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Speculation in the LEGO Market: Will there be a Bubble?

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  • dougtsdougts Member Posts: 4,110
    ^ always pretty crowded, yes. Lots of window-shoppers, but still, high traffic.
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    I do believe in the notion that it takes money to make money, but I don't think many people would be able to make a living buying and selling Lego.
    It does, very much so...

    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. :)
  • Pitfall69Pitfall69 Member Posts: 11,454
    Some kids are tools, no doubt, but LEGO bricks draw intelligent and imaginative kids. Look at the quality of people on these forums. There are some real smart cookies around here. There was another thread awhile back about what jobs do people have on the Brickset forums. Most of the answers ranged from accountants to engineers to web designers...not too shabby.

    There is a huge difference between an AFOL and AFOG(Adult Fan Of Gaming) for example. I spent years on the XBOX forums and was constantly amazed at the morons on those forums. Those are the kids you were referring to...LOL
    I still frequent the xbox forums. I'm an avid gamer...mostly CODand Halo. Not only do they sound like morons in the forums they sound even worse within the game itself.Hopefully these kids will grow up.

    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.

  • LegofanscottLegofanscott Member Posts: 622
    I do believe in the notion that it takes money to make money, but I don't think many people would be able to make a living buying and selling Lego.
    It does, very much so...

    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. :)
    But in reality who in their right mind would risk doing this?, other than maybe a multi million or even billionaire who wants to have a bit of fun

    Also no one really knows what sort of profit, if any, current sets will have in the future.

  • Pitfall69Pitfall69 Member Posts: 11,454
    Exactly. A hobby business is a great way to earn side income or reinvest in your hobby.
  • tvihtvih Member Posts: 92
    There is a huge difference between an AFOL and AFOG(Adult Fan Of Gaming) for example. I spent years on the XBOX forums and was constantly amazed at the morons on those forums.
    *groan* If you want an excuse to put yourself out of your misery, visiting a gaming forum - basically any gaming forum - will do the trick handily. I play a lot of games and frequently make the mistake of visiting game-specific forums. Very. Bad. Idea.

    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.
  • Pitfall69Pitfall69 Member Posts: 11,454
    There is a huge difference between an AFOL and AFOG(Adult Fan Of Gaming) for example. I spent years on the XBOX forums and was constantly amazed at the morons on those forums.
    *groan* If you want an excuse to put yourself out of your misery, visiting a gaming forum - basically any gaming forum - will do the trick handily. I play a lot of games and frequently make the mistake of visiting game-specific forums. Very. Bad. Idea.

    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 just found out my wife is pregnant again today, so apparently I'm doing what real men should be doing...lol.

    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 :-)


  • BoiseStateBoiseState Member Posts: 804
    Just got the Game of Thrones game.. Totally sucks.
  • Pitfall69Pitfall69 Member Posts: 11,454
    Yes, I heard it was awful.
  • pharmjodpharmjod Member Posts: 2,916

    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'm just trying to imagine what $300,000 worth of LEGO inventory looks like. I've got about $18K worth in my basement and its crazy. I assume you have some sort of storage building?

  • BoiseStateBoiseState Member Posts: 804
    I had 200 boxes of Series 7 and I thought I had a lot.. DarthTexas probably has that in his closet LOL. Actually, he's probably smart enough to realize CMF's are terrible as far as investments go. I can't give em away on Ebay.
  • Pitfall69Pitfall69 Member Posts: 11,454
    I had 200 boxes of Series 7 and I thought I had a lot.. DarthTexas probably has that in his closet LOL. Actually, he's probably smart enough to realize CMF's are terrible as far as investments go. I can't give em away on Ebay.
    You are correct. Unless you have 200 boxes of Series 1, I don't see CMF's to be a good investment. I buy 1 box, keep 1 set for me and one set for my daugterand try to sell a complete set and the extras. If I break even I'm lucky.

  • nkx1nkx1 Member Posts: 719
    edited June 2012
    ^The Lego stores I visit (Costa Mesa and Anaheim) have always been fairly busy each time I go (albeit not that often). Of course, the Costa Mesa store is in a fairly affluent area and the Anaheim store is in Downtown Disney packed with vacationers; therefore my observations may not be very representative of how busy other stores are.

    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:)
  • ufjasonufjason Member Posts: 23


    It does, very much so...

    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. :)
    You have $300k invested in Lego? That's a lot of disposable income! You still have to spend a lot of time on research and hunting for clearance product when the opportunities come around.
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    You have $300k invested in Lego? That's a lot of disposable income! You still have to spend a lot of time on research and hunting for clearance product when the opportunities come around.
    Well, probably not quite that much... But it is over $100K... :)

    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.
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    I had 200 boxes of Series 7 and I thought I had a lot.. DarthTexas probably has that in his closet LOL. Actually, he's probably smart enough to realize CMF's are terrible as far as investments go. I can't give em away on Ebay.
    :) These aren't the CMFs you're looking for...

