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If I really wanted to make a living selling Lego, I would have to invest about $3 Million into inventory, which is about 10 times what I have invested now. Which is what makes it a hobby business...
I've done the math, it can be done, but it would require a real warehouse with employees and capital investment. I have other things to do that are less risky and more profitable. :)
I was an engineer for 10 years. I cashed in my 401k to buy business and start a new career as a personal trainer. I guess you can say I'm a pretty good business person seeing both of my businesses are quite successful. I only work half as much as I did when I was an engineer yet I make almost as much in my personal trainer business and the other business ...well...the sky is the limit.
Also no one really knows what sort of profit, if any, current sets will have in the future.
Still, it's a bit sad that both hobbies suffer from the "it's not for adults" mentality among what appears to be the majority of the general public. "A real man doesn't play video games!" "A real man doesn't play with Legos!"... yeah, I don't even want to get started on what I think of the things "real men" apparently should be doing.
I love to play video games, but obviously it is not my life. I love to visit the Xbox forums, especially the banned and suspended ones. If you want a good laugh look at those :-)
Not only are the stores always busy, but the Lego aisle in OC retail stores is always being hogged by annoying little kids! Of course, those annoying little kids obviously comprise a significant portion of Lego's target market, so I guess I shouldn't complain too much:)
This is of course why some of the disagreements appear in this forum over the future price of retired Lego sets, we all come from different places in life, both physical location, as well as economic situations.
Actually, I have a single case of Series 6 and a single case of Series 7. Anything marked "collectible", usually isn't. Think Franklin Mint for a perfect example. ;)
What TLG really means by "collectible" is that you can collect all 16 of them and play with them, not that they will become worth anything.
200 boxes? Sheesh, you're braver than I!
Of course that requires some capital to accomplish, and I'm blessed to have it, but it is the key to making it work.
I personally don't ship any sets out most weeks. The only sets I personally box are the $1,000+ UCS sets, otherwise I don't touch any of them.
BTW, I have employees for my main business too, total is not large, only 2 part time employees for Lego and 6 for the main business.
So instead of "manufacturers thought the future of the business was focusing on the demand of adult buyers who transformed collecting from hobby to investment."
if you read "manufacturers thought the future of the business was focusing on the demand of adult buyers who transformed collecting from hobby to investment."
you get a completely different view of why the baseball market tanked. Don't blame the collectors, blame the manufacturers.
I can't hide the way I feel about you anymore
I can't hold the hurt inside,
keep the pain out of my eyes anymore
My tears no longer waiting,
my resistance ain't that strong
My mind keeps recreating a life with you alone
And I'm tired of pretending,
I don't love you anymore
To this day, it's still unclear to me whether or not he loves her. ;o)
Do I think this will only be caused by the world economy collapsing again? No course not. If it does the value of lego will be the last thing on my mind. Besides the only place lego can down in price is on the second hand market. I cant see anything making lego reduce prices.
What resellers need to be always aware of is prices go up and down. So while they live in good times now it wont always be like that. And like a good goverment enjoy the good times and save for those moments when it all goes south.
That is all I was trying to get across. There are people that benefit from a bad economy, so I figured that is what you meant to a certain point.
It's all good. I wasn't going to call you out because you aren't the only one that has mentioned this before.
I was worried you were going to call me out and start doing bench presses on me until i conceded :-D
I tend to type what is on my mind and hit send. Gets me in trouble alot. I have been to the doctor and he says there is no cure for "foot in mouth disease"
That's the beauty of the forum. You don't have to worry about someone going "postal" on someone because they didn't share the same opinion. There would be bullet holes and severed heads every where and @Yellowcastle banning someone just wouldn't have as much clout. "Okay Pitfall. I have had just about enough. You are banned from the forum!" :)
Along that line of thinking when buyers see some sets selling for $250, $500 it makes it easier for other sets to get to those same amounts. You also see this in stocks.
