Has anyone gotten out of the reselling "business", and can you share the reasons why?

nkx1

For almost the past year, I've been amassing a small inventory of sets for resale. However, to be totally honest, I've started to change my mind about reselling. Reasons include:
-Lego boxes taking up too much space in closets (and sort of "junking up" the house)
-Impatience waiting for sets to be discontinued (which now seems to be taking longer and longer)
-Anxiety about picking losers, regardless of much everyone says a particular set is a sure-thing
-The prospect of limited return on investment due to more and more resellers in the marketplace
-Time needed to list, package and ship sets to customers (time I would rather be spending on something fun)

Basically, I'm beginning to think that reselling is more trouble than it's worth on a small scale. By small, I mean inventory totaling $10,000 or less. I'm thinking I would rather lose out on a few thousand dollars reselling (which is certainly not money for nothing), and instead simply enjoy the hobby and have more time to do, well, anything. Has anyone else reached a similar conclusion with respect to reselling?

SirKevbags

I know I couldn't balance the love of the hobby and wanting to build things with trying to make money from it. A few sales to fund purchases is one thing, that can be a challenge. Holding that much stuff would detract from the fun for me. When I buy a set or open one I don't want the first thought to be how much money I've lost from popping the seal.

akunthita

Yep. Same thing here. Also, I would add that I read the BrickLink forum daily, and my understanding from the conversations there is to make reselling LEGO a business really worthwile (meaning making decent amount of money) is a BIG undertaking and a LOT of work. Unless someone is willing to go all the way and put major effort into it, you would be happy to break even.

Having said that, selling LEGO still does work at times; not to run it as a business, but to fund the hobby. I sell minifigures and parts I don't want regularly, and I own all my LEGO free and clear - meaning when all said and done I paid nothing for my LEGO....(c;

So if someone doesn't have play-money, or in general strapped for funds, or feels guilty spending so much on LEGO, re-selling is a great way to fund the hobby. But I would never want to turn it into a business. I considered it and even tried it, but it is not for me. It is significant risk and more work than what I can put into it. So yeah, you are not alone... (c:

LegoFanTexas

Opinions will vary, however I will add my thoughts:

Less than $10,000 of inventory is a hobby business. Nothing wrong with that, it can help support your Lego buying habbits and perhaps make it "free" to enjoy your own Lego sets, depending of course on how you value your time.

To make it an actual "business", you need hundreds of thousands of dollars to make a real go of it, the time it takes to sell sets, some that sit on the shelf for a year or more, not all sets will really do well in the after market, etc. All that means that you have to bet big and wide to catch the good deals.

Over time, you of course get better and learn what to buy and what not to, but then at some point, you're spending as much, if not more time doing that than you are enjoying Lego.

I must say, I no longer enjoy building as much as I did a year ago, because the business part can really take over. Once you see hundreds of boxed sets piled together, some of the magic is lost.

One Fire Brigade is really cool, 100 of them are just cardboard boxes of plastic to be moved and sold and becomes work really fast.

Would I do it all over again? No, I don't think I would... I am still buying, but less than I did 6 months ago, my goal is to return it to a self funding hobby, but I suspect that 2 years from now when the inventory is gone, I'll just go back to enjoying the brick and leave the reselling to everyone else. :)

TyoSolo

I've just started, but not to make a profit, just to sustain my obsession :-). The main reason I'm reselling now is that when I first started, I bought everything I could. Now, I have limited the themes I buy to the ones that really interest me - as a result, all those extras I bought have ended up on Bricklink, as have parts from sets where I am interested in specific elements (for example the base plates from the Lego Games).

I wouldn't do it to make money, as picking the parts for orders is a huge ball ache, and not worth the time for serious profit.

LegoFanTexas

TyoSolo said:

I wouldn't do it to make money, as picking the parts for orders is a huge ball ache, and not worth the time for serious profit.