    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!
  • BoiseStateBoiseState Member Posts: 804
    I got them cheap because they had been damaged during shipping.. They were stacked too high and the weight busted the seals on the bottom boxes. I'll still end up making some money, but they are going for much less than they were 2 months ago.
  • nkx1nkx1 Member Posts: 719
    ^Wow, I'm surprised LFT has time for his main business(es) with how much Lego he must ship, given $300k worth of stock. I work from home, and I get stressed (about getting my real work completed) if I have to ship more than about 10 things a week lol.
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    I have employees... :) That is really the key to making any business work. If you physically have to do the work, then you don't have a business, you have a job where you're the boss and worker rolled into one.

    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.
  • nkx1nkx1 Member Posts: 719
    Ah, gotcha. Employees make sense for that much Lego!
  • CCCCCC Member Posts: 20,526
    "Card sales fell dramatically in the 1990s after manufacturers thought the future of the business was focusing on the demand of adult buyers who transformed collecting from hobby to investment." I dont think lego will produce only adult sets from now on but that second half, in my opinion, reflects much of how the second hand market can be viewed. Looking at the role of resellers thread there seems to be a small but growing view that people dont want to pay the prices that are being asked as some people who are here for the big profit look to use it as that.

    *Ducks to hide from hoards of angry people*
    I think you are highlighting the wrong bit.

    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.
  • prof1515prof1515 Member Posts: 1,550
    Yep, if you take something out of context it changes the entire meaning.
  • Pitfall69Pitfall69 Member Posts: 11,454
    From reading this thread and similar ones, I get the feeling that some people want the market to "tank" just so they can get Lego at affordable prices. I think most of us agree if that happens a big factor would be an worldwide economic collapse. Someone actually commented that he wishes that this would happen. This to me is ignorant. If this does happen people wouldn't have the money to buy Lego at "reasonable " prices. Im going to look through and see who said that.
  • RedbullgivesuwindRedbullgivesuwind Member Posts: 2,115

    you get a completely different view of why the baseball market tanked. Don't blame the collectors, blame the manufacturers.
    To be honest I blame both. The adults create the market then some burk goes and completely changes the thing that makes it magic. Because they lose sight of what made them special in the first place and just go after the bottom line.
  • RedbullgivesuwindRedbullgivesuwind Member Posts: 2,115
    edited June 2012
    Yep, if you take something out of context it changes the entire meaning.
    Whenever some says that I always think of Ronnie Barker reading a letter to someone in the tv series Porridge. He goes "Now I must go and get on my lover. Oh sorry there is a apostrophe there. Now I must go and get on, my lover."
  • BrickarmorBrickarmor Member Posts: 1,258
    From reading this thread and similar ones, I get the feeling that some people want the market to "tank" just so they can get Lego at affordable prices. I think most of us agree if that happens a big factor would be an worldwide economic collapse. Someone actually commented that he wishes that this would happen. This to me is ignorant. If this does happen people wouldn't have the money to buy Lego at "reasonable " prices. Im going to look through and see who said that.
    The identity of the "perpetrator" here is irrelevant, I can recall the comment said as a light jest (sprinkled with truth, to be sure) that if prices were to fall they could scoop up some great sets, world economic conditions aside. If the "don't blame me!" logic of resellers is that they make prices lower than they would otherwise be, how low is too low? Is the amount of stock proportional to the decrease in aftermarket price? If the world economy tanks the Lego will still be useful... for scattering on the ground behind you as you flee from barefoot cannibals.
  • evileddie1313evileddie1313 Member Posts: 126
    ^^^^ If the world economy tanks, LEGO bricks will become Über popular! What are all the unemployed people going to do with their spare time? LOL
  • YellowcastleYellowcastle Administrator, Moderator Posts: 5,234
    edited June 2012
    Whenever some says that I always think of Ronnie Barker reading a letter to someone in the tv series Porridge. He goes "Now I must go and get on my lover. Oh sorry there is a apostrophe there. Now I must go and get on, my lover."
    There's an American Country song that goes:

    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)
  • RedbullgivesuwindRedbullgivesuwind Member Posts: 2,115
    edited June 2012
    From reading this thread and similar ones, I get the feeling that some people want the market to "tank" just so they can get Lego at affordable prices. I think most of us agree if that happens a big factor would be an worldwide economic collapse. Someone actually commented that he wishes that this would happen. This to me is ignorant. If this does happen people wouldn't have the money to buy Lego at "reasonable " prices. Im going to look through and see who said that.
    That was me and it was said part in jest and part seriously. I think you would be hard pressed to find anyone aside from sellers who want prices to go up. Would I like to be able to afford cloud city or some of the first UCS models? Course I would like anyone else. Would I like lego to go back to the days in 2007 when the republic cruiser cost £70 instead of the jedi cruiser that was £100. Yeah cause I would. It wont happen but it was nice. In the same way I would like to buy apple products on the cheap or a car for less than it costs.

