Buy a set simply to sell it for profit?

[Danpb]

I'm not sure if this should have been in the "what set should I buy next" thread, but I wanted to hear from a bunch of you on this.

I bought Green Grocer and had a great time building it. It is my first modular building and I was completely impressed.

That said, I know there is talk of it going away for good at some point (soon?). It is on back order until mid-June here in the US. I have been tempted to get another Green Grocer to put away for awhile and resell, but honestly, that doesn't sit well with me.

I'm not sure I'd feel right reselling the set for higher than retail as I've often been the person who wanted set X, but couldn't swing the after market prices.

So, what are your thoughts? Would you buy a set and put it away for resell purposes? As tempting as it is from a financial stand-point, I'd also be tempted to just get another modular building while they are still available (Fire Brigade may be next :D).

Thanks, everyone!

[Siegfried]

I must confess that I don't like doing this. I've even bought some sets for that purpose but I ended up using the parts instead. But I'm stupid like that. There's nothing wrong with doing this, it's just smart business. Be warned though; you might need to hold onto it for a while to get the best price.

[escortmad79]

I've got a midi falcon put back for investment when it gets retired.

I'm not one to hoard Lego & not build it but this was cheap so bought it

[Rick]

A related discussion, not the same, but some of the topic is about keeping sets MISB for resale.

[BearHeart]

I bought a few sets with the intention of reselling them. However, I decided not to bother with it and I might end up opening and building them in the future. I'm not planning to buy any more sets for the purpose of making a profit.

IMO, you have to buy really big sets and hold on to them for years for it to be worthwhile. I see no point in buying a $30 set to make a $20 profit in three or four years.

[DLuders]

Although I don't have extra cash to buy EXTRA sets as an "investment" (to sell later at a profit), I personally don't see anything wrong with this. There are folks that part-out the newest TECHNIC sets to make the newest parts immediately available to folks building their own MOCs. Under the forces of "Supply and Demand", the prices will seek their natural levels. With the sad state of other investments, you may actually MAKE A PROFIT (whereas stocks may lose money). TLG just wants to SELL SETS, and they probably don't care whether they sell in bulk to one person or to many kids. I have noticed that Lego Shop At Home sometimes puts a limit of 5 copies of one set per person.

[jonwil]

I would never buy a set to resell later, I prefer to buy sets for my own collection. And to buy sets before they disappear from the shelves. (although some sets seem to come and go from the Australian market very quickly like the Racers Lamborghini)

[Danpb]

Good stuff, everyone - thanks :). I've considered it only to get more money for..well, more bricks ;). The idea of having to wait for months/years discourages me a bit as I love nothing more than opening new sets :D (well..and building them)

[roamingstop]

Dont think of it as an investment unless you have mega $$$ in cash to burn - and excellent storage to keep large models for 2-3 years (minimum). Even then a lot of people are thinking 'look at prices of cafe corner / market street' etc... we too can make a profit!.

Rather if you really like a model buy an extra one or two for posterity... it can be opened in 2-3 years as a 'reliving the old experience' - finding all the right pieces straight away. If you are really lucky and pick a model which people want then you can think... 'hey I have one in the loft'... 'I dont like it much'... 'time to sell'... Doing it as a business model - probably better off with buying Swiss gold. Unless you can afford to sit and wait on discontinued items... E.g. technic bulldozers are now about 1.3x original sales price and slowly creeping up. I would expect the same with the crane truck and other flagships...

[Tyrant]

I've bought a number of sets to resell and so far they have been selling. Yes, with some sets you do have to hold on to them for a while so you will need some place to keep them. If you are going to do this, you need to take advantage of sales instead of paying retail for them. This way you have less in them and the possible profit is greater. There have been a comment or two about smaller sets not being worth it. I don't believe that to be true. Yes, you may only double your money but you should buy more than one if you are wanting to resell them. Using the SW battle packs as an example, you can get 10 of them for the price of Home One and 10 of their boxes are easier to store. On top of that, if you have a KMart or Meijer near you you can get them on sale (buy 2 get 1 free) so for the same buy in price you can 15 instead of 10. Then once they double in value you actually have triple the value in inventory (15 doubled is 30, or 3 times the 10 you payed msrp for). Like coupons, it isn't about any one single item. If you make $20 in profit on a $20 set, you don't buy just one to sell. You just need to consider what drives the value of each individual set and if there is a cheaper alternative that will kill resale value. And, like I said, if you are buying a set to resell try to find some way to reduce it's cost to you. Just don't expect instant returns.

