Predictions on Discontinuing Sets and their Secondary Market Value

MattsWhat · November 2015

Also, we have no idea the contract terms lego has with its licences. They may have long notice periods and clauses that mean companies can't leave and produce with or through an alternative etc. It would seem unlikely that any company would have a contract that would allow that for the very reasons you state. At least without huge buyout clauses that make it next to impossible.
Compare this to what happened before, that wasn't a loss of a licence it was the collapse of a licence (essentially). Yup, that could happen again, but now the success and variety of different licences and own lines make it so much less damaging if they have a lone ranger type debacle with a currently successful line.

TheLoneTensor · November 2015

madforLEGO said:

As for Dinos. If I am not mistaken the Dino line for LEGO a few years ago did great while produced, but the aftermarket value was not spectacular, except maybe that main set with the T Rex. Now, this is Jurassic park, so I think the name may carry it better, but only until another Dino line appears.

Those past dinos did well, but I don't remember them being as unavailable as these are. As for value, the Jurassic World/Park brand is pretty strong. I can see these retaining more value than any future Dino line. With the JW sequel coming in a couple years, I can see these being very sought after.

SumoLego · November 2015

With respect to Disney (or any other strategic partner), one ought to expect succesful companies to act in a similar manner.

I doubt Disney would opt to stop utilizing third parties for toy production - Hasbro, Lego...

And if it were that simple, explain to me why the Barbie-themed MegaBloks are nowhere near as succesful as Friends. Or why Kre-O is on life support...

pharmjod · November 2015

I want to see kreo die a painful death. Mostly cause I'd rather see Hasbro work with LEGO doing at least transformers if not GI Joe.

Aanchir · November 2015

madforLEGO said:

For all of LEGOs profitable indie lines I would wager that they are making far more money on the licensed lines-and relying on them -more than they care to admit, otherwise why have them?

For example, all it takes is someone at Disney to wake up one morning and say "Gee, why are we paying LEGO all of this money? Why not buy Megabloks, be a competitor, and make our own lines?" Guess what, if that happens a good chunk of LEGOs revenue goes bye bye real quick; bye Disney, bye SW, and bye Marvel. Three major money makers all gone at the snap of a finger. As much as City, Friends, Creator and Ninjago make for LEGO, I'm guessing that losing three licenses overnight would hurt bad (never mind a rival mega brand would likely make lines to compete against LEGOs lines). Then you have expanded factories and new supply lines all over (just like in late 90's), manufacturing too many part types (just like late 90's/early 00's) and fairly uninspired designs (like the mid to late 90's) sucking money out of LEGO's pockets. I also see the company delving back hard into 'virtual brick' which is another potential pitfall from the late 90's. I see many parallels to the 90's, regardless of what any book says. Also add onto this what appears to be instances of inferior part quality (and apparently a 'ho hum' response to it) and the future of LEGO could turn quicker than most think.

I still think LEGO does not think of the 'what ifs', at least as much as they claim to now. I just think they have gotten a bit over confident in their success (just like the late 80's to mid 90's) and if they are not careful it bites them in the tookus real fast. Especially with this talk of ripping off Idea submissions for large sets (like Helicarrier and GB HQ), what appears to be growing instances of inferior part quality, and ever rising costs of the sets (which seem to be more than just inflation).

The thing is, Disney ISN'T paying LEGO any money to produce those licensed themes. It's exactly the opposite — LEGO is paying Disney for the right to produce products based on those brands. So as long as LEGO licensed products are selling, and selling better than any clone brand product could sell, and the LEGO Group is interested in maintaining that contract, there's really no incentive for the licensee to jump ship.

Also, if you think the LEGO Group doesn't think about these "what ifs", you are doing them a great disservice. They think about all kinds of what ifs, up to and including if they lose their plastic and dye suppliers. What makes you think the possibility of losing a major licensing partner has not crossed their radar? That very possibility is probably why the last time the LEGO Star Wars license was renewed a few years ago, it was renewed for ten years (a much longer time than a typical license agreement).

LEGO would definitely take a big hit if they somehow lost their biggest licenses, but because they have so many other non-licensed lines to depend on, it would almost certainly be a hit they could recover from, unlike in 2003 when almost every theme they had was losing money.

And there's not the slightest reason to think the LEGO Group is manufacturing too many part types. They produce far fewer elements per year than they did back in their crisis years. Back in 2004, they produced over 14,000 elements per year. Nowadays they produce only around 6,000 per year and they keep that number closely in check. Designers generally cannot put any new element into production without taking another element OUT of production.

Oh, and regarding the LEGO Ideas "controversies" you mention: you'd have to be completely clueless to think the Helicarrier set was in any way ripped off of the Ideas project, or that it even COULD have been. The final Helicarrier set was officially revealed in January 2015, while the Ideas project was created in May 2014. A set this large and complex cannot be designed in just seven months. Even ordinary-sized sets generally start development at least 18 months before their date of release (so, a typical LEGO designer today is currently working on 2017 sets).

