brick and mortar store for used LEGO

goingdeepe

Thinking about opening a brick and mortar store dealing with used legos.....besides auctions, ebay, bricklink, and craigslist...any idea where you can buy minifigures and legos in bulk?  any companies?

MattsWhat

I can't imagine the footfall in a used lego specific store would ever be enough to support the cost of having it open.  And if the money from the other methods is supporting it staying open then you are just losing profit.

Captain_Eyebrow

I would be as cautious as @MattsWhat is suggesting.  The bricks and mortar approach is admirable but expensive.  As you would not really be supplying a service (e.g. fixing domestic appliances etc) you would need to be in a busy area to drive footfall, a busy area equals a higher rent and possibly a service charge.

The you have got the utilities costs (e.g. gas, electric) telephone and broadband (I'm assuming you'll also sell on line and operate a bricklink store?), insurance costs and not to mention business rates!  Also how many days are you going to open?  If you go 7 days a week are you going to work every day or are you going to pay someone to work on your days off.  What happens if you want to go on holiday?  Do you shut the shop?  If so you income dries up but the costs keep on coming.

I'm not saying its not a good idea as it sounds lovely and if was near me I would be a regular visitor but please think very carefully and plan out the costs before you commit to anything. 

CCC

And don't discount sorting costs - there is a lot of work sorting through job lots of other people's lego, matchbox cars, megabloks, batteries, chinese knock-offs, teeth and cat poop.

And theft of minifigs. One of the joys of bricklink is that you don't get the public fingering through your stock.

goingdeepe

It will be in a high travel area near a mall...main income will be from used sets, new retired sets, and minifigures, will also be hosting summer camps and birthday parties. I would also sell online.  Would have less than 10 employees mostly high school and college kids.

I have two different business people running the numbers to see if it can work. big thing for me is finding start up inventory for a low price.

Have a possible great location with inexpensive lease/rent.

madforLEGO

Well start up inventory would likely come from bulk lots from those selling them on sites like Craigslist and eBay (or someone closing their bricklink or brickowl store) and in other avenues like 'boot' sales (like in the UK) or 'garage' sales (like in the US). The issue is that sources of LEGO not provided by LEGO themselves (which apparently is like pulling teeth to get a license to sell LEGO from LEGO) are not constant and the prices fluctuate, plus you also have to know that more and more folks are getting into reselling LEGO, so you will likely also have to be 'johnny on the spot' when those lots do come up, and even then maybe a bidding war occurs, and again those and bricklink and brickowl may not have to worry about overhead where you do if you have a brick and mortar store.. I think if you want a good idea of how a LEGO used brick store runs, first find a person on Bricklink or brickowl that can provide insight as to what demands are on you, again keeping in mind what it takes to run a physical store even 5 days a week.

CCC

goingdeepe said:

 big thing for me is finding start up inventory for a low price.

That's the same for every BL seller in your area too, with probably less overhead.

solid_strider

There are at least two second-hand Lego stores in the North Texas area:

www.Facebook.com/minifigsbricksandmore

https://bricksandminifigs.com/


I haven't been to the first one (it's in a mall), but a Bricks and Minifigs opened near me a few months ago.  They were trying to open up closer to a big mall, but the overhead became too much and they picked a location in strip mall with a Kroger and a second-hand baby store a few stores down.  They've been pretty busy whenever I stop by.

goingdeepe

thinking birthday party room and summer camps will help with income....

bea

There used to be a store like that in my general area. I have no idea if they are still around but, tbh, I would be very surprised if they were.

It was a small space and it didn't look like they had a lot of capital for the interior so it looked poorly lit, a little grubby and rather barren, compared to what people expect from an actual lego store or just a toy section at your average megastore. They had minifigures hanging in little zipper baggies from pegboard, a glass display case with more figures under the register and then open shelving with some stacked sets. I looked briefly at the minifigures, saw the prices and left.