[MacK]

I probably could never do this as I have trouble keeping sets sealed for more than a day or two. But in all honesty I'm sure there are more things you could buy to sell with a better profit than Lego. If you are dead set on making a profit off of Lego though; you could just part out sets particularly ones with rare minifigs to make a profit instead, there was a good article on this subject on the brothers brick a while ago.

[Pyramid]

I would never buy a set with the sole purpose of selling it.

That being said, a while back, I bought Jango Fett's Slave 1 from a friend for only $20! A great deal by itself, but I was able to sell the Jango Fett Figure, years later for $85. So basically, I got $65 dollars and a ton of awesome lego pieces for free.

[BobaFett2]

Very tricky situation. I would suggest either:

Buy another and sell it for the cheapest price after it becomes discontinued (but still higher than retail)

Buy the set and use it, it's got great parts and if you really need money sell the instructions and box

Buy it, and like fine wine (or so they say, I think alcohol is disgusting) it's value will mature over time until it doesn't matter how high you price it it will be worth about 50 dollars more.

[fred67]

I have no problem "feeling" right about buying a set for resale. If you're good, one initial investment could support your hobby from there on out if you're good at picking sets.

I bought a Cafe Corner shortly before they went off the market for a discounted price and now they sell for $300... with $300, I could buy TWO Green Grocers, and while I may have to hold onto them for a while, I'm sure their prices will double (or nearly so) within months after it's off the market.

I'm not saying I will do that; I bought the Cafe Corner for me... but contrary to what some others have said, I think a wise LEGO collector could do well and make a ton of extra pocket change reselling discontinued LEGO.

I personally have tons of sets because I just don't have the time or space to build them... some have been discontinued, and now it's a tough choice to sell them or build them myself. I would never buy a set I didn't personally want; at least that way, if it doesn't increase in value (*), you have something you want.

(*) I bought two TIE interceptors because the regular TIE was no longer available... I built one, and still have the other one in the box.... it's not really any more valuable than it was, even though it's a 2006 set that has long since been discontinued... but the reason I bought two was because I figured it was close enough that I could nearly build a complete regular TIE with it... and I can, when I get around to it!

Just as an example... knowing now that the modular buildings are VERY popular, you could have:

Bought 2 market streets when they came out; built one for yourself, held onto the other.

Market Street is selling on BL for over triple the price... over $300, with which you could have bought two Cafe Corners, and built one for yourself.

Now Cafe Corner is selling for over $300, enough to buy two Green Grocers...

There's overlap between the sets which might make this strategy "dangerous" where you risk missing a set waiting for one to be discontinued, but you could stagger it, too (invest in two sets at a time)... in this case, it's a pretty sound investment.

Of course, you didn't know this in 2007 (how popular the modular buildings would be), and neither did I... but you know it now, and I guarantee (as much as an anonymous guy on the internet can) that $150 for Green Grocer is going to be a good investment. People will tell you that you may have to wait a year... maybe even two... this is a possibility. But how many other investments DOUBLE in price over the course of two years? Especially those with what is really, let's be honest, very little risk... in fact, since you could always use it yourself, there's essentially ZERO risk.

If I had more expendable cash, you'd better believe I'd be buying more... but again, I would only ever invest in sets that I wanted anyway, that way you simply can't lose.

Edited May 4, 2010 by fred67

[Tyrant]

I have no problem "feeling" right about buying a set for resale. If you're good, one initial investment could support your hobby from there on out if you're good at picking sets.

I bought a Cafe Corner shortly before they went off the market for a discounted price and now they sell for $300... with $300, I could buy TWO Green Grocers, and while I may have to hold onto them for a while, I'm sure their prices will double (or nearly so) within months after it's off the market.

I'm not saying I will do that; I bought the Cafe Corner for me... but contrary to what some others have said, I think a wise LEGO collector could do well and make a ton of extra pocket change reselling discontinued LEGO.

I personally have tons of sets because I just don't have the time or space to build them... some have been discontinued, and now it's a tough choice to sell them or build them myself. I would never buy a set I didn't personally want; at least that way, if it doesn't increase in value (*), you have something you want.

(*) I bought two TIE interceptors because the regular TIE was no longer available... I built one, and still have the other one in the box.... it's not really any more valuable than it was, even though it's a 2006 set that has long since been discontinued... but the reason I bought two was because I figured it was close enough that I could nearly build a complete regular TIE with it... and I can, when I get around to it!