Oh lord! The parts business is another ball of wax... Bless the people who do it, for no, there isn't any money in that.

There are a few big time people who do it, have warehouses, employees, the whole nine yards. I spent an afternoon a few months ago and did the math to see if adding that to my business would make any sense.

Short answer: No

Long answer: NO!

:)

momof2boys99

I think if it is more trouble than it is worth for you than you have your answer. We only live once and why be miserable or stuck? I have a passion for what I am doing and part of that is because my kids love it. They are involved too. I think if you are not happy doing it, sell what you want to and take your money and put it elsewhere. Good luck!!

DadsAFOL

^^ There is some profit in it, but not a lot. I have a regular day job, and my BrickLink store is run out of my house (for now) by two full time employees. It will never replace my regular income, but it is a nice supplement, even after payroll and other expenses.

TyoSolo

^I also have an employee for the parts picking. It's my Wife. She has more patience than me, and all it costs me is the occasional shopping spree! That said, I've only had a couple of parts orders so far, so that could change.

SirKevbags

LegoFanTexas said:

I must say, I no longer enjoy building as much as I did a year ago, because the business part can really take over. Once you see hundreds of boxed sets piled together, some of the magic is lost.

That is my biggest concern and why I would never do it on any sort of scale.

LegoFanTexas

DadsAFOL said:

^^ There is some profit in it, but not a lot. I have a regular day job, and my BrickLink store is run out of my house (for now) by two full time employees. It will never replace my regular income, but it is a nice supplement, even after payroll and other expenses.

If you don't mind my asking, can you post a link to your bricklink store? I do buy parts about once a month, I would love to add you to my favorite store list. I know I'll get great service! :)

princedraven

I'm loving this thread, it wasn't long ago that everyone was saying putting money in an investment fund was madness and we should all be investing in Lego. I did say at the time, my kids money is going in the bank, yes you 'could' make some money, if things work out right, but it is really refreshing to see that some people are realising that it is not a sure thing as it was being described back then.
Hopefully now people can actually start to appreciate the hobby more for what it is and not get so caught up in the investment angle.

LegoFanTexas

Oh, don't get me wrong, I'm making money on Lego... My primary issue is this...

"Is this the best use of capital I have?"

If I put $100,000 into Lego, what is my return on capital investment? Could I make more elsewhere? What is this risk of this, vs other investments?

Then there is the whole "the magic is gone" aspect. Do I want to turn the family hobby into a business? Frankly, already have, and am working on unwinding that a bit.

I have my eyes on an investment property or two, I missed the whole fuss from 2002 to 2008, so perhaps now is the time.

richo

My dad runs his own business (not in Lego I might add!, it's in manufacturing), and he has made a real success of it.
When anybody asks him what the key to it is, other than the obvious things like hard work, he always says two words 'cash flow'.

The problem with selling sealed lego sets, and in particular small scale hobby sellers, is that you need to keep stock for a number of years before it becomes profitable, and therefore the model doesn't lend itself in the slightest to this ethos, especially in the beginning. On this basis alone it is not as easy as some people might think.

DadsAFOL

If you don't mind my asking, can you post a link to your bricklink store? I do buy parts about once a month, I would love to add you to my favorite store list. I know I'll get great service! :)

Thanks for the plug!
bricklink.com/store.asp?p=DadsAFOL

rocao

^ That's not a plug, THIS is a plug:
DadsAFOL is already on my favorite store list and has excellent service. It has large inventory and consistently competitive prices, which often do not coincide on Bricklink.

momof2boys99

^That is a great plug. I will add it to my list too.

LegoFanTexas

Just looked at your store, what a great Technic inventory! I am often looking for one gear, or an odd pin or something else, you seem to have a lot of that stuff.

Didn't dig deep right now, but I'll be back, don't worry. :)

Bosstone100

How do you put a store on your favorite store list?