    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.
  • YellowcastleYellowcastle Administrator, Moderator Posts: 5,234
    ^ Everything considered, I'd prefer my collection maintains its aftermarket value "just in case."
  • Pitfall69Pitfall69 Member Posts: 11,454
    ^ Yes, "sprinkled with truth".

    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.
  • Pitfall69Pitfall69 Member Posts: 11,454
    ^^^^ If the world economy tanks, LEGO bricks will become Über popular! What are all the unemployed people going to do with their spare time? LOL
    Stand in line and hold make-shift signs that read "we are the 99%"

  • evileddie1313evileddie1313 Member Posts: 126
    ^^^^ If the world economy tanks, LEGO bricks will become Über popular! What are all the unemployed people going to do with their spare time? LOL
    Stand in line and hold make-shift signs that read "we are the 99%"

    ;-)
  • RedbullgivesuwindRedbullgivesuwind Member Posts: 2,115
    ^ Everything considered, I'd prefer my collection maintains its aftermarket value "just in case."
    If it doesnt hold its value ill take your collection off your hands for a very reasonable price.

    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
  • Pitfall69Pitfall69 Member Posts: 11,454
    ^ Lol. No. I wouldn't do bench presses ON you. That would just be weird :)

    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!" :)
  • YellowcastleYellowcastle Administrator, Moderator Posts: 5,234
    ^ Hey now. ;o)
  • cloaked7cloaked7 Member Posts: 1,448
    If there is a huge global downturn in the economy LEGOS are going to be the least of everyone's worries. Something like that will have a huge impact on everything, so I don't know if it's 'correct' to apply that to the equation. I mean, if we are invaded by aliens it would probably impact LEGO prices.
  • cloaked7cloaked7 Member Posts: 1,448
    edited June 2012
    Also, one thing that impact prices of some things, like stocks, is if they break certain ceilings in price they are not hindered as much until they hit another ceiling. The buying community determine what the ceilings are. And, some of them are obvious. For instance, it may take 'effort' for any given LEGO set to go past $100 but after it goes past $100 it has no trouble going to $110, $120, $130... Prices can shoot up in spurts like that.

    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.
  • Pitfall69Pitfall69 Member Posts: 11,454
    Ok, so you said not to include a global economic downturn into the equation, but then you compared Legos to stocks and when there is a poor economy it definitely affects stocks.
  • cloaked7cloaked7 Member Posts: 1,448
    ^^^^^ @Pitfall69 I think you missed my point, or I didn't explain myself very well. Probably the latter.

    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.
  • zippityzoomzippityzoom Member Posts: 86
    With all this talk of "LEGO as investment" in mainstream media, I've noticed that a lot of people are treating their LEGO as gold, thinking every set is UCS Millenium Falcon or something.

    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?

  • JosephJoseph Member Posts: 629
    edited March 2013
    You might want to take a look at: http://www.bricksetforum.com/discussion/2371/speculation-in-the-lego-market-will-there-be-a-bubble
  • koozkooz Member Posts: 158
    Two thoughts.

    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...
  • prevereprevere Member Posts: 2,923
    No offense, but it's not fair to compare December sales with April sales. Q4 is a whole different ballgame.

    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.
  • wrangler6915wrangler6915 Member Posts: 528
    Saw this story about a family who never got off the beanie baby band wagon and lost a small fortune.

    http://www.businessinsider.com/family-spends-100000-on-beanie-babies-2013-7?op=1

    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?
  • Pitfall69Pitfall69 Member Posts: 11,454
    There is a thread already discussing whether the Lego "bubble" will burst. Let me find it.
  • Pitfall69Pitfall69 Member Posts: 11,454
    Bump...excuse me :)
  • Pitfall69Pitfall69 Member Posts: 11,454
    http://www.bricksetforum.com/discussion/2371/speculation-in-the-lego-market-will-there-be-a-bubble#latest
  • CCCCCC Member Posts: 20,526
    There is a big difference between sets and exclusive minifigs. A minifig could easily lose its value due to a remake, a set is still loads of parts.
    LegoPodcaster
  • fy222fy222 Member Posts: 200
    it is already a bubble. you are in it, have fun =)
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