Just as an example... knowing now that the modular buildings are VERY popular, you could have:

Bought 2 market streets when they came out; built one for yourself, held onto the other.

Market Street is selling on BL for over triple the price... over $300, with which you could have bought two Cafe Corners, and built one for yourself.

Now Cafe Corner is selling for over $300, enough to buy two Green Grocers...

There's overlap between the sets which might make this strategy "dangerous" where you risk missing a set waiting for one to be discontinued, but you could stagger it, too (invest in two sets at a time)... in this case, it's a pretty sound investment.

Of course, you didn't know this in 2007 (how popular the modular buildings would be), and neither did I... but you know it now, and I guarantee (as much as an anonymous guy on the internet can) that $150 for Green Grocer is going to be a good investment. People will tell you that you may have to wait a year... maybe even two... this is a possibility. But how many other investments DOUBLE in price over the course of two years? Especially those with what is really, let's be honest, very little risk... in fact, since you could always use it yourself, there's essentially ZERO risk.

If I had more expendable cash, you'd better believe I'd be buying more... but again, I would only ever invest in sets that I wanted anyway, that way you simply can't lose.

As your example shows, it is all about picking the set. Now that we have some trends and ideas from the past few years since the after market has been growing we can make educated guesses. Also, as you say, there aren't many legal investments (aside from straight gambling, which obviously has high risk) that see that kind of return. Yes, it is on the smaller scale and one should use traditional investing if they are looking to invest serious sums of money, but that kind of return isn't something that happens very often in the regular markets. I sell most of my sets for at least twice what I pay for them. Even after I factor in the taxes I paid and cost of going to get them (when they aren't bought online with free shipping) the return is still well above anything you can reasonably expect to see on a reegular basis with investments when viewed in terms of percentages. For most sets, buying them when they are on sale (and most sets are on sale at some point or another) is enough insurance because at that point even selling them at MSRP will provide some profit if you have to move them or are tired of holding on to them. Or, once they rise above MSRP you can afford to sell them lower than the commpetition because your profit starts at a lower price point so you are in a better position to actually sell them. It's worked for me so far to get money to sustain the hobby, though I'm looking at your idea of rolling over the profits. I've coonsidered it before but I haven't been in a position to seriously consider it.

Also, I have never felt bad about doing this or anything like it. I've done it in one form or another with most of my hobbies. With the miniature games I play they are sold in random boosters so some figures are worth more than others. I sell off extras and ones who's value jumps that I have no use for all the time. It helps pay for the hobby. On the rare occasions when there was a reasonably sure way to know if a valuable figure was in the box, I bought them. I honestly don't understand what people have against making money.

[Thee Pirate]

Whenever sets go on sale at Wal Mart or Target, I frequently buy them out.

For example, Galactic Enforcer was on sale at Target a week ago for $80, I thought that was a good price and considered buying it, but I had to hold off until payday. Low and behold, I walked into Wal Mart today and they had 3 copies of it on clearance for $35 each. Since it was a set I wanted anyways, I bought all three. One has been opened now, the other two are going to collect dust for a few years.

I did the same with all the 2nd wave IJ sets, along with a few other sets here and there from the Construction line up, a few Creator sets, the Troll warship, Power Miners, Star Wars sets and so on. I probably have around 40 or 50 MISB sets that were all purchased for at least a 50% discount. For the Troll Warships, I bought 4 copies for $20 each, and turned around and sold the dragons on Bricklink for $15 each, along with all the minifigs for an average of $2.50 each. I essentially got a lot of pieces for free.

If you play your cards right in Lego, it's completely possible to turn a profit. I'm getting stationed in Germany in November. Since I'll be able to order U.S. and European sets and ship to both regions for the same price, you can bet your @$$ if there's exclusives, I'll be selling them in the opposite region on bricklink, if for no other reason than to spread the Lego.

Edited May 4, 2010 by Thee Pirate

[roamingstop]

The one thing to not forget - Lego have in the past reissued discontinued models a couple of years later (I can think of Technic Submarine, Pneumatic Loader etc). This may not be likely in the current climate - but it is important that you remember that this can happen. And the lead times can be long.

[Danpb]

Loads of great replies, everyone - thanks so much.

I think at this point, I'm leaning toward just buying the sets I want - maybe I'll try going for profit, but as I am just rediscovering my love for the brick, I think I"m too focused on getting new pieces :)

[The Green Brick Giant]

I have never resold a set but I'm fine with it, you need to get the money to pay for new sets and it's legal and not morally wrong in any way.

