212 and keep them 3 years, although they have far better chance of tripling/quadrupling in value than some sets because they are memorable - people will still love SW in 5 years time, especially AFOLs, and it was a great set unlikely to be done again in the next 10 years. For something aimed at kids, they move on quite quickly to something else when a theme EOLs, these are the things I imagine should be shifted relatively quickly.

graphite

Where is LFT when you need him to write a few pages on investment potential. It is true that if you quick flipped everything you had and there was nothing left to buy to do it again you'd make less than the person holding on to stuff but it all has to do with the potential that money has. If you can routinely find something to buy 50 of and flip in the short term then your potential to do that increases if you don't have your funds locked up in something long term. If you take it as an exercise in a cash available from start and not thinking credit etc then the potential is there.

Example: 2 people have the cash to each buy 10 FB's at the same cost, say $100. Buyer one waits 6 months, flips for $225 each (ignoring fees etc) and now has $225. The second person wants to wait 2 years to potentially (not guaranteed) get $500 each. 6 month point buyer 1 now has $2250 in cash and buyer 2 has 10 FBs and no cash.

Here comes RI. Buyer one is able to buy 100 of them. Flips them for say $40 each in the next few months. At the one year point Buyer 1 has $4250 in cash and Buyer 2 has 10 FBs now (maybe) worth $3000-3500, but is still waiting for the slow rise over the next year to $500. Buyer 1 still has another year to find one or two things to quick flip. Even if they can't quick flip the next thing, they're still ahead on value. And Buyer 2 missed opportunities.

This is all speculating value rises and such but it is an example of how one method can work over the other. Like someone else said, both can work if executed properly. There are risks and variables to both and each person takes a guess at which way they think will do the best and which they prefer. Nothing is wrong with either way, just different.

rocao

^ It's all about the numbers you choose to use, and in your first scenario, the hypothetical numbers definitely tipped it favorably for the long-term model. How long is the "bit" that you're waiting?

What if you would have said 20 quick flips for $1000 in one month time vs. sitting on 5 sets for 2 years to make $1000? Storing the sets for two years and tying up that capital seems less favorable than having to box an extra 15 sets, imo.

Also, while the low margin, high volume model requires more work, there is also more certainty and less risk. Using your numbers, it's far easier to pick out sets that will yield $20 apiece than it is to pick out sets that will appreciate $200 apiece.

When this thread started in 2011, people were targeting Fire Brigade, Emerald Night, MMV, and Death Star. At the two year mark, only Emerald Night would be returning ~$200 profit. MMV would be yielding ~$30 profit and you'd still be breaking even on Fire Brigade and Death Star.

With all this said, I think the long term approach actually suits most hobby resellers, myself included, but once again, my original point was that short term profit-taking isn't merely an indication of the weak, impatient, and ignorant.

dougts

Pitfall69 said:

I'm still scratching my head though on this one:

If one person bought 50 sets for quick flips and netted $1,000 and another person bought 5 sets and waited a bit and then netted $1,000; how are the quick flips better than just selling 5 sets? Definitely more time to pack and ship and more $$$ spent on packing materials. Unless you are just putting a poly into a bubble mailer, it takes more than 3 mins to carefully pack a Lego set.

Here's another scenario:

If 2 people buy 50 Lego sets and one person sells all of his in a month or two and the other person waits awhile longer and sells all of his and made more money; how is that not better?

Maybe I'm missing something. I consider Lego sets to be a little like Stocks. I'm not saying they are like stocks, just how one approachs buying and selling them. Buy low and sell high. Why would anyone want to sell their stock before it has reached its peak?

It also seems that the quick flippers have caused the most distress in the Lego community. Minecraft, Lloyd and the Limited Edition Crawler to name a few.

Extend the scenario:

Person A buys 50 LEGO sets for $2500 and sells them all for $5000 1 year later. He then takes that $5000 and buys 100 more LEGO sets, and sells them 1 year later for $10,000

Person B buys 50 LEGO sets for $2500 and sells them all two years later for $7500. Person A packed and shipped 150 sets total. Person B packed and shipped 50 sets.

Would you pack and ship 100 sets for $2500?

CCC

You also need to remember many sets don't peak. They keep on rising, but very slowly. It was already noted that there is often a fairly large jump in the secondary market price at EOL. This is often followed by a gradual rise. It is sometimes better to choose not to ride the gradual rise, but instead sell and move on to the next set that is likely to get the EOL jump.