LegoFanTexas

There is a link when you're in the store, look in the upper right corner of your web browser, it says "Add to favorite" or something like that.

LegoFanTexas

richo said:

When anybody asks him what the key to it is, other than the obvious things like hard work, he always says two words 'cash flow'.

I agree with this very much. I've owned more than one business over the years, this has bitten me more than once.

If you ever wonder how some large, public companies like Amazon can report losses for years on end... Profit and Loss is not the same as cashflow. P&L tells if you're making any money in the long run relative to capital investment, cashflow tells you if you have money for payroll next week.

You can have a highly profitable business, but if you run out of cash and can't pay your staff, it doesn't much matter.

rocao

I tried to temper the enthusiasm when the reselling threads first started.

As collectors, most of us spend a tremendous amount of time and energy price watching. With the gained insight, it's a logical next step when finding a great value to pick up an extra copy or two to resell and fund the hobby.

For most of us, that is a more realistic, practical approach than expecting it to replace our jobs or investment vehicles.

prevere

DadsAFOL is a great store. I've made may purchases from him.

To comment on this thread, as a lifelong fan of the brick; and an reseller (I mainly rebuild vintage sets)...life's short so you better do what you love. Share any success with friends and family.

doriansdad

I enjoy both building and reselling. Not looking to replace my job or hire employees, just looking to keep it fun. I have no problem sitting on a set for a year but I have never had to keep one stored longer than a year to generate a good profit either. I think I spend way more time looking for deals than actually reselling, but I enjoy that as well lol.

mathew

I like cash flow. I have a young family so I cannot tie money up. I considered reselling a few months back but I just couldn't do it. The idea of storing sets, second guessing EOL dates is too burdensome.

cbaker1974

I almost got out of the reselling business, but I am looking for another investment as an exit strategy. As many have said, the "get rich quick" easy money days of Cafe Corner and UCS MF are gone and we won't see those, but there are still profits to be made in the Lego investment world, albeit declining profits each year as more investors enter the fray. I probably spend up to 20+ hours a week on my Lego side-business (searching for deals, listing sets, packing and shipping sets, moving inventory, doing accounting work). From that perspective it is a real business (I have a business license, pay taxes on my sales, etc.). I sat down earlier this year and calculated that I could probably make a similar $/hr doing IT consulting related to my primary day job.

The Lego side business however does have some advantages:
#1 - I am largely working at my own pace with no customer deadlines
#2 - I get the enjoyment of the hobby along with the business aspect..it's more "fun" than an IT job
#3 - I learn some entreprenurial skills that will help me in the future

On the other hand, there are the disadvantages:
#1 - I have a tiny house that's "in-town" in a major metro area, so any space I'd normally devote to playing with or displaying Lego is reserved for inventory - this has really hurt my enjoyment from the hobby side
#2 - There is definately a gamble in picking the right sets...I have gotten pretty good, but there is more risk than in a consulting/services business
#3 - A lot of the work can be routine/mindless and not very stimulating (packing, shipping, etc.)
#4 - Scalability is a big problem - there are a fixed number of buyers for old sets such that more competition (and even myself listing multiples) starts to drive the prices down.

I've been very happy with the rate of return I've gotten to this point compared with the work that I've put in, but to keep growing that return (and further accelerate wealth building), I feel that it's time to go ahead and take the profits and move them into another area in the next year or so. Reselling Lego really helped me get focused on my financial goals for the next few years and establish a plan...I think that's been the best takeaway for me. I still think it will be worthwhile to resell for the next couple of years (it is going to get harder for sure, due to increased competition), and is a good stepping stone towards the "next big thing", but it is clear to me that this is the kind of business you should use as a stepping stone rather than a long term plan.

cbaker1974

^ And to add, getting out of the reselling should help me enjoy the hobby side of it again and focus on what's really important - building and taking joy from LEGO!

nkx1

Wow, thanks very much for all the replies! It's interesting to me to see everyone's take on the issue.