[David Thomsen]

For me, if I were to buy a Lego set with the intention of keeping it sealed and selling it later, my main motivation would be to allow access to this set to someone who finds out about the set in five years time and wants to still be able to buy it in a sealed box. It would be out of love for the toy itself more than anything else.

If I were simply trying to make a profit, I'd invest in something with greater returns and which isn't going to take up a heck of a lot of space.

Having said that, of course I'd sell the set at a profit... partly because of inflation, and partly because I'm not going to babysit large Lego sets for any period of time without compensation.

[Tyrant]

For me, if I were to buy a Lego set with the intention of keeping it sealed and selling it later, my main motivation would be to allow access to this set to someone who finds out about the set in five years time and wants to still be able to buy it in a sealed box. It would be out of love for the toy itself more than anything else.

If I were simply trying to make a profit, I'd invest in something with greater returns and which isn't going to take up a heck of a lot of space.

Having said that, of course I'd sell the set at a profit... partly because of inflation, and partly because I'm not going to babysit large Lego sets for any period of time without compensation.

I'm going to qualify this by saying that if you are talking about tens of thousands of dollars then you would probably be better off investing in something else because certain aspects of this don't scale that well. Having said that, what are you sinking money into that is seeing a greater return than reselling these sets? I'm selling sets 18-24 months after I buy them for more than twice what I payed (after factoring in taxes, etc). That's a profit of 100% or more. Yeah, you can get a deal like that every so often if you are either really lucky or doing insider trading but that is not a sustainable level of return on any "real" investment that isn't insanely risky. Sure, it can take 2 years. 2 years to double your money, buying something that if all else fails you still have a product that you can use. Some of these sets don't increase in value like that, that's true. As with any investment, the key is smart investing. You don't just buy whatever sets come along and whatever price is floating around.

I'll give you an example of something along the lines of the method fred67 mentioned. In the last few days I have sold a number of sets I have been sitting on for 18-24 months. For 3 of them, I had $160 in them and I got $365. I took this money and bought 2 AT-OT sets during the sale. I bought them seperately and used a code for $5 off each of them, so it worked out to $365 for the pair. So, I had $160 in something that has now been transformed into 2 sets who's MSRP is $500.

Some people have mentioned storage. That is a valid concern if you are cleaning out a TRU or 3. Otherwise, if you don't have space for some boxes do you space for the sets/parts without the boxes? I know they take up more room in the box, but either you have some room or you don't.

[fred67]

I'm going to qualify this by saying that if you are talking about tens of thousands of dollars then you would probably be better off investing in something else because certain aspects of this don't scale that well. Having said that, what are you sinking money into that is seeing a greater return than reselling these sets? I'm selling sets 18-24 months after I buy them for more than twice what I payed (after factoring in taxes, etc). That's a profit of 100% or more. Yeah, you can get a deal like that every so often if you are either really lucky or doing insider trading but that is not a sustainable level of return on any "real" investment that isn't insanely risky. Sure, it can take 2 years. 2 years to double your money, buying something that if all else fails you still have a product that you can use. Some of these sets don't increase in value like that, that's true. As with any investment, the key is smart investing. You don't just buy whatever sets come along and whatever price is floating around.

I'll give you an example of something along the lines of the method fred67 mentioned. In the last few days I have sold a number of sets I have been sitting on for 18-24 months. For 3 of them, I had $160 in them and I got $365. I took this money and bought 2 AT-OT sets during the sale. I bought them seperately and used a code for $5 off each of them, so it worked out to $365 for the pair. So, I had $160 in something that has now been transformed into 2 sets who's MSRP is $500.

Some people have mentioned storage. That is a valid concern if you are cleaning out a TRU or 3. Otherwise, if you don't have space for some boxes do you space for the sets/parts without the boxes? I know they take up more room in the box, but either you have some room or you don't.

Definitely... I didn't mean to imply it scaled well. There is a Steve Martin bit where he talks about getting into investing. "So I invested in cardboard at $0.10/ton, and I'm going to sell when it gets to $0.13/ton. Of course, I have to store it in my apartment..."

Even if I could afford $10k in LEGO, my wife would kick me out for not having any place to put it, but it can be a very good investment to help cover the costs of this relatively expensive hobby if you invest in the right sets, and invest in sets you would want in the event they don't increase so much in value... you lose nothing because you're still buying something you like.