I think I'm may be a poor barometer for what actually sells in terms of used lego since I've bought very little of it on the secondary market due to the markup. You have to estimate what portion of the toy buying public are willing to do so and have a plan on how you can reliably get them into your store repeatedly.

danstraindepot

I think you should at least talk to the Bricksandminifigs.com guys, the Franchise fees may turn you off, but they have probably learned a lot of pitfalls to avoid, and any money you pay them may very likely aid in your long-term success.  Wish you all the best.

goingdeepe

lol bricksandminifigs.com is what i am considering

datsunrobbie

You won't just need startup inventory, but an ongoing source to replenish inventory that is sold or walks off. You will need insurance for the parties and camps to cover you when little Timmy tries to eat parts and gets injured, not to mention replacing the rare part that he ate. And insurance for the asshat that steps on a 2x2 block and decides to sue you for pain and suffering.

Natebw

Wow, that is cool. Maybe if my professional career (and associated school loans) doesn't pan out, I'd open one of those. lol

khopewosin

A concept like what they have at In's point in Hong Kong would be great. They have several floors of tiny cubicle like stores selling used and new Lego. 

BuriedinBricks

We just had a Bricksandminifigs open in Madison. It's a nice place and the focus is certainly on used sets, figs, and mixed bulk. Most currently available retail sets he has in stock are marked up 10% or so. NISB retired sets are usually going for around BL prices, if not a little higher.

The used inventory seems to turn over pretty fast and he gets some good stuff in. I've seen old UCS sets, an Eiffel Tower and a Carousel all in store, and then gone the next time I've been in. I think he posted a NISB Haunted House the other day.

Pitfall69

Opening any retail store has its pitfalls. There are the obvious costs, but there are also other costs that ine doesn't think of when opening a business. It is sort of like buying a house; you calculate the mortgage, property taxes and homeowners insurance, but what happens when your hot water tank ruptures, your refrigerator or furnace stops working, or you need a new roof? 

If I were to open a brick n mortar store, it wouldn't be exclusively LEGO. I would throw some comics and other toys new/used as well. 

The thing about small chain franchises is that the markets can be different in other areas than the "flagship" store. The concept may work in San Francisco, but may not work in Dallas or New York City. Once you start changing the concept to fit market conditions, why bother becoming a franchisee?

Pitfall69

BuriedinBricks said:

We just had a Bricksandminifigs open in Madison. It's a nice place and the focus is certainly on used sets, figs, and mixed bulk. Most currently available retail sets he has in stock are marked up 10% or so. NISB retired sets are usually going for around BL prices, if not a little higher.

The used inventory seems to turn over pretty fast and he gets some good stuff in. I've seen old UCS sets, an Eiffel Tower and a Carousel all in store, and then gone the next time I've been in. I think he posted a NISB Haunted House the other day.

Who operates the store while someone is out gathering new stock? With payroll taxes, insurance, franchise fees, and other overhead, I don't see how owning a store could be that lucrative, unless you own the actual franchise. Maybe I am missing something??? I know plenty of business owners that operate in the "red" year after year. Maybe these owners use the business as a tax shelter, but it amazes me how these businesses stay afloat.

Natebw

Pitfall69 said:

Opening any retail store has its pitfalls. There are the obvious costs, but there are also other costs that ine doesn't think of when opening a business. It is sort of like buying a house; you calculate the mortgage, property taxes and homeowners insurance, but what happens when your hot water tank ruptures, your refrigerator or furnace stops working, or you need a new roof? 

Definitely all that is true. But as an owner of two brick and mortar stores (optometry), there are also benefits to having a storefront - visibility, relationships with neighboring business owners, networking, hosting community events, etc that are not possible online. 

I'm not saying this brick venture is worth doing. While my businesses are successful, I look at restaurants all the time and think "I would never want to own this business!" 

BuriedinBricks

@Pitfall69 I know he has a few employees, and I think a lot of stock is brought directly into the store by those selling.

Figs and sets are inside cases, which I'm sure helps limit shrinkage.

goingdeepe

would try to carry more older sets less new

The_Mad_Vulcan

There's a brick and mortar store by us. It seems to be doing pretty good (always busy) and we shop there all the time. It might be smart to contact the owner and get his input/opinion.

A few things that could play to your benefit:

Rent cost: find someplace that is cheap. As a specialty store, you are going to have a lot of people from travel from fairly far away to get to you. There won't be an ideal location where the foot traffic will be a high volume of potential customers.

