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Selling Lego online as a business

zenparticlezenparticle Member Posts: 38
edited January 2012 in Buying & Selling Topics
I happen to have bucket of parts from many old sets that I believe are probably not complete any longer. I have seen how people sell on Bricklink and I was wondering if anyone out there does it full-time, as in making enough money to survive on. Does it really take that much of your time to sell on Bricklink? Where do you get your part inventory from?

I would think that the next step would be to have a retail space where you could sell parts & sets, though that would be expensive and one would really have to love the hobby. Just really curious. Thanks in advance for your input.

Comments

  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    I suspect selling Lego falls into one of two catagories...

    1: A small niche business that is a labor of love, rather like a bed and breakfast would be, since I doubt either would make much money, perhaps enough to live on, depending on your required lifestyle.

    2: An enterprise involving warehouse space, employees, several million of capital invested, and a focused goal on earning profit. This is more like Motel 6 or Marriott (pick your pleasure), neither is a labor of love for anyone, both are cash machines.

    The former is likely best for those who love Lego, the latter best for those who love money. Right now I'm picturing the difference between Barbara Corcoran and Kevin O'Leary on Shark Tank...

    If I wanted to run a small family style business, I'd give Barbara a call, if I wanted to make a billion dollars, I'd hold my nose and call Kevin. I think he is a slime bucket, but I also think he knows how to make piles of money.

    So to answer your question, yes Lego can be a business, but "retail" space isn't it, the Lego store has that one covered, you need cheap warehouse space, cheap employees, and millions of dollars to buy inventory.

    Otherwise, you might as well just open a bed and breakfast, because while it might be fun, there isn't much money in it.
  • choob99choob99 Member Posts: 147
    I agree with @LegoFanTexas, I think its probably a labor of love for most ppl, the sheer amount of capital invested and the length at which you have it invested make it tough to make money at it, that being said there is money to be made is selling lego but its not something that makes money quickly!
  • vwong19vwong19 San DiegoMember Posts: 1,135
    I have a job. Selling Legos on the side is simply fun. The profits that I make probably couldn't pay for my Internet and cell phone bills. My home is already full of Lego and renting space simply is not worth it.

    I think it would be fun job for a kid or maybe someone who has retired and want to stay busy.

    There are several big Brinklink stores and they probably have another primary source of income.

    I have noticed that new Brinklink buyers have doubled in the past year or two, but so has the number of sellers.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    So far I've made 2 bricklink purchases, one from a business and one from a person.

    The business was in Germany, and they had over 4,000 feedback, they have a physical toy store, or so I worked out, and they do the online thing to help support the business, but I suspect their bread and butter is foot traffic.

    The person was just someone reselling older Lego and Duplo they no longer needed, had a few hundred feedback, but spread over time. Still, that is a lot of selling! :)

    I have yet to open a bricklink store, but I need to... :)
  • aplbomr79aplbomr79 Member Posts: 159
    @LegoFanTexas... I am awaiting the day you do. I make a lot of purchases from BL, and having another store that can carry the haul you bring in regularly would be beneficial.

    I have run rudimentary numbers - and no, it is definitely NOT worth my time to quit my job and sell LEGO. However, the more I collect - I am getting more ambitious to 'supplement' my addiction by selling some parts. However, I need a better organizational pattern before that happens - to bad I am Abstract-Random...
  • gmpirategmpirate Member Posts: 1,654
    I've only read about one family that has Lego as their sole source of income. They actually have employees too. There's a b&m store in Oregon I believe as well.

    Wish I was just discovering this as a teenager.
  • CoolsplashCoolsplash Member Posts: 935
    I agree with @aplbomr79 for @LegoFanTexas to kickstart a store on BL. My usual purchase is from BL, though not much. I have a store myself but its mainly something I do on the side as I do not have the investment to take this further and then I have other issues a lot of my friends here know about now with my rantings :P

    But in my opinion, to work/trade in Lego, a person should also have a passion for it and not just to handle it like a business. Our dear friend @LegoFanTexas will surely do really good on BL, as I have known lots and lots of people from the US region who have really good ratings and are professionals. But they all have another source for their income. But the prices these said dealers have at times *whistles* in a good and bad way :)

    Wish I was more organized, or business minded to carry this more better. I handle Information Technology for my company in the day time, which keeps me online for hours and hours, so I recommend Lego should be taken something on the side, as it is a great option to be inherited by our kids when they are of right age :)