These are proven concepts when dealing with stocks. I think they apply to LEGOS too. Not saying that they happen 100% of the time. It has more to do with patterns and such. Stocks are graphed, analyzed, etc. to the max. When that is done the patterns appear. I doubt that anyone studies LEGO prices to that extent, but I bet there are patterns there.
Yes, a huge economic downturn would most likely impact both stocks and LEGO. I'm just saying that I don't think that should be part of the equation when talking about a bubble. Let's take an example. Will Apple stock crash sometime over the next 2 years? I think it's best to debate that based on Apple specific aspects, like will they continue to be a leading force, still be innovative, Jobs is now gone, etc. Discuss it on the the merit of those types of aspects. And, leave out "well, if the whole economy really, really tanks and the DOW drops 75% then the Apple bubble will burst". That's obvious isn't it? I'm just saying, I don't see a need to discuss the obvious. What about LEGO specific aspects and how will they possibly cause a bubble burst? Things like lower demand due to poor marketing, resellers buying too much, too many themes.
I've come across more people hoarding up sets when they go on sale, thinking they'll be able to retire on LEGO sets in the future. As someone who's seen other collectible markets come undone because of "perceived value"—baseball cards, comic books, various toys—I see this happening for LEGO.
I'm not a "dealer," but will occasionally go in on a good deal and sell off the surplus (even then I will only buy a set that I would enjoy) to supplement the money on spend on my kid's habit. Personally, it wouldn't affect me much and will probably be a good thing since the prices will come crashing down.
Does LEGO release numbers of the sets produced (probably not, otherwise folks would just flock to the low-run sets)?
Any of you out there ever worry about the bubble bursting on LEGO?
I have a lot of sets, only a few as investments that I got cheap and think there will be a market for in a decade (Monster Fighters--Halloween won't be going away, and there will always be enthusiasts, so it isn't LEGO-specific). The others I bought to build and play with, carefully saving the boxes in the hopes that, one day, I'll be able to resell and recoup some of the money I spent (not expecting to make a profit on any). I think this may be the way to go, as it looks to me like LEGOs as an investment strategy is a poor one.
To check on the bubble, look on eBay and see how many bids there are for complete sets that were retired in the last year or two. The LEGO market is saturated, and the resale market is stale. Not saying there is no aftermarket, but that it isn't huge. Look again at Monster Fighters--last December, the polys were selling in the $20-$30 range with a dozen bids. Now they're sitting at $12 and no bids. (Just a small snapshot, for sure, but perhaps indicative of a larger trend.)
These are just the ramblings of a guy stuck at home high on Percocet after surgery with nothing better to do than post on this forum, so take it for what it's worth! lol...
But, if a set doesn't sell at least at 2x a year or two after retirement, it's fair to call it a bust. Each set has to be evaluated individually.
I'd be interested in hearing opinions on parallels between this situation and those who engage in massive re-selling efforts. I know that people on these boards say "But Lego is different because...."
But I bet these people thought the same thing; after all, they just assumed that the beanies would keep going up in value due to supply/demand factors...never thinking that at the end of the day, some people might not be willing to pony up hundereds of dollars for a stuffed animal! Same could be said for Lego...people dropping $500+ on Mr. Gold, even more on Comic Con exclusives, etc. I know I'll get flamed for saying this, but unless you are spending that kind of $ for your personal collection, what you are really doing is paying for a molded lump of plastic in the hopes that you can sell to the next guy for more than you paid...and if not, well, you have a really expensive piece of plastic. In other words, there really is not a whole lot of tangible value here. Unless you can sell to someone else who has the same intrinsic value view of a minifig or set, well, than you've got a toy you overpaid for.
Maybe I'm just sour grapes, but I think it is borderline crazy to spend $100K on a speculative toy craze, like these people did...and evern crazier (or maybe stupid) is that the goal was to pay for college for their kids this way!
So, is this the future for Lego? Will there be folks out there with $50 or $100K of MISB sets that might end up going for 50% of original retail to niche collectors?
What are your thoughts?