Also, the Helicarrier set scarcely resembles the LEGO Ideas proposal, which even in its updated form from July 2014 would have been much larger and needed more than twice as many pieces. So it's not even like the MOCist (who never built the model physically and probably doesn't even have a clue if it could support its own weight) could have saved the LEGO Group a meaningful amount of time with his initial concept. If incoherent conspiracy theories like that were enough to bring down the LEGO Group then there's nothing in the world they could do to save their business.

Again, please read Brick by Brick. The things that led LEGO to near-bankruptcy are specific, well-understood mistakes that they are now extremely diligent about avoiding. I'm not sure you entirely understand what many of those mistakes even were.

Sniss · November 2015

Are Disney etc paying Lego? I would have thought it's Lego paying Disney for the licenses (hence why we talk about licensed sets being more expensive) rather than the other way around

dougts · November 2015

most likely, Lego pays Disney a royalty on every set produced/sold for licenses Disney owns. This could be a percentage or a flat fee per set. It could also vary theme by theme. Lego may also pay Disney annual licensing fees on an IP by IP basis just to hold the production rights, independent of any current sets or themes being produced/sold

i cant imagine a scenario where Disney pays Lego anything. Why would they ?

madforLEGO · November 2015

Ok, Correction noted. LEGO is paying Disney for rights. However, I would have to presume that LEGO is making far more back on the profits from the licensed products, correct? more visibility, can sell more video games, etc, right?

I just think that there are parallels between now and back then, with additions of poor part quality and the rising set prices, I see LEGO potentially having issue quicker than most think. Brick by brick or not.

Aanchir · November 2015

madforLEGO said:

Ok, Correction noted. LEGO is paying Disney for rights. However, I would have to presume that LEGO is making far more back on the profits from the licensed products, correct? more visibility, can sell more video games, etc, right?

It depends. LEGO makes a lot on licensed products AND non-licensed products. So for example, I'd say LEGO City and LEGO Friends each sell far more sets than LEGO Super Heroes, but fewer than LEGO Star Wars. Often the number of sets per theme per year can be a decent (though not flawless) indicator of how profitable a theme is.

However, non-licensed products let the LEGO Group keep more of the revenue from each sale since they don't have to pay royalties. This is part of why Bionicle came about in the first place. The LEGO Group saw that the rich, character-driven story of Star Wars helped them sell a lot of products, so they decided to develop their own intellectual property so they could reap the benefits of that kind of story without the drawbacks of paying royalties on each product sold. "Big bang" themes like Ninjago are based on the same principle.

As you can see, it's a trade-off. How long LEGO holds onto a license often has to do with whether they think that trade-off is working in their favor.

While the LEGO Group likes themes that can sell video games, video game sales (and media sales in general) aren't a huge source of revenue for them. In fact, a big part of the video games' purpose is just to help advertise the sets, which are where the big money is made. Same goes for other LEGO-branded media like storybooks, cartoons, etc, for both licensed and non-licensed themes.

VorpalRyu · November 2015

^^ I get what you're trying to say, but with Disney, it's highly improbable they would ever buy up a competitor & try to compete with TLG. Disney knows the power of brand recognition, it is, after all one of their key marketing strategies. They'd have to recognise that a large number of fans like myself (in my case MARVEL first & foremost), while seriously into our respective "Disney brands," if TLG lost the IPs, we'd stick with Lego & forgo our preferred "Disney brands" where construction toys are concerned.

Sniss · November 2015

Agree, it's brand synergy rather than competition. And as Disney owns a huge amount of the marketable characters now (Disney, Pixar, Marvel, Star Wars), they're in a win/win situation really

1x1 · November 2015

I saw 28 new updates and thought something interesting had happened.

1x1 · November 2015

I saw 28 new updates and thought something interesting had happened.

TheLoneTensor · November 2015

29, 30

Brickarmor · November 2015

There is a note on all the JW sets on US [email protected] saying that they will be back in stock in Feb. So it's not done but it'll be a fine Xmas flip, provided the ebayers don't return them to you come Feb.

SumoLego · November 2015

Let's not forget the Lego still sells buckets of regular bricks and make unbelievable margins on those.

They're not sexy, but they still sell very, very well.

pharmjod · November 2015

I only allow for a 14 day return policy on eBay and I don't accept returns for buyers remorse =) not too worried about the JW sets this Christmas

kiki180703 · November 2015

pharmjod said:

I want to see kreo die a painful death. Mostly cause I'd rather see Hasbro work with LEGO doing at least transformers if not GI Joe.

I want to see kreo die from sausages shot from @SumoLego 's sausagecopter! :D

dougts · November 2015

yeah, it's Amazon sellers who have to worry a lot more about the Christmas buy now when none are available, and return in February scenario, what with the 90 day return policy and all

SumoLego · November 2015

A Black Helicopter piloted by evil Lego resellers...

stevemack · November 2015

If you sell as buy it now on ebay you cannot legally refuse a return if the buyer changes their mind! same with amazon, you can't refuse!