    @LegoFanTexas, I am expecting a xx% off coupon from you when your store opens on BrickLink :) with an expiry date of one year :D Hope that is not something a lot to ask :P
  • Pacific493Pacific493 Member Posts: 379
    I have yet to open a bricklink store, but I need to... :)
    Bricklink is a good outlet with a fantastic fee structure, but it is an inconsistent marketplace in my experience. I can list sets on Ebay and reliably anticipate that the majority will sell within 2-3 listing periods. I can list sets on Bricklink and have them reliably sit for a year or more without selling. Bricklink is a smaller market that caters more to enthusiasts than casual fans of Lego. That is good in that you can command higher prices for rare sets when they sell, but is bad in that you have a much smaller market into which you are selling. And if you are thinking about running a parts business on Bricklink, you have to be committed to building a large inventory base to have any chance of competing for the level of sales activity that would be required to operate a profitable business.
  • Si_UKNZSi_UKNZ NZMember Posts: 4,179
    Selling Lego is like being a drug dealer - if you enjoy the produce too much you'll not do very good business - but you probably wont care much either :)

    At the end of the day, it's a fun ride, which is what matters. If you make a bit of cash, then great, but I don't expect to overall any more than I would do if I were to spend my days at the racecourse.
  • sidersddsidersdd USAMember Posts: 2,432
    Here's a link to an interview TBB did with a few big sellers on Bricklink about a year ago:
    http://www.brothers-brick.com/2011/01/30/qa-with-bricklink-sellers/
  • drewsbudrewsbu Member Posts: 28
    I have a job. Selling Legos on the side is simply fun. The profits that I make probably couldn't pay for my Internet and cell phone bills. My home is already full of Lego and renting space simply is not worth it.

    I think it would be fun job for a kid or maybe someone who has retired and want to stay busy.

    There are several big Brinklink stores and they probably have another primary source of income.

    I have noticed that new Brinklink buyers have doubled in the past year or two, but so has the number of sellers.

    I am one of the newer bricklinkers. It seems many people my age (29) and around there are rediscovering the awesomeness that is called lego. I got rehooked on lego because of this past black friday. B&N had %60 off and I bought a ton, figuring it would be nice to build again. Then I got hooked and googling around the internet and coming across sites like this does not help my new lego addiction. I already have about $2500 spent in lego's in a month(don't tell my wife or she will literally kill me) and I feel like I always need more. I just started bricklink buying and selling.

    Happy Legoing.
  • Cam_n_StuCam_n_Stu UKMember Posts: 368
    Great link @sidersdd.

    I suspect if you are in the mom-&-pop end of the business and just want to make enough to live on then it is feasible but if you are selling sets the biggest challenge will be finding enough (hopefully) discounted sets to build up and maintain stock levels. If you want to sell parts then sorting and order picking will take up a significant amount of your time from now on! Certainly not an easy way to make some money.

    If you want to invest big money I do wonder if you could spend a few million and get an automated PAB platform up and running. Pour in loose parts one end, automated sorting with image processing/recognition into a stock database and allied to robotic selection and picking system. I've seen these in the food and pharma sectors and a lot of it is like glorified NXT and Meccano!
  • MatthewMatthew Cheshire, UKAdministrator Posts: 3,734
    ^ I probably shouldn't say this, as it's still on the drawing board, it's very possible this will never happen due to lack of funds or tech know-how, but I have something similar in the pipeline, for picking Bricklink Orders...
  • ljames28ljames28 Member Posts: 88
    I've had thoughts about this previously but stumbled on the issue of how to pick up only one part, and handle varying sizes/shapes of parts. Do you have a ideas about how to solve that?
  • madforLEGOmadforLEGO Chicagoland USMember Posts: 9,172
    There are a few groups, notably in Oregon that seem to have a big business selling loose LEGO, But I would imagine it is time consuming as you have to constantly replenish and inventory stock.. It is ok if you have a group of people/family will to do it but Id imagine it is very time consuming.
  • y2joshy2josh Member Posts: 2,002
    For me personally, I sell LEGO on the side to supplement my purchasing of new LEGOs. And even in that case, I very rarely buy LEGOs specifically to sell them, but rather sell off the sets I think will be fun to build but have no real intention of keeping long term. I think selling LEGO in your spare time is a fun and easy way to offset the cost of buying more LEGO, but for me, I simply don't have the time or considerable start-up funds it would take to make a 'living' off of selling LEGO.
  • gmpirategmpirate Member Posts: 1,654
    It's a fun hobby, but not a sound business. Putting all your eggs into one basket is a risk you can take when you are young and single but not advised when you have others to support.

    What if Lego decided to increase the supply?

    A viable way of doing this is to couple it together with a compatible business. Think restaurant/coffee shops at car washes, holiday shops at furniture stores, super markets in Walmarts/Targets. Maybe your wife runs a gift/card shop and you take a portion of the space to sell retired Lego?

    There are "specialty" toy shops that carry Lego. Be the TJ Maxx/Marshalls of collectables???