Even the best investment advisor can't guarantee anything, but if you see sets constantly sold out at LEGO.com, but with future availability... that's a pretty good indicator.

My dilemma is this... I bought sets I just didn't have room to build, like the Millennium Falcon 4504 on Black Friday sale for $80.00. It's MISB. The cheapest MISB at bricklink is $360. I would never have paid $360 for it in a million years (well... you know what I mean). I didn't buy it as an investment, but not being a "collector" of that sort, it seems crazy to keep it when I could buy two Grand Emporiums and have money left over. Call me crazy.

Edited May 7, 2010 by fred67

[Tyrant]

My dilemma is this... I bought sets I just didn't have room to build, like the Millennium Falcon 4504 on Black Friday sale for $80.00. It's MISB. The cheapest MISB at bricklink is $360. I would never have paid $360 for it in a million years (well... you know what I mean). I didn't buy it as an investment, but not being a "collector" of that sort, it seems crazy to keep it when I could buy two Grand Emporiums and have money left over. Call me crazy.

I'm in a similar situation with the second version of the MTT. I got it on clearance at Wal Mart for $60 or $70 (though I think it was cheaper than that on Black Friday at TRU one year). I was planning on selling it. Now it appears to be somewhat valuable. At this point though, I would build it if I had room to display it. If I haven't sold it in a few months I may keep it.

[CP5670]

I'm going to qualify this by saying that if you are talking about tens of thousands of dollars then you would probably be better off investing in something else because certain aspects of this don't scale that well.

This is the main reason why Lego as a serious investment seems pointless to me. You need to factor not only the storage required, but also the time it takes to first buy the sets, then later advertise them on ebay/BL and finally package and ship them. It seems like a great idea to get a $150 Green Grocer and sell it for $300 after 2-3 years, but now try selling 30 GGs like this, one at a time. It would be a huge time commitment.

I have a few Lego sets I've been meaning to sell but have been putting off doing it for years. One of them was a spare MISB 8466 that I had gotten courtesy of a S@H glitch several years ago. I was planning to sell it on ebay for a long time but never got around to it, and eventually decided that I would rather just keep it as it has a lot of good parts.

If you're willing to put in the time though, it's not a bad way to make some spare change on the side. As you pointed out, these S@H exclusive sets have appreciated much faster in value than ordinary Lego sets. Although that might not last in the long term, since if a lot of people start buying up those sets for reselling purposes and the overall demand goes up significantly, TLG will increase the supply to compensate.

Edited May 8, 2010 by CP5670

[Tyrant]

This is the main reason why Lego as a serious investment seems pointless to me. You need to factor not only the storage required, but also the time it takes to first buy the sets, then later advertise them on ebay/BL and finally package and ship them. It seems like a great idea to get a $150 Green Grocer and sell it for $300 after 2-3 years, but now try selling 30 GGs like this, one at a time. It would be a huge time commitment.

I do see what you're saying, but I've been selling stuff online for over a decade so boxing things up and posting ads just doesn't seem that time consuming to me. I've all but stopped using Ebay and stick with BL now. For me, the only headache is getting shipping quotes. As for your example, I don't think I could bring myself to sink that much into it. Or at least not paying retail. I would've bought those during the sale last year, or go to a LEGO store and rack up tons of points. Storing 30 of those could be tricky, but if I could turn a $4500 profit I would try to find a way. That's the part that doesn't scale well though. Well, that and the fact that 30 at once would flood the market which is why I try to diversify. I do agree with what I think you are saying in that this alone is very unlikely to pay the bills.

I have a few Lego sets I've been meaning to sell but have been putting off doing it for years. One of them was a spare MISB 8466 that I had gotten courtesy of a S@H glitch several years ago. I was planning to sell it on ebay for a long time but never got around to it, and eventually decided that I would rather just keep it as it has a lot of good parts.

That's one of the reasons I don't worry if I can't sell the sets later. I can still use what I bought.

If you're willing to put in the time though, it's not a bad way to make some spare change on the side. As you pointed out, these S@H exclusive sets have appreciated much faster in value than ordinary Lego sets. Although that might not last in the long term, since if a lot of people start buying up those sets for reselling purposes and the overall demand goes up significantly, TLG will increase the supply to compensate.

That is one of my only real concerns. The other is that sales will drop to nothing if the global economy completely falls through. Then again, if that happens I'll probably have bigger things to worry about.