Although it is tempting to think something is worth X times what the RRP is (or what you paid for it), what you really need to think about is how much is it worth now compared to three months (or some other time) ago. If the current (and predicted future) rate of increase is slow, it doesn't really matter how many times RRP it is, it is time to switch investments. You've already got the initial fast gains, why wait for the slow. Much as I hate to say it, you need to follow a brickpicker style stock market ticker to tell you the rate of increase in price.

talos

I was just at the Disneyland Lego store this week, and wanted to get a #10220 there. They didn't have any, and I asked and they told me it was soon retiring and they would not get any more in stock. So when I got home, I ordered it from S@H, it said it was available, but then the next day, it went to out of stock, with a ship date of 25 Aug. Which is Monday so it shouldn't be delayed much. I think it will soon retire as well. Get it while you still can, I guess. It did come out in 2011, so its been around 3 years.

madforLEGO

10220 is likely on its way out, as well as Tower Bridge, Sopwith camel, Grand Emporium, Death Star, Haunted House (though there are divided opinions on that) , Winter Village Market, technic crawler and Kingdom Joust At least notables as they are 'exclusives.
I'm sure that there are Super heroes ones going out, notably the Bat cave, I would not hold my breath that the Tower of Orthanc and Arkham Asylum are going to be around for another year.

brickupdate

@talos Yep, I just grabbed a #10220 at retail because I felt like this was my last chance.

@madforLEGO makes a great point about HOW MANY sets are retiring even just now - and I think this is part of why folks like me get worried that the aftermarket is unsustainable from both a reseller and buyer standpoint.

madforLEGO

brickupdate said:

@talos Yep, I just grabbed a #10220 at retail because I felt like this was my last chance.

@madforLEGO makes a great point about HOW MANY sets are retiring even just now - and I think this is part of why folks like me get worried that the aftermarket is unsustainable from both a reseller and buyer standpoint.

It is a lot, usually LEGO has a couple of exclusives here or there go, but I think this is a special circumstance due to some hold overs and lengthening of the time frame for the mods.
But if you take into account how many things have gone out in the year it has been pretty crazy.
Next year likely is the Pet shop, Arkham Asylum (if not this Christmas), Tower of Orthanc (if not this Christmas), Santa's Workshop (yeah, weird I know as it is not out yet), guessing on Sydney Opera House, Horizon Express and fairground mixer (as no one knows how long this carnival style set will stick around for).. again those are just the 'sought after' ones I can think of, that does not account for the rest of the LoTr lines (if not gone by this end of year) next, same with Hobbit lines.
possible creator lines of Seaside house, and small cottage, possible treehouse.
City Coast guard line may start going by end of this year s well, since Artic is now entrenched as the special line.

Pitfall69

brickupdate said:

@talos Yep, I just grabbed a #10220 at retail because I felt like this was my last chance.

@madforLEGO makes a great point about HOW MANY sets are retiring even just now - and I think this is part of why folks like me get worried that the aftermarket is unsustainable from both a reseller and buyer standpoint.

How is the Aftermarket not sustainable?

brickupdate

@Pitfall69‌ I suppose what I mean in terms of the aftermarket being "unsustainable" is at the scale or popularity of what we have seen in recent years. Where many on these forums bemoan not finding the incredible sales like we found a couple years back; in having exclusive sets stay active for years longer than before; having more competition from more resellers; etc. Obviously, there will always be an aftermarket. Please remember that I grew up in the baseball card business in the 80s, from the very beginning of the hobby in a broader cultural sense, to the fall. I know (as many have pointed out in this forum before) that LEGO is quite different from baseball cards, and they are correct. I suppose I was simply referring to the newer challenges to resellers, and the fact that as the aftermarket matures more and more, that it is more difficult to make a buck in it. Again - just my personal perspective, what I love about this community is that each comes with a different set of experiences.

Pitfall69

I too was in the Sports Card Business, but luckily, I got out of it right before the collapse. Most of that was overproduction of product and a lot of gimmicks.

While it is true that there have been a lack of sales and no discounts on exclusives; this just means that a) Lego aftermarket prices for retired sets will be more and/or b) there will be less money to be had by resellers.

I'm not worried that Lego sets are out longer now-a-days. There are still people that miss out because of lack of money, coming out of their Dark Ages, or simply because there is too much product to collect and one is bound to miss out on something.