Advertise. I found out about the local store from Craigslist, and that don't cost a dime.

Couple it with a Bricklink store/ selling on eBay etc. For further revenue.

http://usplaces.com/others/burien-wa/bricks-r-4-kids 

TigerMoth

An issue here is that everybody has a different idea of what is intended.  For example, you talk about selling sets. I think people might picture that as a store with shelves of boxes. One popular store I've seen doesn't do it that way. Instead it has glass cabinets with built sets. There may be a box or instruction, but there might not be. You buy the model; they seal it in a bag; you take it home and dismantle it.

Another question is whether you're selling sets as toys or collectibles (or both). People will buy a three-year-old City set, as a toy for a child, at a premium on the original price because an equivalent set will now cost more. They'll also pay slightly more because it's (now) unusual. Or are you hoping to buy a Millenium Falcon cheaply and sell it for megabucks?

The store I mentioned also sells new LEGO sets. I don't know whether or not they deal directly with TLG, and it doesn't matter because it's in another country, but where they don't play ball with small retailers, there are usually buying groups that act as an intermediary - they buy from TLG and you buy from them. So don't just think that selling new sets isn't an option.

SumoLego

It takes a lot of sales to cover the overhead of a retail location.  Employees are expensive and one would have to move a lot of product to justify those expenses...

TigerMoth

SumoLego said:

It takes a lot of sales to cover the overhead of a retail location.  Employees are expensive and one would have to move a lot of product to justify those expenses...

That's the theory.

But stand outside a small specialist shop in the suburbs and note just how few customers there are. If you come back in a year, they're quite likely to still be there. It's a balancing act more than anything.

CCC

I know it's not what you mean - but the customers are still there after a year. That's the important thing for a specialist shop, the customers have to be loyal to the specialist shop, possibly because there is little competition locally. One problem with Lego is that it is hard to be specialist when there are so many outlets, both bricks and mortar and online. You have to offer something that the customers cannot get elsewhere, and also keep those customers coming back and telling their friends.

That typically means there is not much profit in it. If there is profit in it and you succeed, then someone else will be willing to do the same for slightly less and so you have competition. You have to be better than them (more knowledge, know how to get cheaper stock, know how to add value, etc) to survive.

Basta

goingdeepe said:

......big thing for me is finding start up inventory for a low price.

Hmm, to be honest if you don't already know the answer to this (there is no easy/magical answer by the way) I'm not sure how you intent to keep your store stocked. Finding inventory is going to be a pretty big ongoing challenge and if your starting with none then that's going to make things so much harder IMO.

My guess would be that most people who open one of these stores have been collecting and buying bulk lots and the like for many years so they already have starup stock.

Pitfall69

BuriedinBricks said:

@Pitfall69 I know he has a few employees, and I think a lot of stock is brought directly into the store by those selling.

Figs and sets are inside cases, which I'm sure helps limit shrinkage.

MattsWhat

^adding to what @CCC said. Keeping customers is everything. The problem with lego is the amount of sets, interests, parts, conditions. Your going to be unlikely to ever be a customers only place to shop which in the long run means you will be competing against on line prices.
Finally, the market for something like a carousel is pretty small worldwide, and must be miniscule at a bricks and mortar store. (like approximately zero). And that means your big ticket items,  the ones with large profit, will almost certainly get shifted online. Whereas the 1 cent bricks will be sold in the store. And you have to sell a lot of 1 cent bricks to keep a shop open. 
Having said all of that... Someone who had a lot of parts and sets and maybe didn't have enough space to organise them at home might look for a premises from which to work. If you had to rent some space anyway and that happened to be open to the public when you were working, I could see that doing OK.

Pitfall69

We are not trying to discourage you from opening a store; heck I would love to have a LEGO retail store, but we are just throwing out all the things that you will have to consider when opening such a store. 

One can have a busy and successful syore, but if you aren't making any money because of overhead; it doesn't make much sense to stay open. Like I said before, there are people that open businesses as a form of tax shelter. They may have income coming in elsewhere,  but the business helps keeps income taxes lower.

