Death of Lego Investing? Rerelease of Taj Mahal

[hagridshut]

I don't believe that Lego sets are generally an "investment".  Legos in of themselves do not produce anything.  They are more like precious metals or commodities.

Maybe there should be an options contract market for Lego sets   "Pay X dollars for the option to buy Lego set # YZABCD for E dollars on or before date D".

[anothergol]

IMHO a bad investor would be the one buying the last millennium falcon at full price, thinking it's gonna resell for $5000 in a few years. I'm pretty sure many did, it's always the same story. SW toys.. comics.. wine..

But if you buy a set on sale at 5ct/piece, it's nearly certain that it's gonna sell for at least that amount at any point in the future. And these days even maintaining your value is a good investment. As long as Bricklink exists, parts have a price. Your only risk is Lego fans disappearing. (Lego itself disappearing isn't even a risk, on the contrary)
..providing you have the room for many sets and you wanna bother selling stuff, because that's work.

[Peppermint_M]

I still know I could use my Storm Trooper figures for a bit of a return if I wanted a bit of money. Every time the design is changed, there is still going to be someone out there who wants to acquire the old design. They are not an investment though, simply a little something I could use if I ever needed to.

[Toastie]

8 hours ago, hagridshut said:

I don't believe that Lego sets are generally an "investment". 

I fully agree on that. As far as I am concerned, should people bet or invest (to generate returns) on LEGO sets, I personally regard them as that: People. Doing what people do. And I could not care less about this section of humankind. None what so ever. They are not present in my universe. But they do what they do, and this is how it is.

LEGO is about building dreams, ideas, plans, visions, crazy or not, about technical challenges, the future, about today, the past.

Invest when you want, but create if you still can dream.

Best,
Thorsten 

 

[suffocation]

45 minutes ago, Toastie said:

As far as I am concerned, should people bet or invest (to generate returns) on LEGO sets, I personally regard them as that: People. Doing what people do. And I could not care less about this section of humankind. None what so ever. They are not present in my universe. But they do what they do, and this is how it is.

LEGO is about building dreams, ideas, plans, visions, crazy or not, about technical challenges, the future, about today, the past.

You, sir, are a man after my own heart

[MAB]

9 hours ago, Toastie said:

I fully agree on that. As far as I am concerned, should people bet or invest (to generate returns) on LEGO sets, I personally regard them as that: People. Doing what people do. And I could not care less about this section of humankind. None what so ever. They are not present in my universe. But they do what they do, and this is how it is.

LEGO is about building dreams, ideas, plans, visions, crazy or not, about technical challenges, the future, about today, the past.

It is interesting your last word is 'past'. If someone has been an AFOL for a long time and always bought what they wanted, they don't have much use for resellers. 

But imagine a LOTR fan, or Indy fan, or Ghostbusters fan that wants to create MOCs but they weren't into LEGO at the time of release. They have a choice of using official figures and parts, or not. If they decide to go for the official parts, they can buy second hand which can mean lesser condition or go for new from a reseller. There are many of these new fans joining the community and resellers provide a valuable resource for them, of course at profit for the seller. 

[Toastie]

10 hours ago, MAB said:

It is interesting your last word is 'past'.

@MAB oh my - I am getting old

But you are very right. I never saw it that way. It may be because I am biased - from experience; one day I bought the VW T1 Camper for a sons friend of mine, as both are into old VW vans. He had almost finished his business BA degree - said "cool" and asked how much they'll be worth in 10 years from now. I did not know any reasonable answer - be he bought 9 extra. None are opened. I simply don't get that, that is all. I had built the van the same night for sure.

So yes, when these folks want to go way back, resellers are an attractive option. I was just looking at the "investment" discussion from my very own perspective.

Thanks for your comment, I really appreciate that.

With very best regards,
Thorsten   

[hagridshut]

On 9/1/2019 at 5:30 AM, MAB said:

But imagine a LOTR fan, or Indy fan, or Ghostbusters fan that wants to create MOCs but they weren't into LEGO at the time of release. They have a choice of using official figures and parts, or not. If they decide to go for the official parts, they can buy second hand which can mean lesser condition or go for new from a reseller. There are many of these new fans joining the community and resellers provide a valuable resource for them, of course at profit for the seller. 

I can actually agree with this point of view as well.

There have been periods of my life where I have stopped buying Lego sets and building MOCs, but picked up again after a few years when I had enough time or spare money again.  Sometimes, when looking for particular pieces or buildings for my creations, I find that I could use a set that was made 3-5 years previously, but I cannot buy it at a regular store anymore because it has been discontinued.  I am often able to find unopened boxes of those sets from resellers on eBay or Bricklink.

I don't have a problem with resellers in general.  Some of them make YouTube videos, and I see that they often buy box store inventory that is on clearance or steep discount (40-50% or more off retail price) for their store inventory.  They can sell these gradually at original retail price, or somewhat higher, depending on demand, and make a profit.  I'm ok with this, because they are taking on the risk of storing and marketing all this extra Lego.