To clarify a bit regarding my reselling habits: my approach up until now has been to simply buy one or two extra of popular sets and then sell them after EOL for a small profit. For me, reselling was intended only to make a few extra dollars to supplement my Lego spending. But even that has become a little more of a headache than I expected, hence the reason for this thread lol. I think going forward, selling my used sets after EOL will still be sufficiently profitable (since I always buy at a discount anyway). I'm not really a collector who likes to keep every Lego set I ever bought; it's just too much clutter/stuff lying around!

richo

Two other quick things on reselling that can be an issue;

- Already noted by some, but getting too hung up on re-selling makes it more difficult to enjoy the hobby. i.e. it becomes a self questioning war of attrition when deliberating whether to open a 'valuable' or old set. This I suspect affects more people than you realise. Whilst I can comfortably open old sets with no worry about any 'loss' of money as I am primarily a fan, I do still have a MISB sandcrawler that I desperately want to build, but am unsure whether to open. I need to break through on this one...

- Even worse than the first point, is the move to a mindset that you can never miss a bargain as it's too much of a good deal, regardless of whether you like the theme or set. If you opened your wardrobe tonight and were greeted with 50 Spongebob sets you bought in a sale, jammed in behind the clothes, then you might be in this camp.


anyway, must go, it's about time I built one of those sets with the orange pineapple in. hold on a minute...

mathew

richo said:

- Even worse than the first point, is the move to a mindset that you can never miss a bargain as it's too much of a good deal, regardless of whether you like the theme or set.

Yep. I've made that mistake a few times. I currently have a QAR sitting on my shelf waiting to be built. I picked it up from Target on clearance. I love the look of the sails but the the rest of the ship is rather meh. I can't really make any money re-selling it and I'd rather use the money I spent on something else. So it looks like it might be going back to Target for a refund.

gmpirate

^ I'll take it :)

mathew

^ I would say sure, $100 and it's yours. But when I figure in cost of shipping and time I would only make maybe ten bucks on the deal. It's easier to just return it to Target.

gmpirate

^ agree, was only kidding :P

Pitfall69

I already run 2 businesses...what's another one ;) Luckily I worked my butt off for 15 years and invested my money into business start ups that are now making me money. Right now I still haven't taken the plunge into reselling as a "business" I only resell to support my hobby. It still takes time, patience, and space. I have all 3 at this point in my life.

Pitfall69

LegoFanTexas said:

richo said:

When anybody asks him what the key to it is, other than the obvious things like hard work, he always says two words 'cash flow'.

I agree with this very much. I've owned more than one business over the years, this has bitten me more than once.

If you ever wonder how some large, public companies like Amazon can report losses for years on end... Profit and Loss is not the same as cashflow. P&L tells if you're making any money in the long run relative to capital investment, cashflow tells you if you have money for payroll next week.

You can have a highly profitable business, but if you
run out of cash and can't pay your staff, it doesn't much matter.

Luckily, I don't have any employees. Each person is an independent contractor. You can usually report a loss for about 3 years before the IRS starts to take a peak at your operation.

I'm also looking into investment property. I want a couple of Lakeside homes/cottages. We will see :)

emilewski

This is an interesting thread. When coming out of my dark ages a couple years ago I thought reselling was a no brainer. I want to help fund my hobby only. So I have a few sets stashed away but my Death Stars have been sitting for over a year and I am thinking of getting out of the parts business as I want to build and it is too hateful do that and keep my BL inventory accurate.

sidersdd

I'll likely get out of the biz at the end of this year, or at least scale way back (I believe I said that last year too :P). It's becoming too much of a time sink, and I'm finding myself wishing I had more time to build, and do other projects (e.g., LEGO related software projects). I've built up a nice size inventory of parts (which was part of my plan on reselling in the first place), and now need to spend a good few months sorting and organizing them all (around 150,000+ parts).