Pitfall69

You will definitely want to carry new sets, even if you aren't making mych on each sale. The big money makers will be the used sets, bricks and minifigures. With a State  Sales Tax ID number; you will be able to buy new sets from places like Walmart, without having to pay any sales tax. If you sell the sets later, you will collect the sales tax from the buyer.

ryjay

The scariest part to me is that someone else is running the numbers.  A venture this small, you need to be the expert, and know and run the numbers yourself.    And you're hiring 10 people?

SumoLego

Buying from Wal-Mart at retail would guarantee failure.  Does TLG still do wholesale to small resellers/toy stores?

I would definitely diversify.

I see that yogurt franchises are popular these days.

Pitfall69

SumoLego said:

Buying from Wal-Mart at retail would guarantee failure.  Does TLG still do wholesale to small resellers/toy stores?

I would definitely diversify.

I see that yogurt franchises are popular these days.

I was actually talking about buying sets at deep discounts and selling them later after they retire or parting them out for part inventory and minifigures. 

SumoLego

Ah, I thought you meant retail.

Either way, one would need a pretty vibrant local Lego community to sustain/justify the we expense.

DadsAFOL

SumoLego said:

Buying from Wal-Mart at retail would guarantee failure.  Does TLG still do wholesale to small resellers/toy stores?

They do, but with extreme restrictions.  Your store can't sell more than 50% Lego, which rules out the topic of this conversation.   Also you have to have been open 2+ years.  And you get your sets several months after TRU and the big boys.   

ryjay

Pitfall69 said:

SumoLego said:

Buying from Wal-Mart at retail would guarantee failure.  Does TLG still do wholesale to small resellers/toy stores?

I would definitely diversify.

I see that yogurt franchises are popular these days.

I was actually talking about buying sets at deep discounts and selling them later after they retire or parting them out for part inventory and minifigures. 

Success at the retail level is going to require turnover.  Hard to hold on to sets waiting for the price to go up when bills come at you every 30 days.   Doing the above can work online, but not at brick and motar retail.  

goingdeepe

what I am looking at..2 to 3 full time employees including myself...4 to 6 part time employees college high school kids....mainly selling minifigures, used sets, in the box retired sets, would sell very little of current issue sets, also would sell legos in bulk, host birthday parties and summer camps....looking at locations that have a lot of elementary schools in the area, Ymcas, daycares or grocery stores

we have an official lego store in the area and it is packed so I think the customer base is here just a matter of location and lease price

btw I appreciate everyones feedback positive and negative

CCC

goingdeepe said:

host birthday parties and summer camps....l

Make sure you or whoever you are hiring is good with kids. There is nothing worse than a party run by someone who is really passionate about their product but cannot relate to kids wanting to enjoy their day or just chucking it around.

MattsWhat

goingdeepe said:

we have an official lego store in the area and it is packed so I think the customer base is here just a matter of location and lease price

I'm going to need some convinving that the market base for your enterprise and the official Lego store are particularly similar.  The majority of people who you would need to be in your store would be the demographic of this site.  And from my experience of the retail stores we make up a very small percentage of the people making the store busy.  I agree there would be overlap for the parties element - but actually the overlap of this with the rest of your business model would be small.. On the one hand you have the customers who want loose bricks and retired sets (lets assume this is mostly adults) and on the other you have parties (lets assume mostly children).  The only overlap would be afol parents.  You would also need different space for the parties and the 'shop', probably different staff as pointed out by @CCC and different stock (no one wants a carousel to be used for a childs party, right?).  That's almost two distinct businesses requiring more leased space, more overheads and even more of the bulk stock you originally asked about.

Now, reading back I notice that I come across very negatively in this thread.  I think it is an amazing idea and would love to be able to open a shop like this myself, but I am currently trying to set up a fledgling business myself (not in Lego) and I have to say it is very hard indeed.  You can't wander into this without a knowledge of everything involved yourself and without some pretty good evidence that it will work.  From your posts so far it sounds like it is something you want to do, but you have asked for help with the accounts and how to stock it, and only come across as having a vague idea of how it will work.  I might be completely wrong, and I apologise if I am, but I would hate to see your dreams dashed with financial ruin in 18 months because I hadn't highlighted some of my negative thoughts. Wanting it alone isn't going to make it work unfortunately.