SuperTramp

Brickaholic said:

Why, apparently it is out for another 3 years in the EU ;)

Who said its going to be around another 3 years in the EU?

stevemack

At the end of the day the sports cards were just that, pieces of card... Lego is a large item which is loved by everyone around the world, young and old :)

prevere

^Happy to open up and use parts from sets that retired but never really gained much value.

bp10030

bp10030 said:

"Call to check availability..." for set 21105 Micro World – The Village at [email protected]

Now the Minecraft set 21102 also listed with "Call to check..."

madforLEGO

stevemack said:

At the end of the day the sports cards were just that, pieces of card... Lego is a large item which is loved by everyone around the world, young and old :)

This,
This is why the trading card argument does not work for me. LEGO is a toy, it has a few functions other than sitting on a shelve or encased in plastic to look pretty.

though I guess you can put a card into the spokes of a bicycle.

stevemack

Lol, Cards in spokes... Always good when you have no spokey dokeys (I hope everyone else knew them as those lol!)

doriansdad

madforLEGO said:

10220 is likely on its way out, as well as Tower Bridge, Sopwith camel, Grand Emporium, Death Star, Haunted House (though there are divided opinions on that) , Winter Village Market, technic crawler and Kingdom Joust At least notables as they are 'exclusives.
I'm sure that there are Super heroes ones going out, notably the Bat cave, I would not hold my breath that the Tower of Orthanc and Arkham Asylum are going to be around for another year.

Last I heard 10220 got extended 18 months along with 10188....so early 2016 on those two. 10220 is very low hanging fruit so IMO I would not go heavy on that set regardless of when it retires. Arkham and Tower of Orthanc will not be going this year as far as I know. TLG has no problems extending the lives of popular sets so you can forget about regular production cycles for now. 2015 I would look at Arkham, Tower of Orthanc, Pet Shop and Horizon Express.

cloaked7

doriansdad said:

TLG has no problems extending the lives of popular sets....

What does that say about the Research Institute?

doriansdad

I have no idea. I don't flip and Research Institute does not fit my criteria to hold for resale so it didn't get a second look from me. Speculate away....

prevere

I just wanted some to part out for 1x1 tiles and beakers.

cloaked7

prevere said:

I just wanted some to part out for 1x1 tiles and beakers.

Those will be some pricy tile and beakers given that the set is selling for $100+, and that will only go up if no more are produced. Will it be a set that only lasted a few days?

madforLEGO

cloaked7 said:

prevere said:

I just wanted some to part out for 1x1 tiles and beakers.

Those will be some pricy tile and beakers given that the set is selling for $100+, and that will only go up if no more are produced. Will it be a set that only lasted a few days?

Not really, you can get the beakers via LEGO, though they are pricey through LEGO.

SiE

Some sets decline in value. Look at #41999, it rised to £425 then dropped to just over £200. Im gonna have to wait a long time for them to hit £400 again. Im not sure on FB but am more than happy to flip them for £200 when i only paid £85.

CupIsHalfEmpty

SiE said:

Some sets decline in value. Look at #41999, it rised to £425 then dropped to just over £200. Im gonna have to wait a long time for them to hit £400 again. Im not sure on FB but am more than happy to flip them for £200 when i only paid £85.

I was just revisiting #41999 now that it's over a year old. I could see that set keep dropping in price. Look how many are currently for sale, and how many were purchased in the last 6 months on Bricklink. There's a lot of people still holding out trying to get more, but there isn't the demand. It's also pretty interesting to see the price difference between North America and Europe caused by Mark. I wonder how that Mark guy is making out with the "Thousands" he bought up?

Billybrown

Yes the price has come down a fair bit for #41999, but I put a lot of it down to reseller purchasing and also panic buying at the time. I still hold a few myself, there will be an increase demand again October to Christmas time, sales in general always increase during that period so the price with come back up and when #9398 is discontinued it will only bring the price up further for #41999, which I mentioned on another thread.

I actually think now is a good time to buy them again, for those that dont have one. At £250 they are still a good investment for some resellers even, But not for me as there are quicker flips to be made.

bp10030

bp10030 said:

bp10030 said:

"Call to check availability..." for set 21105 Micro World – The Village at [email protected]

Now the Minecraft set 21102 also listed with "Call to check..."

And Micro World set #21106 now also. So in Europe only one minecraft set left.

JamesJT

#21110 is "call to check..." on S@H UK. I called, it isn't, but they are making more.

Maybe time to flip what I have and buy some minecraft sets...

edgarallanpoe1422

So I finally managed to secure a #10179 UCS Falcon for a reasonable price (around a third of the going secondhand rate where I come from) and I'm on the fence as to whether to flip it as soon as possible or enjoy it for a while. The initially meteoric price rise has long since run out of steam so I'm not concerned with that, what I am concerned about however are rumours of a re-release. What, realistically, are the chances of Lego re-releasing either the set unmodified, or bringing out a similarly-scaled model, or, do I dare to imagine, a larger interior-detailed model? I'm assuming that in any of these scenarios the market would crash overnight, so I wonder whether to sell it while it has no competitors or display it for a year or two and sell it down the track.