What raises costs for me as an occasional buyer of new but discontinued sets is actually shipping/delivery prices, not higher costs due to market demand.  It can cost small stores $10-15 in postage to mail out a medium sized Lego set, because they don't have economies of scale.  So a set that I acquire from a reseller might be bought for the original $50 retail price, but the $15 in postage raises the total to $65.  Stores like Target and Amazon have economies of scale that allow them to both sell at below recommended retail price, and with "free" shipping (not really free, as I believe the cost is factored into the price, but as big customers of delivery services, they get major discounts on shipping fees that small stores can't get). 

What concerns me is when people buy a bunch of a rare or expensive set, with the expectation that they will be able to sell it for 10x the original price, and then these people become upset when Lego Group decides to re-release the set.  Lego Group doesn't promise anyone that it won't reproduce a set in the future.  There shouldn't be an expectation that a discontinued set will stay discontinued, even if this is usually the case.

[MAB]

9 minutes ago, hagridshut said:

What raises costs for me as an occasional buyer of new but discontinued sets is actually shipping/delivery prices, not higher costs due to market demand.  It can cost small stores $10-15 in postage to mail out a medium sized Lego set, because they don't have economies of scale.  So a set that I acquire from a reseller might be bought for the original $50 retail price, but the $15 in postage raises the total to $65.  Stores like Target and Amazon have economies of scale that allow them to both sell at below recommended retail price, and with "free" shipping (not really free, as I believe the cost is factored into the price, but as big customers of delivery services, they get major discounts on shipping fees that small stores can't get). 

What concerns me is when people buy a bunch of a rare or expensive set, with the expectation that they will be able to sell it for 10x the original price, and then these people become upset when Lego Group decides to re-release the set.  Lego Group doesn't promise anyone that it won't reproduce a set in the future.  There shouldn't be an expectation that a discontinued set will stay discontinued, even if this is usually the case.

It is not only shipping, but also payment fees and other fees to sell. If you take payment by PayPal, this will typically cost 4-5% of the sale including charges on postage costs. eBay 10% (or bricklink 3% on goods only). So if something cost you $50 and will cost $10 to ship, and you sell it on ebay a year later, the buyer has to pay you at least $70.60 (including the shipping) for you to even make a profit. That's already 40% more a buyer needs to pay before the seller makes anything.

Expecting 10x is way off these days. In the past 3-4x has been doable on some sets. Occasionally there have been better sets of course that are highlighted.  But if buying at RRP now, even doubling your money is unlikely.  Even getting 50% increase is hard these days. There are so many resellers these days that buy-in price is more important than ever. 

[hagridshut]

50 minutes ago, MAB said:

It is not only shipping, but also payment fees and other fees to sell. If you take payment by PayPal, this will typically cost 4-5% of the sale including charges on postage costs. eBay 10% (or bricklink 3% on goods only). So if something cost you $50 and will cost $10 to ship, and you sell it on ebay a year later, the buyer has to pay you at least $70.60 (including the shipping) for you to even make a profit. That's already 40% more a buyer needs to pay before the seller makes anything.

Wow, I had no idea eBay and PayPal fees were that high now.  It has been more than 10 years since I've sold anything on eBay and used PayPal to collect payment. 

Must be tough to own an eBay-based business in modern times.

[MAB]

14 hours ago, hagridshut said:

Wow, I had no idea eBay and PayPal fees were that high now.  It has been more than 10 years since I've sold anything on eBay and used PayPal to collect payment. 

Must be tough to own an eBay-based business in modern times.

Yeah and it is often forgotten that sellers have to pay such fees when looking at how much they make. It is worse on amazon, for LEGO it is something like 15% plus a fixed fee of 99c for small time sellers. No wonder prices are so high for retired sets on there.

Reselling is not easy money!

[Gomek]

On 9/2/2019 at 12:47 PM, MAB said:

It is not only shipping, but also payment fees and other fees to sell. If you take payment by PayPal, this will typically cost 4-5% of the sale including charges on postage costs. eBay 10% (or bricklink 3% on goods only). So if something cost you $50 and will cost $10 to ship, and you sell it on ebay a year later, the buyer has to pay you at least $70.60 (including the shipping) for you to even make a profit. That's already 40% more a buyer needs to pay before the seller makes anything.

Expecting 10x is way off these days. In the past 3-4x has been doable on some sets. Occasionally there have been better sets of course that are highlighted.  But if buying at RRP now, even doubling your money is unlikely.  Even getting 50% increase is hard these days. There are so many resellers these days that buy-in price is more important than ever. 

I've been trying to unload a lot of sets on Ebay lately, and I really don't like to get less than I paid for them, which I think is fair. The problem is If I paid $40 then with all the fees, I need to ask $60+. People like to send me "fair" offers, and they are fair when compared to Amazon with free shipping. But I didn't get my sets wholesale, and I don't have a deal in place with the USPS. And when you through a ton of fees on top of it, it's just not a fair comparison.

Also I don't really care for people who get high prices to be called "scalpers". When you sell at auction, the laws of supply and demand take over. Tons of people start the bid at $1 and end up getting a $100. Getting a $100 is not the sellers fault. They didn't ask for $100. So even if that set originally cost them $20, I'm not sure how it's scalping if you're simply putting a an item up for auction.