    Just throwing things at the wall, but I think if you can just tack it on to something already viable you have something to fund it and support you. The Lego just becomes the icing on the cake.
  • zenparticlezenparticle Member Posts: 38
    ^ You make a great point. Selling on Bricklink seems to make some money on the side for some, big money for others depending on volume. But adding it to an already viable business seems like the most logical method. If success brings larger revenue, then striking bigger might be an option. I just enjoy the Lego so much that having a job dealing with it seems very enticing. I guess a stronger business plan would need to be developed before becoming reality.
  • cheshirecatcheshirecat Member Posts: 5,332
    ^ £5,000 isn't it - unless you have other business income which would already eat into that allowance. Although if it does happen, ebay and paypal will hand over all their records of you to HMRC, HMRC themselves will require payment for many years past if its owing and you will be charged interest on all of it. Its your responsibility to pay the correct tax so there's really no leniency if you haven't, you wouldn't get in trouble but you would have to pay it back.

    Also if you are starting to resell then take a look at the distance selling regulations stuff I posted in another thread (the royal mail one i think) which will explain why its important to add a returns policy (as roxio said) because otherwise you'll not only have to pay for any returns but also arrange them if the buyer is grumpy. As soon as you start selling something that you bought to sell on rather than say, an unwanted gift, you are classifed as a business seller and subject to the full DSR.
  • roxioroxio UKMember Posts: 1,329
    edited June 2012
    Tax depends on your personal situation, but if you already have a fulltime job on PAYE that will have used your tax-free allowance so any eBay profits are taxable.
    Current allowance is £8,105
  • cheshirecatcheshirecat Member Posts: 5,332
    ^ Yes you are right (I wrongly thought the allowance was on top of PAYE but clearly not). I see you could also be fined if you are running a business (i.e. selling items you bought to resell) and fail to inform HMRC within three months.
  • roxioroxio UKMember Posts: 1,329
    Exactly, and even if eBay is your sole income and profit was , say , £7k, you should still be filing a self assessment tax return showing this.
  • MatthewMatthew Cheshire, UKAdministrator Posts: 3,734
    edited June 2012
    This discussion was created from comments split from: 6868 - Hulk Minifig on Ebay.
    @roxio
    Hi
    I think you need more detail in the title and description to cover word searches, and a returns policy.
    Good on recorded delivery, always use this, but why no overseas option ?
    I know this is your first sale and you could rightly argue you are just selling items from a personal collection, but if you plan to do more (selling of new items) you should register as a business as eBay/taxman will eventually catch up.
    Good luck
    @monkeyhanger
    I would give it more than a day on your listings too, to allow all potential purchasers to hear about it - I usually put up for 3 days. As for Taxman catching up with you, you have to sell a hell of a lot in the UK for the Taxman to want their cut. If you want to sell overseas then the postage costs ramp up quite steeply, especially with recorded delivery options - I do not sell overseas.
  • CCCCCC UKMember Posts: 17,204
    So does anyone know how it works in the case of splitting a set and keeping part of it. In the example here. Buying the Hulk set, selling just the Hulk and making less than the initial cost price, and being unable to sell the rest. Thus from a business point of view making a loss overall.
  • doriansdaddoriansdad CTCMember Posts: 1,337
    I don't know about selling just online but there are a few non-official "Lego" stores in my state run by individuals that do very well. Obviously they sell online thru various channels as well. The model seems to be buy retail sets at 20% off and sell them at 10% over RRP (similar to TRU). For older sets people bring in offer 50% retail and sell at retail (just like any other resale store). Rent out store space for birthday parties etc.

    I have been hitting official Lego sales for a long time now and there have always been the same faces who show up who spend $50k-$100k, so they must be doing well enough to remain in business.
  • MatthewMatthew Cheshire, UKAdministrator Posts: 3,734
    I have been hitting official Lego sales for a long time now and there have always been the same faces who show up who spend $50k-$100k, so they must be doing well enough to remain in business.
    ?
  • prevereprevere North of Bellville, East of Heartlake, South of Bricksburg, West of Ninjago City Member Posts: 2,874
    I have been hitting official Lego sales for a long time now and there have always been the same faces who show up who spend $50k-$100k, so they must be doing well enough to remain in business.
    ?
    Hey Matthew - what do you mean by "official Lego sales"? Just retail sales or auctions of collections, maybe?
  • doriansdaddoriansdad CTCMember Posts: 1,337
    I have been hitting official Lego sales for a long time now and there have always been the same faces who show up who spend $50k-$100k, so they must be doing well enough to remain in business.
    ?
    Clearance and BF sales at official Lego stores. BF is the funnest when they bring 5-6 friends hoping to hit 50% off...if you get 50% off they will throw you a couple hundred $$$ for it if you are willing to give it up.
  • UKtsumiUKtsumi Member Posts: 622
    ^say that in English?
  • teal93mr2teal93mr2 USAMember Posts: 916
    ^^I am assuming that he is talking about black friday. I do not think that Lego will let you "give up" your discount card, as they do not scratch it off until you are already in checkout with your order.
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