Pitfall69

If you are a Star Wars fan, you MUST have this set in your collection. Not that it matters that much, but is your Falcon sealed or used?

I highly doubt another UCS Millennium Falcon the scale of the current one will be released. I know people are hoping, but it is unlikely. If they do release one, it would probably be a scale that is in between the scale of the system set and the current UCS Falcon. The original price of the UCS Falcon was $500 USD, what would the price of a UCS Falcon if it were released right now? They sat on the shelves back then. I don't see many people forking over $600+ now for a new one.

SuperTramp

$600 is what the SSD sells for in Europe and plenty of people are paying retail for that.

monkeyhanger

I can't see a bigger or better MF coming out with the new film either. Can't see TLG trying to sell that expensive a set to the masses (vast majority of kids just don't get a £450/$600 single present for their christmas or birthday unless it's a laptop/Ipod/bike), and way to early for a UCS redo. If I had to sell most of my Lego collection for space or whatever, my bricklinked 10179 would be the last to go.

Billybrown

SuperTramp said:

$600 is what the SSD sells for in Europe and plenty of people are paying retail for that.

Are there plenty buying though? I thinks its a slower burner but I don't have the figures to say either way

Pitfall69

$600 USD? I mentioned in my post that the original RRP for the UCS Falcon was $500 USD, so it is assumed that I mean USD for every price I mention thereafter.

Yes, some people will pay $600 for a Lego sets, but not the majority, so it wouldn't be cost effective for Lego to make a $600+ set that only certain people would buy.

monkeyhanger

Pitfall69 said:

Yes, some people will pay $600 for a Lego sets, but not the majority, so it wouldn't be cost effective for Lego to make a $600+ set that only certain people would buy.

Completely agree, especially one that has been out before. A new huge and expensive set of a ship that hasn't been done before, or for an extremely long time will have far more people (from the limited pool willing to spend $600) wanting to buy it than a redo of a "recent" set, when both ships have similar appeal.

I'd hazard a guess that a UCS AT-AT at close to minifig scale at $600 would sell better than a $600 redo of the UCS MF if both were released soon. Plenty of people that wanted a UCS MF got one when they were available.

A 2000 piece MF is far more likely than a 5000 piece MF to be released for Ep7.

cheshirecat

I reckon 20,000 $600 UCS MFs would sell out within a week, all LEGO would have to do is suggest its a limited release.

theLEGOman

10,000 parts, 800$ 700£, 4,000 limited number release with certificate and small display with model details and sets limited number as well as a printed piece for inside model with number on, 500 randomly inserted figures dark chrome, chrome, gold or led lit part translucent figure eg burning Anakin from the end of ep3.

Bumblepants

^what?

theLEGOman

Bumblepants said:

^what?

I meant it would be nice if they made something like that.

Bumblepants

All in the same set or are those separate ideas? Since most of these hypothetical sets would never be opened the random inserts would never see the light of day. Or are you suggesting that those would prompt the opening of the sets?

Billybrown

cheshirecat said:

I reckon 20,000 $600 UCS MFs would sell out within a week, all LEGO would have to do is suggest its a limited release.

Yes they would because I know someone that would buy 10% of that allocation, as long as its definately a limited release ;-)

doriansdad

edgarallanpoe1422 said:

What, realistically, are the chances of Lego re-releasing either the set unmodified, or bringing out a similarly-scaled model, or, do I dare to imagine, a larger interior-detailed model? I'm assuming that in any of these scenarios the market would crash overnight, so I wonder whether to sell it while it has no competitors or display it for a year or two and sell it down the track.

Odds of an umodified version are zero. I have heard of the $699 MF "playset" and the only reason I give this any credibility is the decision to extend 10188 until Jan 2016 when this new MF playset would take over. That makes sense to me. A playset would not harm the value of 10179 at all (if anything the price would rise). I would assume there will be new vehicles for the new SW movies to get UCS treatment.

You must also consider the new business relationship with Disney. I am sure Dinsey tells TLG what direction they want to go in and has to give the ok on the sets. It would make sense to give the most iconic ship playset treatment and the less iconic ships UCS treatment.

theLEGOman

Bumblepants said:

All in the same set or are those separate ideas? Since most of these hypothetical sets would never be opened the random inserts would never see the light of day. Or are you suggesting that those would prompt the opening of the sets?

All in the same set, a numbered plaque for next to the model, a numbered part for inside it and a 1 in 8 chance for an awesome limited edition figure.

It needs to be high piece count thus high cost to justify its largest release yet status. Large number of minifigs as well, maybe double the death star 2.