CCC

You might also want to consider buying new sets and renting them out. I've never understood it myself, but pley seems to be going still. You'd have the extra advantage of no postage costs if it was instore collect / dropoff. Although you'd still need to check all the minifigs and expensive parts were in the returned sets before giving back any deposits.

mrw

I have a B&M Lego store and it is extraordinarily hard work. 
I have dabbled in used parts but the amount of work in sorting, cleaning and grading completely erodes your margin. I finally settled on selling new parts by weight, which offered both the customer and myself the best deal. 
The amount of competition you face is intense and unless you can compete on price (nearly impossible for a physical, small store) then the value you add must be immense.
I would actually focus more on your parties idea and expand into workshops, build events etc. Sort of like a permanent interactive Lego experience.  Just make sure you can handle children (and adults), expect the occasional vomit, toilet episode and tantrums. I keep a supply of minifig accessories for giving away when the child is throwing a tantrum and their parent needs a hand. 
Also think about natural customer attrition (sp?) - when I used to work in restaurants we assumed a natural rate of losing 10% of our customers per year to circumstances beyond our control (people moving, dying, running out of money etc). Thr marketing expense to reach a large potential pool of new customers each year is very large. 
I wish you best of luck - when you get it right it is an enormously fun and rewarding job to have. 

Edited for spelling and adding the vomit warning. 

Thecollector123

goingdeepe said:

It will be in a high travel area near a mall...main income will be from used sets, new retired sets, and minifigures, will also be hosting summer camps and birthday parties. I would also sell online.  Would have less than 10 employees mostly high school and college kids.

I have two different business people running the numbers to see if it can work. big thing for me is finding start up inventory for a low price.

Have a possible great location with inexpensive lease/rent.

I would not hire college kids if I were you. I have had experience and all they do is talk all day.

goingdeepe

CCC said:

You might also want to consider buying new sets and renting them out. I've never understood it myself, but pley seems to be going still. You'd have the extra advantage of no postage costs if it was instore collect / dropoff. Although you'd still need to check all the minifigs and expensive parts were in the returned sets before giving back any deposits.

great idea on the renting...maybe even/rent to own making payments.
as far as the parties..no sets involved....loose legos build on your own, xbox360 with all lego games.

i would not sell individual parts....would sell in bulk say fill a small bag this size is $5, medium bag $10, large bag $15.

please keep with the comments..they are all helpful.

Aleydita

goingdeepe said:

i would not sell individual parts....would sell in bulk say fill a small bag this size is $5, medium bag $10, large bag $15.

As a buyer I'd prefer to buy new parts that had been put in bags already, say 100 of 1 x 1 brick, 20 of minifig heads, etc. This way you don't get the scratches, slobber and other dirt that comes from loads of people searching through a big pile of Lego.

TigerMoth

Aleydita said:

goingdeepe said:

i would not sell individual parts....would sell in bulk say fill a small bag this size is $5, medium bag $10, large bag $15.

As a buyer I'd prefer to buy new parts that had been put in bags already, say 100 of 1 x 1 brick, 20 of minifig heads, etc. This way you don't get the scratches, slobber and other dirt that comes from loads of people searching through a big pile of Lego.

It would a bit late for that - the original post was talking about used bricks.

catwrangler

Other people have gone into the logistics far better than I could, but I'd add that if I lived within reach of such a shop, I'd want to be able to buy bags of bricks in assorted sizes, but a certain colour - one of my biggest irritations with TLG is that they stopped selling add-on sets like the old Extra Bricks ones: http://brickset.com/search?query=extra+bricks&scope=All

Yes, the internet exists, but the choices are overwhelming and I feel like it's going to take me considerable research to figure out how to get the best value when I buy in bulk for my dream project. People don't always want to do that, particularly since they'll still have to wait for it to come in the post, so I feel you could have a steady trickle of business from impulse builders - including kids, who have discovered the limits of those "lots of bricks, but only a few in each of many colours" sets TLG produce now. 

