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Predictions on Discontinuing Sets and their Secondary Market Value
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Comments
Very few sets are that expensive, and DA is iconic enough I would think lots of them are being stashed.
That is 75 cents a part, not even UCS Falcon is there after 2 years... I'm not sure UCS Falcon will ever get there... That would require nearly $4K for that set. Too many were made for that I think...
At some point, demand becomes satisfied, and while continued sales do happen, as demand softens over time, it removes the upward price pressure.
But yes, as y2josh said, you're probably kidding... :)
Also, it's just my gut, but I think the Excavator will do very well when retired. But, I will admit, I don't know if it's going to be EOL'd soon. It's a unique set, it is generic enough to appeal to different groups. They probably won't build another one. It has power functions. Has huge playability.
And @LegoFanTexas, you never know that with the recent 10 year revised license to make SW sets, I have a gut feeling we will see another Falcon, UCS or not, you never know. It has happened with so many sets in SW universe. I love Bricklink for another fact that it helps us sort sets by Year released. My son wanted to get the new X-wing as his first big SW set, but then he found out there were previous remakes so he just dropped the idea saying 'lets wait for a better version' :P
Getting back on the topic, @weaponxdeadpool, care to share how many DA's have you bought already cause then we might be able to truly understand your logic behind what you explained :) as obviously, everyone wants their stash to fetch big bucks in the long run. JMO.
Consider these two options:
#1: Hold your investment for one year, sell for 2x what you paid.
#2: Hold your investment for two months, sell for 25% more than what you paid.
If you can do #2 consistently it is a much better plan. #1 will only give you 100% profit after 12 months, while #2 will give you 281% profit after 12 months.
I see lots of posts here where people don't consider the velocity of money.
Where it does make sense (for people like us) to make quick flips is where we over extend for the short term. I.e. spend more than we should when we really need the funds for other purposes.
Just my two cents. Good luck.
I think even with all the 'investing' we are a mere drop in the bucket relative to all the LEGO sets sold by WM, Target, Amazon, [email protected]
Yes, when it comes to bricklink and eBay we are still on the same team, so to speak, but competing. But, I think it's a level playing field. Where one person will sell early to get cash flow, another may sell later and get the larger return. And, even with all the popular invested sets, it comes down to supply and demand. If there is a huge demand there is plenty of profit for all.
Now, everyone can keep to themselves and share nothing, but I think the collaboration helps us all in deciding what to buy and when. I mean either we buy the sets right before they go EOL or the average person does.
Lastly, not sure how many are investing tens of thousands in LEGOS. I myself am not.
A good question might be what percentage of sets are being "hoarded" for future sales? If, say, 5% of Death Stars are being bought and left MISB for future sales then that isn't a problem at all. On the other hand if 75% are being set aside for future sale then that doesn't bode well.
Generally something isn't a bubble until you start to hear about it outside of the inner community. When your hairdresser starts talking about investing in LEGO get scared. When late-night TV starts having specials on LEGO flippers then it is time to run.
I will say that I've learned a ton here, at least as much as I've given back... So sharing back with the forum is just good Karma. Hording all the info, just "take, take, take" without any giveback, is not only rude, but bad Karma (I really do believe that).
The whole world is a better place when we all work together and share, rather than take as much for ourselves as possible without any consideration of others. There has to be a balance.
Brickset administrators could probably provide better data, but it appears that there may be roughly 20 people visiting their site (on average) at any given point in time.
Question: Does anyone seriously think that the hoarding or resale strategies by members of Brickset really amounts to anything in the big scheme of things?
Just trying to get a little perspective...
To answer your question: I think the hoarding hurts the recent, small collector the most and has very little to do with the grand scale of things. I find it pretty disappointing to see a set that was just discontinued a couple of months ago demanding a 50 to 100% mark up over it's original retail. Of course that's just the nature of supply and demand. I do think regarding both the Star Wars UC and modulars that value will level out. Too many are hoarding and there's still a small market for Lego sets in the $150+ range.
I have seen no evidence that the act of resellers stocking up on sets cause them to become unavailable significantly any sooner. LEGO seems to use the calendar to decide when to stop producing sets, not produce a fixed quantity and when they sell out they sell out. LEGO doesn't seem to be like concert tickets, for example, where the actions of the resellers reduce availability for everyone else.
Once a given set sells out, the fact that resellers help create a secondary market only increase the availability (and decreases the price) to the "small collector" who wants something. Imagine how much the small collector would have to pay for a given set if zero resellers had stocked up on it?
As I currently perceive it, the purpose that resellers fulfill is to shift the availability of a set in time in exchange for accepting the risk/reward of price. If you want to buy a set #10193 today you can do so from [email protected] for $99.99 no questions asked. If you choose not to buy it today, but decide you want to buy it in three years, there will probably be a reseller there to meet your need. But the price will be an undetermined amount of 2015 dollars instead of a know amount of 2012 dollars, and the reseller is accepting the entire risk/reward premium by setting aside capital today.
All too often people use terms like "profiteering" or "hoarding", to demonize what someone buying sets to resell later is doing.
That isn't it at all, it is just a business transaction, buying an item today that is easy to obtain, on the chance that it will become hard to obtain later and thus command a higher price point.
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To the poster above you who found it "disappointing" that a set retired a few months ago has doubled in price, I would ask, "why?".
1. Are you just upset that you failed to act in the 1 to 3 years it was easy to obtain and now you have remorse over the current market value?
2. Are you upset that someone else is making money when you're not?
3. Are you upset that free market economics are at play and you would prefer a socialist system where the government forced people to make no profit?
4. ???