The time frame for ebay is minimum 14 days and amazon is maximum 30 days to notify you!

For the Uk this is

juggles7 · November 2015

AMZN UK has the same holiday return policy as in the US. I copied the following directly from the AMZN UK site...

Extended Christmas Returns Policy

We've specially extended our returns period for the Christmas season. Items dispatched by Amazon.co.uk during the period from 1 November, 2015 to 31 December, 2015 inclusive may be returned at any time before midnight on 31 January, 2016. Our returns policy will revert to the standard 30-day period for items dispatched after 31 December, 2015.

stevemack · November 2015

That's for amazon themselves. Not for Marketplace sellers...

Please note that this doesn't apply to mobile phones with contracts or items sold and fulfilled by Sellers on Amazon Marketplace

pharmjod · November 2015

stevemack said:

If you sell as buy it now on ebay you cannot legally refuse a return if the buyer changes their mind! same with amazon, you can't refuse!

The time frame for ebay is minimum 14 days and amazon is maximum 30 days to notify you!

For the Uk this is

A 20% restocking fee and buyer paying return shipping deters a lot of nonsense. Also, if the set is not in the same condition (ie they have opened it and assembled it). It's also why I don't fool with Amazon.

stevemack · November 2015

Not true sorry... Restocking charges are illegal for a business seller on ebay (normal seller is a bit different but if you're reselling that makes you a business) and amazon strictly forbid restocking fees now!

You are correct with the postage except in circumstances of faulty/damaged where you the seller is expected to foot the bill

pharmjod · November 2015

I can list a restocking fee on my eBay "store". It can be up to 20%. EBay offers this. It is not something I'm insisting on with my listing. If its different your country, then sorry bout that.

dougts · November 2015

^ yeah, some of us are talking ebay US, some are talking ebay UK/Eur. the laws are different, thus the options are different

pharmjod · November 2015

Yes, I'm in the USA since it may not be obvious.

TheLoneTensor · November 2015

Exactly, 1K from Wall Drug could be Mexico, or Canada.

pharmjod · November 2015

Either way its not UK or Europe :)

pharmjod · November 2015

There, fixed it!

juggles7 · November 2015

stevemack said:

That's for amazon themselves. Not for Marketplace sellers...
Please note that this doesn't apply to mobile phones with contracts or items sold and fulfilled by Sellers on Amazon Marketplace

You're wrong, Steve. Just like in the US, and I quote from your UK Amazon site

The returns policy offered by Marketplace Sellers must be equivalent to or better than the returns policy offered by Amazon.co.uk.

... and that means better for the customers, not the sellers, of course.

stevemack · November 2015

Not including their holiday policy. Hence I put it back to you, you're wrong. The statement I have posted is a direct copy and paste from amazon for the 'Holiday' time sellers!

http://www.amazon.co.uk/gp/help/customer/display.html/ref=hp_502480_top_rsp?nodeId=1161002

Ps, Given I'm quite a big seller on Amazon uk/ebay uk I'm quite well versed in their rules!

Sethro3 · November 2015

Too many rules. That's why I got out of the reselling game.

MattsWhat · November 2015

Anyway, back on topic, all the JW sets back on [email protected] in UK.. at least for the moment. I can't see them making it much into next year though. We shall see.

Milne44 · November 2015

With a 1 per set limit

romanstar · November 2015

Milne44 said:

With a 1 per set limit

jw?

pharmjod · November 2015

Jurassic World

romanstar · November 2015

Cheers.lol

stevemack · November 2015

Of the JW bunch, raptor escape now shows as Sold Out! That's odd! Wonder if that's the last JW production run before xmas?

AceCobra1 · November 2015

Do you guys think it is worth while investing in the larger JW sets 75917 ++ for xmas and flip it at AZ for a higher than RRP ? I have got a couple of the smaller sets to flip but these larger sets don't seem to be as popular ?

stevemack · November 2015

As per usual, it depends on what you pay for your sets tbh....

pharmjod · November 2015

I personally think indominus Rex set will be a decent flip over Christmas. Still undecided on t Rex set. Probably it will too though.

AceCobra1 · November 2015

Is it worth getting it with RRP? I suspect I will not get much from the actual flip itself but having a coupon with the purchase and a free bricktober might be worth it. What are your thoughts?

black_towr · November 2015

There aren't many sales for these JW sets so if your buying them your most likely paying RRP.

TheLoneTensor · November 2015

All I have to say to that is if you're buying them at RRP then you're very lucky.

pharmjod · November 2015

Right now the bigger issue is finding them at all. They are sold out at retail just about everywhere. Yes, some of that is resellers, but quite a bit I wager is also parents buying for kids. I see this as one of those themes that is a casualty of LEGO not being able to keep up with demand since they are making about a gazillion sets at a time. Any recent restocks are likely gonna be it before Christmas. I fully expect to see everything back on the shelves by February or March. I don't usually dabble much in Christmas flipping, but I'm gonna roll the dice with JW sets this Christmas with a focus on raptor escape and indominus Rex and maybe t Rex.