dougts

goingdeepe said:

what I am looking at..2 to 3 full time employees including myself...4 to 6 part time employees college high school kids....mainly selling minifigures, used sets, in the box retired sets, would sell very little of current issue sets, also would sell legos in bulk, host birthday parties and summer camps....looking at locations that have a lot of elementary schools in the area, Ymcas, daycares or grocery stores

we have an official lego store in the area and it is packed so I think the customer base is here just a matter of location and lease price

btw I appreciate everyones feedback positive and negative

this exact model has a pretty successful track record the last 5 years in various locations around the country.  Key is picking a good location, getting advertising, keeping overhead down, and understanding how long term this business is going to be viable.  I suspect the birthday parties are a big part of the profits, but kids birthday party businesses come and go.  LEGO is hot right now, but this as a viable model could be fad-ish.

dougts

I'll add to the above by saying that I am in a 30 minute drive of 4 of these types of shops (and within 15 minutes of 3).  They basically all do the following:

• sell parts by weight (some are new only, most are new/used mixed together).  Almost always this is just all poured onto a few very large tables with rails all the way around.  People sort through, put what they want in containers, and pay by weight
• Buy new/used sets and bulk parts by the pound.  These will generally go into stocking the parts tables, but in some cases the sets will be kept to sell of course
• Host birthday parties.
• Sell new/used sets, generally older and retired.  Often built and on display with price tags
• Sell MOCs that are also built and on display
• Buy and Sell Minifigures (obviously).  Licensed and highly desired non-licensed are sold as full units with accessories.  the generic stuff is often dumped into BAM bars

What you see very little of in all 4 locations is sealed sets for sale (outside aftermarket winners). Certainly not in any depth.  Polybags here and there, maybe a few small sets for impulse buys. But these stores can't compete on price on new stuff, and have limited ways to acquire inventory, so that's not part of the business model.

So, the market audience for these stores is generally multi-faceted
1. AFOLs looking for parts, retired sets, MOCs, Minifigs
2. Parents buying bulk parts for their kids (this is a lot bigger market than you might think)
3. Birthday Parties.  Good profit margins, generate secondary sales, gain new customers
4. People looking to sell off their old LEGO (or unscrupulous sorts dumping off new sealed sets at half of RRP....). This is a great source of cheap inventory.

goshe7

SumoLego said:

I see that yogurt franchises are popular these days.

This says it all to me.   And it's not a nice message.   When one of these yogurt shops is in a prime location in a large city and still fails in under 6 months, it's clear the money is to be made in franchising and not in running a franchise. 

dougts said:

 understanding how long term this business is going to be viable.  

Pure genius.   One of the principles of my reselling approach is to plan that my entire inventory could become worthless and ensure i can deal with the consequences.   (Remember the Chinese lead toy scare, and that lego is now manufacturing in China, and that the Chinese approach manufacturing differently than the West. ...)  The thought of being committed to a physical presence makes me want to run the other way. 

DB361

I'm not by any means a business expert, but here's my two pence worth;

- The number of employees. Up to 10 people seems rather a lot to me, but you do want something in the form of backup. If you open, say, 9-5 Mon to Sat and slightly less on a Sunday (not sure what Sunday trading is like in the US), that's 48 hours + Sunday a week to man the shop. Realistically, during office working hours you'll be very quiet and only need one employee in, with the vast majority of your footfall at weekends, where you will want probably two people on. Having 5 or 6 people on the shop floor like a Lego brand store will only end one way for a small independent business. Then take into account school holidays, staff holidays, exam season (particularly if you're employing mostly students), Christmas when demand will inevitably go up etc etc.

- The competition - there's the obvious in the form of Lego brand stores, numerous online sellers and well known retailers, but who else is selling Lego? I'm in south west England, and there's only two independent shops that specialise in Lego within a 2 hour drive of me. But then there's dougts above who says he's within a 30 minute drive of 4.

- What will you sell? Those 2 stores in my part of the country sell a hell of a lot of stuff other than Lego - one is within a furniture and bric a brac store, and the other sells all sorts of collectables including figures, retro video games, Warhammer and CD's and DVD's.