Let me give you an example of frustrating reseller behavior: When a group of resellers buy say twenty MMV sets each, all at once from Amazon thus cleaning them out of stock. Then they try flipping them for 20-30% above retail, not really making any money but still hurting someone who might just want to pick up the set for their kid's upcoming birthday. I understand if a set is a couple years old. That's a different market. But trying to make a quick buck off a recently discontinued or out of stock set is kind of scummy.
Just think about that for a second, before you respond...
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BTW, MMV is a terrible example, it has been on the market since 2008, anyone now in 2012 claiming "but resellers bought the last 20 in stock at Amazon, a poor kid is going to be upset for their birthday" is just completely missing the big picture.
There has been... PLENTY ...of time to buy this thing, plus, it is still for sale from Target for $89, and Lego [email protected] still has it for $99... TRU did have it in stock, until BOGO cleaned them out.
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My son just built General Grievous's Starfighter...
Ok, now I know why it has been on sale, sheesh!!! This is NOT a playable set, way too fragile, my poor son, who was able to put together the new Y-Wing and TIE Fighter just fine by himself, was frustrated to no end with this thing, it kept breaking on him. I finally had to fix a number of problems and finish part of it, because it just doesn't want to stay together.
Not meant to be a review of the set, he loves the minifigs, but it isn't Lego's best work.
There have been a ton of sales on the MMV since it came out. More than ample enough opportunities to get it on the cheap. This thread has been discussing the potential EOL of MMV since it's (the thread's) very beginning. It's old news.
Also, there are sets I passed on that I shouldn't have (Green Grocer comes immediately to mind), but that's life and now I have to pay $500 if I want it. Furthermore, I don't have the means that others may have or I may choose to use it elsewhere, and that's life too.
It'll all be okay in the end.
The secondary market is an interesting thing and one that I really enjoying studying. I've only been back into Lego since the fall of 2010. I'm still kicking myself that I didn't get the motorized AT-AT, Grand Carousel, Taj Mahal, and Green Grocer when I had the chance.
Resellers cannot drive the price up if the buyer isn't willing to pay the price (supply & demand). Yet clearly there are buyers willing to buy at above MSRP, sometimes ridiculously so. I can't begrudge a reseller for selling a retired set though, when I could have had the same opportunity to acquire it. If you remove some resellers out of the picture, that would only make the price go up farther.
Keep in mind, when a set is retired, it isn't as if ALL resellers put their items on the market immediately. There are some that are willing to make 25%. Other's 50%, 100% and so on. Resellers sell in varying stages and time frames. Some hold on to their sets for a couple months and others a couple years.
As an example, when the MMV retires, what will happen? The price will start to go up above MSRP. But how much and over what time period? That's really the question, isn't it? No one can say with certainty. There is a bunch that's been sold. Very true. However, I believe that with every snap shot of a moment in time after retirement, there won't be nearly as many on the market as there was when it was readily available. And so the discussions continue... is it a good set? will it be desired in the months/years ahead? If so, the price goes up... If not, it still seems that the price goes up, just not as much and it is over a longer time period.
Oh, something else that makes this thread "fun" is just going back and reading some of the past posts. Last week, I made it a point to read the first 2 pages of this thread. Some good insights, some not so great but only because we know what "right now" holds.
OK, back to lurking...
Resellers of 10178 Motorized AT-ATs will cry out in joy this weekend as I've decided to open mine and build the thing for our IndyLUG show in March.
That being said, there are still good deals to be found here, especially those EOL'd sets with prices that had been pushed up. For example, Imperial Flagship is selling at USD245 equivalent, and Emerald Night at USD145.
So, yes I get why people become re-sellers. At the same time, I recently joked to my wife that collecting toys as an adult is sometimes like being Al, the bad guy from Toy Story 2.
The demand > supply excess for Series 1 was very well documented, but apart from one or two select minifigures (particularly the zombie) they don't seem to be commanding prices significantly above RRP (that I can see from a cursory glance on eBay). I wonder what effect the seemingly over-production of the later series will have on the first - will people just get bored of the CMFs, devaluing the first series? I have a sealed set of Series 1 which I've always intended on sitting on for a couple of years.
There is a bell curve, a place where an item peaks in value. Very few items are immune to this curve, and at some point all remaining demand is gone at a given price point, so the price starts going down.
I think we're seeing this already on the early Star Wars UCS sets... I sold some last year for more than I'm getting today, I will be very careful to not keep more than one or two of each in stock because of this. During Christmas, I had 8 10030 sets in stock, now I'm down to 3 and won't replace them until I've sold 2 of those, keeping 2 in stock.
10030 has reached the high point I think, 10221 SSD, I think has removed any further upward price pressure, now that there is another big gray arrowhead ship to buy. :)
With the Star Wars license renewed for another 10 years, you will see more sets go down in value. Look at the quality of minifigs they are putting out. Way more printed legs, specialized helmets, etc. The older figures are so much more basic, as are the builds of some of the sets. As we see a third or fourth version of sets, they will not be as desirable except for completionists.
@LegoFanTexas - I wish I could see your "trades" as some people share their trades on the stock market. We could analyze your strategies and get more insight into the market. Funny thing is, there are many others out there who do what you do, and DON'T say a peep on these forums. The quietly get info, make deals based on it, get profit, and don't share the info they learn. It would be cool if more folks like you spoke up.
Thanks for that.
The expectation seems to be that this will take the place of the Emerald Night as the "premium" train in LEGOs product line for around two years. But I note that the previous Maersk branded set was only on the shelves for about six months.
10219 seems to be getting harder and harder to find outside of [email protected] It feels like nobody is getting restocked once they run out.
Does anybody have any educated guesses on what is happening here?
both soon to be gone, each have unique-to-the-set figures, but only one train and this is the fourth castle??
Thoughts on best pick for a year from now?